CSR

Causesurism: The Rise of Luxury and CSR

Isaac Mostovicz writes that that the rise of luxury brands embracing causes and CSR can be positive...

A recent article by Vanessa Friedman in the Financial Times talks about the recent trend towards “causesumerism”, a new term that has been coined by Lisa Ann Rochey and Stefano Ponte in their new book Brand Aid.

Causesumerism refers to

” …the increasing tendency of luxury and fashion brands to help consumers justify purchases by injecting a note of do-goodism into the selling of the product.”

The book focuses mainly on product (RED), which aims to stop the spread of AIDA in Africa by using the sales of branded goods such as Armani and GAP to support the global fund for fight AIDS, tuberculosis and malaria.

I have previously written about the relationship between luxury brands and CSR, and I believe that luxury and good causes are not mutually exclusive. This not only makes good sense for the long-term prospects of the brands in question, but can also be a positive attribute in luxury marketing – particularly if the brand aligns its CSR initiatives to core brand values and identity, and resonate with consumers.

Kahro, a jewelry stores Raleigh NC store which I run, has teamed up with Kay Yow Cancer Fund, a Raleigh NC based charity that work to fight female cancers. Giving to charity is seen as an aspect that Kahro shares with its customers; just as they spend extra, Kahro spends extra. This charitable giving builds self-esteem for all the Kahro employees, as they know that their workplace gives something back to the local community. In turn, this raises productivity and staff commitment.

Is this good in terms of marketing? Yes. But I also believe that it can deepen brand identity, and that it is not always driven by profit – it may make sense from an employee satisfaction perspective, or from a genuine wish to impact local communities.

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CSR and Luxury in an age of Transparency

Isaac Mostovicz writes that that the luxury industry is becoming more tuned in to Corporate Social Responsibility...

I have recently written on the link between luxury brands and Corporate Social Responsibility, or CSR, so it was with interest that I read the Financial Times blog post “Luxury conquers its CSR fear” which reported that the luxury industry is slowly beginning to talk about sustainability and CSR more openly.

The article gives the example of luxury jewellery brand Tiffany & co. who have recently launched a new website dedicated to CSR. This is interesting because a few years ago the author of the Financial Times piece ‘graded ‘some public luxury companies in CSR categories, and Tiffany did particularly badly, in part due to a lack of public information.

Tiffany & Co: CSR section of the website

Tiffany & Co: CSR section of the website

It looks as though, the article argued, luxury brands have realised that in an age of transparency it is better to have information out there for consumers to see, rather than hiding information behind closed doors in the fear that consumers will pick holes in it.

It is not just Tiffany that is doing well – LVMH also has a section on CSR on their corporate website, with an environmental charter.

This article illustrates that the luxury industry is beginning to change, and  I believe that sustainability and luxury are no longer mutually exclusive terms. This not only makes good sense for the long-term prospects of the brands in question, but can also be a positive attribute in luxury marketing – particularly if the brand aligns its CSR initiatives to core brand values and identity, and resonate with consumers.

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Luxury brands and charity partnerships

Isaac Mostovicz writes that that charity partnerships can form a positive part of a luxury brand's CSR strategy...

British luxury designers, including Mulberry, Erdem and Giles Deacon, are creating limited-time teddy bears for this year’s BBC Children in Need auction reports Luxury Daily.

Luxury brand Mulberry create bear for BBC Children in Need

Luxury brand Mulberry create bear for BBC Children in Need

Children in Need is a BBC-owned charity that gives grants to local projects in Britain that focus on helping disadvantaged children.

Emma Hill, creative director of Mulberry, said of the project:

“When we were approached to design the fashion bear, we thought it would be a great opportunity for us to use our resources and create something genuine, loveable and close to our hears to support the cause.”

I found this interesting, because I have been recently thinking about the role that Corporate Social Responsibility, or CSR, plays for luxury brands.

Corporate Social Responsibility (CSR) can be defined as “a form of corporate self-regulation integrated into a business model”. In the past, CSR has been seen as an ‘extra’ that is nice to do but not necessary, and that may well leave the company out of pocket. However, this view is rapidly changing, with brands that are not undertaking CSR initiatives and reporting on these finding themselves scrutinized.

It is not accidental that brands such as Mulberry have chosen to partner with the BBC Children in Need. The cause is one which resonates with the consumers of those British luxury brands – in fact, the article states that many luxury brands have chosen children-focused charities recently to connect with their customers. This does not weaken their brand identity, but rather strengthens it, positioning their brand as socially responsible whilst resonating with customer’s wishes to ‘give something back’.

Kahro, a jewelry stores Raleigh NC store which I run, has teamed up with Kay Yow Cancer Fund, a Raleigh NC based charity that work to fight female cancers. The charity is close to the heart of Kahro’s clientele, which creates a link between the way the customers wish to act and the way the company behaves. Giving to charity is seen as an aspect that Kahro shares with its customers; just as they spend extra, Kahro spends extra. This charitable giving builds self-esteem for all the Kahro employees, as they know that their workplace gives something back to the local community. In turn, this raises productivity and staff commitment.

For me, the key to successful charity partnerships is to ensure that they are aligned to employees, brand values and customers, and that they feel authentic rather than driven by profit.

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Core values for CSR

Isaac Mostovicz writes...

The excerpt below is from a paper of mine which will be published in the Special Issue of the Corporate Governance Journal and presented at the 2011 colloquium of EABIS, the Academy of Business in Society. I have co-authored the paper with Andrew Kakabadse and Nada Kakabadse.

The paper will be published on September 5th and looks at the core values which must underpin CSR programmes if they are to be effective.

On April 20th, 2010 an explosion on the Gulf of Mexico Deepwater Horizon oil rig exposed the United States to an historic ecological disaster.

This episode illustrates the limits of CSR programmes currently undertaken by global businesses. The logical rules and regulations which business and government leaders created did not work to exemplify the broadly shared social values that US society deemed to be important.  Representing our deeply held values and the metaphorical expressions of our beliefs, these accountability structures must change over time to continue to align with prevailing beliefs and core values. This global CSR failure also reflects the dynamic process which CSR programmes must undergo over time.

Emerging markets can also learn a valuable lesson from this case study as they continue on their path of economic development. Their CSR programmes should also reflect their own cultures’ unique social norms and be dynamic enough to respond to unprecedented threats due to increased stakeholder scrutiny and constraints on environmental and other resources.

Exploring this case study provides important theoretical lessons for companies in emerging markets and elsewhere to consider.  For instance, can increased regulation prevent corrupt or unaccountable corporate practices? Are voluntary systems of accountability fundamentally flawed and fuelled only by corporate disdain for regulation? And to what extent should markets be allowed to dictate the course of play vis-à-vis the more arm’s length yet expensive bureaucracy created by government regulation?

Corporate responsibility cannot be practiced if various personal attributes do not exist in the individuals within the company.  These consist of the four pillars of leadership, ethics, personal responsibility and trust, all of which are dynamic in nature. Incorporating these personal qualities can help improve the planning and practice of CSR programmes as well.

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