Only 13 per cent of people trust what they read in a company’s CSR or sustainability report, according to new research which said corporate Australia was facing a “looming crisis” as consumers become more disenchanted.
Talking the Walk, released Tuesday by Cavill + Co, also found two-thirds of Australians believed companies pursue profit at all cost.
Cavill + Co founder Hailey Cavill told Pro Bono Australia News that poor communication was to blame, and even companies genuinely engaged with CSR were wasting millions on failed PR strategies.
“Communication from companies is not getting through because in this day and age consumers don’t have to listen to what companies are saying, they can create their own content, and they’re choosing their own communication mechanisms,” Cavill said.
“Corporate social responsibility and social good isn’t getting through… because there’s high levels of skepticism, there’s low trust, it’s just really, really hard for companies these days to get the message through.”
She said effective communication that resonates with consumers could make the difference between CSR being dismissed or embraced.
“There’s already a high level of scepticism, and so they [consumers] are not interested in hearing what companies are saying, but also companies tend to communicate in this over-sanitised way, and they’re putting out big CSR and sustainability reports,” she said.
“They’re not presenting it to people in a way that’s interesting, there’s no emotion there, there’s no stories, it’s more fact. They basically give it to them in formats that switch their brain off rather than connect with them.
“In this day and age everyone’s getting all their information off social media and it’s all about entertaining, emotive content, and when you look at corporate communications it’s not emotive, it’s not entertaining, it’s not even interesting, it’s boring.”
The report said that consumers were also becoming increasingly savvy, which made transparency all the more important.
“When they [companies] are caught out they don’t own up, they’re not honest,” Cavill said.
“There’s a whole bunch of new companies like Patagonia, Toms, Thankyou Group – they’re operating on this new model called radical transparency. So there’s a new wave of companies coming through that are just being really open about what they do with their staff, with their customers.
“But generally corporate Australia doesn’t operate like that. Their sort of default setting is, ‘let’s present a perfect picture, let’s protect ourselves, let’s hide behind corporate affairs’ rather than just being courageous and allowing people to know that they’re struggling with this.
“It’s not easy to balance your commercial imperatives with your commitment to society, particularly if there’s an ingrained culture there. It’s a challenge, and you’ve got to be prepared to share the journey and share the struggle.”
As for companies who attempt whitewashing or greenwashing to maintain their reputation, Cavill said that consumers would not be fooled, regardless of the investment in communications.
“You can’t pretend to be operating on honesty and not be doing it,” she said.
“In terms of the large corporations who have many arms, all the arms need to know what the other arms are doing because if one organisation says one thing and another does another thing it doesn’t work.”
She said, ultimately, if companies don’t change their communication strategy, corporate investment in CSR could be put at risk.
“At the end of the day if companies don’t get the communication right, they’re not going to be able to justify the business case for doing it, and therefore it’s not going to be necessarily seen as a priority,” she said.
“If you get it right it will attract the best staff, it will encourage customers to buy your products, communities will welcome you with open arms, all those things that are part of the business case.
“If you don’t communicate it well, then you might as well not be doing it. So it’s really important for the future of CSR as a practice to actually get the communication right.
“Not only are they [companies] wasting millions of dollars, they’re actually missing out on a massive opportunity to get a competitive advantage because the new wave of consumers out there, particularly Gen Y and Z, which are the 21-to-39 age group, they are making it very clear they want companies to step up, they want companies to do good, they expect them to do it.
“It’s just not good enough anymore to make products and offer services, and make a profit.”
The report comprises of three years of research, based on analysis of 26 existing reports and research Cavill + Co undertook between 2014 and 2016.