Doing business with a friendly face

News that big-name brands are engaging in altruistic pursuits is usually greeted with a degree of knowing cynicism by members of the public. Nevertheless, corporate social responsibility (CSR), or the act of undertaking projects that are in the interests of the wider community, looks set to become even bigger business.

Today’s brands realise that business is likely to be better when it has a friendly face. "Building trust is the underlying factor in creating a strong reputation," says Ben Davies, of CSR Europe, a membership-based body that counts brands such as Johnson & Johnson and Microsoft among its members.

Pragmatic companies with a sound long-term strategy are pretty candid when it comes to linking their caring, sharing instincts with brand visibility. "I think that any work that anybody does in the community enhances their reputation," says Akhtar Badshah, who is in charge of Microsoft’s global community investment and employee programmes.

Microsoft, along with organisations such as Cisco and Randstad, is helping the citizens of Europe improve their chances on the jobs market by providing IT courses through not-for-profit organisations. The work is conducted as part of the so-called employability alliance, which was set up with Employment and Social Affairs Commissioner Vladimír Špidla.

"This is a long-term strategy to ensure that communities grow so that the company also thrives in the community," says Badshah. "We have programmes across Europe focused on bringing basic skills to all sections of society."

Badshah likes to use the expression "mutually beneficial" to describe Microsoft’s activities. Microsoft and the denizens of Europe are not the only ones to benefit either. Policymakers smile upon Microsoft’s Lisbon-friendly agenda - upping the IT skills of the general population will bring the EU one step closer towards fulfilling its aim of being the world’s leading knowledge economy by 2010.

Appealing to policymakers could perhaps help repair damage done by the European Commission’s attack on the company’s business practices. A 2004 anti-trust ruling forced the company to share server protocols with competitors, imposing a fine of €497 million. In July, the Commission added another €280.5m in fines, accusing Microsoft of dragging its feet in preparing documentation. Competition Commissioner Neelie Kroes recently extended the deadline for Microsoft to provide more documentation in its defence by 20 days to 23 April.

But Badshah denies the link. "Microsoft has been investing in the community since 1983. A lot of our activities have been singular in their approach. The competition issues have been much more recent," he says.

In any case, there is increasing clamour for brands to be more transparent in their CSR activities. "A lot of European companies don’t usually communicate what they do," says Davies. France and Denmark already have more stringent controls in place with requirements for details of CSR activities in financial reports and the UK has encouraged companies to introduce procedural changes that create more transparency. Davies thinks that EU rules are unlikely.

CSR has come to be an indispensable part of brand strategy. In the absence of strict EU rules, companies in sensitive sectors such as pharmaceuticals can expect to be watched closely by the public nonetheless. As Davies points out, what is immaterial to one company may not be for another.

News that big-name brands are engaging in altruistic pursuits is usually greeted with a degree of knowing cynicism by members of the public. Nevertheless, corporate social responsibility (CSR), or the act of undertaking projects that are in the interests of the wider community, looks set to become even bigger business.

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