Tracking Corporate Disaster Relief from the Head to the Heart
Wednesday, 2nd October 2013 at 10:20 am
Globally, there is now a near-universal demand for corporate aid in the aftermath of natural disasters. Nadia Boyce looks at the hyper sensitive issues around the emotions and motives of corporate giving.
Reactive CSR in response to natural disaster brings up complex questions, as high pressure responses to human tragedy create a unique set of circumstances far removed from the ordinary parameters within which CSR initiatives operate.
The past decade has seen numerous destructive events that have formed a basis for study of corporate response, including the 2011 Tohoku Tsunami and earthquake in Japan, and the 2004 Indian Ocean tsunami which claimed the lives of around a quarter of a million people.
Australia itself has not been immune – the Black Saturday Bushfires in 2009 and the Queensland Floods of 2011 devastated communities and put a spotlight on what the business sector could offer in response.
Released this month by public relations and marketing agency Cone Communications, the Disaster Relief Trend Tracker presents the findings of a global study around consumer expectations and disaster relief as a CSR activity.
The research, conducted among a demographically representative sample of 10,287 adults in 10 countries, including the United States, Canada, Brazil, the United Kingdom, Germany, France, Russia, China, India and Japan, suggests 87 per cent of the world’s consumers believe companies must play a role in disaster response.
It also alludes to positive brand messaging for those companies partaking in disaster response, and suggested consumers had great faith in companies to respond – it was believed by consumers they could do so more effectively than government agencies and that they should leverage their ‘unique assets’ to assist.
Yet, the role of the media and publicity, the significance of company motives and the relative importance of reactive disaster responses are issues that remain unclear.
Head versus heart
The tumult and fragility that characterises the aftermath of a disaster creates an environment that corporations must navigate where issues of appropriateness and sensitivity are paramount. Motives may become a contentious issue.
The nature of community tragedy, where all members of society may be mobilised to assist, raises the question of whether consumer opinions should even be considered by companies in deciding to leverage assistance.
Dr Mario Fernando is an Associate Professor at the University of Wollongong who interviewed formal and informal donors, civil society leaders, business leaders and victims of the Asian tsunami in Sri Lanka as part of his research into the corporate response following the disaster.
He analysed the genuineness of tsunami related corporate social responsibility (CSR) activities of two leading Sri Lankan private sector organisations.
Dr Fernando is unequivocal in his assessment of his subjects’ motives around tsunami response.
“It was not the place and there was no chance for them to put on their corporate hat. It was a spontaneous reaction, they never thought from a corporate angle,” he says.
“Even with those executives I could see an emotional response 11 months after.”
Fernando says corporate natural disaster response differ to action following "bad episodes" where business may be culpable, such as the Bhopal chemical leak or the Bangladesh factory collapse earlier this year.
“Natural disasters show quite a contrast to how organisations react to ‘bad episodes’. It’s quite different. I don’t think you get the same authenticity because with ‘bad episodes’ it is more about guarding the company’s reputation.”
With the Cone study suggesting that 87 per cent of the world’s consumers believing companies must play a role in disaster response, and nine in 10 looking more favourably upon brands following their disaster responses, the pressure on companies to act is clear.
As part of his research, Fernando used a theoretical model of organisational virtuousness, which defines a company that has pure altruistic motives for CSR activity.
He says that even those corporations virtuous in motive will inevitably be judged for their disaster response.
“People can still label them as having an ulterior motive. It is extremely easy to twist that story,” he says. “A company has no escape, that kind of argument can always be brought forward.”
Jim McGowan AM is an Adjunct Professor at the School of Government and International Relations at Griffith University. He was Director-General of the Queensland Department of Community Safety following on from his role as Director-General of Emergency Services. He was also the overseer of emergency services operations during the Queensland floods of 2011.
McGowan acknowledges that expectations around corporate response are present in Australia and that they are generally being met.
“There is a need for the largest and wealthiest corporations to be seen to be giving.
“My experience is that with the bigger corporates, that’s all forthcoming. They generally want to be there and don’t have expectations that it will contribute to branding strategy,” he says.
“It would be a bit crass for corporates to go out and use their assistance as leverage for marketing efforts. Their motivation ought to be to help people affected by these events through no fault of their own without over thinking how it will affect them from a brand point of view.”
In the aftermath of the Queensland Floods, national newspapers published a list of the ASX200 with each company’s announced philanthropic contributions to recovery.
It is hard for corporations to reconcile publicity with purity of intent, particularly when media coverage spotlights corporate giving, Fernando says.
Responding to the tsunami, one organisation in his research initially decided not to use CSR response initiatives for enhancing the corporate image.
However, in the absence of any publicity around their CSR initiatives, their stakeholders had wanted to know the company’s contribution to the relief effort and pressure for disclosure increased as some stakeholders channeled their own resources through the company to direct them to affected areas.
Corporate image became important as stakeholders were expecting the organisation to be seen and wanted to see the right thing being done.
The organisation ultimately had to use an awareness campaign being careful not exploit the human tragedy while ensuring that the company image was not negatively impacted by not being seen to be doing something.
Fernando says some approaches should be avoided to appear non-exploitative.
“There are some companies unashamed to say they want a return from CSR, and align their CSR programs with profit making strategies. For them it is part and parcel of profit making," he says.
Many will say they have to have a cost justification for CSR initiatives, he adds.
“I’m not sure whether that kind of language should be given to CSR initiatives in natural disasters,” he says.
In for the Long Haul
One way emerging for companies to show genuine commitment is through follow-up beyond immediate recovery.
Yet while the figures from Cone Communications suggest that a majority of consumers want companies to play a long-term role in relief efforts, Fernando’s research flags possible changes in attitude to disaster response as time passes.
Fernando says that rational decision-making seems to have little significance during the first 48 hours after a natural disaster. In that initial phase, decision-making from the heart proves more significant.
However, with increasing pressure from stakeholders, the research showed that "heart" decisions were later balanced by rational decisions.
The need to spontaneously react to the outpouring of emotion in the aftermath of the 2004 Tsunami overshadowed the need to make the strategic business decisions, but in the long run, driven by market forces and ingratiation, it was possible that organisations would shift back to business-driven behaviours.
Beyond Reactive Action
While the Cone Communications study focused solely on reactive responses to disaster, corporate involvement in disaster relief is not one dimensional.
Jim McGowan says the most significant need in Australia currently is for corporates to move beyond reactive initiatives and become more proactive in disaster planning and policy.
“The focus is on response and recovery not prevention and mitigation. Insurance companies, for example, haven’t played a role in advocating for government policy,” he says.
Following the Queensland floods, a business roundtable of 10 CEOs was established to help align support from corporate Australia with recovery efforts.
McGowan says it was a landmark event in terms of corporate involvement.
“It’s the first time I’ve ever seen any contribution from the corporate sector to policy debate," he says.
“It’s the first contribution more broadly. Most act as good citizens during disaster events but it is reactive, not influencing policy agenda.
“There are examples from bigger companies, donating food gifts and free flights, but it’s not contributing effectively to the broader debate."
McGowan said corporations were in a unique position where they could make a difference.
“They should be contributing much more to the debate around policy – they have the capacity to influence it,” he says.
The Cone Communications research showed that the majority of consumers (69 per cent) thinks corporations are better able to respond to disasters than government agencies, but McGowan makes a key distinction.
“Governments are required to deal with much broader consequences of disaster, while corporates have a much narrower focus,” he says.
The way in which corporates channel that focus may be what proves crucial.
While the study showed 89 per cent of global citizens think companies should leverage their ‘unique assets’ to lend support to affected communities, McGowan says caution should be exercised.
“There can be unforeseen consequences of giving," he says.
“Corporates might donate things that are also supplied by small businesses locally, and that takes away demand. Cash and services are better to give. What you don’t want is donating goods that are otherwise part of community businesses.”
A telecommunications company might donate mobile phones, but then the man in the local Post Office who sells them has no sale, he says.
The Human Side of Disaster
Fernando and McGowan’s responses suggest that making any assumptions about the motives, contributions and roles of corporates in disaster response is a flawed approach.
The challenging and traumatic circumstances post-disaster make this form of CSR a unique one, driven at times by raw compassion rather than business strategy.
McGowan alludes to post-disaster community sentiment being focused less on judgement and more on pragmatism.
“I think people are generally appreciative of the help,” he says. “I don’t think they know or care about whether that help comes from corporates, government or individuals.”
Fernando, meanwhile, says he is in no doubt about what the tsunami brought out in the corporate leaders he interviewed. Ultimately, they were people like everybody else.
He speaks of the responses he received up to eleven months after the disaster.
“The main thing I saw? That passion and hunger to help another human being.”
Read more about the Cone Communications Disaster Relief Trend Tracker here.