June 5, 2008
I’ve always enjoyed eating meat but have been consciously cutting down my intake not because of some ethical notion nor equally through fear of contracting CJD from imported US beef… My reason for reducing my meat intake is partly health based but also loosely based on the environmental argument.
Likewise, I now turn off the water when showering as I put on shampoo or lather. However, I started to do this not because of environmental concerns. The shower room in my new apartment in Korea actually leaked into my living area. So to avoid flooding, I avoid the water running too long. This habit has changed the way I shower everywhere.
Today is “World Environment Day: Kick the Habit! Towards a Low Carbon Economy”. What creates change; what is the incentive? I previously worked with Repak, Ireland’s packaging recycling body, for three years and remember attending a breakfast seminar on social behavioural marketing with my former colleague who I worked with on the account. Our client had informed us that only about 10% of people will ‘do good’ as they see it and recycle without any financial incentive. With Ireland set targets of recycling 50%, our communications strategy quickly evolved into using social behavioural marketing techniques and articulating the personal financial incentives to encourage the general public to recycle more. The focused campaign was successful and Ireland met and exceeded its tough targets a year ahead of schedule.
Germany is an acknowledge leader when it comes to the environment and propogating the movement over the last 20 years. This is because of bottom-up people power. This is less visible in Korea, and in other Asian countries according to my colleagues in Edelman’s Clean Tech practice. I was warmed today to see entire pull-outs in both the Chosun Ilbo and Joongang Ilbo, two of Korea’s biggest newspapers who have also recently taken up environmental campaigns themselves, the Chosun focusing on ways to reduce packaging and sporting a new green logo on its front. Conergy (disclosure: current client) is building Asia Pacific’s biggest solar power plant in SinAn, Korea and POSCO announced yesterday (see and search for POSCO Taps Solar Energy for the article) that it is using its roofs for generating solar power also. This is all down to the feed-in-tariff structures the government has established and there is real momentum appearing to happen within industry, at least.
The next trick, however, is to articulate the incentives to the Korean public in a language or in the terms that are relevant to them. What’s their leaking shower moment!?! That’s how to kick the habit.
May 30, 2008
Interesting article — Does Being Ethical Pay? — in yesterday’s Wall Street Journal on corporate reputation, based on some simple but decent controlled research. It concludes:
“Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods.”
The article also points out what our global CSR lead, Chris Deri, would call an “Irresponsibility Discount.” His view is that the research seems to identify a material discount and negative correlation between irresponsible company conduct and consumer consideration and purchase behaviour. He would also point out that the research, however, doesn’t actually uncover a significant halo effect for products considered ‘ethically sound.’ This seems to imply that responsible conduct has merely become one of the basic expectations for products, like quality, price and consistency.
February 27, 2008
A colleague of mine brought up a very strong point when we were discussing the effect of the inauguration of President Lee on Monday. There’s been a lot of debate as to whether the new president will lead Korea to further bullish growth of the economy (which had been ticking along fairly well under the Roh administration between 4 and 5 percent). In fact, like the way Tiger Woods would swing his way to boosting the US stock market, business confidence is back according to the just posted Korea Times article.
However, the real reason that I’m writing is this: what will be the new administration’s effect on the communications environment in Korea and in particular how that changing environment could effect big multinationals in Korea. My colleague said:
“During President Roh’s administation NGOs were relatively quiet because they felt that Roh was their spokesperson. With Lee in the Blue House, it’s more likely that those same voices will take on a different tone and manner.
“Rather than focusing all efforts on the relationship with an already-supportive Roh administration, it’s the ‘dark voices’ from their perspective that must be engaged. A lot of mulitnational may be viewed and examined with closer scurtiny than they were during Roh’s administration by NGOs. These NGOs need to be engaged in an open and transparent way and multinationals need to work out reciprocal and strategic benefits from this engagement. NGOs and civil groups will play a greater role in our clients’ business during this new administration.”
Good points, well made. In fact, we’ve noticed a decline in trust in NGOs in Korea over recent years through our annual Asia-Pacific Stakeholder Study. When Korean opinion leaders were asked how much they trust a number of institutions, we’ve noted the trust in NGOs and civil groups has fallen by 5 points in 2007 alone from 30% to 25%. Perhaps they’re due a comeback in 2008 and 2009?
November 15, 2007
More on this to come, but please follow the link to learn more about Edelman Korea’s view on CSR in Korea just published today: The Greater Good: CSR and the Strategic Management of Reputation in Korea (English version) or 기업의 사회적 책임과 전략적 명성관리 (Korean version).
The Corporati team would be delighted to hear your thoughts.
August 13, 2007
I met a friend whose working on a global HR program / project for one of the major international chaebols here over the weekend. Like me he’s one of the few ‘foreigners’ who works in or with international Korean companies in Korea. He shared this article with me this morning.
To me, it brings up a constant theme which I have observed since my time in Korea. Korean companies talk alot about “going global” but less time acting like global companies.
How a company treats its employees and manages its employees fairly is one of the biggest factors driving the perception of social responsible companies in Korea and overseas. According to Edelman’s 8th annual Trust Barometer, which studies opinion leaders in markets throughout the world, including Korea, when respondents were asked, “When you think of the major global companies that you trust, which are the most important activities for a socially responsible company to engage in?” the most important factor was the same for all markets. That’s the same in Korea, China, North America or Europe – no difference! Treat your employees fairly and equally, and you increase your reputation as a responsible company.
If a company is perceived as a responsible company, it’ll retain and attract more and better employees. A 2003 survey of 800 MBA students from Stanford University showed that 97% of respondents were willing to forgo financial benefits (accept up to an average of 14% cut in expected income) to work for a company with a better reputation for corporate social responsibility and ethics.
How major Korean companies approach employee relations outside Korea is critical for their reputation and success. Unlike the article, I still believe Korean companies are international companies (not glorified exporters as the article suggests) but just need to factor in more international practice and behaviours to increase their success. My opinion: you’re a global company, act like one.
August 7, 2007
I thought I’d piggy-back Steve’s post on how annual reports are an indispensible communications tool, and should be approached and developed with this lesson in mind.
The same applies for social or sustainability reporting. The GRI has gone as far as saying today that “sustainability reporting is becoming a more utilised tool in maintaining and building brand – often a company’s most valuable asset.” This is on the back of reviewing the world’s top brands and how 43 of the top 100 global brands have issued such a report.
From a communications viewpoint, compiling a sustainability report itself not only offers an opportunity to engage a group of stakeholders during the process but it’s also an opportunity to reach out to a wide range of stakeholders. But if — and it’s a big if — it’s communicated effectively.
Simple things like publishing a smaller/summarised version for ‘less technical’ audiences, and producing a user-friendly and accessible report that it is easy to find on the website are simple steps that any company thinking about producing one must consider. There’s a huge time investment necessary to put together a social report, and businesses should try and get as much value out of them as possible.
I searched one Korean company who produces a GRI accredited report but it can only be accessed through the IR site. This is good for investors, but the company is missing out on a great opportunity to showcase their social responsibility (and build their brand) with a range of stakeholders who would rarely visit the IR site.
Going through the process of developing a social report is something Korean companies are beginning to (and should) turn their attention to. Korean companies have a bit of catching up to do, however. The last time I trawled through the database, of the 2,173 sustainability and environmental reports meeting the GRI standards, only 37 were from Korean companies (two of these were overseas companies based in Korea also). That compared with, for example, 269 from Japan, 230 from the U.S., 138 from Australia, 78 from Germany and 74 from Finland.
July 10, 2007
I’ve touched on the semantic confusion about defining the social responsibile activities of business before. Here’s an informative post from Business Ethics that asks a few solid questions. It makes a great point by linking to this page showing how different pharmaceutical companies are referring to the practice.
I couldn’t find a place to comment on the blog. So: I like the term business ethics. I’d postulate that the recent wave of terminology has resulted from a consciousness of a change in social culture (including democratization of information through the internet, ramification of the globalization movement and so on), and a lot of confusion surrounds how “doing the right” thing differs from country to country (not helpful when that social culture rapidly changes). CSR is nothing new, per se, but it is an expression of this changing social context.
I would like to see agreement on the terminology (it’s a little annoying) but for now we’re going to see a lot of people referring to the same thing differently; however, I think we may lose out on nuances that different organizations are trying to express (I think there’s a danger of this happening internally within an organization where communication of your business ethics is an important factor in the retention of talented employees).
Broadly speaking (and for simplicity’s sake, setting aside for a moment the obvious Milton Friedman viewpoint), in the U.S. CSR traditionally focused on corporate philanthropy – what a company does with its money after it has made it. High profile ethics scandals at Enron, WorldCom and others have driven companies and stakeholders to look hard at issues including corporate governance and executive remuneration. However, the predominant focus is still largely on how a company “gives back” to society.
In Europe, by contrast, the focus has traditionally been more on how a company makes its money in the first place – the processes that are in place to ensure that the core business is managed in a sustainable manner and in line with initiatives such as the U.N. Millennium Development Goals and the principles of the International Labor Organization.
In Korea, the visible face of CSR has typically been very much along the American model, with companies making significant contributions to (and often generating considerable marketing mileage from) corporate philanthropy programs. There is also a tendency to give ‘lip-service’ to CSR visions and not follow through in a substansitive manner.
This debate is changing and, as more people voice opinions, the language gets looser (I’m guilty of this myself, no doubt). In 2006, there were 3.5 million blog posts on CSR… I’m glad there is a debate, as without I wouldn’t be learning.