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Social Enterprise News

March 21, 2005

Spring Newsletter - Net Impact - Responsible Business, Responsible Reporting

A recent UN study found that media coverage of corporate social responsibility has increased along with the public's interest. However telling the story poses a number of challenges for both companies and the media.

A recent United Nations study focusing on media coverage of corporate social responsibility (CSR) found that as CSR has become more mainstream in business practice, media coverage of it has increased. The report, called “Good News and Bad,” also found that companies and the media are challenged to get the CSR message out. A distinguished panel of three senior financial reporters and one corporate manager discussed these challenges at a breakout session of the 14th annual Net Impact Conference, “Business Leaders Building a Better World.”

The relationship between companies and the media is improving as companies make greater efforts to be socially responsible and candid about the challenges they face and as the media make greater efforts to report on these issues in a balanced way. For example, the Wall Street Journal recently ran a front-page story about Gap’s internal review of its factory and labor conditions, and the Financial Times, which frequently covers CSR, ran a notable story in 2002 about the efforts of banana giant Chiquita. In both cases, the companies were candid about their problems and were able to draw positive attention to their efforts to deal with those issues.

“I think there’s a lesson for companies in communicating about CSR in terms of a warts-and-all approach,” said Gavin Power, senior adviser and head of public affairs at the United Nations Global Compact, who moderated the session, “Media as a Social Watchdog.”

Still, there is tension. Media coverage of CSR is not always positive, or even always accurate — especially in headlines, where editors of newspapers and television networks want to hit hard and grab an audience. “When the Fair Labor Association submitted its report this year, I spent a lot of time with journalists talking about why Nike supported the Fair Labor Association and the fact that it is a transparent mechanism for identifying incidents in our supply chain, cooperating with other brands who happen to be in the same factory and resolving issues,” said Caitlin Morris, senior manager of Nike’s global issues management. “Several times, I got a great story by the reporter and a headline that said, ‘Sweatshop Abuses Identified by Independent Labor Organization at Nike.’ How do I explain to my senior management the value of being transparent and working with the Fair Labor Association if that’s what ends up on their desk Friday morning?”

Many companies continue to distrust the media and remain gun-shy about communicating their CSR initiatives. Abbott Laboratories, for example, has quietly worked to make its AIDS drugs more accessible to countries in Africa. “One of our reporters at the Journal got wind of what they were doing, went to them and said, ‘Why aren’t you telling us?’” said Ronald J. Alsop, news editor and senior writer at the Wall Street Journal. “We ended up doing a story, but they were just so afraid that it would make them out in a negative way that they wouldn’t even approach the media themselves about it.”

“What we have to do in the media is to build trust with the corporations so that they feel more comfortable in telling us these stories,” said Sarah Murray, U.S. editor of the Financial Times. “Because I think that in the end, if they do, they can actually build credibility.”

Businesses recognize that opportunity but are challenged to package their message for the media. In the wake of its sweatshop scandals in 1995, Nike reevaluated its labor standards and considered the meaning of CSR, Morris said. People at the company who were passionate about the environment generated a groundswell of support for environmental reform through the elimination of toxins and waste in Nike’s production process. The company has succeeded in eliminating PVCs from most of its products and has reduced its use of ordinary cotton, which is treated with pesticides.

But these stories are nuanced and complicated, Morris said. Nike can’t advertise its products as PVC-free because it doesn’t want to take on that industry, she explained. And, while Nike is the world’s largest purchaser of organic cotton, its 100 percent organic cotton line is very small. The company makes its biggest environmental contribution through a commitment to a 5 percent blend, but Nike doesn’t advertise that because it’s not a selling point to its client base. “Do 14- to 20-year-old boys care about organic cotton?” Morris asked. “Probably not.” Even if they did, she added, “it’s hard to make a market-sell to people that 5 percent blend is cool.”

“So the only way to really get into the story about the importance of organic cotton is through the media,” she added. “I need the media to tell the stories for me that I can’t tell in an advertisement and that I can’t stick on a hang tag.”

The reporters on the panel agreed that CSR is a positive trend worth covering. Marc Gunther, senior writer for Fortune magazine, said the trend has led to a new business model that is about relationships and partnerships rather than transactions and that is focused on the long term rather than the short. He said companies demand improved conditions in their supply chains because they understand that employees who are treated well work and produce better. Nearly half the Fortune 500 companies offer domestic partner benefits, and many support affirmative action. Companies are taking steps to curb greenhouse gas emissions. And corporate America has become more transparent and less secretive. “I really believe something big is going on here,” he said. “The question is, Why haven’t you read more about it?”

For several reasons, the reporters agreed: Americans are cynical about big business. Nearly 70 percent of the 22,000 people surveyed in this year’s Harris Poll rate corporate America’s reputation as either not good or terrible, noted Alsop, who was involved in the project. So reporters and readers are skeptical of corporate changes. Furthermore, those changes are complicated and incremental and are therefore difficult to report. CSR spokespeople want to talk about process, and the media want to report results. The language and jargon used to talk about CSR get in the way of coverage. And because the terms and concepts are vague and abstract, coverage tends to be driven by specific issues, such as climate change, human rights or corporate irresponsibility.

Good news is hard to tell and even harder to sell. “The plane lands is not a story,” Gunther said. “It is very, very hard to sell good-news stories to editors.” There is also the danger that in focusing on good news, reporters will miss the bad news, Murray said. For example, positive coverage of the IT industry’s efforts to increase Internet access in poor countries and address the digital divide missed problems in the industry’s factory conditions. Reporters ignore press releases about corporate philanthropy if not accompanied by real reform. And, most important, there is little demand for these stories. Financial publications cover issues important to businesspeople and corporate executives, and CSR is not what keeps them up at night or what they think about first thing in the morning, Gunther said.

According to the Harris Interactive survey, the public almost unanimously wants to know more about companies’ good deeds, even if it is divided on how it wants to hear about them. Gunther encouraged students to do something about it. “When you see a story in FT or the Wall Street Journal or Fortune that you like, send an e-mail, send a letter,” Gunther said. “Because if our readers are not responding to our stories, we’re not going to be able to get them in. A little bit of reader response, a little bit of push, can go a long way in getting the stories in that I think we all want to see.”

Nearly 1,400 MBA students, professionals and sponsors attended the 2004 Net Impact Conference, “Business Leaders Building a Better World,” which was organized by the Social Enterprise Program and took place November 11 to 14. The sold-out conference drew participants from 80 business schools, 167 companies and 11 countries. Hosted by a different business school each year, Net Impact’s annual conference is one of the largest and best-known gatherings of socially minded business leaders in the world.

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