CSR Strategy

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Corporate Social Responsibility
To promote voluntary measures as an effective way to address tobacco control and create an illusion
of being a ‘changed’ company and to establish partnerships with health interests.

WHO Definitions of Tobacco Industry Tactics for resisting effective tobacco control, 2009.''


Corporate Social Responsibility (CSR) refers to activity whereby controversial companies attempt to win back social respectability by changing their image. Often though, this is mainly a public relations exercise, without any real changes in policy.

CSR has been pioneered over the last two decades by the oil, chemical and tobacco industries. For example, oil companies have been presenting themselves as environmentally friendly and transparent, leading to an accusation of "greenwashing", which is defined in the dictionary as "disinformation disseminated by an organisation so as to prevent an environmentally responsible image". [1]

By the late 1990s, after suffering significant defeat in the courts costing them billions as a result of the Master Settlement Agreement, the tobacco industry also started introducing CSR policies to enhance its reputation. Since then, CSR has been used strategically to try and prevent effective government regulation to reduce tobacco consumption. Tobacco companies have attempted to avoid legislative regulation by offering voluntary forms of corporate governance instead. PR Companies such as KPMG, have an important role in advising and developing CSR strategies.


WHO: CSR of the Tobacco Industry is an Inherent Contradiction

CSR is an increasingly important tool for companies trying to improve their image. However, there is no widely agreed framework for CSR which specifies minimum standards of social performance - even though public institutions such as the European Commission have tried.[2] This creates an opportunity for any kind of company to present itself as socially responsible, and therefore, it has allowed tobacco companies to develop CSR programmes even though tobacco use is the world's leading cause of preventable death. Tobacco-related deaths are projected to rise to 8.3 million people in 2030 (from 5.4 million in 2005) as the activities of multinational tobacco companies spread the smoking epidemic to developing countries.[3]

Since tobacco companies are not permitted to advertise or promote their products by law, engaging in ‘corporate social responsibility’ activities offers an alternative route to reach various audiences. However, such activities may be a violation to The World Health Organisation’s Framework Convention on Tobacco Control (to which the UK is a signatory). The Guidelines to article 5.3 of the Convention are quite specific on this point, and state the following:

26. The tobacco industry conducts activities described as socially responsible to distance its image from the lethal nature of the product it produces and sells or to interfere with the setting and implementation of public health policies. Activities that are described as “socially responsible” by the tobacco industry, aiming at the promotion of tobacco consumption, is a marketing as well as a public relations strategy that falls within the Convention’s definition of advertising, promotion and sponsorship.
27. The corporate social responsibility of the tobacco industry is, according to WHO, an inherent contradiction, as industry’s core functions are in conflict with the goals of public health policies with respect to tobacco control.

And under Recommendations it says:

6.1 Parties should ensure that all branches of government and the public are informed and made aware of the true purpose and scope of activities described as socially responsible performed by the tobacco industry.
6.2 Parties should not endorse, support, form partnerships with or participate in activities of the tobacco industry described as socially responsible.
6.3 Parties should not allow public disclosure by the tobacco industry or any other person acting on its behalf of activities described as socially responsible or of the expenditures made for these activities, except when legally required to report on such expenditures, such as in an annual report.[4]

Stakeholder Engagement and Dialogue

On the advice of external public relations consultants, the use of dialogue between a company and its major stakeholders has become a key public relations(PR) strategy. The argument is fairly simple: if the workings of business could be seen as open and transparent, then such businesses would not be suspected of having anything to hide. In the late 1990s, Philip Morris and then British American Tobacco (BAT) initiated a series of stakeholder engagement meetings as part of a concerted campaign to rebrand themselves as responsible tobacco companies. [5] [6] [7]

A few years later, BAT launched a website called BATresponsibility.eu to highlight BAT's first EU Social Reporting cycle. It was a result of stakeholder consultation sessions facilitated by Pavel Telička, the former EU Commissioner responsible for Health and Consumer Protection issues between September 2006 and January 2007. BAT has periodically undertaken further dialogue sessions, most recently in 2010 (In 2013 the site has ceased to exist). The last one was organised by auditing firm Bureau Veritas and facilitator Acona - the slogan: "CSR is all about managing risk and opportunity" [8]

Engaging in a dialogue with stakeholders and opposition can be a double-edged sword. Previously secret documents from the tobacco archives illustrate how the tobacco industry was advised to use dialogue to break the "confrontational postures" of special interest groups. In 2000, John Sharkey, who had worked in the tobacco industry for 20 years including for BAT, Philip Morris and Japan Tobacco International (JTI), advised his industry colleagues that the tobacco industry "must be seen to be listening, must be seen to be trying to fix things, and above all must engage in continuous dialogue. Continuous dialogue makes outright opposition much less easy or, at least, seem much less sensible and more political".[9]

Divide and Rule

Sometimes, the desire for openness and dialogue is a PR strategy which is intended to co-opt the opposition, or split it with a deliberate 'divide and rule strategy'. The TobaccoTactics page on Project Sunrise, for instance, shows that in 1996 Philip Morris developed a plan to "drive a wedge between anti-groups." Having studied 600 internal industry documents about the project, researchers concluded that Philip Morris' intention was "explicitly to divide and conquer the tobacco control movement by forming relationships with what it considered 'moderate' tobacco control individuals and organisations." The tobacco industry deliberately tried to position itself as the rational voice in the smoking debate. Researchers argue that "Philip Morris sought to strip some tobacco control advocates - those who rejected its offer of partnership - of public credibility by characterising them as extremists".

Partnerships and Good Corporate Citizenship

Through partnerships with other organisations, tobacco companies try to enhance their reputation as a good corporate citizen, involved in governance. Some of those partnerships have a direct link to a company's policy on CSR. BAT for instance subscribes to the Institute of Business Ethics, a charity encouraging high standards of business behaviour based on ethical values. The Institute helped the company with developing policies on governance and transparency, and with the publishing of BAT's Social Report.

With other partnership projects, the benefits for the tobacco industry are more indirect. Imperial Tobacco, for instance, is one of the founders of a campaign set up to encourage individuals, companies and local groups to clean up after themselves. McDonald's and Wrigley (fast food and chewing gum) are the other two companies involved in Love Where You Live. The fact that this campaign was set up by three major waste and litter producers could be construed as "greenwashing". The campaign is coordinated by Keep Britain Tidy, an environmental campaign group with over 50 years experience, while the Department for Environment, Food and Rural Affairs is the fifth partner. The page CSR: Imperial and Love Where You Live explains that the involvement of the government, effectively helping to position Imperial as ’a concerned corporate citizen’ could very well constitute a violation of the WHO’s Framework Convention on Tobacco Control.

Philantrophy and Sponsorship

Another way for companies to generate a feeling of responsibility and caring around their brand is to give money to worthy causes. As part of its Public Relations and Corporate Social Responsibility (CSR) programmes, the tobacco industry has long been philanthropic to various causes.

For example, one undated internal Philip Morris document records that the company was concentrating on supporting projects in three areas: the arts, higher education, and hunger and nutrition. It noted that "since 1958, Philip Morris has been among the strongest corporate supporters of the arts". [10] In the late nineties, the company announced a $100 million donation to fight hunger. [11]

Current Giving

On its website, Philip Morris argues that "More than 40 years ago, long before corporate social responsibility became a catchphrase, our predecessors at Philip Morris Companies were granting money to causes they held dear." On its website it identifies five areas of "giving that we focus on: hunger and extreme poverty, education, rural living conditions, domestic violence, and disaster relief ... Today, PMI provides over $30 million annually to support charitable causes around the world. In 2011 we supported 274 charitable projects across 58 countries. In total more than 3.5 million people were impacted globally by PMI charitable giving. [12]

BAT now says on its website that "We recognise the role of business as a corporate citizen and our companies have long supported local community and charitable projects. We approach corporate social investment (CSI) as an end in itself, rather than as a way to promote ourselves, and our companies have always been closely identified with the communities where they operate ... Our global CSI expenditure in 2011 was £13.6 million." [13]

In its Annual Report, Imperial Tobacco says "We have revised our approach to community investment to better focus on supporting countries of need and those which are most important in terms of tobacco supply and our business presence. We allocated around £3 million to partnership investment.." [14] Meanwhile, Japan Tobacco International says on its website that "JTI realizes its goal of corporate philanthropy through more than 120 partnerships around the world". [15]

Good Governance

Recent research by the Tobacco Control Research Group at the University of Bath has shown that British American Tobacco and Philip Morris are using a wide range of CSR tactics to:

  • broker access to public officials
  • influence policy preparation
  • break up opposing political coalitions
  • rebuild the company's reputation for instance:
- as a provider of reliable information
- as a platform of voluntary regulation[3]


Relevant TobaccoTactics Resources

Cessation Support as CSR Strategy

A quite cynical example of good corporate citizenship (and of Hiring Independent Experts), is that of Philip Morris funding a centre for smoking cessation research at Duke University in the US. In return, the staff of the centre is on the board of PM's QuitAssist initiative.

Reputation Enhancement

In May 2011, Durham University was criticised for accepting a £125,000 donation from British American Tobacco (BAT) towards the Chancellor's Scholarships for Afghan Women appeal. The appeal assists women to come to Durham from Kabul University to study their postgraduate degrees for five years.



Notes

  1. Concise English Dictionary, Definition of "Greenwash", 10th Edition, 1999
  2. See for instance: Commission of the European Communities, Promoting a European framework for Corporate Social Responsibility, Green Paper, Brussels, 18 July 2001, accessed April 2012, and same author, Implementing the Partnership for Growth and Jobs: Making Europe a Pole of Excellence on Corporate Social Responsibility, March 2006, accessed April 2012
  3. 3.0 3.1 Gary Fooks, The limits of corporate social responsibility: Techniques of neutralisation, stakeholder management and political CSR, Journal of Business Ethics, in press - April 2012
  4. World Health Organisation, Guidelines for implementation of Article 5.3 of the WHO Framework Convention on Tobacco Control: on the protection of public health policies with respect to tobacco control from commercial and other vested interests of the tobacco industry, point 3, 2008, accessed April 2012
  5. KPMG, BAT, The Project - The Way Forward, 15 November 1999, 15 November 1999
  6. BAT, Draft Role Profile, Stakeholder Planning & Development Manager, September 1999
  7. Philip Morris, Philip Morris calls for constructive dialogue - "It's time to talk", 13 October 1999
  8. BAT, Stakeholder Dialogue 2010, Accessed August 2011 - the website went off line late 2012; Acona, What we do, accessed October 2012
  9. John Sharkey, Tobacco Industry's Response to the New Social and Legal Environment, 26 August 2000
  10. Philip Morris Companies, Corporate Philanthropy Summary, Undated
  11. James B . Hyatt, Corporate Giving - Philip Morris launches $100M anti-hunger drive, Philanthropy Journal Online, 10 March, 1996
  12. Philip Morris, Our Charitable Giving Program, Website
  13. BAT, [1], Website, accessed May 2011
  14. Imperial Tobacco, 2011 Annual Report
  15. JTI, Corporate Philanthropy, Website, Accessed May 2012