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Corporate Social Ir-responsibility, smoke and mirrors

Published: April-29-11

Juan Villamayor posted a blog entry on April 28 about the CSR of companies responsible for bad products;  products that kill people (munitions manufacturers and cigarette companies among others).  One company stands out in my mind for practices equally repugnant to the tobacco industry even though the products it manufacturers, when used according to manufacturer's instructions, do no harm.  Although I suppose that, too, is debatable.

As the manufacturer of Breast-milk substitutes (a.k.a. Infant formula) the company's profit-at-all-costs motive has had a lasting impact on me and anyone I know in the business of international health and development over the past 30 years.  To this day I cannot eat chocolate or any of the other confectionery items made by the company.  Nor would I drink any of its bottled water.  I actually go out of my way to ensure I do not support this company in any way and that my friends follow suit.  This is how adversely affected I have been by the company's tactics even though as an individual I have not suffered personally.

What is it then that converts the product on the shelf from being relatively innocuous to being an egregious villain?  A company's marketing policies, practices and associated tactics can be as lethal as those employed by any in the tobacco industry.    

Marketing Infant Formula in Limited Resource Settings

In 1981, UNICEF and the WHO introduced the International Code of Marketing of Breast-milk Substitutes in response to this company's subversive marketing tactics, which included among others the provision of free supplies of breast-milk substitutes to hospitals.   The company continued to violate the voluntary Code for decades after it was introduced regardless of the shaming that occurred.  Each time an allegation was made, the company would deny any involvement yet continue to provide poorly funded hospitals in developing countries with infant formula and additional funding for their operations, provided the Hospital agree to put a can of formula in the hands of every Mother leaving the hospital with babe in arms; practices which are in direct violation of the 'Code'.  Anyone who has breastfed a baby knows that the first weeks of a child's life are the most critical period for establishing a ready supply of breast-milk.  Without regular and frequent infant suckling, Mom's breast-milk supply quickly dries up.  With breastfeeding interrupted by a supply of formula provided by the hospital, a natural source of breast-milk is not available to the baby when the formula runs out.

This means buying the formula in the open market. 

When You're Vulnerable

In any economy, canned baby formula is expensive, but in developing countries the relative cost is unaffordable for most.  Because of the expense, families dilute the formula attempting to make it last longer.  If I was poor, and I was led to believe that what I was doing was in the best interests of my baby, I wouldn't behave any differently.  As a consequence, the baby is deprived of essential nutrients at a critical period in life and fails to thrive as a result, beginning a rapid decline in overall well-being, with increased vulnerability to infection.    

Not only do babies on the breast-milk substitute not thrive when the formula is diluted, they are further compromised by exposure to contaminated drinking water used to mix and dilute the formula.  Do you know that over 884 million people in the developing world are without an adequate supply of safe potable drinking water

A Deadly Combination

The combination of insufficient product and contaminated water has proven deadly for hundreds of thousands of babies throughout the developing world over the past 30 years.

So, you can imagine my reaction at seeing John Elkington of CSR and sustainability fame announced as a member of the company's Creating Shared Value Advisory Board earlier this year.  Then when Ann Veneman, UNICEF Executive Director 2005-2010, claimed a seat on the company's 14 member Board at its recent meeting of shareholders April 14, 2011, I was equally surprised.  Ms. Veneman acknowledged as she took her position that the company is still not fully compliant with the 'Code'. 

Are these dangerous liaisons?  Or, is there a kernel of value by association?  Such associations are unlikely to change my perception of the Company, but what do they do for you?

Dangerous products, unethical marketing; what's to prevent the corporate social responsibility designation from going up in smoke?

photo credit: mothersofchange.com


Write a comment about this article
Comments
Ruth Ann Barrett
Posted: 27/05/2011 9:26:00 PM
Do you have video on Youtube as would like to add your voice to earthsayers.tv, voices of sustainability. CSR with its focus on reputation management, at best what it has become, is primarily (1) reporting of reports; (2) doing good without connection to being good; and (3) ultimately, as Seth Godin recently point out, "No organization cares about you. Organizations aren't capable of this." His point? If you are a caring person and not among caring people, move on. When CSR is combined with sustainability initiatives it gets some power. Companies like Cisco understand this, and while not perfect, at least they are no longer old school CSR. Amen.
Cathie Guthrie
Posted: 02/05/2011 12:30:00 PM
Well said, Molly.

Thanks for adding to the conversation!
Molly White
Posted: 02/05/2011 9:51:00 AM
When Carol Cone states that cause marketing is dead, this kind of backlash against what many perceive to be matketing and communications whitewash is one of the reasons why. Sophisticated CSR, with credible stakeholder engagement, thoughtful corporate policies that are actually embraced and implemented and long term commitment are the only reputable or impactful option for corporations today.
Cathie Guthrie
Posted: 30/04/2011 8:05:00 AM
Hi Stacy,
Thanks for introducing me to Glycosyn. I hadn’t heard of the product before, but I am quite confident in there being a place for any product that enhances the nutritional status of the world’s children.

I certainly do not want to question the science behind any of the breast-milk substitute products in the market place. My beef is with corporate decisions driving marketing tactics that fly in the face of evidence-based codes of conduct such as the International Code of Marketing of Breast-milk Substitutes, assembled by authoritative bodies to curb adverse consequences such as those I describe in my post. Sensitivity to the realities of the developing country market place requires more corporate integrity than has been illustrated over the past 30 years.

I agree that the appointments of Ann Veneman and John Elkington present an important opportunity to influence change with shareholders and the office of the CEO.
Let’s hope worst fears of their appointments being used as endorsements of poor practice are unjustified and can be quickly allayed.

Always grateful to have your feedback, Stacy.
Stacy
Posted: 29/04/2011 8:12:00 PM
I think you raise a lot of really great points. I don't have an answer on what the best way to address them is. However, I do know that there are companies that are actively seeking out ways to fix the issue of lack of nutritious milk (both natural and formula) available in developing countries. My father-in-law happens to be the CSO of one. (http://www.glycosyninc.com/) And these companies have the potential and want to partner with major corporations to help them turn things around. Also, sometimes the best way to influence change is from within. Maybe Ms. Veneman is hoping she'll be able to have a positive influence on the company as a result of taking the position.
Jayaraman Rajah Iyer
Posted: 29/04/2011 8:11:00 PM
Hi Cathie

It is an apt analogy that needs to be used against many a corporate.
Cathie Guthrie
Posted: 29/04/2011 10:45:00 AM
Hi Jaya,

Thanks for placing some excellent points on the table. I hadn't considered the 'CSR Warrior' identity until now, but hey, you know what they say about the shoe: "if it fits, wear it". I might just try this one on for size.

Drop by any time!


Jayaraman Rajah Iyer
Posted: 29/04/2011 10:27:00 AM
Followed you from Juan's Controversial sectors to find another warrior for the society. I find CSR professionals alone can take the battle, without going up in smoke, bringing sense to the big business connecting to the society by conveying a blunt message - sustainability of values alone can enable them to come out of the abyss they are in.

The 2nd tier business units with CSR function lead by CEO-cum-owners are responsible for CSR & Sustainability catchphrases being brought to the forefront. Big business and Governments are alike - incremental cost of each idea overwhelms the benefits.

I find GRI a stumbling block of UNGC that is restricted to a few companies. None of the 558 companies KPMG-EIU survey mentioned about GRI. UNGC has to reach to million companies that include Banking, Investment cos.,in financial sector that have ruined the world economy. CSR is an absolute must for banking that is a long way to go.

CSR professionals are the only set of managers who could pull the unwilling and uncooperative Corporate from where they are today, not marketing, finance, HR, technical people.

From what I have observed you seem to be the most outspoken in CSR and would welcome your Sustainability Leadership in CSR by bringing this function as a powerful knit unit.


-


Write a comment about this article
Comments
Ruth Ann Barrett
Posted: 27/05/2011 9:26:00 PM
Do you have video on Youtube as would like to add your voice to earthsayers.tv, voices of sustainability. CSR with its focus on reputation management, at best what it has become, is primarily (1) reporting of reports; (2) doing good without connection to being good; and (3) ultimately, as Seth Godin recently point out, "No organization cares about you. Organizations aren't capable of this." His point? If you are a caring person and not among caring people, move on. When CSR is combined with sustainability initiatives it gets some power. Companies like Cisco understand this, and while not perfect, at least they are no longer old school CSR. Amen.
Cathie Guthrie
Posted: 02/05/2011 12:30:00 PM
Well said, Molly.

Thanks for adding to the conversation!
Molly White
Posted: 02/05/2011 9:51:00 AM
When Carol Cone states that cause marketing is dead, this kind of backlash against what many perceive to be matketing and communications whitewash is one of the reasons why. Sophisticated CSR, with credible stakeholder engagement, thoughtful corporate policies that are actually embraced and implemented and long term commitment are the only reputable or impactful option for corporations today.
Cathie Guthrie
Posted: 30/04/2011 8:05:00 AM
Hi Stacy,
Thanks for introducing me to Glycosyn. I hadn’t heard of the product before, but I am quite confident in there being a place for any product that enhances the nutritional status of the world’s children.

I certainly do not want to question the science behind any of the breast-milk substitute products in the market place. My beef is with corporate decisions driving marketing tactics that fly in the face of evidence-based codes of conduct such as the International Code of Marketing of Breast-milk Substitutes, assembled by authoritative bodies to curb adverse consequences such as those I describe in my post. Sensitivity to the realities of the developing country market place requires more corporate integrity than has been illustrated over the past 30 years.

I agree that the appointments of Ann Veneman and John Elkington present an important opportunity to influence change with shareholders and the office of the CEO.
Let’s hope worst fears of their appointments being used as endorsements of poor practice are unjustified and can be quickly allayed.

Always grateful to have your feedback, Stacy.
Stacy
Posted: 29/04/2011 8:12:00 PM
I think you raise a lot of really great points. I don't have an answer on what the best way to address them is. However, I do know that there are companies that are actively seeking out ways to fix the issue of lack of nutritious milk (both natural and formula) available in developing countries. My father-in-law happens to be the CSO of one. (http://www.glycosyninc.com/) And these companies have the potential and want to partner with major corporations to help them turn things around. Also, sometimes the best way to influence change is from within. Maybe Ms. Veneman is hoping she'll be able to have a positive influence on the company as a result of taking the position.
Jayaraman Rajah Iyer
Posted: 29/04/2011 8:11:00 PM
Hi Cathie

It is an apt analogy that needs to be used against many a corporate.
Cathie Guthrie
Posted: 29/04/2011 10:45:00 AM
Hi Jaya,

Thanks for placing some excellent points on the table. I hadn't considered the 'CSR Warrior' identity until now, but hey, you know what they say about the shoe: "if it fits, wear it". I might just try this one on for size.

Drop by any time!


Jayaraman Rajah Iyer
Posted: 29/04/2011 10:27:00 AM
Followed you from Juan's Controversial sectors to find another warrior for the society. I find CSR professionals alone can take the battle, without going up in smoke, bringing sense to the big business connecting to the society by conveying a blunt message - sustainability of values alone can enable them to come out of the abyss they are in.

The 2nd tier business units with CSR function lead by CEO-cum-owners are responsible for CSR & Sustainability catchphrases being brought to the forefront. Big business and Governments are alike - incremental cost of each idea overwhelms the benefits.

I find GRI a stumbling block of UNGC that is restricted to a few companies. None of the 558 companies KPMG-EIU survey mentioned about GRI. UNGC has to reach to million companies that include Banking, Investment cos.,in financial sector that have ruined the world economy. CSR is an absolute must for banking that is a long way to go.

CSR professionals are the only set of managers who could pull the unwilling and uncooperative Corporate from where they are today, not marketing, finance, HR, technical people.

From what I have observed you seem to be the most outspoken in CSR and would welcome your Sustainability Leadership in CSR by bringing this function as a powerful knit unit.