Sharing your ethical credentials
Editorial

Sharing your ethical credentials

We look at two companies and explore the routes they have taken towards establishing and broadcasting their ethical credentials

As marketers, you’ve audited the supply chain, written an ethical charter and made your data flows compliant with GDPR. Now, how do you communicate your achievements to customers without seeming to be jumping on the bandwagon? The Co-operative Group and engineering giant Siemens have solved this problem successfully in different ways.

The Co-operative Group

Ethical values and principles have deep roots within The Co-operative Group and have been an important part of the organisation’s business and campaigning ethos since the retailer’s beginnings in the cooperative movement of the mid-1840s. However, a turbulent period for the group during 2013-14 led to huge losses, a tarnished reputation, and a major re-structuring and rebuilding of the business.

Under new leadership, the Co-op refocused the organisation by building on the inherent consumer trust that existed for the brand and the ethical reputation it had enjoyed before the crisis. The rebuilding phase focused on differentiating the food business through measures such as an increasing the amount of Fairtrade products and ethically sourced UK produce.

It encouraged customers to sign up to its membership scheme, which promised rewards for spending, and pledged that some of this spend would be directed to local community projects. This resonated with the long-standing ethos of the organisation, as did its sustainability agenda – both of which were consistent with the Co-op’s traditional brand purpose.

Paul Gerrard is policy and campaigns director at the Co-op. He says: “For the Co-op, improving society has always been more than CSR. Since 1844, the Co-op has a rich heritage of campaigning on social and environmental issues that matter to our members. 

“My role is, after our recent troubles, to re-establish the Co-op as a contemporary, relevant, campaigning organisation that fulfils its purpose of ‘championing a better way of doing business for you and your communities’.”

Aligning all parts of the business to this purpose has been a crucial part of focusing the organisation, both internally with employees and externally in the way it communicates.

A rebranding from ‘The Cooperative Group’ back to the Co-Op’s 1960s-era logo further emphasised past values and its ethical tradition, while trying to build on that authentic ethical cachet with younger customers across all channels – traditional and digital.

That difference was evident in the group’s 2016 Christmas advertising campaign, which was based around its work in community projects, rather than employing the usual supermarket spectaculars. Its campaigning principles have also recently seen it lead the way in the Bright Future campaigns on getting victims of modern slavery into work, plus initiatives on bottle deposits and reducing plastic waste.

Gerrard’s role is to be internal and external champion for campaigns. He says: “The issues we campaign on are thoroughly researched and backed by the Executive and our 70,000 colleagues. They also reflect what matters to our 4.6m members.”

In 2017, for the first time, the organisation published its annual review of ethics and sustainability – the Co-op Way Report 2017 – at the same time as its audited financial results and accounts, further emphasising the importance placed on the business’s ethical credentials and communicating this to customers.

The result of this rebuilding process has been a return to profit in 2017 and a surge in membership of 1.2m since the membership scheme re-launch in September 2016.

Siemens

 

Siemens was founded in 1847, and over its 170-year history, the German company has grown into a global engineering and technology giant. The conglomerate is currently the largest industrial manufacturing company in Europe, with activities covering many sectors.

Today, Siemens prides itself on a corporate culture that emphasises ethical conduct and compliance, integrity, transparency and trust. It achieves this through both internal and external activities and programmes that engage communities and supply chains in which it operates. Yet, in December 2008, following a global bribery and corruption scandal, Siemens faced a record fine of US$800m from US authorities – and a settlement payment of €395m (£354m) in Germany after a long-running regulatory investigation. This inflicted huge damage on its corporate reputation.

Rebuilding that reputation was the top priority for new Siemens CEO Peter Löscher. He implemented rigorous corporate governance structures, introducing a strict regime of new anti-corruption/compliance rules and processes. The company brought in a leading anti-corruption advisor, hired more than 500 compliance officers and established a new compliance unit.

“It was absolutely rigorous for everybody, to make sure we are always a very compliant company,” says Justin Kelly, director of communications and business development Siemens UK and Ireland. “But it’s about much more than compliance and not breaking the law – it’s about being a responsible business.”

Siemens’ response has been commended by independent anti-corruption and ethics experts, including the OECD and US authorities. The company is now recognised as one of the most transparent companies in the world, with a corporate compliance standard acknowledged as one of the best globally.

Kelly believes the Siemens brand claim – ‘Ingenuity for life’ – underpins its responsible business ethos, and cites three main elements to developing an ethical core: leadership; authenticity and culture. Leadership is important, he says, to demonstrate the business’s willingness to tackle some challenging subjects. 

For example, he points to Siemens UK’s focus on mental health issues and the importance of building an open internal culture about this, while also working externally with charity MIND. Promoting diversity and inclusion – for instance, through the establishment of an LGBT network internally and activities externally – is another example of this alignment. “As leaders, we know that we can have a positive impact, but there’s also that ability to try to make a difference externally as well as internally,” Kelly says.

Authenticity is crucial too. “If you’re not authentic as a business and genuinely believe these things, and have an engaged workforce that buys into your ethos, it’s pointless trying to talk about them externally – people will see right through it,” Kelly says. To ‘walk the talk’, it’s essential to share this ethos through the workforce at all levels.

This is reinforced by a strong ownership culture. “The bottom line,” says Kelly, “is to act and behave as this were your own company. Having that really engaged workforce means things we do have real impact.”

In the UK, this responsible ethos is articulated both through internal and external engagement. For example, an innovation network has been established across a number of key UK universities. Siemens UK has also focused heavily on the skills agenda, employing more than 650 apprentices and 100 graduates.

“Sometimes it’s OK to set a target and to say ‘we want to achieve this sometime in the future’, but I think we would rather talk about the proof points of what we’ve done and how we’ve achieved it,” Kelly says. “It’s about doing it rather than talking about it.”

Lessons to take away

The Co-op, then, has weathered recent storms and committed itself anew to the organisation’s original values. In practice, this has involved a membership drive and the demonstration of its commitment to community and social causes in above-the-line advertising.

Meanwhile, Siemens has fought hard to regain its reputation through the establishment of strict anti-corruption and compliance processes. In both cases, marketers have played a key role, not by broadcasting superficial, bolt-on gestures, but by communicating profound organisational evolution, understood by the workforce and backed up by strong corporate values.

Find out more about building a CSR strategy into your B2B business here.

Phil Lattimore
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