CSR and its communication at Nestlé Australia

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Crisis response 
 
Hence various kind of crises often have the effect of 
catalyzing CSR responses. These crises can be economic, 
social, environmental, health-related, or industrial. For 
example, Newell (2005) notes that the economic crisis in 
Argentina 2001-2002 marked a significant turning point in 
CSR, prompting debates about the role of business in poverty 
alleviation. Others see climate change (Hoffman, 2005) and 
HIV/AIDS (Dunfee, 2006) as crises that are galvanizing CSR. 
Catastrophic events with immediate impact are often more 
likely to elicit CSR responses, especially of the philanthropic 
kind (Crane et al, 2008). The corporate response to the Asian 
tsunami is a classic case in point (Fernando, 2007). However, 
industrial accidents may also create pressure for CSR. 
Examples include Union Carbide’s response to the 1984 
Bhopal disaster in India (Shrivastava, 1995, cited in Crane et 
al, 2008) and Shell’s response to the hanging of human rights 
activist Ken Saro-Wiva in Nigeria in 1995 (Wheeler et al, 
2002, cited in Crane et al, 2008). 
The 2008 global financial crisis (GFC) is another “good” 
example. The GFC has in fact raised the question of whether 
supporting CSR initiatives is a good issue in financially 
troubled times. If organizations are purely profit maximizing 
units, it would be expected that they would not engage in CSR
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projects in times of financial crisis: both organizations and 
each party in the society would rather try to avoid the effect of 
crisis by remedial actions; such as cutting costs by laying off 
workers, postponing investments, reducing budgets for the 
following year in a contraction manner, consuming less.  
However, CSR is demanded in times of financial crisis (Air 
Human Right, 2008, cited in Karaibrahimolu, 2010). In such 
circumstances thus it is a big mistake for organizations to 
reduce their CSR projects.  At the core of a financial crisis is a 
collapse of trust in the capital markets. Lack of accountability, 
proper regulatory controls and transparency all play a role in 
this. According to Barber (2008, cited in Ole śków-Sz łapka & 
Sobi ś, 2009) the recent crisis revealed to the capitalists 
that social responsibility is necessary. The corporations 
know that the way of acting in the past is responsible 
for the disasters threatening their consumers. He also 
claimed that recent recession on the market as each 
crisis is firstly a deep caution for modern civilization 
and also a great chance to come-back of balance 
between social and economic capital.  
Young and Thyil (2011, in press) conducted an 
interesting survey which highlight the changes in focus 
in governance and CSR, their driver and key features 
pre and post GFC and how Australian corporations have 
reacted to them. The data were collected longitudinally
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in two rounds: in 2007 and again in 2009 (pre and post 
crisis) from institutional investors, corporate 
governance executives, and fund managers.   
The 2009 data emphasize the importance of individual 
behaviours, greed, self-dealing, conflict of interest, and lack of 
honesty in senior positions as causes of the GFC. Boards 
acting in their own interests – as agents not of shareholders but 
of themselves. “A reliance on agency theory and its 
propositions around internal structures, the use of options to 
align interests, and market controls have all been found to be 
inadequate in the current financial crisis. But the data also 
points out that there is a solution. Among the variables 
examined, the ethical behaviour of the board appears to have 
the strongest impact in pre-empting a crisis. By setting a 
culture of ethics, and ensuring a top-down percolation of that 
culture, it is possible to have a self-managed, self-regulated 
system which can act as a ‘system of barriers’ for individual 
wrong-doing” (Young & Thyil, 2011, in press).  
The financial crisis, as all the other kinds of crisis, thus 
provides an opportunity to move towards better systems and 
responsible investment, where there is an incentive for a long-
term vision rather than short term gains. It should cause 
qualitative change in CSR practice in firms and bind 
CSR closer with a strategy. In such circumstances, in order 
to cope with the financial and economic downturn,
54
organizations need to focus on providing society’s needs; 
therefore, transparent CSR projects could provide the social 
support needed by organizations and society to overcome the 
down turn.  
CSR can help generate revenue through new markets, 
market share and products; lower operating costs 
through resource efficiency; improving corporate image; 
assist to recruit and retain the best staff; and reduce 
exposure to market volatility (Ole śków-Sz łapka & Sobi ś, 
2009). It will cause a greatest business visibility 
through an increase of reporting and communication 
among firms. The crisis itself thus creates a filter on CSR, 
highlighting only those companies with good corporate 
governance and effective CSR. 
 
NGOs and media pressure 
 
Non-governamental Organizations (NGOs), such Amnesty 
International, Greenpeace and Human Rights Watch, are 
increasingly influential in corporate reputation management 
and CSR. 
NGO “watchdog” or advocacy groups often serve as 
consultants to governments and global organizations and have 
increasing influence in setting global agendas on individual 
issues. Companies must be increasingly alert and responsive to
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NGOs’ agendas, especially in the areas of human rights, 
labour issues, the environment, and business practices. 
According to Edelman Public Relations Trust Barometer, 
NGOs are rated among the most trusted global institutions 
(Edelman Trust Barometer, 2009). 
In many countries, media are increasingly turning to NGOs for 
their opinions on global issues and they are held as highly 
credible sources. In India, for example, CocaCola bottling 
plants require large amounts of water in a region where water 
can be scarce (www.cokefacts.org). The company is highly 
proactive in working with NGOs, local government, and the 
communities in which it operates to address environmental 
and resource issues. Partnering with local entities, Coke has 
established rainwater harvesting initiatives and shares its water 
management expertise with local communities to enhance 
local water collection. In April 2003, CocaCola India was 
honoured by the government of Delhi in the State Government 
Bhagidari (partnership) program for its rainwater harvesting 
initiatives (Stecklov, 2005). Despite these initiatives, NGOs 
had a direct impact on the company’s local operations. In 
March 2004, local officials shut down a Coca-Cola bottling 
pant in southern India over unsubstantiated claims by local 
residents and activists that it drained local water supplies. 
Beyond their increasing visibility and credibility in the global 
arena, Internet technology has enabled activist groups with
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limited financing to take their message to a global audience. A 
one-man NGO used a laptop computer, a Web site, and a 
telephone calling card to build global alliances against 
CocaCola’s environmental practices in India (Stecklov, 2005). 
For its part, CocaCola used its Web-based fact sheet to 
publicize its proactive work with the local community, 
counteracting the anti-company message.  
Corporate communication professionals must be vigilant in 
monitoring NGO agendas through the media and on the Web 
and must seek common ground effectively to address their 
concerns. As CocaCola did, communication professionals 
need to use their company Web sites as important proactive 
tools to advance their policies and agendas and to counteract 
misinformation. 
 
Societal Contribution 
 
On a rounded view, social responsibility, like effective 
corporate governance, can be seen as part and parcel of the 
way a company’s affairs are conducted. It is not an “add-on”, 
something to be addressed incidentally to the core of the 
business in order to satisfy particular third party concerns. 
Those in charge of a company’s affairs should have an interest 
in managing external impacts of the business in relation to the 
environment, human rights and other matters that may impinge
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on the success of the business. To go further and expect a 
company to place greater emphasis on a particular issue that 
some groups may consider important for the community 
overall, but that is not germane to the company’s business, 
may only distract attention from its business purpose for no 
real gain. On this rounded approach, a company will be seen to 
be socially responsible if it operates in an open and 
accountable manner, uses its resources for productive ends, 
complies with relevant regulatory requirements and 
acknowledges and takes responsibility for the consequences of 
its actions. For some companies, this will require them to 
engage with particular social and environmental issues. 
The current interest in issues relating to the social 
responsibility of corporations reflects in part the success of the 
corporation as a vehicle for productive enterprise and the 
visibility of corporate business activities. The degree of 
responsibility displayed by particular companies in the course 
of their business affairs is understandably a matter of public 
interest. The success of the corporate entity as a vehicle for 
harnessing capital and human, physical and intellectual 
resources to productive ends has resulted in the corporation 
becoming the predominant form of private sector business 
organization and one that is frequently adopted for non-profit 
and state-owned bodies as well. The corporate structure has: 
“permitted people to raise capital from the public, to invest it
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without, in most cases, a danger of personal risk and to engage 
in entrepreneurial activity which, otherwise, would probably 
not occur” (Kirby, 1998, cited in Corporations and Markets 
Advisory Committee, 2006). 
Companies large and small are involved in providing all 
manner of goods, services and related activities locally and 
sometimes globally. The prominent role of companies in the 
provision of goods and services, and the perceived reach of 
corporate activities and influence, have also given rise to 
concerns about the impact of corporate conduct on broader 
community interests (including, for example, through 
environmental effects) and the transparency and accountability 
of the way in which companies conduct their affairs. 
Questions have been raised about whether corporations have a 
responsibility to society going beyond their role as participants 
in the economic system. There may be underlying concerns 
too about divergence between the social responsibility of 
individuals acting on their own account and the collective 
responsibility of individuals acting in a corporate or other 
organization environment. 
Current interest in these matters within Australia and 
elsewhere is reflected in the efforts of companies themselves 
to explain better their own practices and contributions to 
society, in calls by community groups and others for improved 
practices, more information or more regulation, in the growth
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of self-styled ethical investment funds and in legislative 
measures to regulate ever more aspects of corporate behavior 
(Corporations and Markets Advisory Committee, 2006).