CSR management, Profile

Few British companies could excite the degree of press interest that Marks & Spencer has faced over the past couple of years. Criticised for underperforming, being out of touch, closing overseas branches, moving its sourcing abroad, it has undergone an extraordinarily public cross-examination. With the allimportant Christmas trading period in full swing as Briefing goes to press, there are cautious grounds for optimism: the share price has doubled since its low-point, and UK retail sales and operating profit were up for the first time in two years, when the last trading statement was published in October.

Surviving lean times

There are few better tests of how deep a company's CSR goes than how it deals with difficult times. Was the community budget axed? No. "There were some skirmishes", says Ed Williams, head of CSR, "but the budget was not cut. It's part of the bloodstream of the business".

There are some other convincing arguments for the truth of this statement. In the 1930s, Simon Marks, son of one of the company's founders, was describing what we now call the 'stakeholder company', having been struck during a trip to the US by "a general sense of the moral basis on which modern business should be conducted, so that all participants - management, employees and public - could benefit." The idea of shared benefit is a key one for Marks & Spencer, which has long been praised for its excellent working conditions and generous community contributions. It continues to blaze a trail through CSR milestones, notably:

• It is the first retailer to start to install an environmental management system into its stores;
• Information on its website is exemplary, covering issues like GM, organic foods and materials, antibiotics in food production, chemicals, food miles, sourcing, what happens to unsold food;
• It is leveraging its customer base - one percent of UK domestic energy is used to wash Marks & Spencer clothes, so the company calculates that its recent move to drop the temperature at which many of its clothes need to be washed could save 0.25% of the UK's domestic energy usage.

Children's Promise It was Marks & Spencer that galvanised the high-profile Children's Promise Millennium campaign. Six thousand companies joined up, giving a total of thirteen million employees, customers and the public the opportunity to give the last hour of their 1999 earnings to seven children's charities, raising £21 million. The campaign was a major impetus for payroll giving in Britain, and influenced the Chancellor's 2000 budget.

Behind Children's Promise was Ed Williams, who was working on the company's Millennium Programme, after a career in HR. The idea for Children's Promise grew out of focus groups with Marks & Spencer employees, customers and suppliers about how they wanted Marks & Spencer to mark the Millennium. It was developed with the New Millennium Experience Company, following the Board's decision to take the company into a major sponsorship of the Millenium Experience. CSR practitioners take heart: MORI research last year found clear evidence that Children's Promise brought significant value to the Marks & Spencer brand. And Ed argues that despite tough times, M&S has maintained respect from customers and onlookers because of the values it stands for - particularly trust. He believes the company will maintain its CSR leadership role by putting these values into practice.

Getting the tone right

A point worth noting here is Marks & Spencer's track record of mobilising other companies during the Children's Promise campaign. Ed thinks this was achieved because Marks & Spencer chose a deliberately discreet level of branding in the campaign's promotion. Companies wanting to communicate more about their CSR could learn from this. Marks & Spencer presents its values in a rather modest way. It gets the tone right. A good example is the company's advertisement in the FT/BITC supplement on CSR, published on December 4. It promotes the efforts of Marks & Spencer employees as volunteers in their own time, outside the company. It provides a platform for their achievements, without claiming credit for them.

Future goals

Communicating more - and with a similar degree of sensitivity - about the company's approach to CSR is one of Ed's key goals for the future. Another goal is embedding CSR even more fully into the business - both managing the CSR implications for core business functions, and involving employees at all levels in community programmes. The company also seeks a very good understanding of the needs of its different stakeholders, so as to strike the optimum balance between societal interests and benefits to the business.

On this theme of partnership and mutual benefit, Marks & Spencer has just announced its sponsorship of the new Sieff Award, which recognises an individual or organisation, based in the community, that best collaborates with the corporate sector for the benefit of society. It is the newest of BITC's Awards for Excellence, due to be presented next July.

The shift in the company's approach to CSR mirrors its business shift to meet the demands of the 21st century. From responding to 13,000 charity requests for funding a year, the company is moving to fewer, more strategic partnerships, offering mutual benefit. Marks & Spencer has picked three themes, plus employee involvement, to focus its community strategies in future (see box above). The themes matter as much to the business as to its host societies. Here are two examples of the new approach:

Business Action on Homelessness:

over the summer, M&S successfully trialled a two-week work placement for homeless people with BITC. Unusually, eight people started the trial,and eight finished it. Key success factors were:

• directors' championing of the programme;
• quality of briefing for the on-site mentors;
• use of product - clothes, fares and lunches for participants.

The programme will now be rolled out around the UK, aiming for 200 placements in 2002, and up to 600 the year after.

Are You What You Eat?

is a new, free educational resource pack for schools, produced by Marks & Spencer and focusing on food, healthy eating, diet and exercise - a good blend of the two themes of health and education. A particular issue is the need for a balanced, healthy lifestyle. The pack includes information and activity cards and teachers' notes, and has been written with help from schoolteachers. It targets 11-14 year olds, and the company hopes for a take-up to match the impressive 42% gained by its Portrait of the Nation teachers' resource pack, which accompanied a touring photographic portrait of Britain, commissioned by Marks & Spencer to mark the millennium. The teachers' pack includes a survey on lifestyle and diet, the results of which will be shared with the Department of Health and posted on the Marks & Spencer website. The programme is part of Science Year, a major government initiative to promote science to young people.

Employee Volunteering

Marks & Spencer held its second round of Employee Volunteer Awards on October 18. These recognise diverse aspects of employees' volunteering, with awards of up to £1,000 for winning volunteers' charities. The company also matches employees' fundraising up to a maximum of £10,000 in each  financial year, and organises staff secondments to charities, called 'development assignments', which are evaluated against training goals before and after placement. The company helped found CARES, BITC's latest volunteering initiative, and plans a big boost to its involvement with this programme next year, focusing on the three themes above. 

Management

Ed's role covers Marks & Spencer's impact on society and the environment, including trading, sourcing and employment standards. He is responsible for ensuring that appropriate policies and standards are in place, and for monitoring, auditing and reporting the company's performance against them. He reports to the communications director, Cheri Lofland. He is secretary to, and a member of the CSR Committee, one of four plc board-level committees. This used to be the Community Involvement Committee. It took on its wider CSR role two years ago, and reports to the full plc's board once a year.

Ed has a team of nine people, all based at the corporate headquarters in Baker Street, and works with a broader, 'virtual team' of managers around the company with CSR issues on their agenda. These include representatives from diverse business functions - health and safety, HR, ethical trading and supply chain, technologists, environment, company secretariat, as well as community involvement. Ed has recently created a Marks & Spencer CSR Forum to bring these diverse managers together once a quarter and share learning within the UK.

The company is aiming to apply the same policies and standards among its UK and overseas suppliers as within its owned and operated businesses. It is also developing social investments in overseas markets. Literacy classes for textile workers during the working day in Morocco are one of the latest examples. Morocco has a huge illiteracy rate, but the programme has a business case too - helping to improve quality standards and productivity.

Future

Marks & Spencer will produce its first CSR report in May 2003, with an interim report in November 2002. At least one major cause-related marketing initiative will be unrolled next year, as will a new community initiative to mark the Queen's Jubilee. Marks & Spencer's guiding principles are:

• Business alignment - moving CCI and CSR even more into the core of the company, and securing employee involvement at every level;
• Further developing Marks & Spencer's role as a company that builds sustainable partnerships to benefit all the partners involved;
• Rigorous stakeholder dialogue and sensitive communication.

Current plans, then, are a natural development on what has gone before, with the company's core values underpinning them. Can we argue that CSR is valuable to a company even when times are hard? Customers' trust matters, and Marks & Spencer believes that its reputation as a company with strong values helped keep customers loyal during a difficult time. Its decision to hold its community budget steady, at one percent of pre-tax profits, was a commendable move, and a notable demonstration that this company's CSR is a genuine outworking of its values, and not a short-term response to carrots and sticks from government, NGOs and even consumers. This deserves more recognition, and it should stand the company's future CSR, and we hope, performance, in good stead in the long-term. Philippa Foster Back at The Institute of Business Ethics says more on this earlier in this issue. Let's hope Marks & Spencer's customers prove the point.

Corporate Citizenship Briefing, issue no: 61 - December, 2001