Blog: Dean BestWill economic clouds rain on CSR spending?

Dean Best | 9 July 2008

With the outlook for business looking bleak, questions are rightly being asked about the continued commitment among companies towards sustainability.

Last month, at the CIES World Food Business Summit in Munich, food executives gave little away over whether the gloomy economic climate was testing that commitment.

There is, however, the not unreasonable argument that the recent investment in CSR initiatives, including those on sustainability, has come during bumper years economically.

And as the economic storm-clouds gather, the argument goes, some companies, particularly those publicly-listed and facing daily pressures to protect the share price, may take their foot of the gas on sustainability and invest a little less on issues like the environment and ethical consumerism.

However, at a conference in London yesterday (8 July), the likes of confectionery giant Cadbury, sugar processor Tate & Lyle and UK retailer The Co-operative Group were keen to demonstrate their commitment remains.

For the Co-op, which has invested heavily in building its ethical business and expanding its range of ethical products, its commitment to issues like carbon emissions, free-range eggs and Fairtrade has gone hand-in-hand with rising consumer demand for such products.

While some companies have done little on such issues or, at best, have merely dipped their toes in the water, the likes of the Co-op and Tate & Lyle, which in February said it would switch its retail sugar to Fairtrade, have shown what some of the more household names in the food industry can do on sustainability – and what they can do to encourage consumers to think more about such issues.

But, just how strong is consumer demand for such products? Will consumers, often faced with having to pay a price premium for organic or Fairtrade, decide instead to purchase standard products as concern over the economy mounts?

The Co-op thinks not but it remains to be seen just what effects the economic downturn will have on both consumer spending – and on corporate commitment to CSR.


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