A new kind of benevolence

A harried new mother reaches for a packet of nappies in Belgium and in Bangladesh a baby is vaccinated against tetanus; in San Francisco, a teenage boy swigs a bottle of fizzy drink and an Ethiopian chickpea farmer becomes a little bit richer.

Consumer-facing multinationals, having banged the drum on corporate and social sustainability, are also turning their attention to a more tangible social issue: the world’s poor.

An increasing number of initiatives have been designed to spark the interest of consumers, who have become increasingly apathetic and cynical about environmental claims, while keeping other stakeholders – particularly investors and employees – on side. A recent global study by Nielsen found that US consumers recorded one of the steepest declines in concern about global warming: less than half of Americans polled fret about climate change and only 58 per cent of Britons do.

Thus, at last month’s Clinton Global Initiative – former US president Bill Clinton’s annual philanthropic summit, which attracts business executives, celebrities and heads of non-profit organisations – a slew of heart-warming deals were launched, ranging from efforts to restore sight to the blind to coaching young adults and eradicating disease.

Meanwhile, Procter & Gamble, the world’s biggest consumer goods company, has put the heft of its $9bn Pampers nappies brand behind a campaign, conducted with Unicef, to help protect 100m women and babies from tetanus. For each pack of nappies sold, Procter & Gamble will donate one tetanus vaccine.

“Baby care consumers want a clear idea of the benefits,” says Matthew Price, an executive at Procter & Gamble who heads the Pampers-Unicef initiative. “This is an emotional story.”

Emotional, but not purely altruistic. P&G says it recoups the 7 cents per vaccine it donates through increased sales because of the vaccine campaign marketing.

Similar initiatives by companies in other sectors tick different commercial boxes: food and drink companies’ support of smallholders helps ensure security of supply; drugmakers Eli Lilly and Dow Chemical both have pledges to help educate the next generation of scientists.

Derek Yach, senior vice-president for global health policy at PepsiCo, is clear that the US beverage and snack group’s project helping chickpea farmers in Ethiopia improve productivity fits firmly into the bigger corporate picture. The company, which has already established its agronomist credentials through potato farming in China and sunflower oil farming in Mexico, literally reaps what it sows: potatoes and oil in crisps, chickpeas in hummus and smoothies.

“As a company, we felt we needed to start diversifying our supply chain, first in terms of where we source for our global business and look to where we could boost [production] without changing the environment,” he explains.

The company also aims to lift communities out of poverty and turn subsistence farmers into entrepreneurs through the provision of superior seeds, training in modern farming methods and irrigation.

Similar projects are being carried out across the globe by other companies. Nestlé, the world’s biggest food and drink company by sales, deals with more than 500m farmers who supply it with everything from crops to milk. SABMiller, which derives 80 per cent of sales from emerging markets, has 28,000 smallholders, 19,000 of which are in Africa, from whom it buys grains.

Both organisations are providing farmers with training and specialist knowledge on how to improve crop yields which, in turn, helps the companies improve the quality of their products.

Today’s corporate benefactors thus clearly have an eye on their own commercial concerns, as well as wider society. But this was not always the case.

“Traditionally, these were done from a purely philanthropic perspective and in a somewhat haphazard way,” says Karina Litvack, head of governance and sustainable investment at UK-based F&C Investments.

But an increasing number of companies, she says, are now carrying out extensive research and engaging in activities directly linked to their business. Ms Litvack cites as examples mining companies offering treatments for HIV to employees and staff.

It is also a strategic decision that reflects a growing focus on fast- growing emerging markets. Companies hope that building loyalty and a reputation now will pay dividends when incomes rise and consumers in a country turn from recipients of aid to buyers of goods.

It may be some time before Bangladeshi mothers are bulk-buying Pampers, but in Ethiopia – where gross domestic product, according to the Economist Intelligence Unit, is expected to grow 7.75 per cent in 2011-2012 – consumers are a ready market for processed chickpeas.

Indeed, says Mr Yach, in a country where the Ethiopian Orthodox Church prohibits the eating of certain meats and dairy products for up to 200 days a year, the market for alternative proteins is particularly attractive.

However, doing good is not always easy. A report by Saïd Business School’s Linda Scott, Mary Johnstone-Louis and Catherine Dolan on the Pampers initiative lays bare an intricate administration and bickering over minutiae.

Even after P&G acceded to a last-minute 40 per cent increase in the cost of the vaccine, there were further problems getting it to recipients, who were often in remote places and un­able to fund the long trek for a free jab.

The use of celebrities by P&G caused another spat. P&G uses stars, such as actress Salma Hayek, to advertise its products, and liked taking them – along with top-ranking staff and press – to watch the vaccines being administered. According to the report, the celebrity focus “was unseemly, perhaps too commercial for Unicef . . . [whose field offices] sometimes grumbled that these press junkets were an unwelcome distraction”.

Success also brought its own pitfalls. According to the report, gung-ho Procter & Gamble employees wanted to roll the campaign out to other products in the portfolio, where the link with babies was rather more tenuous, such as Ariel washing powder and Duracell batteries.

Yet, despite such pitfalls, “everyone has benefited,” says Ms Scott. Procter & Gamble sold more nappies, gaining share even in mature markets and Unicef also built its brand. Tim Hunter, Unicef’s international fundraising director, says: “This is a great way of engaging with an audience, which Unicef would not be able to do itself because we don’t have the big ad agencies.”