AC Nielson study shows Indonesians demand CSR

atrick Guntensperger, Contributor The Jakarta Post, Jakarta

While most corporations are now devoting human and financial resources to the practice of Corporate Social Responsibility (CSR), there remains a prevailing belief in some myths that surround the entire realm of socially responsible behavior.

At the top of the list of CSR myths are: that CSR is a luxury add-on that corporations can indulge in only when they are highly successful and when controlling costs is no longer a first-level priority; and that CSR is of minor, if any, significance to consumers in Indonesia and in other developing nations.

However, a recent study by AC Nielsen might just drive a stake through the heart of those two pernicious fables.

The study was carried out in March and April of this year, the results of which were provided to Oxford index, a UK-based international CSR consultancy doing work in Indonesia, and consisted of questions to Indonesians in five major cities across the archipelago.

While the average Indonesian might be unfamiliar with the term CSR, the survey suggests that the principles of social responsibility are of real concern to Indonesians.

Although the term CSR was only recognized by 29 percent of the respondents, deeper investigation revealed that the vast majority, 81 percent, nevertheless believe that social responsibility on the part of corporations is important.

Even more significantly, an overwhelming 84 percent of potential customers would support a corporation they recognized as socially responsible.

These figures indicate that CSR is far from being an unnecessary frill. It is clearly something for which there exists a demand in Indonesia. Or, as they say in the world of advertising, "The market has spoken."

When over 80 percent of consumers make their wishes clear, it is time for businesses to start listening.

AC Nielsen's executive director and head of the company's social research division, Catherine Eddy, said, "There is a whole range of inferences that can be drawn from such a strong positive response."

Farquhar Stirling, managing director of AC Nielsen in Southeast Asia, said, "We now have real evidence that social responsibility provides companies with a distinct advantage in the marketplace."

That competitive edge would, in economic terms, offset many of the short-term costs that a manufacturer might incur in the process of switching to more sustainable methods and products.

We might also conclude that corporations that were recognized as meeting Socially Responsible Investment (SRI) criteria would enjoy an edge in the stock market among investors looking for ethical investment vehicles.

A company with a high CSR profile and credibility would attract individuals with an interest in SRI. It would also be more likely to meet the criteria of institutional ethical investment funds -- a highly lucrative, rapidly growing and much sought-after market segment.

Most market analysts will agree that consumers and investors who demand SRI criteria have a common trait. They refer to them as "picky but sticky". That is to say, they are discriminating in their selection of purchases and investments, but once they have committed, they have intense loyalty.

This would lead us to conclude that the smart money is on those corporations that get in the green game early. They will pick up the first wave of customer loyalty and will be likely to retain those purchasers.

The data also lead us to conclude that the market clearly needs a consistent, comprehensive and credible system of assessing and recognizing corporations and products that meet the public's demand for social responsibility.

The author advises Oxford index on corporate communications and can be reached at pguntensperger@yahoo.ca