Are Luxury and Corporate Social Responsibility Compatible?

This week saw one very pertinent question being raised by several writers across the web: is it possible for luxury brands to project corporate social responsibility when the product they sell is associated with power, glamour and consumerism?

The discussion was spawned by the release of a new McKinsey survey that found that most executives think CSR adds to shareholder value in the long-term. Fair enough.

But do consumers actually buy it? According a report in Non Profit Quarterly, many people are quite skeptical of CSR programs implemented by for-profit companies.

The statement was based on the views by Carlos Torelli, a marketing professor from the University of Minnesota who singled out luxury brands as an example of how tricky putting across CSR messages can be for some companies. This is so, he said, because of the conflict between the corporation's "self-aggrandizing ethos and its selfless CSR message."

The same article asked its readers how they would feel about the CSR efforts of 10 most powerful luxury brands in the world, which in 2009 were Louis Vitton, Hermes, Gucci, Channel, Rolex, Hennessy, Cartier, Moët & Chandon, Fendi and Prada. Some reader comments echoed the general gist of the article that social responsibility initiatives by luxury brands do not ring authentic.

"As someone who works in CSR and Corporate Governance, I have found that many luxury brands say they are committed to CSR, but do not practically implement solutions that truly reflect the ethos of CSR", said one reader.

"It seems to me that this is a very small, and somewhat exclusive population so that the bulk of their CSR efforts are unknown to the majority of people in the US. I believe they probably are sincere, however, I am skeptical that the reach of their CSR policies and practices actually provides any kind of meaningful substance to solving social problems", added another reader.

Elsewhere, The New York Times' Steve Lohr wrote that corporate social responsibility efforts have always struck him as "the modern equivalent of John D. Rockefeller handing out dimes to the common folk. They may be well-intentioned, but they often seem like small gestures at the margins of what companies are really trying to do: make money."

But he described a new model called shared value, which he said builds on the triple bottom line concept (people, planet, profit) but "emphasizes profit-making not just as a possibility but as a priority."

Shared value is, according to Michael E. Porter, a Harvard Business School professor,  "a more sophisticated form of capitalism". In this type of capitalism, addressing social issues is part and parcel of the search for profits.

Porter's and his colleague Mark R. Kramer's theory is that social problems are market opportunities and capitalism has a place in solving them. The shared value concept is not a moral stance, they argue, but it's about "galvanizing companies to exploit the market in addressing social problems."

Finally, sustainability website Triple Pundit also reported on the survey and added an interesting comparison between Anjelina Jolie and Paris Hilton to illustrate how CSR can work - or not.

To put it shortly: Anjelina's humanitarian efforts ring true due to her persistent work and about-face in terms of image, having evolved from a sexy, risqué type of woman to a serious campaigner.

On the other hand, when Paris says she wants to carry out philanthropic work no one believes her because her actions tell a different story.

The lesson: for corporate social responsibility efforts to be taken seriously, they need to be consistent and deliver real value.

Image credit: CSRWestAfrica