Graeme Newell

what is corporate social responsibility? don’t ask vw

What is corporate social responsibility? We have talked about balance and sustainability before. Those are essential elements of any corporate social responsibility program, but many companies find they have to go much further. They must be so transparent and honest with the public that there is never even a hint of scandal. Leaders know their brands cannot afford negative publicity. Of course, sometimes even the biggest companies take a fall. When these companies are already in the public eye, failure and perceived dishonesty are a recipe for massive scandal.

VW found this out the hard way in 2015. An EPA investigation discovered a software code in VW’s diesel engines designed to cheat emissions tests. The program could tell when the engine was being tested, and it generated a false performance report for better results. This came in the middle of the company’s largely successful push to sell diesel cars to U.S. drivers.
After the news went public, VW admitted to putting the cheat code in about 11 million cars sold internationally. Since each engine produced pollutants of up to 40 times the maximum limit, this was an environmental offense of massive proportions. The faked results were in place to hide how bad the emissions problems really were.

VW has always tried to make customers feel they are part of a club-the proud, stalwart, loyal VW owners. But no amount of emotional marketing could fix this problem. Customers returned their cars in large numbers. Making matters worse, VW never made an effort to make amends for their deception. A quick look at VW’s Youtube channel shows not a single video addressing the problem.

Another company that found itself in a scandal is the Odwalla juice company. In 1996, drinkers of the juice became sick after Odwalla used blemished fruit in a batch of apple juice. The fruit had E. coli in it, and one young girl died after falling ill. In response, Odwalla did what VW was unable or unwilling to do. The company took full responsibility, changed its manufacturing process, and kept the public informed of the changes.

So, what is corporate social responsibility? For Odwalla, it meant stepping up and changing the culture. For VW, it appears to be a halfhearted attempt at damage control. The clear lesson here is that honesty and integrity will beat past performance every time.”

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Check out Graeme's latest book called "Red Goldfish"

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