Are companies using CSR to hide unsavory business activities?

No longer limited to philanthropists and those generous — and slightly eccentric — CEOs, Corporate Social Responsibility (CSR) has become somewhat of a PR exercise for corporations, as consumers and investors alike become more conscious of where they put their money. Japan has been practicing CSR since the 1970s, but the term has generally been either a demonstration of sustainability of a major corporation, or a convenient means of damage control after an accident or scandal. These professional window dressers and green-washers have perfected the art of making proverbial lemonade, but consumers are becoming increasingly aware of just how much mileage well-known companies are getting out of their CSR.

Advertising heavyweight Dentsu knows a thing or two about PR. On their website, Dentsu details their CSR commitments, including meeting International Standards for Business, Government and Society (ISO), protecting human rights (a broad umbrella) and participating in community involvement, as well as a commitment towards their employees “work-life balance,” a hot key-phrase in the Japanese media. The company asserts that a healthy balance between a “satisfying professional life and a rich and rewarding private life” breeds employees that help Dentsu add value to their service.

A reasonable proposition, but what may sound like typical corporate banter translates into a much harsher reality at Dentsu. The company is infamous for having extremely high rates of "karoshi," a Japanese word for death by overwork, as well as suicides.

Employees are often known as “Dentsu-man” because of the harsh working conditions they put up with and the hefty overtime pay it’s often thought they receive. Incidents had occurred on and off for years, and the company built a reputation for itself as slave drivers. The suicide of one employee in the mid-1990s garnered significant attention when the family of the victim sued the company for damages, a case that was carried all the way to the Supreme Court.

A labor union investigation found that 42.9% of male and 58.7% of female employees were under-reporting the number of overtime hours worked. Repeated overnight stays at the company were not uncommon, and the company had made no efforts to curb these problems. Court proceedings found the health facilities at Dentsu to be insufficient, but there were no detailed reports of changes that were made subsequently. Mistreatment of employees continued.

The turning point was in 2005, when a freelance television director working on a project, planned in part by Dentsu, returned to his home one night and collapsed, later dying due to brain hemorrhaging. The man’s parents sued the three companies responsible for the project, winning damages totaling 100 million yen. An investigation found that the director had not been given appropriate time for rest or sleep during the course of the project, and the death was labeled as "karoshi."

To address, or perhaps camouflage accusations of employee mistreatment, Dentsu has been pushing employee health and “work-life balance” programs since 2006. This includes encouraging staff to take yearly paid vacations and creating a summer holiday period. Japan’s top advertising agency reminds its employees to keep things in check with posters of clay animation-like characters in the shape of a W (work) and an L (life), posted throughout their offices. But it’s clear that the company’s fraternity-like corporate culture still remains, masked transparently behind slogans such as “increasing the value of our human resources” and “satisfying work leads to a satisfying life.”

Toyota prides itself as heading the pack of ecologically conscious companies, garnering a reputation internationally for its “zero emissions” goal and aggressive sustainability practices. But as much as the company touts slogans of green responsibility, some of their best efforts have been attacked by the environmentally conscious for being misleading faux-eco propaganda.

In May this year, Toyota launched their “Eco-gae” advertising campaign, pushing consumers to trade-in their current vehicles for the company’s (slightly) more fuel-efficient new line-up, using the almost childish logic that fuel efficiency equals less gas used, which in turn means less CO2s generated, equaling a car that is good for the environment. The commercial features a woman exchanging an incandescent light bulb for a compact fluorescent lamp, and a man holding a steering wheel claiming he did the same with his car. The commercial chirps cheerfully, “There was nothing wrong with my car, but I exchanged it for one that’s more energy efficient!” Unfortunately for Toyota, this backfired.

Internet message boards lit up with complaints. Eiji Kosaka, a politician in Tokyo, proclaimed publicly on his blog, “Toyota is playing consumers for fools.” One video on YouTube overlaid videos of the commercials with direct inquiries made to the company doubting the campaign’s message and then the company’s insufficient reply. “We made this commercial with the goal of informing long-time owners of the same vehicle that changing to a newer vehicle will use less gasoline, therefore reducing CO2 emissions,” said Toyota.

The company has since changed its website to include information that “about 55-80% of the CO2s released by a vehicle come from the actual operation,” while only about a quarter is produced during the actual manufacturing process. This does not, however, change the fact that a new car has, by default, a significant carbon deficit while used cars, even those of minimal fuel efficiency, have either already paid or are closer to paying off their debts.

Making one Toyota Prius hybrid car, according to sustainability engineer Pablo Päster, consumes 113 million British Thermal Units (BTUs—a unit of energy used to measure fuels). That makes Toyota’s new plan to produce up to 480,000 Prius units this year a huge carbon creator. This is a significant jump from their 2007 numbers of about 279,000 units, and still only slightly higher than the number of their popular SUV RAV4s produced last year.

In 2007 Toyota rolled out plans for the 2008 model of another popular SUV, the Highlander. According to the press release, "The 2008 Highlander is significantly larger, roomier and more powerful than the vehicle it replaces. Yet its fuel efficiency will be virtually unchanged." And it’s no secret that gas guzzlers are amongst Toyota’s most profitable products; the company’s “Toyota in the World Databook 2008” lists three SUVs in their top five models produced during 2007.

Regardless, Toyota manages to maintain its image as head eco-honcho through PR focusing on sustainability and social contribution. Well-publicized conservation and ISO compliance activities make Toyota seem a model of social responsibility, far from above “green-guilting” consumers into pushing up sales figures.

“They must think we’re idiots,” commented one poster on a popular Internet message board after learning of the automaker’s misleading campaign. While on the surface CSR remains an exercise in good PR for businesses around the world, as the playing field changes and social responsibility becomes incorporated into corporate strategy, it may also be the newest — and most difficult to discern — method of taking advantage of consumers. Toyota and Dentsu may have lost a few rounds, but in the long run they may have learned some valuable lessons in how to play the philanthropist card.

© Japan Inc