Strategic CSR: Beyond Goodwill, Crafting a Competitive Edge

Corporate leaders generally understand that corporate social responsibility (CSR) activities can improve their company’s public image. But do those activities make sense from a financial perspective? If executives who wish to make their organisations better corporate citizens undertake costly initiatives that their rivals don’t embrace, they risk eroding their competitive position.

But surely shareholder value and social responsibility are not entirely incompatible?

Of course not. But all strategic bets require the CEO to make the case for them.

Ann Mukherjee, the chairwoman and CEO of Pernod Ricard North America, provides a masterclass on how to do this.

Make It Personal

Pernod Ricard is the largest operation in the world's second-biggest producer of wine and spirits. Mukherjee has been open about the impact of alcohol abuse on her life, including being a survivor of sexual and domestic abuse and losing her mother to a drunk driver.

She has made alcohol responsibility a personal mission and focuses only on issues related to her and her company's purpose of conviviality. By prioritising issues related to their shared purpose, Mukherjee encourages her team to be mindful of how their efforts contribute to the company's success.

"We only go after those issues that drive value, our company values, and our purpose of conviviality," Mukherjee told Time. She describes taking on topics of the moment for publicity as a misguided attempt to mislead customers that will ultimately backfire.

Choose Your Partners Wisely

For Mukherjee, it's not just about saying you'll do something—consumers of trusted brands expect companies to follow through on their commitments. One of the most effective ways to do that is by working with a partner.

By partnering with the US Administration to lead the 2020 shift to use distilling facilities to create hand sanitisers, Pernod Ricard demonstrated its commitment to social responsibility. Even small-scale projects with the right partner can have a significant impact.

When Pernod Ricard launched a pilot project to train restaurants and bars to help customers who drink too much, it invested in its reputation as a supplier that shares responsibility for any problems experienced by its partners.

Use Your Hypervisibility

As a C-Suite woman of colour, Mukherjee knows the risks of hypervisibility, where errors are more readily observed and judged more harshly. However, she has used scrutiny of her appearance to her advantage by using it to promote causes important to her.

After George Floyd's murder in 2020, she painted "Black Lives Matter" on her nails, and following Russia's invasion last year, she painted the Ukrainian flag. She painted "sex responsibly" on her nails to support the launch of her first alcohol responsibility campaign. By giving people something positive to talk about, Mukherjee used scrutiny of her appearance to make a difference.