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Corporate social responsibility

Executive Summary

Corporate social responsibility programmes are increasingly using sponsorship as a vehicle to deliver objectives for two key reasons. First, sport can really change people’s lives. Whether as a participant or spectator, people engage with sport in such a manner that it can make a huge difference to their health and/or their lifestyle.

Second, sport is run at every level imaginable, from kids playing football in the street, to major global events such as the FIFA World Cup or the Olympic Games.

For companies seeking to develop successful CSR programmes, sport therefore offers a ready made and flexible platform that can be adapted to a wide variety of objectives.

CSR In Business

Businesses today are expected to look beyond their bottom line and most accept they have a social responsibility to the health and well-being of the communities in which they operate.

The term corporate social responsibility (CSR) relates to the ethical and legal behaviour by organisations in the workplace and the wider community.

According to accountants KPMG, nearly 80 per cent of the largest 250 corporations in the world now publish CSR reports, up from about 50 per cent in 2005.

Businesses with a strong CSR programme ensure it sits snugly alongside their
sustainable marketing policy, which focuses on how products are sourced, manufactured, promoted and distributed.

Organisations are choosing CSR projects which counter the negative impacts they might be having on the environment or on people’s lives. A strong CSR strategy will prove profitable for a company over the long term because its relationship with different stakeholders, from customers and suppliers to employees and the media, is boosted.

Ultimately a CSR programme will fail unless it is at the heart of the business decision making process and linked to how the organisation makes its money. Stakeholders also demand total transparency and any inappropriate activity or evidence that a company is involved in a social project for the wrong reasons, such as to attract positive media coverage, will attract fierce criticism.

CSR And Sport

For years businesses have tended to spend their CSR budgets on supporting environmental or arts-based causes but increasingly sport is being seen as a way to meet social and community obligations.

Sport is regarded as a much more influential channel than the arts; reaching and engaging with more people from across the entire social and demographic spectrum.

The European Sponsorship Association’s market trends survey of 2007 pointed out that CSR is becoming part of a more eclectic sponsorship mix. This is something that sports rights holders are starting to take advantage of.

Whilst pure sports sponsorship can often be based on hard-nosed marketing and business decisions, any CSR investment is based more on how a business can improve the communities in which it operates.

When a decision has been taken to spend all, or part of, a CSR budget around sport, sponsors are realising how important it is that they choose a cause and sport which has a synergy with the organisation’s own mission statement and values as well as its products and services.

Sport is an effective CSR medium because it boasts values that any socially responsible business should be striving for. These include fair play to everyone involved including employees and suppliers, transparency and opportunities for all to succeed, as well as good community relations.

This report explores the issues surrounding brands, CSR and sports marketing. There are many examples of how businesses around the world are using sport more and more to fulfil their CSR obligations. Sport is adding value to the sponsor and individual sports and at the same time changing people’s lives on a local, national and international level.

Sports rights owners are certainly realising the mutual benefit of teaming up with brands to drive forward CSR programmes.

Nevertheless, individual sports have to prove their own social responsibility credentials to potential CSR sponsors when it comes to controversial areas such as the use of drugs and links to gambling or corruption. How sports look after their sportsmen and women once they retire is also a CSR obligation that must be tackled if brand sponsors are to come on board.

Like businesses around the globe, individual sports are also following their own CSR strategies, with soccer/football the most visible sport when it comes to its community investments. Most professional clubs have initiatives in place to help disadvantaged people improve their education or health.

The need to attract additional funding as the recession hits sponsorship revenues is another reason why corporate CSR budgets are being targeted by rights holders. The smart sports clubs, both professional and amateur, are also looking beyond the private sponsorship sector and realising money is available from public bodies such as the police and health organisations.

This is one area rights holders were generally not exploring until relatively recently. However, the funding of community sports-based projects in this way can be the catalyst to persuading private sector sponsors to get involved in sport too.

Cynicism Towards CSR

The report outlines the struggle that many organisations still face in overcoming media, public and employee cynicism when associating their CSR strategy with sport.

There are pitfalls to avoid if a CSR programme is to work for everyone. For example, all organisations must ensure their CSR/sports activity is perceived as relevant to the business and is run with integrity. Ultimately stakeholders want to see that a brand is being challenged by what it is doing and is not sending out confusing messages.

Another challenge for sponsors linking CSR to sport is research and measurement. This is a relatively new area and sponsors can struggle to budget effectively and many remain unsure about how best to assess their return on investment.

Ultimately there are a number of tests an organisation can use. Is the CSR activity legal and does it meet professional standards? How will any activity add value to the brand and the sport over the long-term and how will it be viewed by different stakeholders? Finally, what impact does a CSR programme linked to sport have on an organisation’s core values? What effect will it have on how employees view any activity?

Companies must ensure their CSR programmes are strategic and well thought through. It must be efficient if it is to have a maximum impact on the sport, social cause and the organisation itself. CSR is about involving all stakeholders and identifying how the organisation can make improvements. This is not about claiming to be the best.