Civic Brands - Navigating the New Frontier of Corporate Social Engagement in Italy

ALLEGRA LO GIUDICE - Senior Innovation and  Fundraising Consultant 

"When I buy a bag, I want to know who made it, where, and with what materials. I want to know if the company manufactures in low-income regions to save on labor, if it pays its employees fairly, and if the raw materials are sustainable, just like the whole supply chain should be sustainable." - Chiara, millennial consumer.

The sustainability of brands and their production processes is now under constant attention. A whole generation of consumers, starting with Millennials, takes these issues very seriously. This group, often not very brand-loyal and highly value-driven, can quickly change preferences if a company makes even a small misstep, like an inappropriate ad. 

These consumers look for brands that reflect their principles and are willing to switch to alternatives that better align with their values. Ipsos data shows that over 40% of people claim they have stopped buying certain products or services because they were disappointed by a brand's behavior.

This issue is so relevant that in Italy in 2019, the Civic Brands Observatory was created from a collaboration between Ipsos and Paolo Iabichino. It analyzes how brands influence our society. With a critical and in-depth approach, the OCB focuses on how committed companies truly are to making a difference, not just in words but through real actions. Recent surveys show that more than half of consumers pay attention to a company’s social behavior, and nearly 80% hope companies offer real help during tough times.

However, not everyone believes companies are sincere; many see their statements as simply a way to ease their conscience rather than real, meaningful changes.

Research on Millennial purchasing behavior offers valuable insights. According to Forbes, Millennials seek purchases that make them feel good. In fact, 60% of them tend to favor purchases that reflect their personality: the brand must connect with them on this level and leave them feeling satisfied. To meet this desire, many companies have adopted clear and understandable business models, such as the "buy one, give one" initiatives from companies like Bombas and TOMS. These models help people feel good about their purchases.

For example, Everlane (an American clothing brand) is committed to making the right choice as easy as wearing a quality t-shirt. They collaborate with the best ethical factories around the world, use only the finest materials, and share these stories, including the true cost of every product they make. They call this approach "Radical Transparency," a new way of doing things.

As a Millennial myself, I’ve always guided my career and personal choices toward social issues. I’ve spent a lot of time volunteering, starting with Amnesty International in the Arms Coordination, a specific group of activists dedicated to monitoring compliance with law 185/90 on arms trade in our country, which prohibits exports to countries involved in conflicts.

Later, I applied to coordinate volunteers during Christmas street events, and from there, I began my career in fundraising.

I chose to work in the non-profit sector, drawn by its mission to create a positive impact.

But activism also guides my private life. Up until three years ago, I ran an Instagram account dedicated to promoting a sustainable lifestyle. It all started with an experiment: a "zero waste" week without producing trash. From there, I moved towards plastic-free living and explored various aspects of sustainability, such as combating fast fashion.

Over time, I’ve seen people's interest in "sustainable" brands grow and discovered how complex it is to define and measure true sustainability. My lifestyle, driven by these values, remained consistent even after my twins were born. I continue to follow practices that many consider unconventional, like buying only second-hand clothes and toys for my children, house swapping during vacations, cycling as much as possible, and consuming locally produced goods.

Brand sustainability is also central to my work as a fundraiser for large organizations. Since my focus is on individual giving, it’s crucial to be mindful of the partnerships we allow; small donors pay close attention to who funds the NGOs they choose to support with small contributions.

This “watchdog” approach has extended to brands as well, with a large portion of consumers acting as gatekeepers.

For years now, consumers have been demanding more from companies and wanting them to do better. At the same time, companies haven’t shied away from these challenges. For some, sustainability is part of the company’s DNA, while for others, it depends more on the interests of their owner or entrepreneur. The fact remains that for many years, companies haven’t just produced objects or services—they’ve created real value. Some companies simply choose to partner with nonprofits to support projects aligned with their values.

The demand for transparency is very high. If today CSR is managed independently by companies, in the future this won’t be enough. Making a large donation at the end of the year or declaring that you follow policies for environmental sustainability and comply with tax or employee contract regulations won’t suffice.

The shift from Corporate Social Responsibility (CSR) to Environmental, Social, and Governance (ESG) marks a significant change in how companies approach their responsibility toward society and the environment, and it’s a change driven by the demand for transparency.

Let’s take a closer look at why and what changes for companies and consumers alike. CSR focuses on voluntary initiatives like philanthropy and community engagement, often separate from the main business strategy. While these activities are positive, they’re generally seen as extras rather than being integral to the core business and are often aimed at improving the company’s image.

ESG, on the other hand, is a more integrated and systematic approach that evaluates a company’s performance on three fronts: environmental impact, social responsibility, and governance practices. Unlike CSR, ESG is closely tied to the overall business strategy, directly influencing strategic decisions, risk assessments, and financial performance.

Key differences include:

• Focus: CSR centers on social and philanthropic aspects, while ESG covers a broader range of factors, including environmental and governance issues.

• Integration: While CSR can be managed separately from core operations, ESG is integrated into all levels of decision-making, influencing investor choices and shareholder expectations.

• Measurement: CSR activities are often measured subjectively and focus on outcomes like donations made. ESG, however, uses standardized and quantifiable metrics that allow for rigorous and comparative evaluations between companies.

In summary, the transition from CSR to ESG represents a shift from a voluntary, philanthropic approach to a more structured, performance-based one, where responsible business practices are no longer optional but essential for long-term success and competitiveness.

Beyond this, many brands have decided to take an even bolder step—and in some cases, face the consequences—because taking a stand can help you gain market share, but it can also lose you some. Brand activism, as defined by Philip Kotler and Christian Sarkar, is:

"The effort of businesses to promote, prevent, or influence social, political, economic, and/or environmental reforms or inertia to promote or prevent societal improvements."

Brand activism, therefore, is a natural evolution beyond corporate responsibility initiatives, driven by a deep concern for society’s most pressing issues.

It embodies the meaning of being guided by values and cannot ignore the problems of communities, such as employees, customers, suppliers, and everyone who contributes to a company through their work or purchases.

The proof lies in action, not words. Now, we all know that nothing drives businesses like profit. So, the question is: does brand activism benefit business? It depends on how we define profit. According to analysts like Scott Galloway and Bloomberg, Nike, with its Kaepernick campaign, generated a value of $43 million in media exposure within 24 hours.

In the four days following the campaign, sales rose by 31%, and after an initial dip, the stock reached an all-time high. Judging by the numbers, decisions to take a stance on certain issues are clearly tied to profit calculations as well.

But if we want to go further and look at the word "activism," which implies an active and political involvement in social campaigns, Patagonia is certainly a social purpose native, a pioneer and leader in this type of brand activism.

The company not only supports employees who may face legal issues due to their activism but also took legal action against Trump's decision to review the boundaries of some protected areas. Patagonia has launched many other initiatives and is also an example of CEO brand activism. In September 2022, Yvon Chouinard announced an unprecedented decision for the company in an open letter:

“Our only shareholder is now the planet. If we are to hope for a living, thriving planet—and not just a thriving company—we must do everything in our power with the resources we have. Here’s how we’ll act. We are going 'purpose' rather than public. Instead of extracting value from nature and turning it into profits for investors, we’ll use the wealth Patagonia creates to protect the very source of all wealth. Here’s how it works in practice: 100% of the company’s voting stock is transferred to the Patagonia Purpose Trust, created to safeguard and protect the company’s values, while 100% of the non-voting stock goes to the Holdfast Collective, a non-profit organization dedicated to fighting the environmental crisis and defending nature. These funds will come directly from Patagonia. Each year, the company’s profits, after reinvesting back into the business, will be distributed as dividends to help combat the climate crisis.”

When a CEO is involved and actively pursuing a purpose, it depends on how the concept of profit is generally framed. This attitude is explained in an article titled “Why Making Money is Not Enough”:

“The problem with industrial capitalism today isn’t profit [...] there’s a persistent myth in contemporary business that the ultimate purpose is to maximize profit. This is a result, not a purpose. It follows that the best way to maximize profits in the long term is to avoid making them the primary objective.”

A notable instance is the letter from Starbucks’ CEO to shareholders and employees, in which he expressed concerns and outlined a series of social commitments.

Another example is Nike's "Just Do It" campaign, which, despite facing backlash and some consumers burning their shoes, ultimately succeeded in a competitive and polarized market.

The consumer landscape has changed dramatically. Millennials and subsequent generations demand authentic and tangible commitments from brands. Sustainability has evolved from a buzzword to a critical factor influencing purchasing decisions. To meet these expectations, companies must move beyond Corporate Social Responsibility (CSR) and adopt Environmental, Social, and Governance (ESG) principles, seamlessly integrating sustainable practices into their core business strategies.

However, is that enough?

Brand activism goes further, encouraging companies to engage proactively in social change. In this context, transparency and authenticity are essential for building long-term trust and achieving success, requiring consistent dedication in every decision and meeting.

Partnerships with the non-profit sector are also crucial. NGOs, with their expertise, often lead efforts in driving the social change that companies aim to support. The landscape of collaborations between businesses and organizations has shifted significantly; previously, only a few large organizations would partner with businesses. Now, even small and medium-sized companies are becoming involved, and many NGOs that once hesitated due to perceived risks are now open to these collaborations.

This sector is expanding but must be approached with caution, adhering to regulations and ensuring that agreements are clear and transparent for both NGO supporters and consumers.

ABOUT THE AUTHOR: Allegra Lo Giudice began her career as a campaigner but quickly discovered a passion for fundraising. She is now a consultant and interim manager, helping nonprofits develop sustainable programs by innovating processes, introducing fresh ideas, and implementing strategies that ensure long-term impact. Her expertise encompasses team leadership, service design, and digital fundraising, and she consistently aims to foster growth and resilience in the organizations she collaborates with.

This article appeared in the October 2024 Issue of Impact Renactimento Magazine.

EDITOR IN CHIEF: Dr. Giulia R. Tufaro, ART DIRECTOR: Angela Melandri ADVERTISING & PARTNERSHIPS: Fiona Schmid