Virgin’s Earth Challenge is a $25 million global science and technology prize. And it’s a smart, strategic business move. Richard Branson set it up with Al Gore last year, just as the Intergovernmental Panel on Climate Change reported. It buttresses other action Virgin is taking to address climate change.
Virgin’s sponsorship of Earth Challenge makes sense. The company is addressing the biggest issues it faces and getting media attention in the process. As for public good will, a recent survey reported in the London Times revealed 53 per cent of consumers think that Virgin is the airline doing the most to tackle environmental issues, more than twice as many as for British Airlines.
Compare this with corporate sponsorship of the Olympic Games. Let’s start with the price tag. The Top Tier of Olympic sponsorship sells for $45 million. For sponsors of the Beijing Games, it’s an investment that conflicts with serious social and environmental issues their customers care about. Now, the principles of the Games are still emotionally relevant. No argument there. Who doesn’t love to root for their country’s athletes? But consider that 67 per cent of consumers say they think that commercial sponsors should withdraw this year over China’s human rights record.
The dark clouds growing over the Olympics is more evidence of the sea change occurring in sponsorship in the 21st-century. Smart companies increasingly are integrating all the marketing tools they have to help to build their brand and reputation – and ensure that they are all working to address matters that mean something in people’s lives. Consider that sponsors who invest in NASCAR, with its gigantic carbon footprint, and Earth Day are sending hypocritical messages. Where this conflict is rising to a head is in the vigilante power of social capital investors.
As more companies seek to have their stocks held in the portfolios of the rapidly growing number of socially responsible mutual funds, they’ve had to face the scrutiny of these investors. The Internet has made this group vocal. The revered Domini Fund has an established process for taking community input for the fund, and fund managers take seriously the opinions of its share holders. Look for a day very soon when a company’s sponsorship investments will play a much more strategic role in how the brand is conceived and communicated.
As the RenGen rises, cultural consumers grow hungry for something more substantial than the vague goodwill associated with 20th-century style sponsorship. They want change. They want help with problems that seem beyond them. They want to buy products from companies who are their friends not their fathers.