Should a Giant Tobacco Company Donate to Covid-19 Relief?
There is a basic contradiction between companies that offer products or services that can cause harm, and these companies’ engagement in corporate social responsibility. Simply put, what is the rationale behind selling the public unhealthy products with one hand and donating to relieve the public’s hardship on the other? This question contradicts companies’ essence, integrity, and identity. Some companies offer many products that may be unhealthy or even addictive if consumed too much (sugar, for example) or if consumed at all (tobacco, for example). People consume these products even though they know they may not be healthy for them for a variety of reasons. However, these same companies develop their corporate responsibility outreach to give back to society, to solve some of the problems their products caused, or to donate to relief and aid in other areas. The contradiction: Why would companies that wish to help society create products that cause harm in the first place?
This is a complex topic that has challenged corporations for decades. The rise in consumer advocacy and awareness has tested many companies. In recent years, regulations and consumer advocacy have demanded that companies be responsible and focus their attention on their outreach. In addition, many companies view corporate social responsibility as part of their identity and social story, which elevates their brand and positive recognition in their audiences’ eyes.
Yet, what is an understandable conflict in the normal course of things could become an even more significant challenge during a crisis. During an emergency, public opinion tends to be more willing to gather together and expresses support and gratitude for leadership. This conflict-time solidarity is called the ‘rally around the flag’ effect. This concept unfolds the audience’s personal and political identity to explain the increased popular support of the president during periods of crisis or war. Within this period, the public sees the president as the embodiment of national unity. Therefore, the public willingly harnesses its spirit and vigor to support and defend his policies and avoid criticism. The audience holds themselves, as loyal and responsible citizens, to a higher standard during the crisis. At the same time, they endure difficult and excruciating situations and expect the leaders to follow suit.
Furthermore, the public projects the same expectations onto corporations and becomes more sensitive to reputation building than it would normally be. During times of crisis, the public expects companies, especially large national ones, to uphold higher standards. It is as if the status quo of capitalism, where profit is applauded and understandable, becomes a boasting statement, triggering a sense of helplessness and anger and contrasting the people’s suffering to corporations’ revenue and reputation. When these companies manufacture services or products that are harmful, this tension could explode and cause a public-relations backlash.
Take, for example, tobacco companies that manufacture addictive and harmful products. During the pandemic, some tobacco companies have marketed their products by offering medical protective gear such as masks and gloves, upon purchasing their vaping and smoking products. In another twist, the tobacco industry is trying to present itself as a positive stakeholder in global health and not as an industry whose core business is promoting harmful products. For example, Altria, the maker of Marlboro cigarettes, announced a $1 million relief investment to help support vulnerable residents surrounding its headquarters in Richmond, VA. It is worth pointing out that $1 million is almost pocket change for the company that saw revenues of more than $25 billion in 2018. In a different case, British American Tobacco (BAT) announced the development of a vaccine against SARS-CoV-2. The main criticism of these actions calls the companies’ donations hypocritical and potentially dangerous. Critics argue people who smoke are at greater risk if they catch the coronavirus because it attacks the lungs. The National Institute on Drug Abuse, part of the National Institute of Health, has warned that the coronavirus could be an especially serious threat to those who smoke tobacco or marijuana or who vape. The coronavirus debate comes as companies approach a regulatory deadline to show the Food and Drug Administration that their e-cigarette products have a public-health benefit. This step will allow the firms to keep selling them in the U.S.
This is why visible and robust marketing, as well as their charitable giving, could be seen as self-serving. When their product could put people at even higher risk during the pandemic, why would they advertise it, to begin with? Why would they associate such products with charitable gifts of medical gear that is designed to save lives?
Philip Morris International donated 50 ventilators
The most striking case study of tobacco companying charitable giving during the Covid-19 pandemic going wrong is the case of Philip Morris International (PMI), the world’s largest tobacco company. The company has been accused of executing a publicity stunt after it donated, via its Greek affiliate Papastratos, 50 ventilators to the government of Greece, as coronavirus infections mount in the country. Since smokers are more likely to suffer a severe form of Covid-19 than nonsmokers, argued the critics, this donation is lip service. The company that produces a harmful product is donating to a situation it helped to create.
Philp Morris International’s response called the criticism false. It said the company has donated the ventilators following a direct request by the Greek Ministry of Health and has not publicized the donation in any way. In other words, there was no intention for publicity or reputation gains. At the end of the day, they write, this donation inspired other companies to follow suit and donate more ventilators. However, this argument may be tricky since the company did not actually advertise the donation, so it is unclear how they reconcile this tension.
The donation highlights the critical discussion about the most effective way for companies with potentially harmful products to donate during times of crisis. Simply put, giving away 50 ventilators is a charitable deed. After acknowledging that deed, the media and the public can engage in a fruitful discussion about the effectiveness and morality of PMI’s philanthropy. More broadly, how should we evaluate the social responsibility of corporate firms that eventually want to make a profit from harmful products? These discussions are important and essential to understanding the broader context of corporate responsibility and to encourage more companies to give effectively.
What could PMI do differently?
Good intentions are not the right focus here because intentions do not matter much when the public expects companies to be moral and accountable. Instead, PMI should be aware that donating via their affiliate would eventually link their donation to their brand. They should have also considered the moral and practical implications of a tobacco company giving ventilators and the public’s reaction. Perhaps it would have been better to donate it anonymously or donate in other areas. These considerations would help them make a positive difference and prove their genuinely positive intentions. Without them, it is just a story of a donation that can easily be mocked and criticized.
Communicating Corporate Social Responsibility During a Crisis
Learning from PMI’s experience, here are some guidelines to consider when planning a charitable initiative during a crisis. Accepting that the contradiction between tobacco companies’ products and corporate social responsibility is inevitable, and tobacco companies’ goals for their charitable giving during crisis, what should they do? How can tobacco companies donate during the Covid-19 pandemic?
Detach the brand from the donation
Donate anonymously. When there is no recognition of the donation, there will be no claim for reputation building or publicity. The anonymous donation will support the community and, at the same time, release the company from criticism, blaming it for taking cynical advantage of the crisis to promote themselves. PMI, as described above, has not followed this step to the fullest. Its donation of the ventilators was managed and delivered by its Greek affiliate, and the donation was eventually attached to PMI’s brand.
Detaching the brand from the donation might lessen the stimulating effect of the donation. Names of big brands’ donations usually encourage other companies and individuals to join in charitable giving and eliminating this aspect can minimize the public motivation to donate. Yet, this side-effect is only secondary to the potential backlash of negative framing of donations that makes them ‘toxic,’ warning other companies to avoid similar charitable giving.
Donate via blind management
Donate through a separate organization. In this case, the company will fulfill its goal of supporting the community and bringing relief during the pandemic and will not be tied to any name-recognition or branding scandal. The blind management of the donations can also follow the company’s guidelines, dictating which areas the company sees fit to donate to in order to make sure the gift is effective and meaningful. This step requires companies to maintain transparency over the choice of the blind donation management organization in order to eliminate any criticism of wrongdoing. This step will fulfill the purest form of corporate social responsibility and prove the company’s best intentions. The donation will appear in the company’s financial records and will trigger tax breaks, yet it will continue to be anonymous.
Donate to different areas than your weakness
Donate to other areas than the areas where your product can cause harm. If companies insist on donating directly using their brand, it would be best to avoid the pitfalls of aligning the company’s name in direct contrast with the harm its products cause. If chosen, this path should be followed using extreme caution and delicacy.
What should nonprofits fighting smoking do during the Covid-19 pandemic?
Covid-19 can infect the upper or lower part of the respiratory tract. As researchers are still trying to learn more about the virus, it is still unclear how smoking affects the disease. However, since Covid-19 is a disease that can lead to severe respiratory problems, it is still relevant to the goals of nonprofits fighting smoking in particular.
Nonprofits are facing a double-edged sword. On the one hand, their fight against smoking companies proves even more crucial and valuable during this pandemic. If there were scientific proof that smoking kills in more ways than expected, this would be a boost to their fight to ban smoking. On the other hand, these nonprofits should avoid exploiting the hardship and sorrow this pandemic has brought for their cause. Nonprofits should become a trustworthy source of information, as they follow and record tobacco companies’ actions during the pandemic. Once the scientific research is ready, they should immediately explain the coronavirus’s effect on smokers to journalists and the public.
To summarize, addressing acute social and health problems during the Covid-19 pandemic is much more complicated than during ordinary times. Thus, routine moral questions about companies’ identity, ethics, and responsibility are being challenged in more stringently. Corporate responsibility for harmful products should be thought about differently, making disconnecting the brand and reputation from the donation itself even more important than before. After all, this is what it is all about.
