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Diageo’s CSR policy and Foetal Alcohol Syndrome

Diageo PLC is a transnational alcoholic drinks company trading in approximately 180 markets worldwide. To meet demands, Diageo has offices in 80 countries and has over 20,000 employees (Diageo, 2012). The company produces leading brands of spirits, wine and beer and last year (financial year ended June 2010) recorded revenues of £12,958 million, an increase of 5.5% to the previous year (Data Monitor, 2011). This shows the company is a clear leader in the industry with continual financial growth and consumer investment.

Diageo is one of the largest publicly quoted companies in the UK resulting in a great demand for proven corporate social responsibility; a topic of which has been debated as far back as the 1920’s (Oberman, 2000, cited in Fisher & Lovell, 2009). The ‘social’ aspect of responsibility derives from the impacts made on the surrounding environment by the company in question. Diageo has implemented a responsibility policy comprised of five priorities/objectives that must be adhered to. Diageo states they are “enriching lives, communities and the environment through good business” (Diageo, 2012). This is supported through their first priority being ‘alcohol in society’, which Diageo concentrates effort into changing by uniting with 170 other brands (including Tesco and Unilever) to support responsible drinking and lifestyle (Parsons, 2011) through the government’s new ‘responsibility deal.’

An important business driver is to be transparent; Diageo have publicly pledged to follow this responsibility deal to convey their efforts for a better society. The company is funding a foetal alcohol syndrome (F.A.S.) initiative created by Nofas-UK (National Organisation for Foetal Alcohol Syndrome), which will train 10,000 midwives to help pregnant women reduce their alcohol intake. The prediction is to help more than a million mothers over three years (Hill, 2011).
Diageo are trying to tackle the issue of alcohol misuse through new tactics, but as a distributer of alcohol, it is clear to question their ethics by enrolling in such a responsibility.

Diageo have acted ethically by funding the FAS initiative if we consider a consequentialist approach, which centres the outcomes of ethical decisions not moral principles (Chryssides & Kaler, 1996). To refer to the term ‘utilitarianism’ (created by Jeremy Bentham 1748-1832), which focuses on the greatest happiness of the greatest number, by funding the initiative, Diageo are set to help over a million mothers which consequently results in healthy children. Utilitarians would agree the outcome is positive, through their ‘feeling-based morality’ (Chryssides & Kaler, 1996) which suggests by reducing pain, e.g. the deformity of many newborns, pleasure can be experienced, e.g. healthy newborns.

On the other hand, it can be seen that Diageo is in fact causing pain to the ‘greatest number’ due to the harmful effects of alcohol consumption. The company has the greatest percentage (30%) of shares in the vodka market alone (Mintel, 2009), and in 2010, sold 218.7 million litres (The Telegraph, 2011), thus supplying and potentially harming a greater number than those touched by the FAS initiative. To refer to the rationale of business, it is assumed that by Diageo maximising profit, happiness will also be generated. Though it must be considered under an utilitarianism principle, the pleasure created by the increased profits, must be derived from the cost of pain to other people (Fisher & Lovell, 2006), in this case, the alcohol related deaths. Also financially, the “four million pound donation is a fraction of the £840 million it pumped into marketing its brands last year” (Peev, 2011). In order to supply happiness to the greatest number, it is clear; more money could have easily been delegated to the cause.

When making a moral decision, consequentialism evaluates the action based on the outcome, however Diageo’s actions can

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