How CSR Can Have the Opposite Effect


This Valentine's day, I enjoyed a corporate love-in. I was fortunate enough to attend my fourth annual Business in the Community (BITC) conference in six years. It is always fascinating to hear what the leaders of the world's leading corporations have to say, especially when Corporate Social Responsibility (CSR) is the focus.

I have a deep respect for BITC and I acknowledge the need to celebrate achievements and recognize responsible business leadership. Notwithstanding, its annual event always reinforces for me how dangerous and counterproductive CSR can be.

This is because there is never any acknowledgement of the deep cynicism people have towards business, especially when they claim to be responsible.

 The definition of CSR provided by the World Business Council for Sustainable Development is typical. It states that CSR is "the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"—the opposing view, one supported by a great deal of evidence according to many in the NGO community, is that CSR is a game that big business plays. A game by which they talk a great deal about the desires and ambitions to act ethically and responsibly, where they introduce tokenistic policies and practices for presentation purposes, but in effect, they change little and continue to maximize profit careless as to whether this is at the expense of society and the environment or not. 

In a quite stunning address, one of the keynote speakers at the BITC conference supported this view in many important respects.

Alain Grisay, the chief executive of F&C, a fund management firm with £100 billion of assets, spoke of the tendency of government to do the will of business, not the will of the people. He stated the governments must create better legislation to reverse this, to create conditions where companies were not rewarded for externalizing costs.

 The threat from CSR to social business comes from this perceived duplicity. Do you think that there are any businesses out there that would claim to take social, environmental or ethical (SEE) issues seriously but, in a stark reversal of what they say they are doing, are actually seeking only to extend their hegemony and self-interest?

The worry is that any business that makes SEE claims could in fact be the cuckoo in the nest.

 The huge problem we all face is that practically all the world's biggest companies now "do CSR." Some sound very convincing indeed. But as with all slick communications and marketing, it is often impossible to determine where the fact ends and the fantasy begins. One wonders first whether Company X can be trusted when it says it cares, then one wonders if, in fact, any business saying it cares can be trusted.

 All social enterprises depend on effectively communicating How they do things differently, How their social purpose is (at least) as important as their commercial success. Having a social purpose, having their stakeholders understand and buy in to their social purpose, is what gives social enterprises their competitive advantage over mainstream businesses. Who is to say that a company that says it is a social enterprise will be regarded any differently from a company that says it does CSR?

SEE Potential conducted research with Ipsos MORI in 2005 and again in 2007 to test public attitudes to business and business responsibility. Against all 10 indicators we found dramatic increases in cynicism and scepticism towards businesses and the claims they make about their SEE practices.

In being honoured as the BITC Business of the Year, BT was cited for a 60% reduction in CO2 emissions since 1996, planting 250,000 trees, flexible working for UK employees and raising GBP6m for charity.

The phrase 'is the glass half full or half empty?' was used repeatedly at the conference. Glass half empty people would say that BT's Corporate donation of GBP6m is paltry when it amounts to just 0.03 per cent of total revenue. Glass half full people say GBP6m raised for charity can help a tremendous amount of people and the relative size of the donation is immaterial.

 The landscape is more complex than this analogy suggests however.

For me, as a BT customer for most of my life and someone who has been working in CSR for six years, I see this award-winning company as part of the problem, not part of the solution. The global issues we face appear more serious and more intractable than ever. I am very worried that, in picking up gongs for being good at CSR, the world's leading corporations are making life practically untenable for Social entrepreneurs, genuine innovators for public good and sustainable business pioneers.

This article was written by Michael Solomon, founder and managing director of SEE Potential Ltd. It originally appeared on www.evancarmichael.com.




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