Corporate Social Responsibility (CSR) was created as a way to ensure that corporations are conducting their businesses in an ethical way. CSR was originally a concept founded by Howard R. Bowen after he wrote “Social Responsibilities of the Businessman” in 1953 and asked “what responsibilities to society can business people be reasonably expected to assume?” In his seminal book, Bowen also provided a preliminary definition of CSR as referring “to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society“.
These days CSR has become crucial for public-facing businesses. As we begin to explore Business Values ahead of our next #MidtownBigIdeas event we’re asking is CSR enough? Or is it simply an elaborate PR exercise where the main aim is to make the company look good, rather than actually do good?
There was a time when proffering support to local charities, planting trees here and there and endeavouring to protect the environment was sufficient but by 2010, media attention had shifted away from the day to day activities and began to scrutinise the trust and reputation of corporations around the world, and it became clear that CSR needed to be more integrated into the heart of business organisations, rather than just being a tick on a checkbox. “Superficial greenwashing” as it was known, had become obsolete in favour of a new approach.
According to The Atlantic, a paper authored by Jean-Etienne de Bettignies of Queens School of Business and David T. Robinson of the Fuqua School of Business at Duke found that “the money, energy, and influence used to push popular CSR programs would be better spent either radically altering the way companies operate, or allowing better regulation—which would theoretically prevent companies from becoming being bad actors in the first place.”
Many argue that CSR just doesn’t go far enough. A 2014 report from Ceres and Sustainalytics found that “while there are encouraging pockets of sustainability leadership in the U.S. business community, far too many companies are only taking small, incremental steps to address pressing sustainability issues that could impact their bottom lines and the future of our planet and economy – such as climate change and human rights,”.
Time cites a 2013 study by Elaine Wong of the UC-Riverside School of Business Administration and Margaret Ormiston of the London Business School which found that firms focused on pursuing a socially responsible agenda are more likely than other businesses to behave in a socially irresponsible ways. Similarly, in light of Volkswagen’s flouting of emissions control rules in 2015, Forbes writer Enrique Dans stressed that the main problem with CSR is that “we are asking companies to self-regulate” and argued that CSR Strategies are often seen internally “as superfluous, a luxury that mustn’t get in the way of making profits”.
But some companies do CSR very well and harbour great results. The CSR strategy of smoothie makers Innocent clearly stems from the heart of the brand and has led them to be a bit of an industry leader when it comes to sustainability and giving back. Within the City of London, Alium Partners, an SME and leading global recruiter of interim executives across the private and public sectors, have used CSR strategies in 2015 to engage young graduates in the Tower Hamlets area who face barriers to employment, while IBM partnered with London Connected Learning Centre, to share technology expertise with primary school teachers, giving them confidence to teach the new computing curriculum. And this doesn’t just improve external reputation. The Guardian claims that a strong strategy to give back is the only way forward for business and explains that companies who give back can see better staff loyalty, engagement and productivity.
CSR done properly and executed well can have a genuinely positive impact – but it’s also often done badly. Lack of regulation means that CSR Heads can freestyle, often favouring profits and other business needs over the Greater Good. The focus for businesses needs to be more on results and less on public perception.
Do you think CSR is a band-aid over a bullet hole or are businesses doing enough to act ethically? Join us at the fourth in our #MidtownBigIdeas series as we discuss Business Values and the ethical positioning of a business at Mitsubishi Corporation from 6.30pm on 21st March. We’ll be exploring how Midtown businesses can change the rhetoric around “evil” corporations and demonstrating some of the very real value they can add to society. Don’t miss out on your free tickets. Register now.