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CSR:

Business strategist Robert Craven notes a renewed sense if anger among environmental campaign groups, who are growing tired at the corporate world's apparent glossing over the cracks of environmental damage. Will this lead to tougher government regulation or can business regulate itself?

 

The CSR movement was born out of the environmental concerns of the 70s and 80s. Pollution (the Bhopal Chemical disaster, the Exxon Valdez oil spill, Chernobyl) and the rainforest depletion all led to a recognition, or at least a belief among some, that the way the we were managing the earth’s resources had to change. The Cadbury Report in 1992 was an example of this reaching the public agenda and then Heads of State came together for the Rio Summit (also in 1992) for the Earth Summit where the concept of sustainable development was promoted.

CSR was one of the biggest corporate fads of the 1990s – almost as big as the dotcom mania. And now it is an industry in its own right,with newsletters, websites, consultancies, and job titles all steeped in the CSR ‘ology’. But tensions arise over how CSR can, or should, be embedded into the business culture.

Carrot And Stick

Because governments have been largely unwilling to make companies address their own CSR impact, the movement has evolved as a voluntary code. But because it is a voluntary code, CSR initiatives are generally disconnected from wider frameworks. This lack of consistency or agreement about purpose or longer-term goals makes the results both fragmented and inconsistent.

The NGOs claim that it is this lack of compulsion that is wrong with the current approached to CSR.  Christian Aid is calling on politicians to take responsibility for the ethical operation of companies rather than surrendering to those from business peddling fine words and lofty sentiments. In their 2004report, Behind The Mask, they name and shame top ten brands that pay lip-service to CSR while ‘making things worse for the communities in which they work’.

Does It deliver?

In many cases the original protagonists who fought so hard to get CSR on to the agenda now feel duped and conned.  They accuse firms of paying lip-service to ideas of corporate citizenship, but when commercial interests and broader social welfare collide, then profit seems to win every time. And when respected charities such as Christian Aid and Oxfam publicly display their disappointment, then maybe it is time for the public to step back and consider what has actually happened.

The Economist has argued that the CSR lobby has made big business appear more responsive, yet it seems that the lobbyists have been fighting an enemy they don’t fully understand.  Before you can improve capitalism you first need to understand it and the thinking behind CSR hasn’t taken this on board. Many charities and advocacy groups hadn’t figured out whether big business was part of the problem or part of the solution.

Until this is sorted out in their own minds, the lobbyists, will be a fragmented force which will lose political power when fighting the might and muscle of the (possibly less virtuous) multinationals who see their prime objective as increasing shareholder value on a year-on-year basis.

Do manufacturers with appalling CSR records even suffer any damage? Nike, for example, was one of the key targets of the CSR campaigners, yet I could find no specific evidence to show a direct correlation between pressure group activity and a slowdown in sales and share prices, in spite of acres of anecdotal evidence.

NOW WHAT?

CSR became a mission because traditional government action was deemed to be ineffective: orthodox politics was viewed as a sham by activists such as Naomi Klein (author of the influential No Logo) so pressure had to be brought to bear on the companies themselves. Ten years later, instead of celebrating a great victory, the disenchanted NGOs are coming to regard CSR as an even greater sham.  And now they are asking the governments to step in and sort out the companies. 

What are the consequences of this ambiguous situation? Firstly it dilutes the arguments of the pro-CSR lobby.  Secondly,  it strengthens the resolve of the anti-CSR lobby to ignore them.  And thirdly, it dilutes the resolve of those companies trying to be more ethical as they are viewed with no more trust than if they'd done nothing at all.

If CSR really is the Holy Grail then surely what we are looking at is simply a business version of the Da Vinci Code – at best a great story, but badly executed, and with little concrete evidence to support its case.

Christian Aid supports responsible and ethical action by business. The problem, they and their colleagues argue, is that CSR is unable to deliver on its grand promises.  Their report states that 'the corporate world’s commitments to responsible behaviour are not borne out by the experience of the many who are supposed to benefit – in some cases the story and the reality are simply contradictory!

About THE AUTHOR

Robert Craven is a keynote speaker and author of the business best-sellers 'Kick-Start Your Business' and 'Customer Is King'. He has recently been described as 'one of the UK’s leading marketing specialists' and the 'entrepreneurship guru'. He runs The Directors’ Centre, helping growing businesses to grow.
For further information, contact Robert Craven on 01225 851044. (rc@directorscentre.com) www.directorscentre.com

©Robert Craven, CEO Magazine, 2006

publication details

First published in CEO Magazine, Aug 2006