In recent years, the practice of corporate social responsibility (CSR) has come under fire, with critics condemning it as being irrelevant, ineffective, or both. However, its irrelevance or ineffectiveness is not the fault of the basic premise of CSR, but its strategic execution.
What's Wrong with CSR?
The case against CSR, crystallized by Aneel Karnani, argues that "the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed." When social responsibility and profits align, CSR isthus irrelevant. For example, if a department store chainfinds it profitable to replace their lights with LEDs or supplement their power with solar panels, then there's no need to praise the company for doing something in their self-interest.
On the other hand, if social responsibility and profits are not made consistent with each other, CSR becomes ineffective. Companies will favor profits over doing good, because doing otherwise would run counter to the single reason most companies are established: to make money.
Despite a greater call for corporate citizenship and the adoption of corporate governance guidelines in many countries, executives are unlikely to favor public interest over that of their shareholders. In fact, important innovations that do promote the greater public interest, like seatbelts and organic food, are rarely initiated by business but by grassroots groups lobbying for better regulations or demanding alternatives.
In many such cases, CSR becomes nothing more than "greenwashing", which refers to the practice of deceptively making a company’s practices seem environmentally or socially sound. This presents dangers not only for the larger society, but also for the companies themselves, as this kind of spin can be very damaging for a business’s credibility and trustworthiness.
Why CSR is Still Right
CSR, when done sincerely, can still be very effective both from a social standpoint and from a business standpoint. When businesses do adhere to corporate governance standards, or exceed these as some cases show, then meaningful change can be made in the communities in which companies do their work. And because consumers support companies they trust, earnest CSR efforts can themselves do wonders for a business’s profile.
This means that CSR in fact remains relevant, and can be a great driver for change when done in earnest. The UN’s Sustainable Development Goals for instance explicitly call on businesses to more strongly engage with development – a challenge that many companies would be smart to act on.
And when a company is in fact doing good, there is nothing inherently wrong about publicizing that good, even if the motivation at first blush may appear selfish. Society has long held individuals fighting for worthy causes in high regard and worthy of emulation, such as saints and national heroes. The American Revolution was partly motivated by the desire to remove unfavorable British taxation policies. The GomBurZa are martyrs for representing the right of Filipino clergy, like themselves, to have equal status as the Spanish friars. Their motivations may bee seen as selfish, but in carrying these out to fruition, much good was achieved.
In the same way, businesses that promote their virtues – if such virtues are in fact true – encourage others to follow in their footsteps. CSR can foster the transmission of good ideas to other businesses that may not recognize or accept the viability of socially responsible initiatives.
As for greenwashing, it becomes ineffective when the corporate advocacy is radically different from the company's purpose. This disconnect causes the public to question a company’s motivations, leading to distrust. Companies have to identify the areas of society that their businesses in fact impact, and work to turn this impact into something positive and empowering.
For example, no such disconnect was seen when M2.0 helped MSD with its advocacy campaigns. The pharmaceutical giant sought to reduce and eliminate the spread of HPV and cervical cancer, a fight where it has done much.
In 2015, perhaps the greatest lesson about CSR's relevancy is not to trash it but to rethink its execution. Companies need to align with their CSR in such a way that advocacy is a natural virtue of the company instead of an afterthought. It's not the time for corporations to relinquish advocacy but to truly bear social responsibility and make lives better.
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