'Corporate social responsibility': a wobbly concept
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When academics, pundits and corporate heavy hitters take the stage to debate semantics, who wins? That question weighed heavily in my mind during last week鈥檚 鈥淕reat CSR Debate,鈥 an event hosted by PR Firm and instigated by Professor Aneel Karnani鈥檚 controversial Wall Street Journal , 鈥淭he Case Against Corporate Social Responsibility.鈥
As the webcast beamed out live to an audience of over a thousand viewers, thought leaders including The Economist鈥檚 Matthew Bishop, ThomsonReuters鈥 Chrystia Freeland, UN Global Compact鈥檚 George Kell, BSR鈥檚 Aaron Cramer, Campbell Soup鈥檚 Dave Stangis and GE Foundation鈥檚 Bob Corcoran argued about concept that evidently means different things to different people. As moderator of the debate, my intent was to 鈥渘avigate鈥 the conversation to the point where a 鈥渟ide鈥 would 鈥減revail.鈥 But within the first few minutes, I realized why efforts in this direction were futile.
鈥淲hat do we mean by corporate social responsibility (CSR)?鈥 asked Karnani. 鈥淚t鈥檚 not just that the terminology is clunky. It is also unclear.鈥
Indeed, it is unclear. According to a published by Wiley InterScience, there are approximately thirty-seven different definitions of CSR floating about the business world. This problem is compounded by dozens of competing CSR or sustainability-related measurement and certification programs. Do well-meaning corporations adopt or standards? Should they join the or ? Do or models make the bigger difference? Who knows?
What we do know is that the old-school CSR rhetoric utterly fails to resonate. At least that was something both sides could agree on. 鈥淭he problem with the rhetoric is that it can create confusion about what a business is doing in it鈥檚 core, versus what it likes to talk about or claim public credit for,鈥 said Freeland, who pointed to campaigns issued by , and as examples of marketing hypocrisy.
Beyond the language and clear instances of greenwashing, however, there was a deeper point to be made, particularly by practitioners on the panel. When so-called CSR is most effective 鈥 when it generates so much value for stakeholders and shareholders that corporations cannot afford to stop investing in it 鈥 then it is no longer regarded as CSR, but good business strategy. GE鈥檚 multi-billion dollar in clean energy and affordable health care stand as a testament to this.
鈥淚f you label CSR or corporate citizenship as purely a philanthropic activity, then I agree that鈥檚 misguided,鈥 said GE鈥檚 Corcoran. 鈥淸Authentic CSR] is about the core of what a business does, how it does that, and what it sells that is of value, that helps to meet unmet needs.鈥
Campbell鈥檚 Soup鈥檚 Dave Stangis agreed. 鈥淐SR is there [at Campbell鈥檚] not because it鈥檚 nice to do, but because it makes the company better. It takes money from the supply chain, makes us more nimble and drives innovation.鈥
Still, despite the demonstrable move toward CSR-driven business models, Karnani insisted that corporations have no obligation to solve society鈥檚 ills. 鈥淭hat is the role of government regulation,鈥 he said. 鈥淕overnments are a far more effective protector of the public good than any campaign for corporate social responsibility.鈥
Here is where a second key distinction lies. It is one thing for corporations to conduct business ethically 鈥 trading within boundaries set by law. However, it is quite another thing for corporations to use laws as a strategic compass. Those that do will be playing catch up forever.
There is also the matter of our transformed society. 鈥淲e don鈥檛 live in a world where government鈥檚 only job is to set and enforce rules and businesses only job is to sell products and services within those boundaries,鈥 said Cramer. 鈥淲e live in a transparent world, a globally connected world, a world where civil society plays a big role, where global markets exist but global governance does not.鈥 Despite the clunky language, today鈥檚 CSR is fundamentally about collaboration, which means getting to optimal solutions faster than if we waited around for regulation or business to advance independently, Cramer explained.
鈥淲hat is really going on here is a struggle to determine what tomorrow鈥檚 markets are going to be in a world that鈥檚 changing very fast, where all the old boundaries are breaking down,鈥 said Bishop. 鈥淣ow we鈥檙e all workers, consumers, capitalists and voters. And we鈥檙e trying to work out the right institutional arrangements to govern in that new world.鈥
So where does the 鈥淕reat CSR Debate鈥 leave divided minds? Perhaps right back where they started, or perhaps pondering the following choice: respond to the new reality, or don鈥檛. Stangis put it this way: 鈥淭his isn鈥檛 a debate about right or wrong, winning or losing. For me, it鈥檚 about changing the world, one company at a time 鈥 or sitting on the outside describing why that can鈥檛 happen.鈥
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