Corporate Social Reality

Last week I focused most of my The Mythmakers: The end of CSR. Again. on Porter and Kramer’s shared value  or CSV. I did mention Alberto Andreau’s argument that Shifting From CSR To CSV Isn’t The Solution and that the truth and future lies in Corporate Sustainability. I ran out of space and didn’t really give enough attention to Andreau’s argument. What follows are some parts of the original post that landed on the cutting room floor.

As I stated before, Andreau’s idea of Corporate Sustainability is just another way of practicing CSR. But I also want to focus on the three main points he uses against the use of CSR:

1. CSR sends the wrong message: Firstly, breaking down the individual words of the concept is problematic. But there is nothing wrong with expecting business to have a responsibility. The idea that business have some responsibility is as old as business itself. In some cases this is regulated and in some cases not. And remember – before regulations there was nothing. Those companies who had annual financial reports was seen as “responsible” before it became a requirement. And same for those companies who stopped employing slaves. All of these were early CSR practices and then became requirements. It’s not the wrong message – it’s only the wrong message if we think that business have no responsibility towards society. Regulatory or not. Remember, business is in an unwritten social contract with society – do no harm and at a push try to do some good (where CSR comes in). Business can argue that they should be able to do what they want and how they want to but the truth also lies in the reverse – society need not support you or even allow you to operate if they don’t like you. If you argue that business should be able to do what they want then you should also live with the fact that people should protest and target you because that is their same right. We in CSR believe that it is not an either/or question and that business and society need each other and both share a responsibility towards each other to ensure mutual benefits.

The “corporate” part of CSR tells us that this is about business. It is a business approach – one that should add value to the bottom line. “Social” refers to the societal part of the business. Business operates as part of society and have a social obligation – as stated above. And the “responsibility” part refers to the rest of the argument I make above. The combination of the three concepts tells us that this is about business finding opportunities and areas of co-responsibility in their interactions with society – and that they also have a responsibility towards society to add value. And society includes all stakeholders – shareholders, consumers, employees, communities, suppliers etc. All different parts of society. We so easily focus on the “responsibility” part of the definition and easily forget that it is a “corporate” strategy that includes opportunities to add value (money, returns, increased sales, new product innovations, cost savings etc) to and through values. Don’t get stuck on the last word – see all three and how they interact.

2. Information overload: I agree that we have too much information today. But it is this same information that continues to drive new innovation in how we practice CSR, and how we live our lives in a world of information overload. The challenge is rather that CSR is developing so fast as a discipline that we can’t always keep up. Imagine if the concept of business was only started in 1970 and went through all its various changes and implications in 40 years. And really, CSR only took off about 15 years ago. That’s a lot of changes in a short period of time. The information overload is the wheels of CSR spinning at a 1000 miles a minute. It is daunting but it is exciting at the same time. We are in the middle of a new way of doing business – and we are at the center of that. Hang on – this is a wild ride.

3. Absence of global standards: Yes and no. Yes it will help if we have a few more global standards. But there won’t be a global standard for CSR. As I explained earlier – CSR is too complex and you can’t have a single standard for this complexity – only for some of the parts. And, we are finding new and innovative ways to implement CSR each and every day. How do you standardize innovation? Lastly, not even “business” have a single standard out there – only some of its parts and some guidelines at best. We don’t even have a single standard for financial reporting in the world – and that is such as basic business practice. What chance of a global standard for CSR then? Maybe our expectations are just too high on this front.

Of course there are some very specific challenges regarding his proposal to use Corporate Sustainability. Firstly, the addition of “corporate” does not address one of his own problems with the corporate part of CSR – “the term ‘corporate’ serves to instantly exclude every institution outside the realm of corporations.” I don’t think this is much of an issue but Andreau raised it as a concern regarding CSR so the same goes for Corporate Sustainability. Why is it okay for him to use it in Corporate Sustainability but not for us in CSR? Secondly, he argues that we need to widen the meaning of sustainability to ensure it covers everything he wants sustainability to stand for. Why is it acceptable to adapt the meaning of sustainability but somehow not acceptable to do the same with CSR? Actually, I am not asking for a change in the meaning of CSR but only a recognition of its complexity. I agree with his call for simplicity but I don’t think that changing the name will help. The simplicity lies in the earlier definition of CSR I gave and the complexity in the execution. I don’t agree with him that CSR has lost the battle against “philanthropy” and “social action”. Only in the eyes of some who practice it inconsistently or who haven’t kept up with the ever evolving world of CSR practices. Heck, just because some businesses don’t practice business in the right way doesn’t mean we should question business as a whole, does it? There are corrupt business out there; businesses who exploit workers; business who sell snake oil etc. Should we now say that all businesses are bad and should be dropped just because some practice it in the most harmful way? Same goes for CSR – some have practices they call CSR that really isn’t CSR. We should be diligent in raising our concerns with those companies who abuse the term – not abuse the term ourselves. And arguments where we question the concept of CSR only underlines this confusion. Instead of defending CSR against abuse and misunderstanding, we compound the problem by proposing new concepts and terminology and creating even more confusion.

All the additional points made by Andreau is as true of CSR as of Corporate Sustainability: It’s a business approach; it seeks to create long-term value; it embraces opportunity; and it helps manage risk. Thank you Alberto, you described CSR very well – it’s all of the above. Simple but complex at the same time.

To quote Alberto and change it just a little: “This is where the future lies: A unified return to CSR. Not CSR only in terms of philanthropy or compliance only but a sense of CSR related to value, opportunities and risk management.”