Shards of Truth that Hurt

Chrystia Freeland wrote an article in the Washington Post on Sunday taking a crack at CSR by asking “What is BP’s Social Responsibility”.    In it, she argues that;

“many of the business disasters of the past 24 months have been facilitated by the mini-industry of corporate social responsibility — known as CSR by those in the trade — a fetish encouraged by the philanthropies that feed off it and funded by the corporate executives who have found that it serves their bottom line.”

Of course I, like many of the people who have added comments to the web site, bristled at the language and the content.  Corporate responsibility is not about philanthropy, or at least, that is not all it is about. Corporate responsibility is far more importantly about the interactions between a company (its operations and products) and society.

That companies with CSR strategies were central to major incidents doesn’t ‘give the lie’ to CSR any more than the safety practices of a company would be invalidated if that company had an accident.  What it should do is cause us to look more closely at those practices and improve them.

Chrystia argues that “the heart of the relationship between business and society doesn’t lie with the charitable deeds that companies do in their off-hours but whether they are doing their day jobs in ways that help — or hurt — the rest of us.”

This I agree with completely. But then Chrystia concludes “the chief social responsibility of business is to make a buck”……  No, no, no, Chrystia, you had it right the first time.  The heart of the relationship between business and society is whether they are doing their day jobs in ways that help — or hurt – society. Making a buck for shareholders is a component of that, but so is paying employees, so is paying taxes, and so is providing products and services that meet the needs of society ethically and sustainably.  These are all components of corporate responsibility (I prefer to omit the ‘social’ word).

But if Chrystia, like the many of my own friends and family who sent me this article, think CSR is about philanthropy, perhaps those of us who call ourselves practitioners have something to answer for.  Perhaps we need to think about where we spend our time and attention and how we better articulate the values of our field inside as well as outside our own companies.  We need to ensure that philanthropy is a part of our tool kit only in proportion to the impact it has relative to the broader impact of our company’s activities and that we spend a commensurate proportion of our time on our company’s broader impact.

  1. Comments 2

  2. Ron Vassallo 2:38 pm on July 20, 2010

    Finally, after a day of wailing and gnashing of teeth by your peers--characterized by much outrage but little reason--you have presented a cogent argument. You're right in one regard: corporate responsibility needs to be more than philanthropy or its simply the most cynical PR. Niall Fitzgerald, Deputy Chairman of Thomson Reuters, once said: "If it isn't central to you business, it won't get done." It was a wonderfully succinct statement that gets to an element of truth in the Freeland article. No corporation will make a fundamental positive change for society unless the activity is central and in alignment with its core, profit-generating activity. If you're Honda and you announce today that your future is ineluctably tied to producing the best electric car, that is sustainable corporate responsibility for all stakeholders and your shareholders--the guys who OWN the business. If you're BP and you issue platitudes on climate change while presiding over the worst industry record for safety and infrastructure maintenance, then your CSR or CR is merely legerdemain. BP, and its entire industry, had--perhaps still have--an opportunity to drive positive change but that will only happen when the positive impact they want to make aligns with their core, profit-making business strategy i.e., when they can be persuaded that green energy is both scalable and a wildly profitable enterprise. Until then, I suggest we spare Ms. Freeland the outpouring of outrage and collectively exhale. We could use the moment to gauge whether there isn't a kernel of truth in the critique.

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