Is CSR a sham?

Here’s Tom’s blog for the CBI Great Business Debate web site, April 2015. CSR should be a core function of business, not an optional nice-to-do add-on.

 

I know the Chief Executive of a charity so big that business suitors come pleading for his charity to enter partnerships with them, not the other way round. ‘Which department are you from?’ he asks; if the answer is ‘Public Affairs’ or ‘CSR’ he dismisses them. If it’s ‘HR’ or ‘Procurement’ he says ‘Let’s talk’.

All four big American motor manufacturers had ongoing CSR operations when the ‘crisis’ struck in 2007. All cut costs as demand for their product plummeted; three decimated their non-core business activity, especially CSR — but not Ford. Today, Ford has one of the world’s biggest CSR programmes; it is led by the amount of impact it has, it helps establish the company in new markets, and motivates the workforce to new heights of engagement, loyalty and productivity.

At the offices of Deloitte, who serves you coffee? Who provides the quality, recycled paper? The answer: outsourced social enterprises, businesses with a social purpose, brought in deliberately to promote broader values through procurement. About six per cent of the procurement budget is earmarked for this. I don’t know the size of their CSR spending, but I bet it’s less than six per cent of procurement!

These examples of ‘doing good’ within mainstream corporate life all make business sense.

The problem with ‘traditional’ CSR is that it’s optional, an add-on

‘Sustainability’ is the buzzword of the third millennium: it embodies much more than the environmental value set of twenty years ago.

The problem with ‘traditional’ CSR is that it’s optional, an add-on. It’s not sustainable in the sense of justifying its existence as part of the long term purpose of the company.

Much CSR activity has roots in shop floor activism — look at Comic Relief’s widespread presence there — but it needs managerial leadership and commitment to make it part of the company mission, to make it sustainable. Take payroll giving: seven times more popular in USA than it is here. Why? Because few UK companies recognise its motivational value in creating a broader purpose to coming to work, or promote it as a form of employee engagement or make it a lynchpin of their company’s internal communication strategy.

In superficial CSR, building the team is more important than creating social impact; having a good time more important than making a difference; ticking the boxes more important than discharging the responsibilities of the corporate citizen. In superficial CSR the boardroom doesn’t know what the shop floor’s thinking, the Charity of the Year has no common mission with the company — other than a desire to be popular — and fundraising by employees (even in their own time) is claimed as a company achievement in its annual report.

The true corporate citizen cares about their environment, physical and social, because they care about the future of their stakeholders

Is it any wonder that ‘CSR’, first coined 60 years ago, was criticised as lacking rigour as early as the seventies? The true corporate citizen cares about their environment, physical and social, because they care about the future of their stakeholders and their children; balancing their own broad sustainability with making sufficient profit, ethically, to keep them viable in an ever more complex and challenging world.