CSR…misunderstood and necessary.
January 31, 2011 4 Comments
If “to be great is to be misunderstood”, as the poet said, then CSR is definitely one of the greatest things in the world.
Aman Singh, in her great blog about CSR, recently wrote a post with a provocative title: “In the Classic Battle of CSR vs. Sustainability, We All Lose” in which she was discussing the results of a recent survey showing that MBA students didn’t seem to care for Social Responsibility. She asked a very relevant question: “Is this an issue of stakeholder differences or once again a case of the age-old contest of terminology, i.e., what IS the difference between CSR, sustainability and corporate responsibility?”
The very same day an article in The Economist, mentioned in another great blog post by Davidcoethica, described how Milton Friedman’s views on CSR were perceived around the world, showing that “the world’s most Friedman-friendly country is the United Arab Emirates”, with 84% agreeing with his famous assertion that “the social responsibility of business is to increase its profits.”
The word “social” probably contributes to the confusion. Anti-CSR advocates, ironically on both sides of the ideological spectrum, Milton Friedman’s followers and anti-capitalism movements, focus on the word “social”, arguing that companies are legally bound to maximise profits to shareholders and that corporations can only be ‘socially responsible’ if they are being insincere. And who wants to work for such a company?
Working for a company engaged in sustainability strategies seems a lot cooler than working for a company that promotes ethics and socially responsible business practices. But actually, beyond the words, the objective of corporate social responsibility is to contribute to sustainability and sustainable development, as defined in the Brundtland report, “a development that meets the need of the present without compromising the ability of future generations to meet their own needs.” As businesses are the main consumers of world resources, human and natural, and the world economy moves increasingly closer to the limits of its resources, companies have no other choice but to act responsibly. How can companies contribute to sustainable development? By integrating social and environmental concerns in their business operations and in their interactions with their stakeholders, according to the EU definition for CSR or, as a the software company SAP puts it in its sustainability report, “holistically managing economic, social and environmental risks and opportunities.”
This definition is closed to the one that Alberto Andreu Pinillos, Global Director of Reputation, CSR, and Sustainability at Telefónica, used in a recent interview for this blog: the DJSI’s definition for Corporate Sustainability: “a business approach that fosters value creation in the long-term for shareholders, taking advantage of the opportunities and the effective risk management, related to social, economic and environmental development.”
We have to get used to the “semantic battle” around sustainability – a buzz-word? – CSR – an oxymoron? – Ethics – boring?
In my opinion the debate around those concepts also help to make them more visible. The issue though is that spending too much time debating the terminology and concepts is a distraction from what really matters: execution. CSR and sustainability are no longer a “nice to have” for companies. It’s a “must have” and more importantly a “must do”.
See, the war is not between CSR and sustainability…CSR contributes to sustainability..big time!
A real issue, in my opinion, is the gap between “embracers” and non-embracers. The recent Sustainability and Innovation Global Executive Study, a collaboration between MIT Sloan Management Review and the Boston Consulting Group warns that a gap has grown “between companies that embrace sustainability-driven strategy and management” and companies that don’t. That’s a real issue.