Has the CSR movement really won the battle or have they lost the war?

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In the article from the Economist from 2005 Clive Cook argued that the CSR movement have won the battle for ideas about the virtues company and not least the harts and minds of executives around the world.

As Cook put it in 2005 “CSR commands the attention of executives everywhere—if their public statements are to be believed—and especially that of the managers of multinational companies headquartered in Europe or the United States. Today corporate social responsibility, if it is nothing else, is the tribute that capitalism everywhere pays to virtue.”

And there is no doubt that CSR have made its way into almost every crack of the business process from Human Resources and employee benefits to product development and production. These seem to be no escape from CSR everywhere one goes there seem to be a big sign that boasts about how corporations in some obscure way bring good to the world. Reports are being issued, social media are bring utilized and campaigns are being run just to boast about how this company is creating shared value or is leading the fight against green house gasses.

It would seem that the CSR movement have not only got the a good grip in the tail of the business beast but that it is also able to make a good buck for itself along the way.

“The winners are the charities, non-government organisations and other elements of what is called civil society that pushed for CSR in the first place. These well-intentioned groups certainly did not invent the idea of good corporate citizenship, which goes back a long way. But they dressed the notion in its new CSR garb and moved it much higher up the corporate agenda.”

But now six years down the road and one maybe two economic crisis’s down the road it the effects have not been what Cook describes. Companies have not flogged around the charities, the NGOs or CSOs in order to create a new type of development system in the face of government cut downs. In fact there have been a tendency to streamline efforts into the main business process to search for the ever-elusive business case.

While the CSR movement had hoped that companies would come to them because they had to power to publicly humiliate them through exposure in the press and other media this has not happened. Instead business have initialised CSR as part of the conditions of doing business like it has done with marketing, lobbying, employee benefits, supply chain management, etc. One could say that in public-relations terms, their victory is total but the war on ideas was not really won by the CSR moment in the end. CSR did not change the face of corporations in any significant way. So when Cook argues that “…their opponents never turned up. Unopposed, the CSR movement has distilled a widespread suspicion of capitalism into a set of demands for action.” It is a truth with modifications it would be more accurate to say that corporations reorganised.

One can just take a quick look at some of the so-called “green” companies that have been hailed by the CSR

moment as frontrunners. Companies like BP that even adopted a green logo but ended up with a huge crisis on their hands in the Gulf of Mexico. Novo Nordisk that have been instrumental in the CSR reporting scene and the fight against diabetes that seem to go from one bribery scandal to the next on a almost continues basis or Bank of America who were in the centre of the financial crisis creating bank products that they themselves had a hard time understanding and in the end lead to the fall of several major financial institutions around the world.

And maybe it was because that they did not really believed in the idea of corporate social responsibility that they were lead astray. That “they were starting to suspect that they have been conned. Civil-society advocates of CSR increasingly accuse firms of merely paying lip-service to the idea of good corporate citizenship.” So corporate executives started to think how to make the best of it, how can I “conn” everybody back, so that was what the executives did. They might have called it something different but in reality they started to dress their unsustainable products in a think “green” coating just think of the three companies I just mentioned and the companies they have been running while at the same time doing some of the most unethical acts in corporate history.

We should not blame the companies for being what they have always been. All companies are in some way or another born out of the basic idea of greed that the owner somewhere along they way would make a buck or two from what the

company was doing. So companies continue to be build around the idea that the main interest should be to make some kind of profit from its activities. “When commercial interests and broader social welfare collide, profit comes first.” And we seemed to forget that when everything went fine and that there would be a price to pay when markets started to go downhill.

As Cook so rightful said but might not have fully realised the corporations have not changed their DNA they are still the same beast that they have always been. What we need to learn is that the state, society, the environment and business need to co-exist like everything else in the world but that we will never live in perfect harmony with each other but constantly need to keep each other accountable for our actions no matter what role we play. So when Cook says “Capitalism does not need the fundamental reform that many CSR advocates wish for. If CSR really were altering the bones behind the face of capitalism—sawing its jaws, removing its teeth and reducing its bite—that would be bad: not just for the owners of capital, who collect the company’s profits, but also for society at large.” I think that this is even more true now that it was when the word were spoken in 2005 when we really did not fear the big fundamental chang

 

es that we soon after experienced.

Private business on a leash

Business needs frames and structures that they can relate to not given control over and it is the role of the state and society to constantly provide and negotiate these in order for business to strive. Like a cage in a zoo business need to be reminded that not all animals can be give the same level of freedom no matter how cute or well dressed they appear to be. A tiger however cute is still a very deadly beast and it is the same with business no matter how well one dresses up a oil company it is still producing a product which eventually will dry out and pollute atmosphere. “Private enterprise requires a supporting infrastructure of laws and permissions, and more generally the consent of electorates, to pursue its business goals, whatever they may be.” The last thing they need to be given the key to the cage under the pretence of CSR and corporate sustainability reporting and then be left to govern themselves.

Governments and interstate institutions like the federal government in the US and European union should realise that they play an important art in creating these structures that by hindering the movement of business that actually help business being sustainable. For fare too long have governments give over power to private business for them to control and decide what was good and what was not. This has only resulted in agony and pain for the populations of the world creating huge scandals, systems without transparency and business who does not realise the consequences of their actions.

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2 thoughts on “Has the CSR movement really won the battle or have they lost the war?

  1. Pingback: Will Globalization Effect CSR? Vol. 2

  2. Pingback: Social capital and its use within CSR – Moving away from the target « SRI Portfolio Management

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