The Corporate Social Responsibility 2-by-2

Nathanial Whittmore, who writes a great blog at Change.org, posted yesterday about Brad Googins’ response to Barack Obama’s inauguration speech (Brad runs the Center for Corporate Citizenship at Boston College).  Nathanial was very enthusiastic about Brad’s call for corporations to step up to their citizenship responsibilities in the midst of the current crisis.

Brad’s post makes some sweeping claims, including, “Indeed, a great deal of rethinking and recalibrating corporate responsibility has been taking place, positioning citizenship at the heart of the enterprise.”

Reflecting on the years I worked in CSR (some of them collaborating closely with Brad and his colleagues at the BCCC), I have to disagree.  Outside of a very few organizations that were founded around a mission (like the Body Shop before it was bought by L’Oreal), I do not agree that citizenship is at the heart of the enterprise for 99.9% of enterprises.

So while I applaud Brad’s exhortation, I worry that now is the time when we’ll see less, not more, progress by corporations in CSR.

Looking at the evolution in corporate behavior and expectations around that behavior over the last two decades, my hope is that there’s a slow but inexorable pull of rising expectations – reflected especially in the progress in diversity initiatives, environmental responsibility, more strategic philanthropy and volunteerism, etc.

But my fear is that the vast majority of corporations are not ready or willing to make real tradeoffs in order to “do good” for the world, and that, in times of economic hardship, CSR becomes a “nice to have” that drops off the list.

I wrote about Nike a little while back, just one example of why I’m skeptical about many CSR efforts.   My fear is that very little progress has been made in areas that are hard to tackle and which involve real tradeoffs.  In fact, with all of the CSR standards out there (ISO 26000, the Global Reporting  Initiative, the UN Global Compact), it strikes me that there’s not a lot of straight talk about where the dial has and has not been moved in CSR.

This got me thinking about a 2 by 2 matrix of CSR – with impact on the world on one axis and level of tradeoffs on the other.  I took a stab at sketching this out:

csr-2-by-21

There’s nothing definitive about this picture, and it’s only meant to be illustrative.  But one has to acknowledge that, thanks to changes in attitudes and expectations, we’ve made some good progress on the left-hand side of the graph (where the tradeoffs are low, and the impact ranges from low to high): the recognition that, for example, reducing energy consumption will be good business and good for the world; or that a more diverse workforce – and programs that support it – is the right thing to do and a great way to attract and keep more talented employees.

But if CSR is “at the heart of the enterprise,” and if, as Brad Googins quotes, Lee Scott, the Chief of WalMart, told the Retail Federation, “There is no conflict between delivering value to shareholders and helping solve bigger societal problems,” then we’d see a lot of movement on the right-hand side of the graph.

And, in most cases, I’m seeing no movement at all.

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4 Responses to The Corporate Social Responsibility 2-by-2

  1. Brad Googins says:

    I loved Sasha Dichter’s blog on Corporate Social Responsibility 2.2 and his reaction to my comments on the Obama era in CSR. As someone who has been wrestling with these issues and observing what has been going on, I can honestly say some days I wake up and the glass seems half full and other days it seems half empty. So I guess it always comes down to perspective.

    I remember visiting the Apartheid Museum in Johannesburg a few years ago after not having visited South Africa for 10 years since it was in the last throes of the old regime. I kept finding myself relating things back to the United States and our history of the Civil Rights movement. By some standards the progress in South Africa and in the United States in civil rights has been nothing short of miraculous. The change in one generation – 20 years – is truly remarkable. But I was also reminded of how much things really have not changed in some fundamental ways and could be quite discouraged. So half full – half empty.

    So with corporate citizenship or responsibility I feel exactly the same way. We spent a few years developing a framework – the Stages of Corporate Citizenship – that we thought reflected what we were seeing in companies around the globe from very old and traditional models to game changing. We purposely built Stage 5 around game changing in a fashion that we believed no company could claim they were there. In running this framework by more than 300 companies by now, I can say that about 80 percent rate themselves at about a Stage 2 trying to get to Stage 3. It reflects that we are still in the early stages of this journey with a long way to go before all of us would see the glass as half full. That being said, I am reminded of the many incredible innovations that exist in companies around the globe, and I view these as the seedlings that hopefully will grow into a movement toward Stage 5. I am also encouraged by the data from our State of Corporate Citizenship survey that indicated CEOs from across the spectrum of 800 small, medium and large companies reported a significant movement toward seeing corporate citizenship as strategic. This was mirrored a few months later by the previously skeptical Economist, whose own survey reflected a major change from two years previously.

    Of course, all of this is tempered by the fact that we are still in such early stages. The short-term shareholder return has stood firm but the footing is less secure during this economic crisis. While the business case seems to be less of an issue and there is an acknowledgment of the strategic importance of citizenship, the reflection of this inside the company, in its products and services, and its processes is very weak.

    Nonetheless, I am by nature a half-full guy, and in this case buoyed by some pretty good data and trends that are emerging.

    Brad Googins, Ph.D.
    Executive Director, Boston College Center for Corporate Citizenship

  2. Sasha, as always a very thoughtful and provocative piece. (You know I’m a big fan of Brad’s and his perspective is always thoughtfully nuanced.) But you are right to challenge the field this way. You’ve been at the heart of it.

    My take — CSR has come a fair distance in 10-15 years. Every industry leader worth its salt has a CSR team of some kind. It has an environmental, health, and safety staff function. It audits parts of the supply chain. It has a diversity strategy. It is putting its toe in human rights waters. It has a few quality giving initiatives any philanthropist would envy. The C-suite gives at least glancing attention. It publicly reports on what it does. This is very different from 10 years ago.

    Is it enough? No — the world’s on fire and collectively these add up to a series of squirt guns.

    So where do we go? I’m intrigued to see if 3 issues become game-changers. They are climate change, the market of 4 billion underserved individuals, and the new markets created via public private partnerships to find market mechanisms to deliver apparent public goods (health, safe roads, ICT infrastructure, etc.).

    These game changers help companies (and countries) think seriously about how to compete and grow responsibly. You are absolutely right to diagram the tradeoffs involved in making commitments to CSR. To break free of these tough tradeoffs requires coordinated effort of regulatory reform, targeted finance, innovation, and creative business models. We get these through coordination and collaboration among strange bedfellows of business unit leaders, university scientists, “venture” foundation program officers, non profit service providers, government ministers, and financiers (among many others). Together they can write the rules that make it competitive to (for example) produce and provide renewable energy. Should we define the role a company plays in this scenario as “good CSR”? If it helps encourage more of this behavior then yes. If it discourages it, then no. Just as long as we start moving to the next iteration of “CSR” that really gets to the heart of competing responsibly and sustainably. Keep the good posts coming. see http://www.AccountAbility21.net to see what we’re up to. — Steve

  3. Sasha says:

    Steve, Brad, I truly appreciate you both taking the time to post such thoughtful replies. You both are pushing the thinking in this field, so it is great to have your insights.

    Two quick thoughts:
    1. Brad, the rating of “Stage 2 starting to get to Stage 3″ for 80% of the companies you interviewed is very interesting indeed. That feels about right to me, and the big question is whether it gets incrementally more or less difficult to progress to subsequent stages? My hope is that it gets easier (due to changed expectations of the corporation). My fear (illustrated in some ways with the 2×2) is that it gets incrementally harder, which would mean that 10 years from now if you do the same survey, your results won’t have changed much

    2. Steve, on the three opportunities you mention, I feel most qualified to talk about the business opportunity in serving the market of 4 billion underserved individuals. There are many very interesting initiatives underway, especially in the public/private partnership space (for example Acumen Fund’s 50/50 JV in Lifespring, a wonderful chain of maternal health hospitals in Andhra Pradesh, together with Hindustan Latex). The size of this market – and the actual work that’s getting done in it – relative to the size of global corporations, their budgets, and resources, is very very small. So while I want to see a “glass half full,” I think, so far, we have a glass with just a few drops of water.

  4. Pingback: Corporate Social Responsibility 2×2 conversation « Sasha Dichter’s Blog

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