The importance of Corporate Social Responsibility
Many business Directors seek new and innovative ways to align their profit-making with philanthropic giving. All too often this is used as a bolt-on marketing tactic to generate goodwill, rather than a heart-felt and strategic duty to ‘do good’. In this article I explore the nuance of corporate social responsibility and the best routes to ensuring it is implemented for the right reasons.
What is Corporate Social Responsibility?
Two decades ago, the influential academic and economist, Michael E. Porter wrote about the Competitive Advantage of Corporate Philanthropy in Harvard Business Review. He explained that often the giving doesn’t satisfy critics and so more is expected, thus creating pressures to the bottom-line. Porter defines honest strategic giving as ‘addressing important social and economic goals simultaneously, targeting areas of competitive context where the company and society both benefit because the firm brings unique assets and expertise’. One example of this philosophy in practice is Accenture who have a dedicated arm of their core business for innovative corporate citizenship. In short, they have a conscience around their negative impacts and understand that the best way they can make a positive impact is by using their core capabilities of technology, business and management consulting to make a difference to society. Each employee is given the opportunity to spend a handful of days each year using their time for the benefit of society. The benefit for Accenture is they are demonstrating their value by empowering disadvantaged parts of society, and enabling underfunded charitable organisations to have high-value corporate management consultancy.
But how does this work with an extractive product-based business?
Donating service time is a no-brainer for a corporate management consulting firm, but when your core service is manufacturing products with packaging, donating products is just adding to the wider issue. As a society, many of us are learning to live without single-use plastics and finding more sustainable ways to consume products without harmful side-effects. Lots of organisations are becoming better at reducing their carbon footprints and switching to recyclable packaging. But there is still a long way to go for this to be considered truly sustainable.
One school of thought is that companies who refuse to adapt processes to remove single-use plastics should be boycotted – for example, Coca-Cola is frequently cited as the number one plastic bottle polluter around the world. The issue with the boycotting mentality is that Coca-Cola aren’t going to stop producing products because a handful of ex-consumers aren’t buying their products – it is such a small proportion of their global sales figures that its impact is effectively redundant. Surely a more pragmatic strategy is encourage our traditionally extractive transnational corporations to become more ethical, responsible and sustainable over time?
An interesting case study around the problem of Corporate Social Responsibility within inherently ‘harmful’ product organisations is Unilever – a multi-national brand-house that is one of the largest producers of plastic packaging around the world. The strength of their Corporate Social Responsibility is in the perception of their brand as a leading champion for sustainability. Back in 2000, they launched their Corporate Social Responsibility strategy – their admirable approach was to be transparent about where they are and what they plan on doing to become more sustainable. They used a variety of specialist consulting partners to audit their existing impact and plot long-term routes improve their performance. They’ve made sustainable living the heart of their business and all people and processes proactively work toward a better future for all. Plastic waste is just one small element of Unilever’s overall Corporate Social Responsibility. One of the most impressive parts of their strategy is that they have implemented initiatives in every single area of the business where they’ve accounted for a negative impact – for example, where nature is being farmed for its organic materials, they’ve implemented regenerative processes, and where their supply chain is employing people in the poorest parts of the world, they’ve initiated living wage programmes to ensure they receive a fair portion of the value they are creating.
Why is it only now that Corporate Social Responsibility is becoming a common strategic aim?
We’ve reached the tipping point and the signs are irrefutable: climate change causing ever more frequent natural disasters, micro-plastics in every single living sea creature and rising inequalities are a few of the more obvious signs that our capitalistic society is not working in its current guise. Businesses must take responsibility for the impacts they make to humanity and our planet - for too long, capitalism has been extractive, exploitative and polluting. Users are demanding that brands review their ethics, packaging, supply chains and so on. Many eco start-ups are also putting pressure on existing organisations to step-up their Corporate Social Responsibility game.
How can an organisation implement legitimate Corporate Social Responsibility?
The answer is simply to take it seriously: a strategic review of Corporate Social Responsibility within your specific market place, location and against your unique operational set-up. If Corporate Social Responsibility is not taken seriously, at board-level, with buy in from all stakeholders, it will come across as bolt-on marketing, or ‘green-washing’.
Speak with us about reviewing your unique set-up and how we can lead the way in your journey to Corporate Social Responsibility.