GO! Bring on Corporate Social Responsibility
October 6th, 2008 by arvind
Arvind here in London wondering which major bank will have to be rescued next by their country’s government.
I have just learned how the German banking group Hypo Real Estate is to be rescued by the German government to the tune of 50bn euro ($70bn; £40bn).
Meanwhile, French giant bank BNP Paribas has confirmed to take over parts of ailing Fortis bank. The Iceland government, meanwhile, is also working overnight to try to shore up its entire banking system.
The German Chancellor Angela Merkel has said that the managers at financial institutions should be held accountable for “irresponsible behaviour“.
So what is really going on here?! Have banks just been greedy or incompetent or have they come unstuck due to unprecedented financial changes worldwide?
Corporate Social Responsibility is a phrase that has been hyped a lot over the last few years. Businesses are supposed to do the “right” thing for society and not just for their bottom line. But I ask you…..
is this all lip service?
Large businesses donate to favoured causes and carry out various initiatives such as giving staff time off to work in the local community and so on. Maybe this is just a token effort, a PR exercise to “look good”?
Conversely, should businesses even care about the community and the impact on the world due to their activities?
What is YOUR experience of CSR and businesses doing the RIGHT thing? Comments welcomed.
Ere! Guess wot youz lot!
My David see, he as like joined the Lion Tamers’ North American Trade Union he as! Cos like youz can get all kinds ov great deals on insurance and Lion Tamin Outfits an all that stuff right. But like coz theyz is quite a political force in the States see, they av gived my David some top notch secret information right they av!
Seems like that President Bush right, well he’s only goin to get sacked next month!!
That’s right! True it is! An my David reckons see that there’s this bloke called Bartlett Obama or somethink, an he might be like the next Pres! But like see, if he gets the job right it’s goin to be like dead right proper istoric an all it is….. Coz he will like be the first Irish Cafflick ever to be Mr President of the USA he will!!!
But right, there’s this woman wot might get the job an all, an she’s like a former topless model wiv 10 kids an specs, dead clever she is see, named er youngest after Trigger from out ov Only Fools an Orses, an she likes guns an that, which are dead popular wiv them yanks right, they’re always shootin each other, an she’s got this secret weapon which is a bit of right thick usband, an that’s important coz theyz needs to appeal to the fat an lazy burger o/d classes see, an that’s where theyz say the contest between em will like be won fer who gets to be Pres right!
So like see, theyz av got to get themz Red Necks on their side right! That’s the politically correct name these days right for them Original Native American inhabitants, the Injuns see. Cept now like they av stopped livin in wigwams an opted fer them trailer parks instead an all, that’s coz youz can fit a satellite dish on a trailer wivout it rippin through the roof an that.
Anyways, weze is not right sure see, who wouldst make the best Pres? I reckon that Irish bloke is best, coz he’s dead fit an I couldst sing Appy Birfday Mr President to im on is big day an that, an my David could do is tamin act fer im wiv our Norris The Fantasy Lion.
Can’t wait we can’t! Dead excitin it is! Don’t fancy that bird see, so we ope she don’t not get it, an our Norris is worried bout that too, an he like says, “Go to a kid’s soccer game on Saturday and ask them, ‘How are you feeling about the economy?’ 100,000 police officers on the street, trying to get something done, send in the maverick. Was it the risky home-buyers? Earn over $250,000 a year! Those folks on the sidelines knew that two months ago, that’s not patriotic!”
Our Norris, we reckons he’d beat any ov that lot in one ov them debates see.
Why on earth Mr Brown has just re-instated Mandy when you’re available Elt, I’ll never know.
Mandy is busy printing Fabulous Photo Gifts!
CSR?
Show me a business that doesn’t put bottom line profit (or losses in banking) first?
CSR can be part of the mix but it’s often a badge, like an ISO that people jump through hoops to get just to make them feel better about themselves…..right?
I agree with Jim here.
The fact that businesses feel the need to mention CSR as opposed to just getting on with it speaks volumes. Its a PR exercise for a lot of businesses. It could also be argued that CSR has been achieved by providing the surrounding locale with employment and the knock on effects this can have on the localised economy.
Jim / UP - you make a valid point.
However more and more social enterprises are starting up with the stated aim of being in business for society and doing good through their operations.
Yes, a business may provide local employment and positive knock on effects but the question is if whether it also creates any negative side-effects such as pollution, large cabon foot print, congestion, use up scarce resources, worker exploitation and so on.
I hate to sound like the sooth sayer of doom but I think its a facade I really do.
business is not about ethics is it really? look at enron? look at the lehmann collapse? look at the numerous bungs/freebies and backhanders that get passed to grease the gears!!
its about money. sorry but it is.
I don’t think thats disputed but more and more companies are adopting a CSR policy, because it makes them more attractive as a supplier.
At least they’re being proactive, even if it is for monetary reasons.
Due to some illegal activities of Boeing employees, company wide they all must take a mandatory all day ethics course once per year. My husband said that they have hired really good people who make it real and make it fun. However, I keep telling him that you either have ethics or not. Most people really can’t be taught it. But, at least, it gets people thinking and talking and being able to speak up when necessary. Two lessons that I have learned working in the human service field that made my life much easier and happier was 1) unfortunately, you can’t teach common sense (note: head shaking back and forth with eyes closed-ignore the rattling) and 2) you can’t teach other’s people skills.
CC - do you think the Directors of Lehmans and the other failing banks have now learnt Ethics?!
No! It is still about money. I think that they are sorry that they took a risk that didn’t work out and that they got “caught.” The bailout doesn’t help them to learn how to change their practices. But, I do not understand enough about the crisis to understand the national and international impact that it would have with or without a bailout. Heck, the experts don’t even know if it will work. However, I do know that the bailout doesn’t teach them natural consequences…get greedy and you pay a price.
With CSR, I never heard of the term. I don’t know if it is because I am American or have always worked for non-profit agencies where the focus should be on social needs. But, it often comes down to the low budgets we receive, so the employees often have low wages and inadequate benefits. You keep telling yourself it is the intrinsic value, but I hate to watch my co-workers struggle financially and unable to live in a safe neighborhood. That is unless you get into management, but then you get further away from direct client services. Basically the further you move in management the further you become disconnected and have little contact with those the agency serves and the real day-to-day needs. It starts to become all philosophical which isn’t helpful when you have a client that is going to be homeless. I want the bottom line…are you going to approve my exception and fund for emergency housing or not because I need to work another route if your not, so stop wasting my time and just tell me!” Non-profit is a whole other world. I had a couple of interim jobs that were corporate…it was nice not to worry about finances. But, I’m a bleed heart…want to help people.
But if you are involved in a tender process, increasingly nowadays, the business you are tendering for expects you to have a CSR, a diversity policy or sometimes ISO accreditation.
Yes a lot of it is rhetoric but if it forces companies to create this process in order to win business, then thats not a bad thing.
Totally agree with you Lib. Having the intention for CSR is better than nothing.
All big companies now have a Corporate Social Responsibility department though they might call it other things.
Business ethics and long term sustainability have become vital components of any company’s business strategy. With the advent of the net, companies can be easily found out if not doing the “right” thing.
The challenge is to differentiate the hype from the real thing.
If those bankers had more ethics, maybe they wouldn’t have got themselves into the mess they have.
Fair enough but how do companies walk the CSR talk?
Is it measured? Budgeted?
How - KPI’S?
Jim - companies can walk the CSR talk by making it an intrinsic part of their stated company policy and strategy. A classic example here in the UK is Innocent Drinks:-
http://www.innocentdrinks.co.uk/us/ethics/
This is what is on that page which is about their ethics:-
We sure aren’t perfect, but we’re trying to do the right thing.
“It might make us sound a bit like a Miss World contestant, but we want to leave things a little bit better than we find them.
We strive to do business in a more enlightened way, where we take responsibility for the impact of our business on society and the environment, and move these impacts from negative to neutral, or better still, positive.
It’s part of our quest to become a truly sustainable business, where we have a net positive effect on the wonderful world around us. Below you will find our strategy for, and our performance to date, in doing so…”
Then have listed 5 areas:-
1. Keeping things natural
2. Responsible ingredients
3. Sustainable Packaging
4. Resource efficient business
5. Sharing the profits
Hope this helps!
Arvind
is this the same innocent who have ads pulled by the ASA every campaign because of ‘false claims’ ??
just a thought!
innocent are a good brand but they are a money making venture packaged nicely- like the old ben and jerry’s hippies!!
It mostly sounds as thought CSR is lip service to either appease guilt or a good PR exercise. With so many companies, CSR is just an add on policy to the cupboard full of other policies. Very few companies make it part of there whole ethos. There are a few companies that do however and The Body shop springs to mind for this one as it incorporates CSR throughout the whole company and the products.
Supermarkets are also starting with Fair Trade options which is always good to see, however, my cynical side does wonder how much of the profit goes back to the growers. I think Jim is right in his earlier comment, at the end of the day it is all about bottom line profits!
Time to sink the teeth in Arvind……
Love your post mate….
To good….
My take on corporate business and CSR these day and correct me anyone who thinks I am wrong…
Business donates to charities and receives major tax deductions…
Money that would otherwise count towards their overall taxable takings…
Most right off every single penny they can in order to avoid paying out and there by reducing their bottom line…which thay can do extremely, One millionaire businessman down here.. A few years ago paid only something like $5.00 in income tax yet made well in excess of $20 million for the year… hmm go figure..
The push at the moment is to be seen to be environmentally responsible; so many businesses have jumped on the bandwagon and claim to be environmentally clean green etc… In order to gain customers who would not otherwise think to use them… even Petroleum companies are trying this one on…
The bottom-line for corporations is profit and shareholders not society in general and certainly not anything to actually do with a corporate social responsibility.
I have yet to see a corporation who out of the goodness of their steel encased hearts, cuts prices because society is doing it tough, or give away short dated produce to charities..
Who here would like to a Petroleum company such as one who makes about $55.000 (in Oz at least) an hour say ‘oh dare people out there in the country are doing it tough how about we cut our petrol costs by oo I don’t know lets take off 20 cents a litre just because we can….’ wont happen
Nope they wont… because there is no benefit in it for them, no tax deductions, shareholders would sell their shares (if anyone still has any worth anything) because of the reduced profits.
Social conscience and Corporate responsibility are to phrases used as hype, primarily to allow people believe they are doing the right thing and discrediting any that by some slim chance are actually trying to do the right thing…
I can name many many corporations whose social responsibility looks quite good in the papers, looks great in their prospectus, looks even better on their website, but when look into their actually practices leaves a lot to be desired…
There are one or two whom I can name as actually doing the right thing in a way, which appears too be responsible and actually do what they say however given the nature of the beast and the tainted perception myself and many others have, I don’t we would believe them anyway. Sad
post of the day AC
Thanks mate…
I think
Excellent input AC - this is the sort of debate I was hoping my initial post would stir up.
Call me naive but I do believe that a very small number of businesses are basing their whole business ethos on social change. Maybe they are being naive and simply fulfilling a need for people to see business doing good.
Ultimaltely it really comes down to individuals being personally socially responsible. It is only when business CEOs begin to think about the longer term and the greatest good that we will have positive change.
I dont think you are Naive mate.. I think it is more wishful thinking…
Most CEO who I have come across only think as far ahead asthe next stockholders meeting and there the length of the contract… much like politicians no vission for the future…
Perhaps the next generation will being about change but given the role models many hold dear I dobt much will change until they are dragged out kicking and screaming…
The most important thing I feel is to make Big Business and the high end of town Accountable for themselves, ultimately we have a choice as to who and what we support, until we use this power to show them we do care things wont change..
but I do try and see some good but with Corps.. it is very hard.
The balance sheet first BUT what is CSR was encouraged by say each Department and tied into community stuff?
Jim - more and more companies are beginning to seriously look at how their operations affects the local environment and the local community.
Also, employees and especially new graduates are choosing to work for those companies with a more responsible approach to business.
Fair enough - how can it be measured though - in terms of success?
I agree with Lib’s comment. True, CSR may well be merely a public relations exercise, as per the comments of some of my fellow commentators above. Nevertheless, provided that the outcome is projects which have a positive impact, then I feel that the concept should be encouraged.
With respect to Emma’s comment, if I recall correctly, a report which I read in The Economist about two years ago described how large portions of the extra price which we pay on Freetrade products is actually kept by the retailer. Don’t quote me on this, because my recollection is vague, but I am quite certain that the report stated that only a small portion of the extra money actually goes to the farmer concerned.
Cheers
Andew
Nice one Andrew, and welcome to GSTF!
Andrew - I am sure you are right. From the price we pay in a supermarket for Fairtrade products, the bulk of the money goes to the supermarket.
It is not surprising at all that since big businesses have been so tainted as being bottom line and profit focussed, we all find their apparent “doing-good” efforts to be so cynical.
I know from first hand experience how tough supermarket buyers can be, having been to negotiate with some buyers a decade ago in my previous work incarnation as a food marketeer. I can only empathise with any producer trying to get their products listed.
business reacts to the market demand. Stop buying cheap goods made in swearshops and they’ll stop using them. Shy away from profit hungry environmental monsters and they’ll truly change. Divert your pensions investment strategy away from the big earners and they’ll struggle to maintain share price, cycle or walk instead of buying petrol, etc.
Excuse me while I don’t hold my breath.
Soapboxes are fine, demanding csr verbally is fine, however actions are harder. Evil business will change when evil consumer demands it for real.
this is true but when other constraints are in play it is physically impossible..
for example .. i can not ride a bike to the main town for my shopping.. there is no public transport, no buses, trains etc… I am not able to cycle 180km over the mountain range and then be back in time to get Moppet from school.. so as you can see it is not possible to aways achieve.. however if hybride vehicles were more readily priced I would purchase and make use of it..
it is almost impossible to know what is made in a sweatshop and what is not.. even designer labels use cheap labour.. and how many electronic products are made in countries other than asian… and that being the case you do not know whose business pratices are ethical and whose are not.. good brands and manufacturers are not as easy to find as they once were… the multi national company is not going to public announce they use sweatshop labour… then the public as a whole would not purchase the product…
If on a whole, Company A announce to the world they used a back alley sweatshop in china or wherever to product their goods then the companies share prices would plummet as people show their objection to the pratice..
It is not always as easy to do, show, or prove….
most people have an inheirent distrust of big business and Company executives on whole…..
There in lies the consumer choice. Live 180km from the shops you will have this issue, its a personal choice that you made. I am not criticising merely pointing it out, I do know you have less impact on the environment by virtue of your lifestyle choice. Hybrid cars are more expensive as they contain an expensive battery, no free lunches I’m afraid. Great strides are being made in battery technology by the company I work for as consumer demand is there, however these things will take time as we also have to plan for the environmental laws concerning the heavy metals used in batteries and the end of life directive for vehicles - this is where the OEM is obliged to take back the car and dispose of it at their own cost (put in place to promote recyclability in the design and manufacture of them).
You can find out where something is made and how it was made, although you are correct its not so easy. The internet is a marvelous warehouse of information for this, I just googled ‘responsible manufacturers and came up with http://fundraisers.everyclick.com/search?keyword=Socially%20Responsible%20Manufacturers, there are many more if you search things like ‘ethical manufacturer’ or ‘ethical businesses’
You can then further research the suggested companies to see if they truly are. Annual reports are a good place to start.
Choice is limited, however when that choice involves a cost to the consumer moralising tends to reduce and original source purchases tend to be made. If it was easier and clearer then maybe more would make the choice but the consumers need to demand it, using spending power..
Gareth - ultimately it all comes back to people being more personally socially responsible (sound familiar?)
I remember a few months back there was a documentary about how women’s handbags sold in the UK for around £5 were traced to have been made in a sweatshop in India. Their retail price was £5 and people snapped up as they had the most intricate stiching and beading etc.
Anyone could have looked at the bag and realised that each bag would have taken days and hours to make. Working back from the retail price of £5, it would have been clear that the people who made it by hand would have been paid a pittance!
If we in the west still demand and insist of cheap bargains, then is it any wonder that exploitation happens in the so called developing world.
By the way, India despite its fast emergence as an economic power house still has so much to sort out at home - I will save my rant for another post sometime
in fairness though Arvind- and I am not having a go- India has more millionaires than the uK and much more billionaires. surely the Indian people and the wealthy ones at that need to be more aware- its really not our place to dictate another nations working conditions.
Adding to UP’s comment, the “sweatshops” actually happen in every country. Just more in some than others…where we know about it.