Ellen West: across the pond (part two)

September 01, 2003

CSR has taken off in Europe, but the corporate responsibility movement is finding the U.S. a tougher nut to crack. In her first article for Briefing, Ellen West laid out reasons for this apparent stalemate. Here, she provides a checklist dealing with U.S. differences and breaking the transatlantic deadlock.

Avoiding the bear traps

An attendee at a recent CSR conference, representing a company from America’s heartland, turned to me and asked: “Why are there so many people with British accents speaking at this conference?” Whilst it would be easy to dismiss her remarks as typical American xenophobia, I found myself bristling as well at the tone taken by many of the speakers from the UK. The problem is common to many forms of evangelism. In their zeal to win converts, many commentators tend to speak as if any objections to their approach are only excuses. By listening to US companies more closely, they might discover that what sound like excuses might actually make valid contributions to the CSR debate.

Much has been made, for example, of the fact that only five major U.S. multinationals have signed the Global Compact. Meetings have been held to try and recruit more U.S. companies. The response of many companies invited to these meetings is “why is it our problem that U.S. companies haven’t signed? Don’t try to shame us into signing, focus on telling us why we should sign.”

Acknowledge the different context that U.S. companies operate in and adapt your language accordingly. Many leading CSR advocates have not adapted their rhetoric to the U.S. context. If CSR is to catch on, then those actively promoting it need to speak to U.S. companies in a language they understand, with an appreciation for the different home environment in which they operate. Words like “labour”, “transparency”, “sustainability”, “community”, “government” and even “rights” have different meanings in the U.S. Just because we speak the same language or work within the same corporate culture doesn’t mean that our underlying assumptions or the environments in which we work are identical.

There’s no sense giving in to handwringing over the political climate, the Kasky case or the vastness of the American continent. Act as if the short-term differences in acceptance of CSR will be overcome. While the political climate in Washington may not be as favourable as CSR advocates would like, the situation is not hopeless. While conservatives oppose government solutions, they often look to business-driven models to address social problems. The DC constituency isn’t the only one corporate executives have to please. And, finally, President Bush did manage to surprise almost everyone with his initiative on HIV/AIDS.

Likewise, the Kasky case has already become a secondary issue as the Supreme Court refused to decide the first amendment issue and sent the case back to the California courts. Even the geographic spread of the U.S. can eventually be overcome with time, travel and electronic communication.

Accentuate the positive

Don’t assume an American appetite to restructure capitalism. Avoid sweeping generalizations that seem to question the value of capitalism. Instead, present CSR as a way to make capitalism “better, faster, stronger”. Emphasize how traditional U.S. strengths in entrepreneurship, innovation, and management can be brought to bear on social issues. For example, whilst many advocates have focused on public CSR reporting to a limited audience, the different environment in the U.S. might lead to a greater emphasis on the internal management changes needed to produce different behaviours and performance. On issues like diversity or responding to disabled customers and employees, U.S. companies have demonstrated leadership in using training and incentives to effect positive change.

Many U.S. companies operate exemplary programs to deal with single issues. What they need is to weave their strengths on a set of individual issues into a more holistic framework. If CSR can be presented as a way to make a wide range of efforts already underway within a company more consistent with each other and with company values, it might gain more acceptance. European CSR practitioners can also learn something from the U.S. approach to drilling down on single issue and looking at all of the possible ways to affect behavioural change. Painting CSR with too broad a brush and talking only about high-level concepts can mean that the rough and dirty work never gets done. Americans may not always see the forest, but Europeans might benefit from closer inspection of the trees!

While there may not be a common starting point on philosophy, there are common interests in better outcomes. Assume a greater willingness to “do the right thing” and less cynicism about whether that’s possible. It’s no accident that the world’s most admired companies are usually American ones possessing distinct cultures with strong ethical overtones – IBM, General Electric, Johnson & Johnson. Americans are firm believers in the virtues of self-improvement, and that applies to the business culture as well.

In their zeal to convince senior executives to embrace CSR, advocates have trumpeted the “business case” for every aspect of CSR. One-off case studies demonstrating how a single company benefited from a particular CSR approach or activity are valuable, but in the American mind they are no substitute for quantifiable evidence demonstrating cost savings, risk reduction and increased share prices. Some activities, such as employing child labourers, or avoiding purchasing from zones of conflict, are better discussed as moral imperatives. The potential damage to reputation that would arise, after all, stems from the moral outrage of various stakeholders. Be clear about whether you are appealing to the profit motive or the moral conscience.

A CSR melting point or melting pot?

Are we looking at the inevitable parting of ways between the development of CSR in the U.S. and Europe, or could this be an opportunity to step back, re-group and continue advancing the field with a strengthened philosophy and methodology?

The options appear clear:

  • absolutism – keeping faith that the European model is right and will triumph regardless of the American viewpoint;
  • pragmatism – conceding that, while the European view may be correct, CSR will never really develop without U.S. support and an accommodation of U.S. concerns;
  • or, idealism – insisting that, by embracing U.S./European differences, something better and more lasting will emerge from the culture clash and subsequent synthesis of viewpoints.

It will be for those at the front lines of CSR – those within companies and in the advocacy arena – to decide which way the CSR movement swings.

Ellen West previously managed the LBG and was a senior consultant with The Corporate Citizenship Company. She returned to the US in August 2002 after working in Europe for ten years and is now consulting with major corporations. Contact Ellen at: ellenwest@nyc.rr.com

Editorial Comment

Transatlantic trends

A recent survey by PricewaterhouseCoopers of senior executives at European and U.S. multinationals highlighted a seeming contradiction in the U.S. approach to CSR. Of those surveyed at U.S.-based companies, four out of five (81%) believe that sustainability practices will be “essential or very important” to their company’s strategic mission over the next two years, compared to only three out of five (61%) European executives.

While this might lead to optimism about U.S. companies catching up to their European counterparts, two other pieces of data underscore the need to think carefully about how to bridge the transatlantic divide on CSR.

l Firstly, more U.S. executives emphasize the importance of positioning their companies for long-term profitability, while Europeans place more of a focus on the economic and social impacts of their products and services.

l Secondly, while around three-fifths (60%) of European-based multinationals currently report on their social and environmental performance or plan to do so, only about a fifth (22%) of the U.S. companies surveyed can make the same commitment.

While the situation is not hopeless, it does call for some adaptation on the part of those who believe that U.S. business must be made to “see the light”. Ellen West

Corporate Citizenship Briefing, issue no: 71 – September, 2003

Ellen West previously managed the LBG and was a senior consultant with The Corporate Citizenship Company. She returned to the US in August 2002 after working in Europe for ten years and is now consulting with major corporations.