The end of CSR?

John Morrison

 

Posted in: Corporate Reputation, Governance, Guest Writers, Policy & Research, Speaking Out, Strategy, Supply Chain

The end of CSR?

December 11, 2014

John Morrison argues that CSR has had its day, and must be replaced with a more inclusive understanding of businesses’ role in society.

 

“The King is Dead, Long Live the King!”

The end of Corporate Social Responsibility (CSR) has been prophesied many times from the perspective of business thinkers (e.g. Michael Porter) to human rights activists (e.g. Anita Roddick).  Possibly the most eloquent was Sir Geoffrey Chandler, the businessman turned activist, who despised the term even as it was being born in the 1990s – but not enough people listened.

At its best, CSR is a distraction, meaning everything to everyone, and too little to anyone. At its worst, CSR is a fundamental misunderstanding of the true relationship between business and society.  This is not to deny that some very good work has been undertaken under the CSR umbrella. My intention here is not to criticise the good work done, but more to criticise the umbrella. Some of the strongest anti-CSR sentiments I have heard come not from government or NGOs, but from business itself.

For too long the European Union laboured under the straightjacket that CSR had to be by definition “voluntary” – so that all the “mandatory” requirements on business that had a social impact (e.g. health and safety, equal opportunities, anti-corruption) could not be seen as “corporate – social – responsibility’; an oxymoron that would fit well within “Alice in Wonderland”. It is lucky that the European Union changed its CSR definition in 2011, before the 2013 Rana Plaza Factory collapse in Bangladesh (and the death of over 1,100 workers) reminded us why basic health and safety needed to be included in so-called “CSR audits”. It makes no sense to split the mandatory and the voluntary when it comes to basic human rights, particularly as there is no level playing field of enforcement around the world. Professor John Ruggie, the then United Nations Special Representative on Business and Human Rights, deserves much of the credit for this wake up call.

If I sound a little angry and frustrated, it is because I am. In our societies, the breakdown of trust between elected (and non-elected) governments and their peoples, the complexity of global supply chains which still externalize true social cost, the timidity of elected leaders and the indifference of consumers and investors leave us at a dangerous time in history.

All over the world, charismatic populist politicians offering simplistic solutions to complex problems make the world a more uncertain place for its people, but also for business. If there were ever a business case for human rights, it is now. CSR will not help us at all with the awareness and collective action that are needed. Human rights, whilst often perceived as a toxic political subject for many politicians (despite their often favourable private views), are an unavoidable issue if we wish to reap the benefits of sustainable globalisation.

What is needed is a re-focus on the social contract thinking of the past 300 years – started by the likes of Hobbes, Locke, Rousseau and Kant, but arguably revitalised by a number of thinkers over recent years. In the same way that democracy alone will not secure the social contract between elected leaders and their people, CSR will not secure social license for business in society.

At a minimum, businesses must not exploit weaknesses in the pre-existing social contract in society, riven by the effects of rapid globalisation, conflict, corruption or poverty, in return for a quick buck. Laws should prevent them from doing so, and if these need to be international laws with extra-territorial effect, then so be it.  But business can do much more than this. If it understands its place in the social contract, business can strengthen good governance and raise the capacity of citizens to hold their governments (and businesses) to account. This is not turkeys looking forward to Christmas, but rather businesses understanding that sustainable societies mean sustainable marketplaces.

So perhaps the end of CSR would be a good thing, or at least the end of the type of CSR that is not core to the business model, on the one hand, and that is not accountable to society itself, on the other. At a minimum, a tighter definition that brings in government, law and social contract thinking into the many weary definitions of CSR around the world would help.  We need something much bolder, more legitimate and with a sharper edge – fit to tackle some of the challenges of the years and decades ahead.

As already stated, the people I have found that hate the concept of CSR are some of those in companies that have CSR in their job titles. I guess some of you reading this article will fall into this category. If you do, liberate yourself. The Emperor has no clothes! And forget about the King!

Business deserves better than old-style CSR. So does society.

 

John Morrison is the author of “The Social License: How to keep your organization legitimate” (Palgrave MacMillan) (johnmorrisonbooks.com). He is also Executive Director of the Institute for Human Rights and Business (www.ihrb.org). This article was written in his private capacity and does not necessarily represent the views of IHRB.

COMMENTS

  1. AvatarKate

    Totally agree that we shouldn’t need CSR if we better laws, and more importantly, their implementation, compelled business to do the right (and more sustainable) thing more often.
    Unfortunately that is not the case. The West has weakened the opportunity to use trade laws to influence developing countries to enforce labour, safety and environmental laws, and the tragic Rana Plaza collapse deaths were merely the tip of the ice-berg. Whilst true, this article would be more effective if it called for business to speak out against further weakening of the chance for trade to influence better law implementation, e.g. by asking business to speak out against TPP and TIPP for example, or e.g. the top 100 buyers from countries to ask for exporting governments to implement laws where specific greater effort is needed (e.g. as many brand buyers did in 2014 in asking the Cambodian government to release unjustly arrested trade union leaders). With specific requests this article’s message can cause the real change it desires. Until then, in 2014 the media reported business calling for stronger laws e.g. for carbon trading, but implementation was not seen. Orgs like IHRB may be able to help call out firms who are pushing against the majority of business who are in fact calling for leveller playing fields for “CSR” (environment and human rights) through such laws.
    As long as better laws are not written in the west, or implemented in the east (e.g. Bangladesh) CSR will continue to be needed to help companies (that care more than others) to at least implement their Social Responsibility to buy from safer factories treating workers better and polluting less as there is virtually no other way, and as stated, it’s a more sustainable way to do business.
    As for Rana Plaza, Health and Safety has been a key, sometimes the Only part of “CSR/ Social Audits” for many, many (at least 15) years. What was not included in 99% of such Safety audits was the far more difficult Building Structural Safety, although machine, chemical, fire, dormitory, canteen cooking and an endless list of other safety issues was. The very few brands who had included Structural Safety (e.g. Levis) were not buyers from Rana Plaza and similarly risky buildings. It remains debatable whether “CSR/Social Audits” should include Structural safety assessments which are an incredibly technical process, and best left to industry wide and government solutions, hence the establishment of the Accord and Alliance for Bangladesh Worker-Building Safety looking specifically at Structural and Fire Safety, and their efforts to engage, drive and develop government capacity, although outside Bangladesh, very few brands and industry bodies have yet worked out how to assess this issue given trade laws incentivising fast moving sourcing patterns, and little to no trade policy pressure. For example, to cause the government of Cambodia (where other workers were killed in 2014 in factory collapses) to finally actually create Building Structural Safety standards and assessments at all. Again, for now over-worked CSR teams struggle to figure out how to ensure orders are from safer factories when orders move factories so fast and for such tiny amounts, when what is really needed is the type of Government engagement for the level playing field which organisations such as IILO Better Factories Cambodia (supported and driven by business “CSR”) strive to create with Cambodian business and government. Without “CSR” though (and audits telling factories to at least move over weight materials from weak upper floors etc), conversations to drive e.g. safer Cambodia factories might not be happening at all, and we might have seen more collapses in Cambodia (given buildings built to no structural safety standards).
    In summary, better trade law incentivising respect for human rights is better than CSR, but there is a very long way to go until that is created, so for now, CSR is an incredibly important part of causing e.g. safer factories, and other basic worker (human) rights, and those calling for human rights would do better to ask business to talk to their CSR leaders about what issues business could use it’s voice with governments (domestically and internationally) on to ensure better human rights in business partner operations, and yes, more sustainable business.

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  2. AvatarRishi Singh

    Through provoking article John! In India there is rush for companies to spend money on CSR (partially thanks to the 2% CSR bill), not completing understanding the business case and sustainability of markets. Human rights has become like hot iron from furnace which no one wants to hold, not realizing that to shape better societies this hot iron needs to be forged using the skillful hands of UNGPs.

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  3. AvatarDr Zubair Anwar-Bawany

    John, you have encapsulated what we have been advocating for the past 18 months! It’s more than csr, responsibility is everyone’s responsibility!
    Lets try and find a way to get you out to Pakistan for the Beyond CSR Summit in March. Your observations on CSR would be refreshing.

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