What is corporate social responsibility?

(This is part of the roots of the revolution series.)
Business spend on CSR goes up, consumer trust in business goes down

Social media is not the be-all and end all of marketing. It’s one symptom among many of a revolution that is profoundly changing the way business is done. We’ve looked at the rise of virtual communities before; one of the other symptoms is Corporate Social Responsibility.

A nice idea in the 1970s, CSR is becoming a must-have. Global branding thinktank the Medinge Group puts it this way:

” …these are the sort of attributes we would expect of a nation-state, and increasingly we expect them of corporations.”

And Ernst & Young’s Global Megatrends 2009 report (PDF) speaks of the “rise of responsibility”. According to the report, businesses face “increasing expectations and obligations around how they act and the impacts they have on the world around them”. These expectations are coming from a growing body of stakeholders, who are no longer defined simply as “their consumers, employees, regulators and shareholders, but include far wider-ranging groups, including NGOs, the media and local communities”.

Social media is speeding up the pace of change, and amplifying the voice of individuals and lobby groups who want to hold large organisations to account.

Read more about corporate social responsibility:
Nicholas Ind, edited by, Beyond Branding
Gurnek Bains, edited by, Meaning Inc

WHAT THIS MEANS: Ask yourself, why does our company exist, other than to make money? Make that your cause.

Update: Thanks to Alex for telling us that “Communicative Stakeholder Relationship” better describes CSR these days, according to a recent PR Global Forum. Details here and here.

5 thoughts on “What is corporate social responsibility?

  • Charlie

    CSR is a myth while corporations are predicated on the pursuit of growth alone.

    This “profit for the sake of profit” is driven by the “shareholder first” position – an artefact of the market capitalisation that is required by large scale corporations in global markets.

    I would suggest that a starting point for “CSR” is only possible where companies are not primarily (financially) responsible to their shareholders.

    In short, I believe the present extra-corporate environment is not compatible with large-scale publicly-listed companies acting responsibly to anything but the bottom line.

    In the meantime, saving paper and electricity have cost savings – so these means will be undertaken to try and achieve a PR coup – to do the minimum to get the “green vote”.

    I believe that a sustainable, responsible, future cannot include companies which have the same rights as individuals – but not the same liabilities.

    For example, had one individual or small group been responsible for the Gulf of Mexico, or Bhopal, or New Plymouth (!) then we would hear them described as ‘terrorists’, and imprisoned. Companies need to face equivalent penalties to individuals – not nation states.

    We will not see the statutory changes required to do that through the government channel – there is an unbreakable feedback loop of lobbyism and self-interest.

    Perhaps we can achieve this through social pressure and other means – but the path is certainly not an easy one.

    A case in point is the 2002 attempt to introduce a shareholder resolution for fair treatment of bottling plant workers by Coca Cola. Despite a very bad track (criminal?) record in this department, Coca Cola shareholders voted against a resolution that would ensure fare wages and outlaw child exploitation. ->
    http://en.wikipedia.org/wiki/Criticism_of_Coca-Cola#Shareholder_resolution_attempt_.282002.29

    Shareholder voted down the resolution.

    Reply
  • Simon Young

    Thanks for your comment Charlie. I agree that the profit-at-all-costs approach takes any true effectiveness out of CSR. That’s why it’s puzzling that the triple bottom line approach that we heard so much about in the late 90s is no longer talked about. It’s not that it’s irrelevant, or has been adopted widely, it just seems out of fashion.

    I hasten to add, not everywhere. I was recently at a retreat for a Crown Research Institute that spoke of a quadruple bottom line: financial, social, environmental and cultural. There is hope.

    I believe social media provides a channel through which positive social pressure can be applied – but it will still need leadership.

    Reply
  • Charlie

    We have fewer effective channels through which to apply social pressure than ever before – no-one cares if you march, if you complain (include Social Media), if you boycott – the apathetic majority forget and move on.

    So the question is through what means do we apply pressure that will achieve results?

    Seth Godin has much to say on the topic of “starting a movement” by creating passionate adherents to your philosophy – with the intent of creating a self-perpetuating/proselytising meme.

    So, I have one to share. Why do only ‘politicians’ go into politics? Party-internal politics, spin, campaign money, popularity contests, etc. serve to debar ‘ordinary’ people from running for government.

    So, can we use social media to create a political “unparty”? Can social media get a person a seat in parliament?

    Reply
  • Simon Young

    You’re not the first person to moot that. Check out Wellington Mayoral Candidate Jack Yan ( http://www.jackyanformayor.org/ ) … he mooted the very idea you’re talking about some years ago in a Yahoo! group.

    Reply
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