What the hell is CSR?

Corporate Social Responsibility. You know what's happening here? This is --or could be--a really powerful business tool, but it is seriously underutilised, and even worse--misutilised. Nobody even takes notice of it because its is disguised in grandma clothing, looking a bit like a charity case and feeling sort of self-conscious for trying to play with the big boys in business. It's like a stack of money sitting in broad daylight, being ingored by 99% of passersby.

CSR.gov.uk, the UK government body for CSR, uses the following definition, which is not helping the situation: "the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society".

Underneath all of this "voluntary" and "social" talk, the truth is that there are compelling business opportunities for companies that bring externalities and the "interests of wider society" into their business model.

I recently heard Mark Campanale speak at Oxford--he has worked in the field of SRI (Socially Responsible Investment) for a decade, using socially responsible screens, both positive and negative, to deliver impressive financial value for investors who do not want to destroy social/environmental value through their investment choices. One of Mark's main areas of focus is climate change--as it should be for all of us (at what temperature do you wash your clothes in the washing machine, for starters?). Mark made an interesting comparison regarding the reaction of companies today to using climate change to inform their business strategy:

Ten years ago, when the internet was starting to look like it wasn't going away, Mark says he saw companies absolutely freaking out by the prospect of this major shake-up to doing business. These guys were scared. The internet was starting to outline a way of doing business that seemed wholly incompatible with the current status quo. And to many in big business, the internet looked like it was going to destroy value for them, not create it. Some of these just stuck their heads in the sand and refused to interact with the internet, hoping it would go away and hoping the people who did embrace it would get burned by all this value-destruction that was supposed to happen.

The end of this story doesn't need much explaining. The internet has created previously unthinkable value for existing businesses, and has allowed people to invent new methods of value-creation (youtube, anyone?). And it turned out to be something that any and every business could use and exploit to their benefit.

Cue climate change, batting its eyelashes at us invitingly. The fascinating thing that Mark said in his talk was that the language and reactions he is witnessing in business today re: climate change are a replay of the internet panic he saw ten years ago. Businesses don't believe that they profitably can adjust to a "green" way of doing business. The problem with that stance is in the approach. This is an opportunity, a tool, a first-movers-win situation in which businesses, if they had their heads on straight, should be fighting to be first. Instead of saying "we can't afford to be green," leading-edge businesses--like those who got a jump on the internet as a value-creator--will look at green business practices as a huge opportunity to create value in new and previously unthoughtof ways.

I have digressed significantly. My point was meant to be that CSR is a shit name for something much more exciting, more powerful, and more intelligent than "social responsibility." I was talking about this with a guy called Andrew who has spent years advising on CSR policies, and he agrees--Corporate Social Responsibility gets it all wrong. It's not about being nice--corporate away days where people with more degrees than a thermometer (ha, ha) use all their brainpower to paint a homeless shelter. It's not about pleasing "stakeholders"--a nebulous term anyway--isn't everyone, in some sense, a stakeholder of everything, in this globalised world? It ought to be about being smart. What's the long term value creation--and the short- and long-term risk mitigation, of paying your front-line employees a living wage? How can you capture that in your business? In your bottom line? What new doors are being opened by climate change legislation, by changing consumer tastes around climate change, Fair Trade, and ethical business practices? What is doing business with the next billion going to look like in the context of climate change regulation, and widely varying varieties of capitalism in different countries?

I think that just maybe, continuing to call this stuff CSR is both lazy and scaredy-pants. That way, nobody really has to think smarter and harder about change. Really, most people hate and fear change, so this makes sense. All this "social" stuff can continue to get stuck in business' charity-away-day corner, so it doesn't bother the status quo, which seems to be working fine, thankyouverymuch. Sadly for these ostriches, I think the awakening will come with about the same force as the "oh shit, our business missed the internet revolution" moment that many of these same guys had less than ten years ago.

Some people never learn...