What we mean when we say 'CSR'
What we mean when we say 'CSR'
This is the first of a three-part series, published as part of BSR's 20th anniversary.
When BSR celebrated its 20th anniversary last year, we chose themes for both our annual report (“Accelerating Progress”) and our annual conference (“Fast Forward”) to shine a bright light on the fact that we urgently need to develop more scalable and systemic solutions to address today’s sustainability challenges. Similar themes were sounded at another (somewhat larger) 20th anniversary event last year in Rio de Janeiro.
These milestones give us an opportunity to consider both the accomplishments and shortcomings of 20 years of work in CSR/sustainability. It is also a good time to consider fundamental questions about what CSR really is — and what it needs to be — in order to achieve BSR’s mission of working with business to create a just and sustainable world.
I have had numerous conversations on these topics during and after the BSR Conference 2012, and I have also followed an interesting stream of articles and blogs that have appeared everywhere from mainstream outlets such as The New York Times and Forbes.com, to specialist/insider sources such as CSRwire, TriplePundit and GreenBiz.
Based on my conversations and reading, I decided to write a series of articles that aim to contribute to this important dialogue by clarifying a few key points:
- First, what do we mean when we use the term “CSR” (or its synonyms “corporate sustainability” or “corporate responsibility”)? Before engaging in a debate about how much progress we have made and what we must do to make more impact, it’s critical that we define exactly what we are talking about and evaluating.
- Second, what role does BSR play in the larger CSR “ecosystem”?
- And finally, how can the field, and BSR specifically, fast forward progress?
What is CSR?
I often find that I don’t recognize or agree with the picture of CSR that is used in public critiques and debates. As my colleagues Aron Cramer and Zachary Karabell note in their book "Sustainable Excellence," sustainability has become “a sort of Rorschach inkblot whose interpretation says as much about the person using the term as it does about the idea itself.” From the widely discussed Economist critique of CSR in 2005 to more recent musings on the apparent failure of CSR to achieve its desired ends, it’s clear that much of the public discussion suffers from one of two common misconceptions about the nature and role of CSR.
In the first category are the many critiques that narrowly define CSR in terms of selected activities: the creation of CSR reports and voluntary codes of conduct, the expansion of philanthropic efforts, and affiliation with BSR and similar organizations and initiatives as ends in themselves. Thus defined, CSR is easy to dismiss as, at best, a well-intended but woefully inadequate response to our common challenges and, at worst, a cynical attempt by corporations to safeguard their reputations without any real commitment to positive change.
The second camp makes the opposite mistake, conflating CSR with the total sustainable development agenda, which covers efforts by policymakers, trade and development organizations, civil society and many others. Examples of this include recent posts in Forbes.com and CSR Wire in which the authors describe the failures of international trade and development policy over the past half-century, and the limitations of the U.N. system and other Bretton Woods institutional frameworks, as well as the early “mixed returns” of voluntary corporate action.
Before offering what I find to be a more helpful and accurate definition of CSR, I want to start by citing two of the best known (and very different) standard references for the term.
The first is contained in the Brundtland Commission's report “Our Common Future,” from the first Rio Earth Summit in 1992, which defined “sustainable development” as “meeting the needs of the present without compromising the ability of future generations to meet their own needs." This is a wonderfully simple and comprehensive definition, which, by the same token, describes territory that extends far beyond the purview of business.
A second definition is provided by the Dow Jones Sustainability Index, which has become a reference standard at the intersection between sustainability advocacy and mainstream investments: “Corporate sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments.“ This is also a nicely simple and clear definition, more focused on the activities of business, which, by the same token, is too narrowly focused on shareholder value.
This brings me to my current favorite definition, which I think captures the spirit of both of these reference points — covering the breadth of CSR without overstating the role of business vis-à-vis other societal actors. I cite again Cramer and Karabell in "Sustainable Excellence":
“A sustainable business is one that delivers value for investors, customers, and employees; improves the living standards of its employees and the communities it touches; makes wise use of natural resources; and treats people fairly.”
These are admittedly high-level definitions that beg as many questions as they do provide answers. Among the big questions: What is the role and responsibility of business in providing leadership in the development of more comprehensive sustainability solutions, including in public policy?
I will take on this and other questions in the coming weeks, and I look forward to comments and criticisms from all sides.
Next up: What role does BSR — and what role do CSR efforts more broadly — play in the larger sustainable development ecosystem?
Illustration by nasirkhan via Shutterstock