CSR is dead: Long live sustainability as corporate strategy
Corporate social responsibility departments are dead — as are all the consultants, academics, conference organizations and lecturers who prey on them. We have just completed two decades of buzzwords, imitation tactics, greenwashing, PR, meaningless statistics, tomes of reports and the world is over it — they see right through all of it. Google the term "CSR" and you will see story after story stating the same thing: CSR is dead.
CEOs used to see corporate social responsibility departments as a means to mitigate reputational risk. They would have their CSR staff put out endless reports with heartwarming stories and mind-numbing statistics to insulate the organization against any bad media, government inquiry or community concern that might come about as they continued to profit from, and even extend, unsustainable business models and practices.
That’s all over.
The world is too transparent. Consumers, the media, governments and even local communities demand authenticity and look at traditional CSR communications skeptically. What was once an asset to the corporation is quickly becoming a liability, a cost, a casualty of an uncertain and complex world.
Companies that are still drawing a clear distinction between their business strategy and CSR strategy are behind the times. This is a dangerous and foolish segregation and the era of having a sustainability strategy is over: we are at the dawn of the era of sustainability as strategy.
The good news? The CSR/ Sustainability community has unique skillsets, experiences and points of view that companies will need going forward to develop sustainability as a core business strategy. Strategic thinkers, eclectic stakeholder relationships, nontraditional partners — all have the ability to see not only risk but opportunity with creators, connectors, communicators and culturally competent collaborators.
Sustainability is not just about being a good corporate citizen; it is also about creating new income streams and business models. We see this today in everything from new business models that apply circular economic principles to government regulations such as China imposing new Blue Sky environmental laws to titans of finance such as Larry Fink at BlackRock directing that all the companies his firm invests in — literally all the public companies in the world — engage in sustainable practices.
Coca Cola and Bayer are part of a movement toward integrated reporting and actual, measurable sustainability goals. Bayer started combining its financial and sustainability reporting in 2013 and made it clear that sustainability was established at the board level, tying with the Board of Management member responsible for Human Resources, Technology and Sustainability.
Coca Cola’s objective is by 2020 to safely have returned to nature an amount of water equal to what they use in production. The company reported that by 2014 it had returned about 126.7 billion liters of water used in its manufacturing processes back to communities and nature through treated wastewater.
At DSM, our integrated annual report breaks out exactly how the company is doing to meet our internal sustainability goals. From 2016 to 2017, DSM has increased purchases of electricity from renewable sources by 21 percent, lowered its greenhouse emissions by 26 percent and improved energy efficiency by 3 percent. And our CEO, Feike Sijbesma, has tied executive compensation directly to meeting these goals.
Of the world’s 100 biggest economic entities, 63 are companies, not countries. With such power comes great responsibility.
We need to demand the companies operate in a responsible way or others outside the business community — our customers, our consumers, our fellow citizens — will do this to us.
For all of those C-level executives afraid to change their business model to future-proof their companies, consider a truth from my favorite American philosopher, Fred Rogers: "Often when you think you are at the end of something, you are really at the beginning of something else."