Four CSR Myths Debunked
I read with a combination of dismay and amusement yet another op-ed about "the case against CSR," this time on the Wall Street Journal website. Oddly enough, it came from a professor at the University of Michigan's School of Business, with one of the stronger CSR-related programs in the country and host of the upcoming 2010 Net Impact Conference.
This piece followed a Washington Post op-ed of a similar theme only last month, calling CSR a cult and blaming it for the BP oil spill and other disasters -- which could more easily be waved off due to the naïveté of an author with clearly no knowledge of the field, and confused by the difference between walking and talking CSR.
These posts further arguments at least as old and worn as David Vogel's 2005 book, The Market for Virtue, and enhanced by the more visible book from Robert Reich, Clinton's Labor Secretary, titled Super Capitalism in 2007.
So, I will try to help set the record straight by addressing the major recurring myths from these pieces. I join some others who have already posted this week, including Aman Singh Das of The Vault, The Inspired Economist, and The New York Observer.
Myth #1: CSR claims "a duty [of business] to address social ills"
No, we don't. Sorry for any confusion, but many serious practitioners like CSR because it maximizes long-term profits, which are indeed aligned with environmental, social and governance objectives. We understand we have to help those willing companies to work with governments and NGOs to most effectively address "social ills" in a way that helps them prosper over the long term. The other companies we "leave to" governments, NGOs and public opinion, confident that they'll come around or slowly disappear.
Myth #2: CSR is meant to replace laws and regulations
To read the arguments, you'd think CSR advocates were the same as self-interested corporations lobbying heavily to avoid new laws or regulations because they claim they can behave on their own. I've never heard a seasoned CSR pro advocating CSR as a replacement for laws and regulations.
To the contrary, most seem to understand that CSR is about going beyond the minimums required by laws and regulations, which often have trouble keeping up with society's needs or adequately accounting for risks. Lawmakers continue to propose and pass new forms of legislation meant to address environmental or social problems, despite the mainstreaming of CSR or political gridlock.
Moreover, if any regulators are lulled into thinking they shouldn't strictly interpret and enforce existing laws, because businesses are being good on their own, or are too close to those they regulate, CSR pros would be among the first to call for their heads.
Myth #3: Where private profits and public interests are aligned, CSR is irrelevant
This misses the point -- CSR is all about helping companies figure out how best to align and balance these interests, again in the interest of long-term profits, as well as a stronger environment and society because they're good for business, not short term profits. Whatever the motive, companies that utilize CSR best practices have been found most profitable over the long term -- and we think that's good. There are a lot more factors involved then the premise seems to indicate, as Toyota's Prius safety recall proved.
Myth #4: In circumstances in which profits and social welfare are in opposition, executives are unlikely to act voluntarily in the public interest and against shareholder interests.
This is not a zero-sum game and any such hypothetical circumstances, again, exist only in areas of short term profits, which admittedly Wall St. continues to push successfully. Companies focused on short term profits only, however, will likely disappear over the long term in the 21st century, as the shift from shareholders to stakeholders continues. Long term profits are now fully aligned with society and the environment.
Perry Goldschein is a founding partner in SDialogue, LLC, an award-winning sustainability communications firm formerly known as SRB Marketing, that's helped such clients as Ben & Jerry's, National Geographic, and Yale University.
Photo CC-licensed by aubergine.