Is Corporate Social Responsibility Really Necessary?

Is Corporate Social Responsibility Really Necessary?

Also this month:

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Is corporate social responsibility really necessary?

Steve:
It depends. The necessity for corporate social responsibility is not defined by an absolute “yes” or “no,” but by the breadth and depth of the arena in which each individual company operates.

If a company needs to protect its national and/or international "social license to operate" then, yes, CSR is necessary. Companies that this applies to are usually those that provide goods and services to the general public or the government, where the company and/or brand image is important to protect. Examples might include retailers, beverage producers, pharmaceutical companies, airlines and financial investment firms. For others, like a regional cable service, newspaper or industrial supply business, the focus might be more on issues relevant to the communities in which they operate. On the other hand, a local restaurant, hardware store, construction company or florist might focus merely on doing no harm, while participating in, and sponsoring, community events. Notice the trend?

We must be wary, however, of the increasingly annoying trend of non-profit groups, academic research centers and other non-governmental organizations trying to institutionalize every hot-button issue or concept into a business model, reporting standard or rating system. CSR is no exception -- folks are already congregating around the CSR feed trough:
  • The International Organization for Standardization kicked off its effort with a two-day meeting in Toronto followed by a second meeting in Geneva;
  • The European Union is developing a voluntary CSR framework; and
  • The UN Global Compact and the World Business Council for Sustainable Development are "cooperating in the development of a more coherent approach to CSR" -- whatever that means.
Jeffrey Sonnenfeld, associate dean of the Yale School of Management recently opined in a Manager’s Journal column in The Wall Street Journal (March 11, 2003), about the plethora of rating organizations and systems that he feels probably do more harm than good.

The deeper question that I think needs to be raised is "Why CSR?" The phrase suggests only a corporate focus. Perhaps the focus should be more on social responsibility (SR) and less on CSR, resulting in a more inclusive forum for the issue. Since governments have a greater (though not exclusive) charter and expertise for SR, perhaps they can take the lead and partner with companies, which have a greater (though not exclusive) charter and expertise for the economic aspects of the issue. For other thoughts on the matter, Paul Gilding has an insightful answer to this "Why CSR?" question in the March/April issue of [email protected] magazine. A recent report, "Corporate CSR Reporting, Claims and Reality: Smoke and Mirrors" (available in PDF format), sheds light on the current status of CSR reporting in the United Kingdom.
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How important is relevant work experience in selecting a consultant?

Richard:
Relevant work experience is extremely important, but often not in the way that many hiring managers think. The first and greatest mistake that managers make is to examine the related project history for the consulting company as a whole vs. the work experience of the individuals who will actually perform the work. Marketing managers will ramble on and on about how their company has extensive experience in some specific technical discipline. This means nothing unless the talent is dedicated to your specific project and not just in some superficial review/oversight capacity. Who will be involved and in what capacity should be specified in the contract.

Another mistake is to focus too intensely on a firm's experience in a particular industry sector, and ignore the unique issues and experience requirements associated with the specific area being evaluated. This problem has been particularly rampant with organizational restructuring. These projects are often initiated at the highest level, usually the CEO, and both the internal company executives and their management consultants are usually unaware of the nuances of running effective EH&S departments. I have been in a number of companies where havoc was wreaked by MBAs that were clueless on EH&S issues, yet did a fantastic job restructuring the finance, human resources and marketing departments.

In general, you are better off hiring a consultant that has extensive experience in a particular field, even though they may not have experience in your particular industry sector. For example, you are better off hiring a person who has written scores of emergency plans outside your sector than to bring in someone who is intimately familiar with your industry (or even your company) but has never written one.

It is also beneficial to choose an individual with practical experience in implementing what they recommend. Developing technical solutions and action plans are generally the easy parts to any project; it is the implementation phase that is often the greatest challenge. By that time, the consultant is often long gone.

When I subcontract projects, I first look for bright people with a successful record of accomplishment doing work similar to, but not necessarily precisely related to, the project at hand. Hiring managers can be overly focused on finding a precise match between previous projects in their specific industry sector and may overlook the broader question of basic competency.

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I have recently been "downsized." Do you have any suggestions regarding emerging EH&S career opportunities versus leaving the profession entirely?

Steve:
Since I don’t know your specifics, and probably wouldn’t recommend a particular choice even if I did, I’ll keep my suggestions more generic.

Conventional wisdom, career coaches and most professional advice columns suggest that you pursue a rather sequential process of:
  1. identify your passions,
  2. determine which ones will give you joy, fit into the kind of lifestyle that you desire and provide sufficient income, then
  3. select one and give it all your passion.
The added proviso is that if you do what you enjoy and are passionate about it, the money will flow. I think that that's a fine strategy for someone who is semi-retired, has a full-time working spouse or is independently wealthy.

Personally, I suggest that people reverse their thinking. Instead, use the image of scanning the grand central station of your life to determine which escalators show signs of working for you. If none of them seems to be working, try a different view or go to another section of the station. Of the ones that you see are moving, check where they are going and who else (if anyone) is on them, and what you might have to do to get on each of them, then make your choice. It’s always easier to hop on something that is already moving (even slowly) than build the escalator yourself -- unless building the escalator is the joy and excitement that you are seeking.

A recent Harvard Business Review article, "How to Stay Stuck in the Wrong Career" (November 2002), provides an insightful assessment of this approach. The author's premise is that most people go about changing careers using a process that is exactly the opposite of what both intuition and the author’s research suggest. The author suggests that people recognize and follow the opportunities that are constantly seeking them instead of seeking the opportunities that they think will satisfy and excite them. It is a very unconventional and innovative way to approach the situation, but then perhaps that’s exactly what’s needed in such unconventional and innovative times.

What escalators do you see in your life right now?

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In many of your past columns the two of you have discussed career development and strategies for EH&S professionals. What have been your best career decisions and proudest professional successes?

Steve:
This will take a bit longer than we have for each response, so Richard and I will provide what we believe to be our best career decisions this month, followed by our proudest successes next month. To preface our responses, I believe that a person can only make such selections several years after the events occur as it takes that long for them to stand the test of time in light of the bigger picture.

Using that premise, my best career choices were:
  • Accepting the job offer from Exxon following graduation from college in 1974. The first 13 years of my career were gifted with a variety of challenging and diverse assignments, a solid foundation of technical and operational expertise, and a group of really talented people who cared about their work AND their co-workers. New graduates must evaluate potential employers just as carefully as employers evaluate them. The second-best aspect of this choice was leaving when I did, in 1987, for a broader legislative and program-oriented position with a company in more diverse markets and industries.
  • Shifting from a compliance/program focus to a business value, strategic environmental management role in 1993. After several years in operational compliance, legislative affairs and program management roles, I needed to shift from ensuring nothing harmful (fines and incidents) was happening to being a catalyst for making something (business value) useful happen. For me, that’s what separates a "job" from "work."
  • Deciding to shift from a senior corporate staff position to founding my own consulting company (in 1999) is still too recent for me to be able to assess fully and objectively.
Richard: Many (most?) of us float through life surrounded by events and individuals which prompt the career decisions that later prove to be pivotal to our future. My career started when my mother assessed my interest in chemistry (a.k.a. amateur rocketry and explosives) and concluded that I should be a chemical engineer. Off I went to college, clueless as to what this career choice meant.

In retrospect, it was the perfect choice. Chemical engineering offered a sound education in science and engineering and upon graduation provided numerous job offers and one of the highest paying starting salaries. It is still a good choice today for those interested in the environment. Employers typically want graduates with rigorous academic backgrounds where effort was required to graduate and not just payment of tuition and attendance. In general, it is much better to seek a degree in a broad field like engineering or science than to immediately specialize when there are so many uncertainties ahead.

From that point forward, I made deliberate career choices. I left Shell Oil Research and went to Raychem (now Tyco Electronics) because I wanted to work on environmental issues. Four years later, one of the best career choices I ever made was to go to work for General Electric at its NorylÒ Plastics Business as EH&S manager. From then on I made career decisions to keep one step ahead of the events that swirled around me -- instead of trying to hold onto the same job in one location, I advanced at just the right time before becoming a “victim” of circumstances. In some cases, businesses went stagnant. In other cases, oppressive management moved in.

If there is a bottom line to the preceding personal career stories, it is to gain control (as best you can) of your own career decisions. Far too many people transfer in or out of their jobs because of some move initiated solely by management. Yes, there will always be things that happen totally outside your control, but that does not mean you have to be a casualty. Often, you can recognize the warning signs or opportunities to position yourself better to meet your career goals, not just your management’s marching orders. The challenge is to act, not just complain.

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Last month you provided insight into the availability of market research on the wastewater treatment industry. How about market research on the medical waste management industry?

Steve:
It is in a similar state, with only a small number of older studies publicly available. Just to be sure, however, I checked with Sarah Paul of SIS International Research (Sarasota, Fla.). Most of the published work is scientific research into the environmental hazards associated with medical waste; the only market-based work she found was applicable to another country's market. You may want to contact her for access to those articles.

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Postscripts: It’s a Hard Knock Life Department (Act II): In the March 2003 column we commented on how the Vice Fund, an alternative to socially responsible investing, was experiencing some definite hard knocks in its financial performance. Hard knocks are not limited to the investment community, though. The environmental and sustainability publishing business appears to be taking a masters degree at The School of Hard Knocks, too.

Tomorrow magazine is on the ropes and has already cancelled its electronic update service. LOHAS Journal missed its winter issue and The Environmental Marketplace newsletter was just discontinued. While still surviving, Business and The Environment (BATE) newsletter was sold about a year ago; its new owners have replaced insightful editorial content with routine press clippings and rehashed news stories from two or more years ago. Yawn.

On the positive side, Elsevier was able to sell Corporate Environmental Strategy journal at the last minute to NetLogex instead of closing it down. [email protected] magazine continues to provide excellent authors and insights while BSI Management Systems was able to hire William Dalessandro, the highly respected former editor of BATE, for its International Environmental Systems Update newsletter.

Nothing like the combination of thin business models, disconnected management and weak economic times to separate the weak from the strong, eh?

Disclosure: Mr. Rice is on the CES Board of Editorial Advisors though had no involvement in the journal’s sale or decision process.

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Steve Rice is the founder and president of Environmental Opportunities, Inc., a strategic environmental management advisory firm and has worked for both Exxon and BASF in a variety of environmental management positions. Richard MacLean is president of Competitive Environment Inc., a management consulting firm in Scottsdale, Arizona. He also serves as the Director of the Center for Environmental Innovation, Inc. and has held executive level health, safety and environmental positions in several Fortune 500 companies.