Is CSR sustainable in the long-run?

There is much hype on CSR as being the ‘buzzword’ and popular amongst companies. But even though companies nowadays adopt CSR practices, do you think that they are sustainable in the long-run? Well, I think that in order to ensure the sustainability of CSR, the government plays a major role.

First and foremost, the country itself must be socially responsible. Chapter 8 of Agenda 21 (Rio declaration) calls on countries to adopt national strategies for sustainable development that “should build upon and harmonize the various sectoral economic, social and environmental policies and plans that are operating in the country.”

Countries themselves should take immediate steps to come up with National strategies. The strategies must both stimulate growth for the country as well as support sustainable development. The government has to address sustainability issues such as climate change and focus on areas such as power generation and transport. The UK government’s strategy supports sustainable development and their strategy is based on 4 objectives.

If the government can sustain CSR in the long-run, companies will follow suit. The government has the power and authority to ensure that companies sustain their CSR programs. Businesses should make sure their strategies follow the national strategies and apply sustainable solutions. I feel that companies should integrate sustainability into their CSR programs and not let them be a one-off event. Let us make the world a better place and support companies which have good CSR practices.

CSR rankings

One of my major concerns about CSR is that CSR strategies of companies are just words. How can we be sure that they are really implemented?

We might think that a clue is the rankings of the most responsible companies.

There are increasingly analysts that monitor, evaluate and rank the CSR performance of companies. And nowadays you can find some of their rankings in Corporate Knight’s Global 100, or in Ethisphere Institute’s Most Ethical Companies. But it seems that we can’t rely on them because there are concerns about how they are compiled.

According to Sea Change Media’s executive Director Bill Baue, the problems of those kinds of rankings are the following:

–  You cannot see the rationale behind the decisions on actual scoring of company performance.
– Questions about a company’s true impact on society are unanswered.
– There is favoritism because magazines make money from the companies that they rate in their annual lists (through sponsorship, registration fees for events, and brand licensing arrangements)
– The backlash against CSR industry lists is nothing new

Because companies are too busy using all those means to be listed in magazines, they are losing sight of the real CSR performance and that creates an overall lack of credibility to the entire field of sustainable business.

Sources

External CSR – Panasonic’s graph

When companies define their external CSR strategies, they must take into account all the external stakeholders. It includes local communities and citizens.

Concerning its external CSR strategy, Panasonic focuses on the important global issues of the next generation and the environment. The company uses seven parameters to evaluate its citizenship activities based on a process that includes the input of external organizations (see on the graph below).

Using a graph is really useful for people who are looking for what kind is undertaken by companies and for the companies that must achieve some objectives.

This model seems to be inspired from the Kaldor’s magic square. This theory assumes that a country must reach the 4 corners of the square to reach the best possible economic situation. It’s called magic square because it’s really difficult to reach the 4 corners at the same time (it’s more of an utopian situation of the economy) but evolutions are always possible.

Using an image or diagram is really useful. It helps us understand companies’ strategies and also helps companies keep in mind what their objectives are and the improvements they have made.

Sources: Panasonic’s website

CSR Is No Crisis Management

In times of the disaster in the Gulf of Mexico it is important to realize that CSr does not equal crisis management. As this article states, CSR needs to be seen as follows:

„CSR policy is to identify environmental, social and governance risks and prevent disasters from happening in the first place.“

So this means in the case of BP they should now treat the problem in a way it will avoid further problems in the future. Transparency is a big and important word in this context. And if you think about the fact that BP used be in some major CSR rankings and called it a company that takes care of its environment, I found this video quite interesting. Especially if you keep in mind the earlier mentioned definition of CSR. Prevent disaster. Identify environmental, social and governance risks.

The oil spill in 1979 could have been a warning fort he oil drilling industry. Back than they tried the same technology to try to stop the oil spilling out. Nothing of what BP has tried so far worked back than. Why would it today?

And as this website shows and argues, BP is a great example fort he fact that CSR is no optional thing for companies. It is a must.

http://www.huffingtonpost.com/2010/06/04/bp-could-learn-lessons-fr_n_600492.html

http://www2.macleans.ca/2010/06/14/when-things-get-messy/

http://www.thisislondon.co.uk/markets/article-23845061-bp-shows-corporate-responsibility-is-no-longer-optional.do