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.

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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.

Cleaning up a PR disaster with Corporate Social Responsibility?

During the past year, one PR disaster followed another. In spring, Toyota’s cars seemed to have developed their own will. Soon after Goldman Sachs was accused of fraud and now BP has turned the Gulf of Mexico into a sea of oil. How did these corporations deal with the crises?

For the most part companies have surrounded themselves with crisis-management teams and public-relations hired guns to deal with their short-term problems. But if they are smart troubled companies will also review their policies around the emerging field of corporate social responsibility  to discover why things went so wrong, states Jason Kirby.

But can this be the solution to all Public Relations problems companies face today? Using CSR only for the benefit of the corporate image? That CSR is misused as a marketing ploy happens more often than most would like.

In the case of BP, company CEO Tony Hayward has apologized to Gulf residents. But the company could take further steps, say experts, such as establishing a transparent grievance process through which locals can file claims.

I believe that it is valuable that organizations benefit of Corporate Social Responsibility as well (see previous post on benefits). It is the only way that organizations use CSR, without regulations. But of course, using CSR only superficially to prevent bad PR is not what is intended by the idea of acting responsible.

How to develop a CSR Strategy

Organizations face a vast number of challenges in today’s world. One of them is how to develop a strategy for Corporate Social Responsibility. A strategy that is in line with the companies concept. A strategy in which specific priority areas are named. And also a strategy that fits into the organization’s budget and can be published and thus benefits the organization.

A helpful source for all companies facing challenges when it comes to implementing a CSR strategy is http://www.csreurope.org/ , which offers not only information and advice on the topic, but also “examples of practical company solutions to CSR challenges”.

In order to make sure that such CSR strategies are not merely for PR reasons, rankings have been established to prevent this case. An example is the Ethisphere Institute’s Most Ethical Companies. On the other hand are exactly these rankings criticized in a blog by my fellow student Fanny Siegl.

Developing the best strategy is important for organizations, so they can keep up with their competitors. While there are various ways to do it, the most important thing is: To do it at all.


The Role of Governments in CSR

We have been discussing CSR on a market level thus far. Is it possible for the market economy to self-regulate and extract virtue out of companies? What is the role of governments in sustaining this practice?

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