2010 will go down in history as the biggest year yet for awareness, discussion, and commentary about corporate social responsibility (CSR). In 2010, CSR also transitioned from a powerful subject for discussion predominantly on niche online sites and blogs (CSR Wire, Triple Pundit, Inspired Economist), to occupying dedicated room on more traditional business news sources, both online and print (Alice Korngold's blog on Fast Company, Harvard Business Review, Stanford Social Innovation Review, Forbes CSR blog).
In fact, the discussion of CSR—if not CSR itself—went mainstream in 2010 with several memorable, high-profile articles in The Wall Street Journal and The Washington Post.
But what's behind this sudden explosion of interest?
The Good: Surveys Highlight Consumer Demand for CSR
For one, there were a plethora of surveys that showed time and again that consumers want to support companies that embrace corporate social responsibility principles. From Burson Marsteller's 2010 Corporate Social Responsibility Perceptions Survey*, to the Cone 2010 Shared Responsibility Study, the GfK's Green Gauge Global report*, and most recently, the 2010 Edelman goodpurpose study, the numbers vary, but the message is the same. No matter the industry, consumers want true, transparent CSR along with quality products and services.
The Bad: Playing the Blame Game
While the first name that pops up in everyone's mind is the Gulf oil spill, the bad news didn't quite end there. Companies that self-branded themselves as good corporate citizens and were then exposed as conducting business with little regard to their people or the planet, have done CSR major damage. They've also given naysayers plenty of ammunition.
After its much-hyped Beyond Petroleum campaign, BP suffered a mortal blow from all corners for causing the largest oil catastrophe in U.S. history. Further reports exposed other large-scale BP disasters in recent years where cost-cutting measures were blamed for numerous deaths and severe environmental damage.
The media, of course, went to town with the story with Chrystia Freeland (Washington Post) going as far as blaming CSR for the BP oil spill. Yet CSR advocates and practitioners like Fabian Pattberg, Chris MacDonald, and Todd Cort used it as an example of a cautionary tale of what happens when you ignore the basic tenets of CSR.
The U.S. financial collapse was perhaps the biggest consumer betrayal in recent history, whose consequences started a long line of falling dominoes that hit millions of Americans and impacted countless industries. More than two years later they continue to fall as the mortgage investigation brings to light uglier and uglier business practices. Some suggested that CSR was to blame, but again, the blamers ignored the very premise of CSR: That had Wall Street banks worked to encourage a responsible corporate culture, this collapse could have been avoided. And one of the strongest proponents of this thought was Chris Jarvis, cofounder and senior consultant for RealizedWorth, an employee volunteering and CSR consulting firm.
Regardless of who is to blame, the financial crisis has changed the disposition of U.S. consumers and shattered their trust, perhaps forever.[Editor's Note: The crisis also led to much speculation and discussion throughout 2010 of the shortcomings of the MBA curriculum and why management education must change.]
For most of its history, HP has enjoyed an excellent reputation with only a few scattered bumps along the way. A major pothole was the very abrupt and public exit of CEO Mark Hurd for questionable business relationships and fraudulent expense reports.
Was it right, however, to penalize an entire company for the actions of an individual? In the absence of further reports of wrong-doing by HP leadership—and by leaving promptly—Hurd perhaps spared HP significant further damage.
Just when Toyota was beginning to reap the benefits of a collapsed GM, it was forced to make two massive safety recalls. Toyota not only lost millions in sales, but suffered fines, operating losses, and an expensive, public investigation, not to mention the incalculable loss of customer faith.
And the Ugly: Karnani & Freeland Lead the Case Against CSR
I hardly need to name these articles…but I will. CSR as a business practice suffered a very public one-two punch during the summer of 2010 when Chrystia Freeland and Dr. Aneel Karnani each came out with scathing editorials against corporate social responsibility. Far from being knocked down, the CSR community rallied and countered the claims with facts, statistics, and tons of popular opinion.
In the end, it's hard to argue with the studies, each indicating a buying public that is prioritizing CSR over other factors , as well as the argument of CSR proponents—who before becoming vocal advocates for values-based business were (and most continue to run successful firms) leading members of corporate America themselves.
Several well-known CSR bloggers largely debunked Freeland's uninformed condemnation of CSR as the real villain behind the BP oil spill. Notable CSR voices like Tim Wilson, Perry Goldschein, Fabian Pattberg, and Mallen Baker presented well-thought-out rebuttals to Karnani's op-ed piece as well as citing many other CSR pundits to strengthen their arguments.
During an intense webcast organized by Fenton Communications, BSR's Aron Cramer, Campbell Soup's VP for CSR Dave Stangis, Freeland and Karnani debated CSR, continuing to disagree about the role of business in society (or at least how to define it).
While there was some room for agreement on the panel, Matthew Bishop nailed the issue: "It isn't that companies like BP and Goldman Sachs behave differently during a crisis 'because of some fetish in the board room to be green or look good to the public.' It goes much deeper than that."
All of this brings me to the same question I began with: Why has there been so much discussion around CSR this year in particular?
As The Murningham Post's Editor in Chief Bill Baue pointed out in his 2009 Year in Review on CSRWire:
"The biggest CSR development of the year was not readily visible, as it was an idea: that CSR represents not just a trend or professional discipline, but a social movement. In other words, CSR is not a random collection of ad hoc, discrete actions to revise corporate behavior, but rather a coherent aggregation of sustained, widespread efforts to reform (or even revolutionize) the role of corporations, shifting from negative to positive impacts on society, environment, and economy."
For 2010, this intangibility of CSR no longer held true. From an idea, CSR has evolved to tie in strategically with the bottom line for companies and 2010 saw many organizations scramble to figure out how to get on the bandwagon.
Executives are realizing this as is the student body, most evident during Net Impact 2010. Emily DeMasi of The Inspired Economist while referring to the rise in green MBAs and the proliferation of CSR blogs and websites, said, "CSR is still not mainstream, but in 2010, we've seen it move closer from the fringes than ever before." Consumer Power
Looking Ahead: Moving from Commentary to Engagement on CSR
In the end, it all boils down to what consumers want. In an increasingly connected world, consumers have a bigger voice than ever before. CSR has utilized the power of social media to emerge as a frontrunner for a growing mass of consumers who are connecting their decisions more and more with social and environmental good.
I see CSR developing its own cradle to cradle cycle of awareness and support. Students are driving change at the university level > job seekers consider a company's CSR profile when deciding where to work > new hires learn about CSR as an aspect of their job, no matter their role > employees are happier and more loyal to a company that espouses CSR principles > socially responsible business processes (recycling, energy conservation) save money > socially responsible, eco-friendly or cause-supporting products are more popular with consumers > consumers patronize brands that show they care, and pass their brand loyalty on to their children who grow up to be students driving change.
As we look ahead at 2011, I hope that we see even more dialogue about corporate social responsibility, but in the form of sharing ideas and lessons learned. A good starting point could be a global forum on better defining CSR and its place in the business world that both proponents and skeptics accept.
The other thing on my wish list? Less greenwashing please.
--By Andrea Newell
Andrea Newell is a freelance business writer with more than ten years of consulting experience. She is a weekly contributor to Triple Pundit and her writing has appeared on Evolved Employer and The Glass Hammer. She can be reached at firstname.lastname@example.org (@3PMedia).
*Burson Marsteller's 2010 CSR Perceptions Survey
*GfK's Green Gauge Global Report
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