My Opinion on the State of CSR?

One of the satisfying parts of my job is that I am often invited to enter into dialogue with students from around the world. Here is a recent Q&A with Naomi Dukaye, a student at Georgetown University, who wanted to know my opinion on CSR.

1) What is your current opinion on CSR initiatives throughout corporate America and how effective is it?

America is the where corporate philanthropy was invented (in the 1800s with Rockefeller, Carnegie and others) and this is still a strong CSR mode in the U.S., which often manifests through Foundations and employee volunteer programs. However, this is only stage 2 of the 5 stages of CSR maturity (and hence one of the least effective), where stage 1 is defensive (there are plenty of those too), stage 2 is charitable; stage 3 is promotional, stage 4 is strategic and stage 5 is transformative. Most large, branded companies are in stage 4, aligning their CSR programs to their core business and embedding CSR through various codes and standards. Far fewer are in the transformative stage 5, where they redesign their business models (e.g. towards circular economy) and try to change the economic system (e.g. towards pricing external social and environmental costs).

2) What do you see as the overarching issue with CSR efforts today?

What I call the “three curses” (or limitations, if you like) of most CSR efforts remain a challenge: it is mostly incremental, peripheral and uneconomic. But today I see an even bigger problem, which is complacency. Because there is so many CSR activities and CSR codes and CSR standards (more than 450 worldwide), it is easy for companies to convince their stakeholders that they are doing enough and so to become complacent. Yet in the face of many worsening challenges (e.g. climate change, biodiversity loss, income inequality, corruption), we need the opposite: we need bold, ambitious, transformational action by companies. The SDGs pose a particular danger here. Now, instead of just “greenwashing”, companies are what I call “rainbow washing”, i.e. using the colourful SDG icons for PR purposes.

3) Based on of your book “CSR 2.0” and the four approaches that are seen in CSR initiatives, what do you think needs to be done now to address the overarching issue with CSR?

First, I think the language needs to change. I’m not sure CSR is helpful as a term anymore, since it still has so many narrow interpretations. Sustainable business is better, but also comes with its problems. Some years ago, I started to talk rather about future-fitness, and now I am using integrated value. This means taking a multi-capital perspective on value creation by business, the economy and society. It also means integrating across traditional silos in companies. But more specifically, I am promoting the concept as being about finding the innovation synergies between areas of systemic solutions, i.e. solutions that create a future that is more secure, smart, shared, sustainable and satisfying, drawing on the resilience, exponential, access, circular and wellbeing economies.

4) Something that I have personally been grappling with is this idea that an innovative and integrative approach is needed for CSR initiatives to actually have the impact that it has the potential to. What are your views?

This is exactly my intention with integrated value, as explained briefly above. This means encouraging cross-discipline and cross-sector collaboration and keeping the focus clearly on innovative solutions. For example, at Antwerp Management School, where I hold the Chair in Sustainable Transformation, we are setting up Corporate Leadership Groups, which allow companies to collaborate across sectors (and sometimes even to work with competitors) to focus on innovative actions that could advance solutions to our systemic problems of disruption, disconnection, disparity, destruction and discontent. In this way, business is also collaborating with the university, since we facilitate the groups and support them with research. We also have student consulting projects where our students try to find solutions to problems that companies articulate and in several cases this has included CSR issues.

5) What is your response to those who simply do not care about social responsibility, claiming that it “isn’t their problem to worry about”?

I think this is all about framing the issue properly, i.e. taking CSR out of its box. Everyone cares about something, whether it is the health of their children, or the conditions in their workplace, or lack of green space in their city. The art of engagement is to listen to people carefully and to find out what their real concerns are. This almost always leads back to a CSR issue. Then it is to cultivate a culture and forums or institutional structures in society or in business that allows them to contribute to a solution to that problem, rather than remain a passive bystander. This also links to leadership – most people want to be part of a positive agenda, so leaders need to give people that sense of being part of a transformative change, then they will want to join the effort.

6) Why should people care about these things they don’t believe affect them?

People shouldn’t care about things they don’t believe affect them. Each person should start with the issues that directly affect the quality of their lives and the health of their communities. Then, as they engage with those issues, awareness will grow about the interconnectedness of local issues with global issues. We should spend far less time trying to convince people of the scale and urgency of the problems and far more time finding ways to allow them to be part of local solutions that they can see direct benefits from. Action is the pathway to learning. Ultimately, this should be about enhancing the meaning, or purpose, that we experience in our lives. There are many ways to enhance life satisfaction, and one of the most powerful is making a difference in the world and in the lives of others.