Distribution Network
Content
Should it be CSR or CR? It’s better to change behaviour than the phrases we use, says Sir Geoffrey Chandler
The responsibility of companies to society lies in the provision of goods and services, with profit as a measure of efficiency and a basis for continuance, and the exercise of a duty of care for stakeholders the condition of their licence to operate. This is corporate responsibility (CR). What, then, is corporate social responsibility (CSR)? In a rational world the definition would be identical. Responsibility is indivisible. Some recognize this, and a number of entities are now quietly dropping the ‘S’. But for many, not least the European Union and the UK government, plus the countless initiatives that now exploit the phrase, CSR is seen as something voluntarily added on, providing competitive advantage and requiring a strategy to deliver it.
This is to confuse philanthropy, which is indeed voluntary, with core responsibilities, which cannot be. It implies that companies have no inherent social utility and need a sanitizing additive to make them acceptable. The phrase has admittedly helped to emphasize that companies are part of society and that the imbalance between care for shareholders and care for other stakeholders needs to be redressed. It also addresses the relationship between company activity and the major world problems of poverty, disease and under-development.
But it is precisely here that the confusion over CSR has been so damaging. Companies cannot be expected to solve the problems of the world. But they should be expected to conduct their operations in a principled manner that diminishes rather than increases those problems. The provision of a living wage, care for the environment and for human rights affected by company operations – all central components of CR – will have infinitely greater impact than any philanthropy, though a voluntary contribution of skills and resources beyond the needs of a company’s own operations can indeed have an important role to play.
CSR, with its emphasis on voluntarism, has also helped subvert efforts to make the market work more effectively by the mandatory provision of comparable information on the social and environmental impact of companies. With financial data rigorously and comparably reported, the market acts as a stimulus to better financial performance. With appropriate data, this most potent of drivers of change could also help to improve other aspects of company performance. But, despite all the contrary evidence of history, the shibboleth that voluntarism works continues to prevail.
At the end of the day it is behaviour, not semantics, which will enable companies to regain the public trust they have lost. This is the biggest challenge the corporate world faces today. So long as ‘CSR’ remains mired in definitional confusion, it’s not going to be much help in meeting it.
Sir Geoffrey Chandler was founder-chair of Amnesty International UK Business Group
The responsibility of companies to society lies in the provision of goods and services, with profit as a measure of efficiency and a basis for continuance, and the exercise of a duty of care for stakeholders the condition of their licence to operate. This is corporate responsibility (CR). What, then, is corporate social responsibility (CSR)? In a rational world the definition would be identical. Responsibility is indivisible. Some recognize this, and a number of entities are now quietly dropping the ‘S’. But for many, not least the European Union and the UK government, plus the countless initiatives that now exploit the phrase, CSR is seen as something voluntarily added on, providing competitive advantage and requiring a strategy to deliver it.
This is to confuse philanthropy, which is indeed voluntary, with core responsibilities, which cannot be. It implies that companies have no inherent social utility and need a sanitizing additive to make them acceptable. The phrase has admittedly helped to emphasize that companies are part of society and that the imbalance between care for shareholders and care for other stakeholders needs to be redressed. It also addresses the relationship between company activity and the major world problems of poverty, disease and under-development.
But it is precisely here that the confusion over CSR has been so damaging. Companies cannot be expected to solve the problems of the world. But they should be expected to conduct their operations in a principled manner that diminishes rather than increases those problems. The provision of a living wage, care for the environment and for human rights affected by company operations – all central components of CR – will have infinitely greater impact than any philanthropy, though a voluntary contribution of skills and resources beyond the needs of a company’s own operations can indeed have an important role to play.
CSR, with its emphasis on voluntarism, has also helped subvert efforts to make the market work more effectively by the mandatory provision of comparable information on the social and environmental impact of companies. With financial data rigorously and comparably reported, the market acts as a stimulus to better financial performance. With appropriate data, this most potent of drivers of change could also help to improve other aspects of company performance. But, despite all the contrary evidence of history, the shibboleth that voluntarism works continues to prevail.
At the end of the day it is behaviour, not semantics, which will enable companies to regain the public trust they have lost. This is the biggest challenge the corporate world faces today. So long as ‘CSR’ remains mired in definitional confusion, it’s not going to be much help in meeting it.
Sir Geoffrey Chandler was founder-chair of Amnesty International UK Business Group
Super Featured
No
Featured
No