CSR: Ethics or Marketing?

As a modern business trend, it is hard to know whether “corporate social responsibility”—or CSR—will be a lasting ethos that transforms the way companies conduct business or a passing fad designed to make big corporations more likable. CSR may be thought of as a corporation’s conscience—a set of internal policies that govern how the company interacts with and relates to its community, its people and its environment.

There is no question that executives and business leaders have adopted the lexicon of corporate social responsibility. As The Economist notes, “It would be a challenge to find a recent annual report of any big international company that justifies the firm’s existence merely in terms of profit, rather than service to the community.” In the late 1990s, a group of CEOs went as far as launching a global organization—the World Business Council for Sustainable Development—for the purpose of discussing strategic issues related to sustainable business practices. The rhetoric is clear: corporations care.

The question is what kinds of corporate actions have resulted from the emerging ethos of CSR. One area where companies have been keen on improvement is energy reduction. For example, General Mills instituted an energy audit program, and in 2012 reduced its energy consumption by 7 percent. It’s a win-win for General Mills—the company saves money and highlights its commitment to the environment. Other corporations like Solo Cup Company are engaging their employees to help with community cleanup events, trash collection programs or recycling drives at Solo facilities.

But some critics question the motives of companies that institute policies and public relations campaigns related to corporate social responsibility. One argument is that CSR is simply a marketing scheme developed to attract consumers to certain brands.

Many dissenters point out that markets are not concerned with ethics or social responsibility. In an article for the Stanford Social Innovation Review, Deborah Doane explains, “CSR can hardly be expected to deliver when the short-term demands of the stock market provide disincentives for doing so.”

While the companies and critics each present compelling arguments for or against CSR, it may be that corporate social responsibility is just a negotiated balance between companies and the communities in which they operate. It is how the company achieves or bolsters legitimacy with its potential consumers. The business benefit, of course, is that the company will profit in some way from its investment in CSR. After all, conventional wisdom says the primary objective of any corporation is not principle, but profit.

– Daniel Bonasso
Sources: Standford Social Innovation Review, The Economist, Corporate Watch
Photo: Career Realism


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