CSR alive but in poor health
Corporate Social Responsibility (CSR) needs to be rewired says John Elkington, a global leader in responsible business practice and the man who coined the term ‘triple bottom line’.
Elkington made the remarks during a debate hosted by Barclays and chaired by Matthew Taylor, CEO of The Royal Society of Arts (RSA) and former advisor to Tony Blair. Joining Elkington in the debate titled ‘Is CSR dead?’ was Mark Cramer, CEO of nonprofit consulting firm FSG.
Both Elkington and Kramer admitted to initially hating the question at hand but were enticed by the buzz created on social media around it. While both men agree that business needs to play a pivotal role in addressing the world’s most pressing social and environmental issues, they disagree about some of the terminology and ideas around how this will happen. Elkington has been publicly critical of the Shared Value concept, which Kramer developed with Harvard Business School professor Michael Porter. Through the concept Kramer and Porter have questioned whether CSR is still relevant.
Shared Value is described by Porter as: “Corporate policies and practices that enhance the competitive advantage and profitability of the company while simultaneously advancing social and economic conditions in the communities in which it sells and operates. Shared value is not CSR, philanthropy, or even sustainability, but a new way to achieve economic success.”
Mark Kramer. Photo credit: Nestlé
At the debate in the British Library in London Kramer said: “One place where I think John and I disagree is around the role of profit and the definition of profit. I think John believes we need to reinvent the model to take into account things that have no monetary value – the use of natural resources, the welfare of people – so that we can present them to companies as a bottom line that frankly is fictitious.
“It might be good for the world, it would be a nice thing for companies to do but I believe companies respond to reality and real problems.
The term ‘triple bottom line’, which was coined by Elkington, refers to the separate financial, social and environmental "bottom lines" of companies. He argues that companies must take into account their social and environmental impact, instead of solely focusing on finances.
There is an important question around whether CSR is fit for purpose
Elkington told the London audience: “CSR is alive and likely to remain so. For me CSR is a deep rooted, ongoing conversation across sectors about the role of business in society. It is about transparency, accountability and sustainability.”
He also acknowledged that CSR has serious problems, citing the recent Volkswagen exhaust emissions scandal and the behaviour of fish company John West as clear evidence of this. “John West promised to get to 100% pole and line caught tuna by 2017 – it’s currently at 2%. Does that completely wipe out CSR? Absolutely not. It means John West are semi-criminal,” said Elkington.
He continued: “There is an important question around whether CSR is fit for purpose… CSR is coming into the mainstream and when that happens you get dilution.” He also said that while “both Mark and Michael Porter insist shared value is the way forward”, for him this concept does not provide all the answers. It is purely based around a “win-win” situation but Elkington argued that for breakthrough system change to occur the answer is much more nuanced than this.
Elkington used the example of the slavery movement to evidence his point. In the 1800s people were being sent out in ships to die so that others could claim insurance on their lives. This was stopped because of a demand to adhere to human rights and social responsibility despite the fact that both government and businesses would need to pay a heavy financial price to transform the economy so that slavery no longer remained an integral part of it. “It wasn’t called CSR then” said Elkington, but this was an example of positive social change being implemented without the incentive of financial gain. John Elkington. Photo credit: Nestlé
The debate also touched upon the relatively new B Corp movement, which launched in the UK last month and acts as an accreditation mark for businesses that have passed extensive assessments regarding their social and environmental sustainability.
Kramer said: “I’m not sure we need new corporate structures like the B team would propose.” Referring to Richard Branson – “who helped launch the B team and who is a wonderful visionary leader” – Kramer said he was “fascinated” by his involvement when “the last time I looked he owned three airlines, which I believe is the mode of transport that creates the greatest carbon emissions there is”.
Drawing the debate to a close, Taylor announced the result of a vote which asked audience members to decide “Is CSR dead?” The result was a resounding “No”, but as conversation continued into the evening it became clear most were in agreement that current practises and systems were not sufficient in tackling the world’s biggest social and environmental challenges.
Photo credit: NVinacco