You’ve heard it said: the economic crisis means death to Corporate Social Responsibility. Goodbye “green” and all you friendly tree-huggers. The bottom line is back. Serious business is taking over. Didn’t we all suspect it was just a fad anyway?
Funny thing is, it wasn’t a fad. Green is gold and the crisis is only proving the point. Turns out, CSR may be the most important business strategy today.
Boston College, Center for Corporate Citizenship, has just released a report, “The State of Corporate Citizenship, 2009.” It is a survey of 756 senior executives conducted between June 4 and June 23 of this year. The only report of its kind, it samples a cross section of American business. 36% small businesses (1-99 employees), 24% medium (100-999), and 40% large companies (1000 + employees).
And guess what? It says more than half of business execs think corporate citizenship holds higher importance during the current recession than ever before.
The area that took a hit from the economy was philanthropy. It was down in 38% of the companies (50% companies said their philanthropy remained the same). Apparently sustainable products and services are much more recession resistant. As many as 52% of the companies surveyed reported offering sustainable products or services. The ‘greening’ of production and supply chains may have even thrived during the economic collapse – the majority of companies surveyed reported reducing costs through improved materials efficiency.
Other interesting highlights:
- Reputation is identified as the No. 1 driver of corporate citizenship by 70 percent of executives (82 percent from large companies).
- Executives believe business should be more involved today in addressing major public policy issues including health care, product safety, public education and climate change.
- U.S. executives do not support more government regulation – 72% say corporate citizenship should be completely voluntary
- There is a growing gap between large and small U.S. companies on issues of corporate social responsibility.
The report provides robust insight regarding Corporate Citizenship. It offers easy access to important information through simple charts and diagrams as well as succinct summaries. What’s more, the comparisons between large and small companies provides an avenue to understanding the constraints and opportunities unique to each group.
My Thoughts (You know you want them…)
We (Realized Worth) were left with 2 significant questions with this report that we would be curious to discuss with the authors. The first is regarding the correlation between employee lay-offs and corporate citizenship. The second addresses the role of self-interest in CSR.
1. Employee Lay-offs and Corporate Citizenship
The report sites research which claims that small businesses dealt (partially) with the economic crisis by keeping employees, while simultaneously cutting back on efforts toward other areas within corporate social responsibility. Larger businesses, on the other hand, dealt with the crisis by laying off employees, while maintaining or increasing their CSR efforts.
The report seems to suggest that small businesses maintain their CSR profile by not laying-off employees. The implication is that small businesses believe “citizenship begins at home,” and large businesses may have become callous to this sentiment. Therefore, small businesses may have acted as better corporate citizens than the average larger company in this particular regard.
Is it possible that laying off employees could be a responsible decision for a large business? Or that keeping employees can be simply the only option for a smaller business? Either way, corporate practices around laying off employees are complicated. While simplifying information is a strong point of the report, doing so with information like this could lead readers to summarily assign labels of “good citizen” or “bad citizen” without the additional research necessary to come to such conclusions. Employee lay-offs are not good. But they are not always bad. Sometimes these things are simply the nature of business. The point is, lay-offs do not necessarily equal bad citizenship.
On the other hand, cutting back on CSR (community engagement, green strategies, etc) does tend to point toward questionable practices. Companies that become competitive at the expense of society or the environment are bad citizens. This particular point would merit a greater emphasis regarding the state of corporate citizenship in 2009.
2. The role of self-interest in CSR
I couldn’t agree more with the following statement: “(In order to address social challenges business leaders must) move well beyond traditional notions and models of corporate citizenship based primarily on philanthropy to look holistically at the role and impact of business on society and engage actively in bringing their assets to bear on addressing society’s challenges.”
Traditional notions would lead us to believe that writing a cheque, with little personal involvement, is good enough. A holistic approach is something entirely different. It expects that we involve ourselves and are appropriately affected by what we experience. I agree with Boston College that we indeed need to move toward a holistic approach. However, the report also states: “‘The challenge for companies as they engage in the public policy arena will be to separate their immediate self interest and interest of their shareholders from the broader interests of society and their role as corporate citizens”
Is this separation possible? If it is possible, would it be a good thing? Probably not. Creating an “either-or” conversation on the topic of Corporate Citizenship is not an effective approach. In fact, it isn’t even the approach of Boston College. An integrated, or “both-and” approach guarantees the success of corporate social responsibility by tying the self-interests of the company to the interests of the broader community. Once these concepts are inextricably linked, companies are able to make good strategic choices without questioning priorities.
The Center for Corporate Citizenship offer outstanding leadership
Thankfully, there are groups out there like the Center for Corporate Citizenship at Boston College who are doing the work to extricate this information for the rest of us. The field of CSR is burgeoning – soon we’ll all be racing to catch up. While reports with this kind of timeliness and reliable, comprehensive data are few and far between, we have an opportunity to enter into discussions that will equip us each for the world that is about to open up to us. Thank you, Boston College, for leading the way.