Apr 28, 2020
Is CSR always Good?
Corporate social responsibility (CSR) has been a hot topic in the business world for the past decades. Over the years it has become a standard “strategy” for the companies in almost every industry. Having a CSR strategy established means that a company has integrated and applied not only social and ethical policies but environmental as well.
Milton Friedman, a Nobel Prize winner in Economics Research, has stated in one of his papers published in 1970, that Corporate Social Responsibility exists and is applied mainly for the increase in profits, thus for the pure benefit of the company. For a very long time, the economists followed this thought without questioning and did not believe in companies applying CSR strategies for other reasons than that.
As the business world has evolved since 1970, various businesses have taken CSR more seriously and are aware of the impact they have. However, does it mean that companies do not integrate the CSR simply to check out the box of “being responsible”, as this is what is nowadays expected of them and is seen as a standard which they have to fulfill in order to keep up with the competition?
Olivier Delbard, a professor from the Department of Economics, Law and Social Sciences on the ESCP Europe Paris Campus mentions in his interview that a lot of companies till today use CSR simply as a marketing device in which they try to “greenwash” their actions, as the reality of their practice differs from what the CSR strategy implies. Furthermore, they believe that through CSR they would get a better image in society and enhance their reputation.
Applying sustainable strategies in business can be a big risk for a company if what people say is not what they actually do. CSR is a concept that is associated with very high publicity. While businesses are giving a minimal effort to a certain cause, the coverage of it is high enough, making it look like the engagement of the company has been very high, at the same time giving an impression of businesses being serious about the cause, where the reality, as mentioned by Delbard, is completely different.
Moreover, businesses engage in some CSR-related activities which contradict with their business-practices. Let us take a very simple example of Nike. Nike is one of the biggest sport-apparel manufacturers in the world. The company promotes a lot of sustainable products, which aligns with the CSR strategy it represents. However, we cannot forget that CSR is not only about the environment, right? Of course, promoting sustainable products is great, but one very good question would be: who makes those sustainable products? Nike has been involved in accusations connected to child labor and very low hourly wages for their workers. Human rights are one part of the CSR which Nike has avoided. Thus, can we still call the company sustainable and praise it for implementing the CSR strategy?
Unfortunately, Nike is only one of many examples of the wrong use of Corporate Social Responsibility strategies. As there are no rules or norms on how to properly govern CSR, the companies are free to explore it themselves. The implementation of sustainable strategies can be a very long process and can be high at risk. By many, it can be seen as a marketing tool, but is it really that bad if by doing good business also do well? I believe that acting socially responsible while being transparent about the real goals, such as being profitable, can benefit both parties: stakeholders and the business itself. The key is, however, as mentioned by Delbard, that the businesses DO what they SAY.
