Some thoughts on where CSR came from and who leads…

I was asked by a Hungarian newspaper, in advance of a trip to Budapest to speak at a conference, to answer a few questions for an article they are doing on the topic.

So here’s what I wrote. I’d be interested in any reader comments on what I might have missed.

Where do the roots of CSR lie? What is CSR by the most simple, yet universal description?

CSR has its roots in several eras of history. Firstly, the concept of Victorian philanthropy. This was created by the actions of 19th Century UK family companies such as Cadbury and Lever Brothers. A Quaker influence was clear in early philanthropy, which quickly spread to the US in the late 19th Century and early 20th Century.

In the 1950’s a debate began about the role of the businessman in post war affluent society, and academics, particularly in the US, began to take an interest, as did CEOs of large companies and theorists such as Peter Drucker.

Then, the third push for CSR came from the environmental and political movements of the 60’s, 70’s and 80’s. Growing in the 1960s in Europe and the US, and gaining impetus from the anti-Vietnam protests in the 1970s, the notion of responsible business became much more mainstream in the 1980s. There were many protests around companies seen to be supporting the pro-apartheid regime in South Africa, and about the tragedy of the Bhopal Union Carbide industrial accident. Nuclear disarmament campaigns also lead to a rise in the number people deeply concerned about the environment.

In the 1990s information technology and globalization of supply chains, pollution and sourcing collided to create an anti-sweatshop and anti-corporate movement, also partly based on ethics-related incidents involving Shell in both Nigeria and the North Sea.

Since the zenith of the anti-globalisation movements of the late 1990s, we’ve seen social and environmental issues become really mainstream for large companies.

Training and developing employees, anti-corruption, health and safety, creating ethical supply chains and paying the correct amount of tax have all become important corporate responsibility issues, among many others.

For a definition, you could use the most well known one, that corporate responsibility is the contribution of business towards sustainable development.

Which country is the leading force in the field of CSR?

This is a difficult question to answer. Many people say the UK is ahead of many countries but it does depend upon the issues.

For example in terms of volunteering and community work US companies are often better. It is true that many of the companies leading on CSR are headquartered in the UK or have significant operations here. Companies such as Marks and Spencer and Unilever, for example.

But in the US there are companies such as Nike and Timberland who are really good at CSR too. Norway, Denmark and Sweden also have some very interesting companies who do some excellent work on CSR. Companies like StatoilHydro, Novo Nordisk and Ikea, for example.

What shows if a company is really doing good CSR, or if it is doing something just to use it for PR or to be able to say we have done something?

The real ‘acid test’ of corporate responsibility is whether it is something the company does when no-one is watching.

Companies who really believe in the notion of corporate responsibility are working hard to embed it into their business, or ideally already have.

For the best companies, it is simply what they do every day. It is normal business.

The companies that really believe in corporate responsibility are the ones where the CEO is totally comfortable talking about the different and difficult issues that corporate responsibility presents for the company.

Increasingly companies that use CSR just for PR are being discovered much more quickly as more and more people understand what’s real and what is not.

Could you mention some good examples for really good goals, projects etc which were the results of a really responsible company?

The Baku-Tbilisi-Ceyhan oil pipeline, when it was built in 2000-2003, had a goal of not creating conflict in Turkey. Thanks to BP’s responsible planning work, the pipeline has not caused problems either environmentally or socially.

Marks and Spencer in the UK has created a strategy called Plan A that is 100 steps towards sustainability. So far the plan and associated marketing campaigns have been the most successful in the history of the company and M&S has an excellent reputation. Interface, the carpet company, has a goal of being completely sustainable by 2020 and has saved $500 million dollars by being more environmentally efficient. Interface says it is now 60% of the way towards its goal.

Starbucks has recently shifted to fair trade for more than 90% of its coffee sold in the UK. The company is currently promoting fair trade in all its stores in the UK but has not put up prices.

Another example would be Unilever. The company has committed to source all tea and palm oil sold from sustainable sources in the near future.

Are there national characteristics of CSR in your opinion?

Yes. There are global values of course, like the Ten Commandments in Christianity. But implementation of CSR should be very tailored to local needs, whilst bearing in mind the global principles the company operates under.

CSR should be based on both these, and the needs of local people and the environment. So not based on what the CEO wants to do with some spare budget, but on real research on what customers, employees and society believe are the areas where a company can contribute socially and environmentally.

What do you plan to talk about at the conference?

Excellence in CSR. What makes a company excellent at CSR? Here is a link to something I already wrote in advance of the conference: http://sustainablesmartbusiness.com/2009/10/what-do-we-mean-by-excellence-in-csr/

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