Is CSR dead, or is it just in the slow lane?
30 June 2017
Milton Friedman famously said, “The social responsibility of a company is to increase profit”, and that it makes little sense for company managers to spend shareholders money on things that have little or no connection to the company’s work. However, the thought-leaders gathered for VentureFest Oxford came to unpack the future of Corporate Social Responsibility.
Will spending shareholders money or time, or having employees volunteer for just causes, impact positively on profits? Is it enough for companies just to donate money to address the country’s ills?
Some companies do this and whether or not it makes a difference to resolving the problems is perhaps less important than showing responsibility; the Financial Times supplement 'Responsible Business' (22 June 2017) suggests that whether a business is responsible or not is decided by the public.
Some businesses are in the slow lane, with Corporate Social Responsibility (CSR) limited to charity giving as a self-serving PR exercise to alleviate corporate guilt. But for many, CSR is making a difference in being an attractive company to work for.
It’s worth acknowledging the positive impact of CSR at companies which purposefully embraced it. The book, Connect: How Companies Succeed by Engaging Radically with Society, co-authored by John Browne and Robin Nuttall, reports that 89% of company executives believed ‘companies have a moral responsibility to address societal and environmental issues that go beyond legal requirements.’ Milton Friedman famously said, “The social responsibility of a company is to increase profit”, and that it makes little sense for company managers to spend shareholders money on things that have little or no connection to the company’s work.
The thought-leaders gathered for VentureFest Oxford came to unpack the future of Corporate Social Responsibility and addressed three important questions: ‘How can we build CSR into every company?’, ‘How can we increase sustainability through CSR?’ and ‘What is the future for CSR?’
In asking these questions, the discussion highlighted the fault-lines around CSR, including:
- What happens when there is a trade-off between social impact and profits?
- Who does the company ultimately serve and whose interests win out?
- Can innovation overcome the trade-offs?
- Where does the best social and commercial innovation come from and how do we bring both younger and older generations together?
- Do we need a new breed of companies, owned and governed in order to unlock the triple bottom-line?
- How do we get a broader, longer-term view on the business case for corporate responsibility?
- Which stakeholders should have voice and power in business?
- Profit maximisation vs profit adequacy (i.e. commercial viability) – is this key and would shareholders who invested for the former be happy with the latter?
VentureFest discussants covered a wide variety of industry sectors including consulting, academia and tech entrepreneurship. They summarised that:
- “CSR should be about alignment of values, not merely isolated activities.”
- “True CSR must be about a triple bottom-line, recognising the synergies and the trade-offs between the interests of people, planet and profit.”
- “Too often, businesses approach social impact through a narrow prism of a business case. This means focusing on cash impacts within the next 18 months.”
We don’t know the future of CSR, with Brexit looming and wider changes brought on by PESTLE forces, but there are encouraging signs of the growing desire to address both societal and business needs.
Erinch Sahan, Head of Private Sector Team at Oxfam
Darryl Mootoosamy, Community Builder at B Lab UK
Jurek Sikorski, Executive Director of Henley Centre for Entrepreneurship