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Has "CSR" become a code word for "profit trumps ethics"

Posted by Andrew Newton to APEsphere on 30 May 2009 at 07:59 am
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The term "CSR" appears to have become a way of avoiding uncomfortable conversations within business about managing impacts ethically.

 

I had an interesting exchange about corporate social responsibility (CSR) on Friday on twitter with various people who happened to be tuning in at that time.

 

Two in particular were arguing in support of the position that "CSR" should take second place to turning a profit. Now, in working out whether you agree with such an argument you had better be talking about the same thing when you use the term "CSR". It turned out we were all talking about different things.

 

Personally, I define CSR (for present purposes) as the management framework by which ethical questioning becomes embedded across all organizational decision making. Among those ethical questions, in a given instance, we might ask how to weigh up profit considerations against the social and environmental impacts of a decision.

 

What struck me as significant, however, was how both these correspondents who thought CSR should not compromise profit, also thought CSR had no connection with ethics, and yet both thought CSR was about "doing good" in the sense of projects that are designed to achieve a "worthy" result.

 

This exchange is simply the latest occasion on which I have been made to wonder whether the language of CSR is actually undermining the advancement of ethics in business.

 

To people who adhere to the idea that profit is king, and that its paramount position cannot be put in question, the term "CSR" is very convenient.

 

If they promote CSR as a profit generator - and there is an entire CSR industry doing just this - using the term "CSR" helps them to sell their proposition because they can get access to and talk comfortably with executives about return on investment. Selling "being good" using the language of ethics would stumble because being good does not necessarily entail a positive return on investment. "CSR" then becomes shorthand for saying "we will only put you on the spot regarding investments in ethical behavior that have a positive financial return". Comfort assured. The trouble is the public debate gets dominated by this comfortable version of the "being good" conversation, and the difficult ethical choices - those that could reduce profits - get entirely ignored. "Not keen on the emphasis on an ethical approach" said one of my correspondents, "much prefer a value-driven approach to CSR".

 

If on the other hand the "profit is king" advocates denigrate CSR as a drain on shareholder resources, using that term helps them to avoid being seen to suggest that more ethical paths should routinely come second to maximizing profit. No one wants to be seen to be discussing whether they can afford ethics, but they are happy to debate whether they can afford CSR.

 

If the CSR industry wants to keep ethics out of "being good" - and it can hardly be steered where it does not want to go - then those of us interested in business behaving responsibly may well have to distance ourselves from CSR entirely. This means using language like "ethics management" to convey the idea of a management framework for bringing ethical considerations into all decision making across the organization.

 

Any thoughts?

 

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EdAhnert
on 03 Jun 2009
YES, the language of CSR is undermining the advancement of ethics in business! It's absurd to think that CSR should only apply to activities that do good while adding to the bottom line. It's equally absurd to believe, as many of the Davos crowd do, that businesses can solve all of the world's problems by practicing global CSR. Another crazy idea--that CSR can be owned by the public affairs department.

I have been teaching in the field for five years and practicing in it for ten--and stumbling over the terminology the whole time. Let's retire the term and go back to "Ethical Business."
elainecohen
on 01 Jun 2009
hi, i agree that we live in a world which tends to drive us to making choices - either profits or values, either business or csr, either black or white. My world tends to contain a few more colors - one where there are multiple simultaneous possibilities and they are all valid and compatible. so yes you can make profits and promote a csr strategy simultaneously. Promoting csr as only driving business value is to underestimate the powerful forces of engagement and positive impacts that good csr does. Promoting csr as goody-goody clearly ignores the powerful contribution csr makes to the bottom line both by taking out risk-driven cost and by adding in efficiencies. Of course, this is too simple. And the core issue i believe is not HOW MUCH profit a business makes, but when. There is a big difference in managing for short term profit maximisation, ( here, i agree, csr has some trouble getting aligned) and managing for long-term profit optimisation (where  the csr agenda fits perfectly. ) elainewww.b-yond.biz/en
engelen
on 01 Jun 2009
Making a profit is what companies are for. This is their nature as participants in markets. Expecting "ethical" behaviour from them except in order to make a profit, directly or indirectly, doesn't make a lot of sense. It is the job of governments and consumers to shape markets in such a way that profit-seeking by companies contributes to the greater good. This can't possibly be the job of companies themselves: They're only players in a game whose rules are made by others.
The only thing which motivates companies is profits. This is the way itis and this is how it's supposed to be. There's nothing wrong with it.
Call it CSR, call it ethics: The key is to create a situation where companies can have both at the same time - profits *and* ethics, without one "trumping" the other.