In Adrian Henriques’ critique of my book, Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations, his main complaint is not about the value of my advice but the effectiveness of CSR itself.
Henrique’s primary argument is: can CSR ever be enough? He writes: “That of course depends on how you define it. But Mohin seems to confine CSR to an exercise in navigational tactics: doing the best you can within the confines of a business case. CSR is not in the game of setting fundamental direction or strategy. Yet it is from questioning the viability of business models and strategy that real change derives. As a middle-management discipline alone, CSR will essentially be reactive to external pressures and while doing the best it can, it will not challenge the systemic issues that are at the root of unsustainability”.
Henriques misses the mark by asking whether CSR is enough. Of course it is not enough. Government, NGOs, trade unions, consumers, investors, the general public and consumers all have a role and responsibility for people and our planet. The right question to ask is “would we be better off with or without CSR?”
CSR has caught our attention lately because it’s a “man bites dog” story. We don’t expect corporations to be responsible. We expect them to act in their own self-interest, which as history has shown, can come at the expense of the public’s interests. But as corporations have grown in scope and scale, can we afford a world without CSR?
With the scale of many corporations today, the short answer is no. Several companies now have revenues in excess of the GNP of nations. For example, If Walmart was a nation it would rank 22nd in GNP. During the US debt crisis in 2011, Apple had more cash than the US government. And since most of the largest companies operate globally, today’s mega corporations have the ability, and I would argue the responsibility, to influence social and enviro.nmental conditions across the planet.
CSR practitioners can harness the power of business to make a massive difference
I explore the impact of globalisation on CSR in my book. This trend is the primary reason that CSR is so crucial now. Multinational companies operate in countries around the world and have an even larger reach when you consider their supply chains. Conventional wisdom is that companies will seek the most lenient or lax social and environmental conditions. While it’s undeniable that multinational companies source from low-wage countries, it’s not the case that these operations always despoil the environment and abuse workers. With good CSR practices, the presence of global industry can improve rather than worsen conditions.
Due to the advent of CSR, multinational firms are now engaged in what has been termed private governance. Wikipedia’s definition of private governance is “when non-governmental entities, including private organisations … make rules and/or standards which have a binding effect on the “quality of life and opportunities of the larger public”. Simply put, private – not public – entities are making public policy.
A clear example of this phenomenon is the Electronic Industry Code of Conduct. This document outlines standards for environment, health, safety, labour, human rights, ethics and management systems. Drawn from international standards, this code has been endorsed and enforced by more than 70 companies in the electronics industry.
By adopting this code and requiring conformity by suppliers, these companies have made a commitment to proliferate social and environmental responsibility everywhere they do business. In doing so, they have taken on the traditional role of government by imposing these standards even in jurisdictions where they are lacking. In essence, this trend in private governance means that rather than repeating the ills of the industrial revolution in the developing world, CSR is lifting social and environmental conditions in places where these standards have yet to take root.
Obviously, government and NGOs are also essential in our quest for sustainability. Without their oversight, some business will cut corners for short-term gains. It is equally obvious that CSR middle managers alone cannot do the job without having support from top executives across the company. But standing on the sidelines and shouting that business is bad will not get the job done. If we accept the reality of large global businesses and seize on the rising trend toward responsibility, CSR practitioners can harness the power of business to make a massive difference.
The reason I wrote the book was to do just that. While there are libraries full of books that cover the trend toward CSR, very few books provide a practical roadmap for working in the field. After working for many years in this area, I felt compelled to share what I have learned to enable the next generation of business leaders to continue to improve responsible business practices across the planet.
This article by Tim Mohin appeared on The Guardian website. You can view the original here.
Tim Mohin is the director of Corporate Responsibility at AMD. He has worked in similar roles for Apple and Intel. He is the author of Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations, heralded as “the ultimate insider’s guide, from someone who has been at the front lines of corporate change-making at some of the world’s biggest companies”.
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