Corporate Social Responsibility (CSR)
“Corporate Social Responsibility (CSR) is like teenage sex. Everyone says they are doing it, but only half are really doing it, and of the other half…. only half are doing it right.” These words, attributed to CSR luminary Sarita Bahl in a blog post by Denise Berger seem a pretty fair assessment of the situation. And yet CSR has come a long way from its early origins in corporate philanthropy. Part of the problem, perhaps, is that the agenda is constantly evolving; last year’s tax justice becomes this year’s modern slavery and just when a company thinks it has identified all the risks and hotspots in its supply chain, another issue emerges on the global agenda and causes policies to be revised all over again.
We can’t even decide what to call it. CSR, CSER, ESG, CSV, 3BL … a plethora of acronyms exist and their definitions shift depending on who is in the conversation. But underlying all of them is the broad concept that was so neatly defined by Kenneth Dayton: “I believe the only reason for this existence of the free enterprise system is to serve society, therefore I believe that every business must define for itself how it will serve society. Profit is the reward for serving society well.”
The origins of CSR lie in the philanthropic works (or, less charitably, enlighted self-interest) of industrialists like Lord Leverhulme and the Cadburys, often motivated by religious idealism and, it must be admitted, somewhat selectively applied – some companies built “model” villages for their employees at home while still employing slave labour overseas, for example. The major turning point was in 1987 when the Bruntland Commission’s report, “Our Common Future”, was published. As a result, a universal definition of sustainable development was adopted that aims to balance economic growth, environmental protection and social equality. The Agenda 21 plan defined at the subsequent Rio Earth Summit in 1992 provided a framework that responsible businesses could adopt as a basis for CSR activities that addressed identified risks and challenges.
At this point, CSR was still primarily seen as a parallel endeavour to business as usual. Material risks were identified and mitigated through the implementation of formal CSR programmes, but systemic change of business strategy was very much the exception. Niche players emerged like Ecover and Body Shop, and the values-centred brand was born. However, it wasn’t until the turn of the 21st century that mainstream businesses began to recognise that their very purpose might be broader than the creation of wealth for their shareholders.
Meanwhile, in 1959, a young engineer called Kazuo Inamori was founding a business called Kyoto Ceramics – now Kyocera – and beginning to formulate a business philosophy that adopted “doing the right thing as a human being” as the primary criterion for decision-making. The Kyocera Philosophy defines the company’s purpose as “To provide opportunities for the material and intellectual growth of all our employees and, through our joint efforts, contribute to the advancement of society and humankind.” Kyocera’s model of CSR sits the three pillars of economic growth, environmental protection and social contribution on a foundation of the Kyocera Philosophy.
This approach, initiated at Kyocera more than half a century ago, aligns neatly with current thinking on CSR. But it also provides a firm basis for further evolution of the company’s strategy in response to ever-evolving economic, social and environmental challenges. For a company to prosper on a finite planet with a growing population, CSR – whatever your business chooses to call it – must become the fundamental driver of strategy and innovation and an engine for the creation of shared value.