CSR is spreading around the world, but in different guises

THE British brand of corporate responsibility is seen as the gold standard,” says Julia Cleverdon, chief executive of Business in the Community, which for 25 years has been championing the cause in Britain. And it is true that Britain, especially London, has been a hive of innovation in CSR since the mid-1990s, thanks to a creative cluster of think-tanks, NGOs, consultancies and inventive bosses. But according to Simon Zadek of AccountAbility, a think-tank that has been part of the cluster, this is also a repeat of a familiar British business story: superb innovation, poor implementation.

By contrast, when American firms get serious about CSR—Wal-Mart on sustainability, for example—the execution is generally impressive. The Japanese, for their part, see the roots of CSR in the traditions of Japanese business, such as shobaido (the way of doing business) and shonindo (the way of the merchant), and Japanese firms pay a lot of attention to the environment and to relations with local communities. The lead on CSR could even shift from the rich world to the big emerging markets, each with its own traditions and priorities.

For global companies this means that a one-size-fits-all approach to corporate responsibility may not work. What is right for Europe may not be appropriate for India. Such differences in priorities (see table 7) are bound to grow in importance as the BRIC countries—Brazil, Russia, India and China—and other emerging markets gain in economic clout and confidence.



Do it right

Jan 17th 2008
From The Economist print edition

Corporate responsibility is largely a matter of enlightened self-interest


THE CSR industry, as we have seen, is in rude health. Company after company has been shaken into adopting a CSR policy: it is almost unthinkable today for a big global corporation to be without one. Climate change has added further impetus. Investors are taking an ever greater interest. New and surprising sorts of co-operation are springing up: with NGOs, with competitors, with other companies. The message is moving across supply chains and spreading around the world.

Illustration by Ian Whadcock

What has helped to make all this possible is globalisation—which has also been responsible for much of the general wealth-creation through which companies, let it not be forgotten, make their main contribution to society. A sudden bout of protectionism, which is by no means out of the question, could put it at risk. So activists who press for various forms of protection should be careful what they wish for. An economic recession would also be bad news for the CSR industry, parts of which might be seen as a luxury companies could live without.

But assuming that corporate goodness continues to flourish, how will things evolve? The next wave, some believe, will be one of disruptive innovation, featuring a new breed of “social entrepreneur” that will take over from the established big companies as the driving force. Mr Benioff of salesforce.com reckons that social entrepreneurs have “cracked the code” of the next generation of corporate responsibility: it will be for-profit and self-sustaining. Mr Benioff himself plumbed philanthropy into his company right from the start by committing 1% of equity, profits and employees' time as a contribution to the community.

The extraordinary wealth-creation of recent years has produced a large number of extremely rich people, many of them from the software and finance industries, who are interested in a new kind of philanthropy: a smart, capitalist kind. It involves using money for maximum impact by investing in potentially disruptive technologies (in the environmental field, for example) and in social enterprises that can be scaled up as required.

This kind of enterprise has several advantages over established big business. It has focus, rather than being a sideline, as CSR often is for large companies. It involves people who are using their own money and are interested in measurable results: “real good” not “feelgood”. It brings financial rigour as well as an appetite for risk, and it can teach the big companies a thing or two about how to measure the success of social investments.