Like predator and prey, corporations and their critics are locked in a timeless struggle. Critics on the attack accuse corporations of being greedy and destructive. Businesses then try to defend their reputation and prove their worth. It’s important to note that corporations are the prey, eternally hunted by their left leaning critics.
A key defensive strategy used by businesses is Corporate Social Responsibility (CSR). While the criticisms of corporations have remained fairly constant. CSR as a defence has failed and evolved repeatedly. By some accounts, we are now on CSR 3.0 and counting. Or according to some professors, ‘CSV’.
Business leaders have not yet learned, that no new evolution of CSR will ever appease the critics. Appeasement only strengthens and encourages them. In CSR’s many iterations there are two common threads. First, the failure of CSR. Second, the evolution towards the intangibility, indistinctness and possibly non-existence of CSR.
CSR Evolution: CSR 1.0
The early years of CSR were marketing and public relations oriented. Sometimes called check writing CSR. Corporations used philanthropy as a tool to improve their firm’s image. CSR was usually within the marketing department and spent the advertising budget. Businesses were soon criticized for this shallow approach to their ‘social responsibility’.
CSR Evolution: CSR 1.5
Since early CSR failed to impress customers and appease critics, CSR evolved. Instead of writing checks to charities, Firms now ‘strategically partnered’ with them. CSR was nominally moved out of the marketing department into its own space. There is now a CSR manager, CSR Report, etc. Also, as the environment became a priority, suddenly every firm became the same shade of green. Criticisms remained that CSR was too incremental and image driven. CSR was still a defensive risk management tactic.
CSR Evolution: CSR 2.0 & CSR 3.0
CSR 2.0 and by some accounts 3.0 was supposed to fix these shortcomings. The new buzzwords were integration and value creation. CSR is to stop being a separate department, and instead be integrated into all functions of the firm. CSR is no longer a tool to reduce risk, but a strategy that ‘creates and protects value for the company and society’. This is strange due to its lack of new theory. Creating value is what firms are supposed to do anyway, and other stakeholders in society benefit from this value creation. Much of the jargon in CSR 2.0/3.0 is simply efficiency and waste reduction, something firms should be doing regardless. CSV is closely related to this evolution of CSR.
Creating Shared Value (CSV)
Professor Michael Porter recognized that CSR has failed, either to solve problems or to appease the critics of capitalism. He helped create CSV as a replacement. However, as you can read here, CSV is even less substantial than CSR.
Porter says that companies should “create shared value” by “creating economic value in a way that also creates value for society”. Since firms do this by default, CSV is a more vague and invisible form of CSR.
While CSV and CSR 2.0/3.0 are supposed to be the new forms of CSR, they actually represent business pre-CSR. Restating efficiency and creative thinking as supposedly a new CSR evolution.
These new forms of CSR are less tangible. The substance of CSR has been removed, while the acronyms and pretenses remain. The criticism of CSR 1.0 is that it is shallow. The criticism of CSR 2.0/3.0/CSV is that it does not exist. It is comprised of nice sounding terms and business parlance that have no real meaning.
The removal of the ‘Social’ in CSR – from CSR to CR
Another sign that CSR is evolving into less tangible forms is the slimming of the acronym. Firms in industries such as tobacco and military technology have been accused of being inherently unsocial, unhealthy or at least politically incorrect. These firms tried to play the CSR game. But were criticized for speaking of their Corporate Social Responsibility. Critics pointed out that these firms have no social responsibility. These unfortunate industries now usually use the term Corporate Responsibility (CR).
Other firms are beginning to use the terms ‘Corporate Responsibility’ and ‘Sustainability’, instead of CSR. If CSR is vague, these new terms are even more ambiguous. Some companies even define ‘sustainability’ as the sustainability of the corporation itself. Again we see in CSR evolution the movement away from CSR.
CSR Evolution into Extinction
The new forms of CSR/CSV simply imply efficiency and looking for creative ways to serve new markets with new products. In its evolution, CSR is becoming less substantial, less standalone, more invisible. It is now synonymous with pre-existing terms like efficiency and creativity. At some point CSR may evolve itself out of existence.
CSR Evolution Examples
Starbucks stopped publishing a Corporate Social Responsibility Report in 2007, as the term went out of style. Starting in 2008, it’s now a Global Responsibility Report, which is more generic and fashionable.
Observe how Nokia has kept their ersatz term for CSR in style over the years.
Huawei, being a Chinese company, took a bit longer to get into the new fashion.
There is no better proof of the failure of CSR than when companies no longer use the term. Corporations now make up their own label for the activities formerly known as Corporate Social Responsibility.
Corporate Responsibility, Sustainability, People & Planet, etc. These new vague terms mean whatever the company want it to mean. ‘CSR’ may soon be extinct, with only a few firms in the third world still using it.
Click here to see why companies are leaving CSR, and the changing corporate fashion.