By Lauren Hermanus (1 Sept 2010)
CSR means that businesses have a responsibility to the society in which they operate. One way of explaining this is to say that they have a responsibility to contribute more good than ill in the course of their operations. Another is that businesses have a responsibility to make up for the ills generated in the course of their operations, even when these operations also make positive contributions to society.
A third and stronger definition is that businesses are responsible to society – not because they have a negative impact – but because they draw benefits from being a part of society.
Being part of a society comes with all sorts of complications: hierarchies; structures; laws; rules and norms of interaction; ethics and accountability. In a society, we cannot do as we please. And though we owe one another no specific debt; a general debt is raised by the benefits we draw from being part of the system cannot be denied.
When we went out onto the street to ask people what they thought of CSR, Incite found that members of our South African society – some employed by large businesses and others not – had a lot of confusion and some interesting ideas about what exactly this responsibility means for corporates.
After initial ‘um’, ‘what’ and ‘can you repeat the question’ style answers, it emerged that people had very strong opinions about the responsibility of big businesses in SA:
- Corporate responsibility means making ethical business decisions, but being ethical seems to come second to making money.
- There is an important difference between businesses benefitting from and exploiting society, and consumers are sensitive to it.
- Business and society do have shared interests – for example, making sure we all have a healthy environment to live in and be sustained by into the future.
- Businesses are always responsible to both stakeholders and shareholders whose short-term interests may clash.
- Many people see CSR as CSI (Corporate Social Investment), which is about directing a percentage of profit at community projects and not really about core business.
- Others recognised that CSI was only a small part of CSR.
- The public is not necessarily convinced that big businesses in South Africa are responsible.
- Many people see it as the shared responsibility of government, big businesses and civil society to develop SA.
The business case for CSR involves building trust with consumers and so also building company reputations and legitimising operations. These are not things that are easily measured, but that does not mean that they cannot be measured at all. One clear impression we have is that the public is rather cynical about CSR and the way it is communicated – in advertisements etc. In some cases, CSR communications appear to actually have negatively impacted people’s opinions of some companies.
The responses we got conflating ‘giving back’, charity contributions and CSI with CSR showed that there is some way to go in clarifying the latter. CSR is not about the balance sheet, showing how much profit is directed into projects. It is about how closely aligned adding value to society is to the business’s core operations and profit drivers.
Our experience reinforced some of our ideas:
- greenwash/good-wash or anything that even looks like it alienates the public and fosters disillusionment;
- the communication line between business and society is broken;
- it is not just through official lines that businesses communicate to society – consumers are made aware of what businesses are doing through many different channels, including their friends and family who may be employees or customers of those businesses;
- communicating what CSR is and how businesses are doing it/being it needs to be reframed as part of corporate responsibility; and
- communication should be a two-way process – social media sites and other platforms provide so many more ways that companies can engage with the public and their customers outside of traditional advertising.