Friday, 25 October 2013

Lacking impact, CSR leaves business exposed

Guest blog by David Sogge


Picture retrieved from:
http://www.papierentheater.nl/
Corporate Social Responsibility (CSR) makes no significant societal contribution in Europe. That is the headline conclusion of a massive research effort to assess the impacts of CSR on Europe’s economy, society and environment. Because the Global Compact is one more brand of CSR apparel for business, these findings leave its corporate sector participants looking rather naked.

The decision to assess impacts of CSR as practiced by companies in Europe took place after a 2007 resolution of the European Parliament expressed a certain impatience: “the EU debate on CSR has approached the point where emphasis should be shifted from process to outcome.” Given decades of up-beat messages about CSR not backed by systematic knowledge, and amidst a no-nonsense policy climate in which programmes are supposed to be terminated if they don’t produce results, that resolve to probe CSR is understandable.

Launched formally in March 2010, the CSR IMPACT project involved at least 16 university business and management centres and business-related think-tanks. Funded by the European Commission with a €2,7 million budget, this was Europe’s largest systematic investigation of CSR. The research covered more than 5300 small and medium enterprises and more than 200 large firms based in Europe.

After more than three years in pursuit of the key question, “What are the impacts of CSR on the EU economy, society and environment?” the researchers’ key answer was as follows:

"There is little empirical evidence which explains the concrete impacts of CSR activities and programmes on the organizational performance of companies, the wider economy, or the social and environmental fabric of Europe, its nations and regions. By implication, the aggregate CSR activities of European companies in the past decade have not made a significant contribution to the achievement of the broader policy goals of the European Union."

Perhaps anticipating a rejoinder that, once companies begin to monitor CSR outcomes systematically, a more positive picture will emerge, the researchers state: “[W]here outcomes and impacts are measured, there is no convincing evidence that there are significant improvements over time large enough to create change and reach major policy goals.” Indeed, while noting some modest effects in a few specific contexts, the researchers conclude that “impacts that are attributable directly to what might be labelled CSR practices or activities (that follow from the work of CSR departments) seem relatively minor when compared to the overall impact a company has on society.”

The researchers suggest that, as practiced today, CSR should be consigned to the history bin. Public laws and regulatory measures are far more important if public goals respecting job quality, the environment and the economy are to be achieved.

Are these findings now getting attention and stoking discussion?  The researchers express hope that their findings may prove a “watershed in the way that the business-government-society relationship in Europe is defined, measured and monitored”. Yet more than a month after the publication of the research project’s Executive Summary on 20 September 2013, public mention or comment on websites number less than half a dozen. 

In the Hans Christian Andersen story of monarchical vanity and manipulated public opinion, the Emperor was convinced that only those unfit for their social positions or “hopelessly stupid” would not acknowledge the magnificence of his new suit. Might this European research, like the child in the crowd who blurted out that the Emperor had nothing on, overcome such hesitations, shift public mood and send CSR to history’s dustbin? Such things are long overdue, but will happen only with much more vigorous public discussion.
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2 comments:

  1. Very interesting results, which confirm the need for more fundamental change. We hope to contribute to such change through the work of the Sustainable Companies Project (2010-2013). The aim of the Sustainable Companies Project is to contribute to integrating environmental concerns better into the decision-making in companies, as one of the important jigsaw puzzles of sustainability. In an innovative approach, this project has had company law as its core, based on the hypothesis, which has been confirmed through our research, that environmental sustainability in the operation of companies cannot be effectively achieved unless the objective is properly integrated into company law and thereby into the internal workings of the company. Join us for the two-day conference Sustainable Companies: We Make it Happen, 5-6 December this year in Oslo, with inspiring discussions of research-based reform proposals! Web address: http://bit.ly/H6VzPa
    Enquiries: Professor Beate Sjafjell at b.k.sjafjell@jus.uio.no

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  2. Duh! CSR is about acting responsibly in all you do, not just about "CSR projects". Hence, there is no such valid reseaerch question as "does CSR work?", but rather "what dfference doe acting responsibily make?". See also my blogpost on responsible mining at http://philvernon.net/2013/04/30/is-mining-a-development-industry/

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