February 13, 2009

CSR and the Obama Administration?

Last month, the Social Investment Forum sent a pair of letters (here and here) to the Obama Administration, asking the administration to establish an Office for Innovation in Corporate Social Responsibility. The SIF suggests that such an office would "pursue policies and initiatives to strengthen the CSR commitments of the private sector" and lead the business sector in integrating best practices in CSR into their own operations; it also believes this office could improve sustainability across the government's own agencies.

There are certainly reasons that this sounds like a great idea. It would bring attention to the issue of CSR, and, as long as Obama remains popular, his endorsement is likely to have a positive effect on the cause of improving or increasing CSR. I also believe that increased sharing of best practices is a great thing.

That said, I'm not entirely convinced that the government is the entity that we want to take on this role. Is the SIF asking for increased regulation of CSR (either telling companies to carry out more CSR or telling them how to do so), and is that a good thing? I'm not sure. What, exactly, do we expect that regulation would add? What might it take away?

One question I'd want to consider, before deciding whether I want to see regulation on this issue, is whether we're still in the phase of figuring out how to do CSR well, or whether we're in the phase of codifying proven practices. If we're in the latter phase, I can understand the argument that, since we know what we need to do to produce good results, regulation is a way to get these practices into as many companies as possible. But if we're in the former phase, we probably DON'T want the government to regulate CSR - we want to see different companies take on different approaches, so we can see what works. (Of course, there are some activities that indeed must be, and are, regulated, which I might group into the CSR sphere - use of child labor, etc. )

If the SIF isn't talking about regulation, and instead imagines that this office would play a positive, "carrot" role in fostering CSR, then I'm curious about whether the government is indeed the actor that is best suited to carry out this role. There are certainly incentives for fostering CSR that only the government can carry out - tax incentives, for instance. When we're talking about promoting best practices, though, can industry associations and other non- or for-profits carry this out just as easily as the government can, and are they doing so already?

Finally, I was generally impressed by the long list of people and organizations that signed the letter. More than 50 people signed on, both from the US and from abroad, representing "the fields of socially responsible investing, international relief, development, human rights, environmental stewardship and faith based investing." They include representatives of Calvert Group, Ceres, Domini Social Investments, the Interfaith Center on Corporate Responsibility, Oxfam America, and many others. But I didn't see a single representative from a major company that is actually implementing CSR activities. There were a lot of people who advise on, evaluate, and invest based on other companies' CSR efforts, but no actual practitioners. Is that just because such practitioners aren't part of SIF's core constituency, or is this not in the interest of large companies that practice CSR?

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