February 26, 2009

Tech CSR in Emerging Markets - What Would You Ask?

This Sunday is the Harvard Business School/Harvard Kennedy School Social Enterprise Conference. I've organized a panel on CSR by technology companies in emerging markets ("New Markets, New Approaches: Technology Companies and Corporate Social Responsibility in Emerging Markets"). The panelists include:
  • Akhtar Badshah, Senior Director, Global Community Affairs, Microsoft Corporation
  • Robert Richardson, East Coast Education Manager, Intel Massachusetts
  • Michael Yutrzenka, Executive Director, Cisco Foundation and Director, Public Benefit Investment, Cisco
  • Chuck Kane, President and Chief Operating Office at One Laptop Per Child
  • Jane Nelson, Director, CSR Initiative and Senior Fellow, Mossavar-Rahmani Center for Business & Government, Harvard Kennedy School (moderator)

    Here's the official description: "Technology companies are fully engaged in emerging markets—developing, manufacturing, and selling products in developing economies around the world. Just as in developed markets, these companies recognize a responsibility to their emerging market customers, suppliers, employees, and other stakeholders, and have expanded their corporate social responsibility programs accordingly. Many technology companies seem to approach CSR in emerging markets via strategies and business models that are distinct from their developed market initiatives. Are these emerging markets CSR programs truly unique? If so, why are tech companies taking a different approach in these regions? Are there lessons and strategies that could be imported back into developed markets? This panel will explore successful models of technology company CSR in emerging markets, along with the challenges and limitations that these programs face."

    What questions should I make sure get asked during this panel? I'll report back on the conference early next week. If you plan to be there, please let me know!

February 25, 2009

Is the Recession Good for the Environment?

In light of the recession, companies are more concerned with finding the cheapest mode of travel than the mode with the smallest carbon footprint. As companies cut their travel budgets, though, will they increasingly turn toward far-greener technological substitutes like webinars and video conferences? Will this be just the push required to get consumers to change their behaviors, allowing these technologies to disrupt the business travel industry?

Last night, I read
this article, entitled "Recession May Harm Green Business Travel, Survey Says". The article reports that, according to a recent poll (details in the article), CSR in general will continue to grow, despite the recession, but some specific initiative, including green business travel, are likely to be cut to save money. In particular, "the survey found that 79 percent of companies rate cost-cutting as a high business travel priority this year, versus 17 percent for whom environmentally sustainable travel is a high priority."

Green travel, while not explicitly defined by the article, seems (as one might expect) to include travel decisions made with consideration for carbon emissions, such as choosing high-speed rail over flights. According to the article, it has "has not yet taken hold among a majority of companies". The article quotes Yves Weisselberger, CEO of KDS, an expense management company in Europe, as follows: "At this stage, green travel choices remain scarce and are usually more expensive." He goes on to say, "Longer term, though, the picture is brighter—companies clearly want to do the right thing through CSR, so once the financial premium is erased, or the economy permits, we should expect to see green business travel become far more popular."

I have to say, I was surprised when I saw this article and its gloomy view of the present situation. In the past month or so, I've noticed that the recession has caused a number of companies to institute travel bans. (
Here's an article about a decrease in business travel in the UK; if anyone can back up my anecdotal observations about a decrease in business travel in the US, would you please post a comment?) I'm clearly not an expert in carbon footprints, but I feel comfortable concluding that a reduction in travel is better for the environment than a shift toward green travel.

This got me thinking about what companies will use as a substitute for travel. If they had been willing to shell out cash for place tickets in the past, they must have had a job they needed to do - what are they now using to do that job? I bet their solutions will include an increase in the usage of videoconferencing, webinar tools, and similar technological solutions. (In fact, the above article about travel in the UK mentions a rise in video conferences.)

I recently had the opportunity to participate in an online conference/presentation (appropriately, as part of a Proctor & Gamble case competition focusing on sustainability). I have to admit, I was dreading it. The format of the event required each of the five participating teams to present a PowerPoint and video which we'd submitted in advance, and then to go into four or five virtual "breakout rooms" to discuss each presentation in small groups. Between the competing students, the people running the competition, and the P&G executives that were judging us, there must have been at least 25 participants, in literally as many different locations around the country. It just sounded like a recipe for chaos. Instead, I was very pleasantly surprised. The presentations all went smoothly, and in my breakout room, we had a really productive conversation, aided by a "whiteboard" where the moderator could take notes that all of us could see and a polling function. The only equipment we needed to participate was a computer, an internet hookup, and a phone line.

I'm taking a course this semester that's taught by
Clayton Christensen, the mind behind the theory of disruptive innovation. As I was thinking through this post, it occurred to me that this is a classic illustration of that theory. I can't do the whole theory justice in this post (I HIGHLY recommend the book The Innovator's Solution, which is the backbone of our class), but here's a short and rough analysis:

Travel is great. It is the best way to do the job that companies need done when they put their employees on planes, trains, and automobiles. That said, it's fairly expensive, so not everyone can travel, and companies won't use travel in every situation - because, in those situations, physical travel over-serves their needs. Tools like webinars and videoconferencing are not great. They simply are not as high quality as truly being in the same room as the people on the other end of the phone line or computer screen. I've certainly observed this myself in my previous role as a consultant - absolutely nothing builds relationships like face-to-face communication. Furthermore, these tools have historically been frustrating, with frozen screens, dropped calls, and other bugs. However, in situations in which travel is too expensive relative to the benefit it offers - that is, when the customer is being over-served by traditional travel, these tools are a great alternative.

The issue is, though, that the current context isn't static - instead, both travel and these travel substitutes are getting better over time. That means that I can fly where I want to go faster, more easily, and generally better. (Well, that's the theory at least - I guess the idea that all companies improve their products on an ongoing basis might not quite take into account increasing security regulations - but think back to travel several decades ago, and this is more or less true.) At the same time, webinars and videoconferencing tools are getting better, too, so that they more and more and more meet my needs. Of course, my own expectations are increasing over time, but not as quickly as the quality of both my travel options and my travel-substitute options.

Someday, the travel-substitutes will meet and then exceed my needs. Real travel will still be better, but since the webinars and videoconferencing will be more than adequate, while at the same time cheaper, why would I bother to get on a plane? Webinars and videoconferencing will have successfully disrupted physical travel.

In reality, of course, it might not be quite so simple. There will always be reasons that I might want to be someplace in person. In general, though, I buy into this theory enough to believe that technological substitutes for physical travel will certainly steal market share from real travel in the long run. With the same disclaimer that I couldn't tell you the carbon footprint of a webinar, I can only imagine that this would be a strongly positive change for the environment.

So what does any of this have to do with the recession and the article about green travel? My number one takeaway from my introductory marketing class last year was this: It's really, really, really hard to get consumers to change their behavior. You might have a product that would seriously benefit them, but if it doesn't fit into the way they currently live their lives, you have a major uphill battle to get them to adopt it.

To illustrate this concept, I'll go back to my experience in the case competition. I didn't want to use the online tool. I wanted to just stand up in front of the room, make my presentation, and meet in a real breakout room with people who were really there with me, just like I've done in the past. When I was forced to adopt this new technology, though, I found that it met my needs, and I would absolutely use it again.

If the recession is forcing companies to cut their travel budgets, it may be the push they need to adopt technologies that substitute for travel - the push they need to change entrenched behaviors. In fact, in researching this post, I came across
this article from 2003, when we were emerging from the last recession. The article reports that airlines were likely to benefit from the economic recovery, but that "it may not deliver the rebound in business-travel spending they wish for", because companies were likely to continue to use cost-cutting measures they had adopted in the face of the recession, including video and web conferences.

If this theory pans out, the recession may be just the jumpstart needed not for green travel, but for green travel substitutes.

February 24, 2009

Google.Org Announcement

Does Google.Org's announcement really represent a big change for the organization? Does it matter if the entity invests in non- or for-profits, and can it be successful doing both at once? Is it fair to criticize Google for taking a "business approach to philanthropy"?

Google.Org has announced a reorganization, in the wake of a review of its operations. According to
Dr. Larry Brilliant's post yesterday on the Google.Org blog, he will move on from running the company's philanthropic arm to become Chief Philanthropy Evangelist, while Megan Smith, Vice President of New Business Development, will take responsibility for managing Google.Org (in addition to her current role).

While I'm intrigued by the leadership change (I've long believed there's a strong fit between business development, which is all about relationships with external actors, and strategic CSR, which is typically executed via partnerships), I'm most interested in the following piece of Brilliant's statement:

"During our review it became clear that while we have been able to support some remarkable non-profit organizations over the past three years, our greatest impact has come when we've attacked problems in ways that make the most of Google's strengths in technology and information; examples of this approach include Flu Trends, RechargeIT, Clean Energy 2030, and PowerMeter. By aligning Google.org more closely with Google as a whole, Megan will ensure that we're better able to build innovative, scalable technology and information solutions. As a first step, Google has decided to put even more engineers and technical talent to work on these issues and problems, resources which I have found to be extraordinary."

New York Times article interpreted this announcement to mean that Brilliant "signaled that Google.org might curtail its financing of nonprofit groups unless they are closely aligned with Google projects" and said that the "announcement represents a shift in Google’s approach to philanthropy". I'm not sure I agree this is actually a major change. Of course, the reporter may have had access to information that I don't have, but the article indicates that no Google executives were willing to comment, so I'm assuming he came to that conclusion based only on the text of the blog post.

Instead, it sounds to me like Google.Org is continuing on with what it's always sought to do - utilize the company's unique assets to address social issues. Many companies have money (perhaps less right now), and this is certainly an asset they can deploy. However, they have unique access to their employees' skills, their products, and their proprietary technology and information. Anyone can give money, but Google is one of the very few entities that can, for instance, track flu outbreaks before they hit hospitals or help citizens visualize the impact of environmental disasters half a world away. I think Google has always tried to do this - I read this announcement as a reaffirmation of that goal, and perhaps an indication that the organization thinks it needs to do a better job of this, but I don't think this is a major change in how Google.Org does business.

I really don't care if the projects Google.Org invests in are for- or non-profit. It sounds like Google has found that, to date, the projects where it has made the biggest impact have been for-profit initiatives. I don't know if that's just been how it's happened to play out, or if Google is, for some reason, better equipped to make a difference via for-profit initiatives. It doesn't sound like the organization knows that, either - it sounds like its employees have just observed that, empirically, they've worked well with for-profits in the past. Going forward, Google.Org should certainly focus its activities on the initiatives where it expects to make the greatest impact.

The one red flag I do see here (if, in fact, Google.Org is considering moving more towards for-profit initiatives, as the New York Times article implies) is that it's easy to see an organization's tax status as a defining characteristic of that organization, and in many cases, this isn't the case. If Google.Org's goal is to earn a financial return while also having a positive impact, then of course they should focus their funding on for-profit initiatives. However, if their goal is to reinvent the energy infrastructure or change the way people in emerging markets access information (which may provide financial benefits to Google in the long run), I hope they focus on the operations of prospective partners, not their financing decisions.

That said, I'm not sure how easy it is to structure and staff an organization so that it is good at both for- and non-profit investing. In my experience as both a grantmaker directing funding to nonprofits and an MBA student evaluating prospective for-profit investments, I'd say that while the required skill sets are absolutely closely related, they're not identical. While the same person can certainly develop both skill-sets, the terrific grantmaker and the wonderful investor may not always be the same person. What organizations do both of these things well, and how are they structured and staffed to make this possible?

Getting back to the New York Times article, though, I was especially interested in these few lines:

"The company has drawn criticism for relying to much on a business approach to philanthropy and on a belief that engineering could be applied to solve the world’s problems.

'They are doubling down on the technocratic approach,' said Siva Vaidhyanathan, a professor of media studies and law at the University of Virginia, who is writing a book about Google. 'The habits and ideology of the company will lead the philanthropy rather than the needs of the communities or the planet.'"

I really take issue with the idea that someone would criticize the company for taking "a business approach to philanthropy" or for allowing "the habits and ideology of the company" to "lead the philanthropy". At the end of the day, Google is a company. The founders are very committed to using that company to making a positive difference in the world, and that's terrific. However, at the end of the day, they serve at the pleasure of the shareholders, and for Google.Org to be sustainable - for it to last through the many leadership changes that are sure to come in the future - it has to connect back not just to the "needs of the communities or the planet", but also to the needs of the company.

Furthermore, by taking a "business approach to philanthropy" and by using engineering "to solve the world's problems", Google.Org is utilizing its unique assets. I don't know whether Google thinks that engineering is the one true way to save the world - I think it's a little far-fetched to believe that anyone would think there's just one solution to the world's myriad problems. However, I completely agree that engineering (and the other skills offered by Google employees) are certainly the best way for Google to address social problems. As a result, I'm really glad that the company continues to integrate Google.Org into Google.

Corporate Philanthropy Day Video

Yesterday's Board of Boards conference was closed to the public and the press, but you can get a little taste of it in this video from MSNBC - it's a conversation about corporate philanthropy and the recession, featuring Tom Brokaw, Angela Braly (President, CEO, & Director of WellPoint), and Alan Hassenfeld (Director and former Chairman & CEO of Hasbro), all of whom were expected to participate in the event.

Even more interesting - I got to the video via a
post on www.barackchangeobama.com, billed as "The Unofficial Website of Barack Obama: The Change We Need".

February 23, 2009

Happy Corporate Philanthropy Day

Today, February 23, is International Corporate Philanthropy Day, as promoted by the Committee Encouraging Corporate Philanthropy. Through this day, according to a CECP fact sheet, the organization seeks to celebrate corporate philanthropy while raising awareness of the "benefits of corporate community investment" and encouraging the business community to invest further in philanthropy. The day's events include the annual Board of Boards conference, which brings together CEOs from major companies to discuss corporate philanthropy and an event with the UN on the role of companies in furthering the Millennium Development Goals.

I am particularly interested in today's fourth annual Board of Boards event, which is aimed specifically at CEOs and Chairpersons. This year, Tom Brokaw was scheduled moderate a discussion with Carlos Ghosn, president and CEO of Nissan, and Jeffery Immelt, CEO of GE, and the event was to conclude with lunch with Bill Clinton.
Top executives from over 50 companies were expected to participate, including Dan Doctoroff, President of Bloomberg; E. Neville Isdell, Chairman of Coca-Cola; Terry J. Lundgren, Chairman, President &CEO of Macy's; and Ivan G. Seidenberg, Chairman & CEO of Verizon.

I don't know of any similar events that engage CEOs to address not just corporate philanthropy, but CSR more broadly. Is there in fact such an event or initiative? If not, should there be? I tend to think that engaging top leaders in CSR initiatives (including corporate philanthropy) is a critical way to infuse CSR throughout the organization. A mid-level executive charged exclusively with addressing CSR may have a hard time convincing the manufacturing department of the need to reduce its environmental footprint or the purchasing group of the importance of sourcing from ethically responsible suppliers; in such an organization, CSR is too easily corralled into its own little world. When the CEO is engaged, however, he or she has influence over all of these groups and can ensure that CSR goes from "nice to have" to part of how the company does business. In addition, an event like the Board of Boards conference provides an opportunity not just to influence the assembled CEOs, but to use their collective influence and insight to influence the field of CSR.

If you were to design an event or initiative to engage CEOs in CSR, what would it look like? What benefits would such an event bring? (For instance, I imagine that the CECP event helps raise the visibility of corporate philanthropy on the participating CEOs' agendas, creates a bit of peer pressure to keep up with all of the well-known companies that participate, provides an opportunity to demonstrate to these CEOs directly the positive impact that corporate philanthropy can have on a company, and energizes the participants to increase the impact of their own community engagement.) What other ways would you seek to engage CEOs, and how might you use the collective influence of the participating CEOs to further the field of CSR?

February 19, 2009

News Update: Macy's

Yesterday, I asked for examples of companies that are making changes to their CSR programs in light of the recession. Today, the San Francisco Chronicle's SFGate.com website posted this article about the changes Macy's is making to its community involvement activities in that city. These changes come in the wake of news that it will close its Macy's West division this spring, shrinking from 1,400 to 125 headquarters employees in San Francisco. (Here's an article from SFGate that gives some background on the cuts Macy's is making.)

According to the article, the company expects to maintain its commitment to "several high-profile community events", like the annual Passport fashion show, which raises funds to fight HIV/AIDS; the remaining San Francisco employees will also continue to run cause marketing initiatives. On the other hand, thanks to the steep staff reduction, local nonprofits are likely to see a major decrease in employee giving and volunteer hours.

I find it really interesting that the company isn't explicitly making cuts to its community involvement programs, but that such a decrease will be a byproduct of staffing cuts. I imagine this is true in any community that has seen significant layoffs - and as a result, the communities that are hardest hit by this downturn may also be those with the biggest reduction in capacity to deal with it.

February 18, 2009

Examples Needed

I've posted a few times recently about theories - mine and other peoples' - of how companies are likely to adjust their CSR in light of the economic climate. I'd now like to move beyond the hypothetical to dig up some empirical examples. Can anyone pass on information about companies taking any of the following actions?
  • Cutting back on CSR activities in recent months
  • Stepping up CSR commitments
  • Not making any changes, but discussing the economy in their rationale for maintaining their program (e.g., saying they are facing tough times but are maintaining their commitment due to significant need in the community or citing a positive impact on their core business)

I really appreciate any examples you can provide - if you don't want to post here, feel free to email me at ReimagingCSR (at) gmail (dot) com.


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?

February 12, 2009

Trust in Corporations

Forbes has published two articles recently that reference CSR; interestingly, both are primarily about citizens' trust in corporations (or lack thereof). One, published last week, focuses on the erosion of goodwill towards corporations in the wake of the recession. It reports on a survey that said one in three respondents believes corporations are primarily responsible for the recession (46% primarily blame governments), and on another study that found that people are increasingly likely to say that companies make too much profit (59% of respondents) and too few big companies have too much power (70%). The article argues that, in this environment, CSR is important. The other, published this week, centers on Asia; it says that “trust in business wavers” and encourages “private sector diplomacy” - that is, public/private partnerships that address “the region’s most pressing problems”.

I've been thinking a lot recently about the economy and it's impact on CSR. Of course, many of us are concerned that, as companies seek to eliminate spending wherever possible, they'll cut the resources that sustain their CSR programs. On the other hand, on this blog, we've discussed some reasons that this in fact might not happen: At the
Conference Board's recent conference on corporate citizenship, various panelists suggested that CSR should increase now because there's an increased need for it, or that cutting back on CSR damages trust. Reimagining CSR reader Elisabeth commented on a previous post that CSR initiatives can be leveraged "to sustain and even build brand equity in challenging times", while the Ethical Corporation Blog argues, "There is opportunity to gain trust.... Showing you can treat your customers, suppliers and business partners fairly, even when times are right, may help you build that bank account of goodwill, useful when you really need it. "

By the logic of the Forbes articles, I come to the following rationale (partially overlapping with those offered by Elisabeth and the Ethical Corporation blog) for redoubling CSR efforts in light of the economy: The recession - or, more specifically, major corporations' perceived role in sparking the recession - has led to an erosion of trust in companies; engaging in CSR, on the other hand, can help to restore that trust.

If the issue of trust links the recession and corporate citizenship, should we in fact expect to see an increase in CSR efforts?

February 10, 2009

News Update - Microsoft Launches Environmental Sustainability Dashboard

Microsoft has just announced the release of an Environmental Sustainability Dashboard for Microsoft Dynamics. Dynamics is a set of software products designed for businesses; specifically, it offers "financial, customer relationship and supply chain management solutions". The general selling point is that Dynamics "helps businesses work more effectively".

The Environmental Sustainability Dashboard, like the rest of Dynamics, helps a company track its operations, but in this case, it focuses on inputs and outputs related to the environment. It tracks what the company is using up and what it is releasing, enabling the company to cut back. (In more detail: According to Microsoft's press release, this product "will enable midsize businesses to capture data needed to measure key indicators related to energy consumption and greenhouse gas emissions as part of everyday business processes from within their enterprise resource planning solution, helping them pinpoint ways to cut their energy consumption and costs.")

I find this announcement interesting for two reasons. First, this is business. Microsoft is doing this not through a philanthropic arm, but through a business unit. It is selling the product not to its customers' CSR groups, but to the people that manage finances and customer relationships and supply chains - the business processes that keep companies going. Of course, these two motivations certainly are not incompatible - in fact, the press release cites a Forrester Research poll finding that 55% of IT procurement and operational professionals (presumable a close match with this product's target market) want to cut energy costs, while 50% want to do "the right thing for the environment".

Second, I'm struck by the fact that the product is targeted at midsized businesses. We don't hear all that much about CSR at midsized companies. Is that because the CSR initiatives aren't there (at least at a newsworthy scale), because the smaller companies can't (or don't feel the need to) communicate their initiatives, or simply because I haven't been paying attention? In the press release, Kirill Tatarinov, corporate vice president, Microsoft Business Solutions, suggests it may be the former: "In many cases, midsize organizations can't retain dedicated consultants to audit their environmental performance. By integrating groundbreaking environmental performance management capabilities with Microsoft Dynamics AX, we are bringing that critical information directly to customers as part of their everyday business management."

So will the Environmental Sustainability Dashboard push sustainability initiatives down into smaller companies, that couldn't afford to take on this challenge in the past? If so, is this an innovation that could potentially have a major impact on who has the "luxury" to commit to CSR? Or am I failing to give midsized companies the credit they deserve?

February 5, 2009

Company CSR Blogs

I'm really interested in blogs that companies write about their own CSR activities. With such activities buried deep inside an array of different departments, it can be hard to understand how CSR at a given company works and how the company thinks about these activities. Granted, corporate blogs aren't exactly unfiltered, but I wish more companies wrote their own - I think it would really further the conversation about what we're all doing and where we're going. As far as I can tell, though, only a very small number do so.

Here's a list of the CSR blogs, written by companies about their own activities, that I'm aware of - if you know of any others, please help me add to the list! Thanks!


February 4, 2009

News Update - CSR and the Economy

Over the course of the last few days, I've done some thinking and writing about the economy and CSR. Today, I decided to research what other bloggers and reporters are saying about the topic. In general, I continue to be optimistic about the future of this field, as several sources recommended that companies refrain from cutting back on CSR or reported that, empirically, this seems to be the trend. Some interesting articles on this topic are below:

  • Fortune reports, "...A surprising number of companies see corporate responsibility as all the more important given the financial crunch, even as they reduce spending elsewhere in their businesses."
  • On CauseGlobal, Marcia Stepanek writes about a new report by Trendwatching.com; she talks about consumer expectations, formed in part by the recession, that companies should be generous and highlights opportunities this creates for both companies and social entrepreneurs. (I'm interested in the fact that, while some of the examples listed are certainly traditional CSR or corporate philanthropy programs, some involve generosity from the company directly to the consumer. Does this have implications for traditional conceptions of CSR? For instance, does it mean that consumers are less concerned about a company's impact - i.e., social change - and more concerned about its values - which might be displayed by helping the relatively-fortunate consumer just as easily as by helping those with less?)
  • onPhilanthropy's Shikha Dalah considers corporate philanthropy and the pressures it is under in this economy; she comes to a conclusion similar to my position in yesterday's post: "Ultimately, the more integrated philanthropy is into the business, the greater chance it has to be able to achieve maximum impact even in the midst of changing economic circumstances." She also shares takeaways on this topic from a panel of corporate philanthropy executives at a recent Columbia Business School Alumni Club of New York event. (I used to write for onPhilanthropy.com, where I also served as Corporate Philanthropy Editor.)
  • At FT.com, Stefan Stern takes a different perspective: "Now the recession's here we can forget all that nonsense about corporate social responsibility (CSR) and get back to trying to make some money."
  • Dinda Elliott, in Condé Nast Traveler's Daily Traveler blog, considers CSR programs among travel-industry companies and wonders whether companies will remain committed to such programs in the face of economic difficulties. While industry executives report that they will indeed maintain their social responsibility initiatives, Elliott is concerned that only programs with a direct link to the bottom line (e.g., energy conservation) will be maintained. (In the context of my post yesterday, might this in fact suggest that threatened programs have not been properly embedded in the business model?)
  • In October, Ethical Corporation took on this issue in a blog post, articulating 10 reasons to continue on with CSR programs during a recession. While the post is a few months old, it does a good job of laying out a number of key points on this side of the debate.

February 3, 2009

Responsibility & Recession

What are the major issues CSR practitioners are thinking about as they predict the impact of the recession on this field? What kinds of social responsibility programs are companies most likely to maintain in the face of financial pressures?

As you can probably guess, business school students talk a lot about the current economic situation. It comes up in the classroom, in speeches by visiting business leaders, and certainly in conversations about the job search. Somehow, though, I don't think I fully grasped how big this is until I was in New York last week for the Conference Board's 2009 Leadership Conference on Global Corporate Citizenship.

In the city where so much of this started, the financial crisis dominated conversations of all sorts. At dinner with a friend who works in investment banking, we talked about how many of her coworkers have been laid off recently. Over lunch with a former colleague, we discussed the impact on the nonprofit sector. At the conference itself, as I mentioned in
my post on Thursday, the impact of the economic crisis on corporate social responsibility was a major theme.

Over the course of the next few months, I plan to explore the implications of the current economy on corporate social responsibility, for the purpose of understanding what we can expect in this sector over the next few years. I also think that studying how companies react to these trying circumstances helps us to understand the role that CSR plays within their organizations - for instance, are these programs a "nice to have" that can easily be cut back, or are they truly integrated into the business model?

Attending the Leadership Conference on Global Corporate Citizenship was a very helpful way of diving into this big question. The conference was attended largely by high-level CSR practitioners who spend their time dealing with these issues, so I found it illuminating to hear what they're thinking.

The major perspectives that I heard, on the question of how the economic crisis will impact CSR, included the following:

  • We should indeed expect to see some "CSR attrition"
  • With so many people negatively impacted by the recession, CSR is more necessary now than ever
  • The political climate and President Obama's message of responsibility make this the time to focus on CSR
  • If CSR is actually part of a company's culture, its employees will find a way to keep going, despite the external context
  • Pulling back from CSR initiatives during bad times destroys trust
  • The recession will provide an opportunity to differentiate between companies that truly believe in CSR and those who "pay lip service" or are just in it for the good PR - and this revelation may have long-term consequences

I find this last notion particularly intriguing, because I don't agree with the apparent underlying assumptions. There's certainly something satisfying about the logic - the idea that a company would capitalize on a social problem to generate good press, only to turn its back on the cause just when its involvement is needed most, does indeed feel a bit sleazy. Ultimately, though, do the company's motivations for engaging in CSR truly matter?

Here's what I want to see in a CSR initiative - I want to see a program that's embedded in the business. I want to see a program that really and truly is win-win, so that it doesn't rely on good intentions for its continued survival. Maybe the company in question has designed an environmental program that really does decrease costs, for example, or maybe it has engaged with suppliers in developing economies on programs that both improve the quality of the product and the suppliers' quality of life.

Sure, it's great if a business leader has a sense of responsibility to the world around him, if she believes that improving lives through better business practices is simply the right thing to do. I can imagine that such a leader could come up with some pretty amazing programs. But when the next CEO comes along (or maybe the next recession), which programs are most likely to be preserved, the ones that the previous leader "truly believed in" or the ones with a clear benefit to the company?

The recession might indeed provide an opportunity to differentiate between companies that truly believe in CSR and those who are in it for the business benefit - because by my logic, it's the latter group that will choose to continue their programs. Of course, these motivations aren't mutually exclusive, and "good PR", while certainly a business benefit, may be less compelling than benefits that can be more clearly tied to the bottom line. Furthermore, this assumes a basic set of ethics and a legal framework that do not rely on business benefit (i.e., prohibitions on child labor should not have to rely on a business case for why they make sense economically).

I hope I don't sound cynical, because the overall message I got from the conference, on the issue of CSR and the economy, was definitely optimistic. Generally, the participants seemed to see a strong future for CSR, not just in spite of the economy, but perhaps even because of it. This sentiment was best captured in closing remarks by
David Vidal, Research Director, Global Corporate Citizenship at the Conference Board. By using this recession as an impetus for identifying future opportunities and redefining the field's objectives, he told us, "Let's not waste this crisis."