What if I told you that CSR is dead?

Written by Eleonora Rizzo

Lately, the word "sustainability" has become as overused and meaningless as "eco-friendly", "transparency" or "avocado". Already back in 2010, sustainability was included with full rights in Advertising Age’s “Jargoniest Jargon” list. Simply put, CSR and most traditional sustainability initiatives by multinationals have failed to deliver the expected social impact and are now left devoid of meaning to the big public.
But what do we mean by CSR and why has it failed?

The definition of Corporate Social Responsibility dates to the 60s, when companies such as PepsiCo, Shell and Barclays adopted the phrase to demonstrate they were serious about giving back some of the profits to the society in which they operated. Then, the first CSR reports made their appearance, until the 90s when the idea of CSR became almost universally approved and coupled with strategy literature. Nowadays, CSR is a global industry. Almost every company has its own array of CSR professionals (managers, consultant), while nations worldwide are increasingly implementing CSR laws and taxes.

Under the OECD MNE Guidelines  there is a fundamental difference between the term “CSR” and “RBC”, which stands for Responsible Business Conduct.
The first is often associated with voluntary rather than core business, and with external rather than internal work. It is a term encompassing all those philanthropic activities and feel-good projects that companies perform in some regions of the world to show they’re giving back to society.
And what about corruption? Or corporate tax responsibilities?
Actually, the voluntary association of CSR limits the role of CSR managers within the company, so that they are unable to put their hands on those matters other than peripheral to the core business.
On the contrary, Responsible Business Conduct goes beyond this to integrate responsible practices within the internal operations and throughout the supply chain of firms.

In this setting, it’s easy to understand why CSR can only be associated with a partial and temporary solution to major problems. Latest research show that greenhouse gas emissions have increased almost two times faster than the previous 30 years, whereas 60 billion tons of raw materials are extracted each year (50 % more than 30 years ago). Clearly, CSR is only scratching the surface.
Therefore, now that CSR is “dead”, what would be the future of sustainability?

For sure, companies will need to redefine the way they incorporate external engagement into business process at all levels. Every process- from the product design, to the setting of corporate strategy and project plans- must include all those efforts to consider its impact on external stakeholders, among which the environment, local communities and the society.
Take the example of Unilever, one of the most progressive multinationals around the world who successfully managed to close down its CSR departments to integrate sustainability principles into each dynamic of the organization. But how will the new generation of startup companies adapt to these needs?

There will be plenty of challenges in the future for those who will decide to accept them.
If you are interested in these topics and want to discover more, I suggest you to take part to the “Developing a Sustainable European Economy” conference, which GL4B, BESA, 180 Degrees Consulting and The Market Mogul are organising on the 12th of April. It will be the perfect occasion to get a fresh and new perspective on matters related to sustainability and trust in business, and eventually to challenge yourself.
For more information click on the following link.