Monday, December 1, 2008

CSR and the financial crisis

Earlier today I attended a lunchtime event organized by Net Impact and hosted by Columbia University’s School of International and Public Affairs (SIPA) on the topic of CSR and the financial crisis. The impressive panel featured Prof Geoff Heal (Columbia Business School), Kara Hartnett Hurst (Business for Social Responsibility), Prof Jenik Radon (SIPA) and Aaron Hurst (Taproot Foundation). Below are a couple of quick points made during the discussion - please see the podcast section of for the full commentary which I expect to be made available shortly.

Prof Geoff Heal suggested that there isn’t a great deal of historical data relating to the impact assessment of a recession on CSR
policies and practices. Unsurprisingly, it was presumed that profits will be harder to come by in such times, but where CSR is embedded and contributes toward the bottom line, we can expect such policies to subsist; yet if these practices relate more toward PR or philanthropy, one might predict more reduced roles. Invariably, some firms will fall into each of these categories. It was suggested that Business 2 Consumer CSR (especially if tied to brand value) would be less impacted than Business 2 Business CSR, where some cutbacks might well be anticipated, which is somewhat of a moot point. He did however suggest that there is some evidence to suggest that, in an increasingly competitive environment, CSR policies can actually contribute to greater profits (such as in retail). 

Kara Hartnett Hurst suggested that business at BSR is booming, which is indeed indicative. Again, those companies with more integrated CSR programs weren’t cutting back given they have recognized their investment in, and the value of, CSR to a variety of stakeholders. She also noted how there has been a relative increase in the recognition and confidence of CSR given how it is associated with better governance structures and longer term shareholder value. That said, it was acknowledged, more generally, that business conditions are not good and that ‘flat is the new up' - but while reductions are happening, CSR has been less visibly impacted. 

Aaron Hurst highlighted several drivers that will promote further change in CSR over the next months, including the next administration. It was acknowledged, however, that financial philanthropy might well be cutback in this tough economic climate but conversely, increasingly people had their time to offer (he added that it was perhaps because they no longer had a job!).

The commentary was pretty broad ranging yet there were some interesting points of view from the panel on the financial bailout, as well as various recommendations for the incoming Obama team. Overall, the discussion was worth listening to, if you can find the opportunity.