The Death of CSR

By Wayne Visser

CSR 2.0 Quest Series, No. 1

My opening questions to you are: Has CSR failed? And if it has, should we kill it off before it misleads and distracts too many people from the changes we really need business to make? Or can we reinvent the concept and the practice of CSR?

First let me say what I understand by CSR. I take CSR to stand for Corporate Sustainability and Responsibility, rather than Corporate Social Responsibility, but feel free use whichever proxy label you are most comfortable with. My definition is as follows:

CSR is the way in which business consistently creates shared value in society through economic development, good governance, stakeholder responsiveness and environmental improvement.

Put another way:

CSR is an integrated, systemic approach by business that builds, rather than erodes or destroys, economic, social, human and natural capital.

Given this understanding, my usual starting point for any discussion on CSR is to argue that it has failed. In my book, The Age of Responsibility, I provide the data and arguments to back up this audacious claim. But the logic is simple and compelling. A doctor judges his/her success by whether the patient is getting better (healthier) or worse (sicker). Similarly, we should judge the success of CSR by whether our communities and ecosystems are getting better or worse. And while at the micro level – in terms of specific CSR projects and practices – we can show many improvements, at the macro level almost every indicator of our social, environmental and ethical health is in decline.

I am not alone in my assessment. Indeed, Paul Hawken stated in The Ecology of Commerce in 1993 that ‘If every company on the planet were to adopt the best environmental practice of the ‘‘leading’’ companies, the world would still be moving toward sure degradation and collapse.’ Unfortunately, this is still true nearly 20 years later. Jeffrey Hollender, co-founder and former CEO of Seventh Generation, agrees, saying: ‘I believe that the vast majority of companies fail to be ‘‘good’’ corporate citizens, Seventh Generation included. Most sustainability and corporate responsibility programs are about being less bad rather than good. They are about selective and compartmentalized ‘‘programs’’ rather than holistic and systemic change.’

In fact, there is no shortage of critics of CSR. For example, in 2004, Christian Aid issued a report called ‘Behind the Mask: The Real Face of CSR’, in which they argue that ‘CSR is a completely inadequate response to the sometimes devastating impact that multinational companies can have in an ever-more globalized world – and it is actually used to mask that impact.’ A more recent example was an article in the Wall Street Journal (23 August 2010) called ‘The Case Against Corporate Social Responsibility’, which claims that ‘the idea that companies have a responsibility to act in the public interest and will profit from doing so is fundamentally flawed.’

This is not the place to deconstruct these polemics. Suffice to say that they raise some of the same concerns I have – especially about the limits of voluntary action and the ‘misdirection’ that CSR sometimes represents. But I also disagree with many of their propositions – such as the notion that CSR is always a deliberate strategy to mislead, or that government regulation is the only solution to social and environmental problems.

Be that as it may, there are a number of ways to respond to my assertion that CSR has failed. One is to disagree with the facts and to suggest that things are getting better, not worse, as do the likes of Bjørn Lomborg in his Skeptical Environmentalist (2001). That is his and your prerogative. However, I find the evidence – some of which is presented below and which is widely available from credible sources like the United Nations-both compelling and convincing.

Second, you might argue that solving these complex social, environmental and ethical problems is not the mandate of CSR, nor within its capacity to achieve. My response is that while business certainly cannot tackle our global challenges alone, unless CSR is actually about solving the problems and reversing the negative trends,what is the point? CSRthen becomes little more than an altruistic conscience-easer at best; a manipulative image-management tool at worst.

My approach – and the essence of the book – is to say that while CSR as it has been practised in the past has failed, that doesn’t mean that a different kind of CSR – one which addresses its limitations and reforms its nature – is destined to fail in the future. What do you think? Are my arguments unjustified?

Source

Welcome to this international dialogue, Quest for CSR 2.0, with Dr Wayne Visser, pioneering author, academic and social entrepreneur. The dialogue, hosted by CSRwire Talkback, is based on his groundbreaking book, The Age of Responsibility: CSR 2.0 and the New DNA of Business. For the next several weeks, Dr Visser will summarize the main points and key lessons of each chapter of his book, exploring why CSR 1.0 has failed, the 5 Ages and Stages of CSR, the 5 Principles of CSR 2.0 and how to make change happen. Readers will be invited to share their views on each posting. This exciting new series is co-published by CSRwire and CSR International.

Original link on CSRwire

Circularity: Towards Sustainable Consumption & Production

By Dr Wayne Visser

Towards the end of the 1980s, a concept called ‘industrial ecology’ emerged. It was popularized in 1989 in a Scientific American article by Robert Frosch and Nicholas E. Gallopoulos, in which they declared: ‘Why would not our industrial system behave like an ecosystem, where the wastes of a species may be resource to another species? Why would not the outputs of an industry be the inputs of another, thus reducing use of raw materials, pollution, and saving on waste treatment?’ Hence, the idea of industrial ecology is that businesses should not only look at the life cycle impacts as individual entities, but rather look for ways in which to link up with other businesses to minimise their impacts. For example, there is a Danish industrial park in the city of Kalundborg where a power plant, oil refinery, pharmaceutical plant, plasterboard factory, enzyme manufacturer, waste management company and the city itself all link together to share and utilise resources, by-products, energy and waste heat.

Another concept that was gaining popularity around the same time was ‘cleaner production’, which resulted in the UNEP Declaration on Cleaner Production in 1998. Later, this evolved into the concept of ‘sustainable consumption and production’, which was defined at the UN’s 2002 World Summit on Sustainable Development as an approach ‘to promote social and economic development within the carrying capacity of ecosystems by addressing and, where appropriate, de-linking economic growth and environmental degradation through improving efficiency and sustainability in the use of resources and production processes and reducing resource degradation, pollution and waste.’

The University of Cambridge Business Primer on Sustainable Consumption and Production (2007) gives an example to underscore the importance of creating more sustainable industrial processes. On average, the report says, a gold wedding ring weighs 6,000 kilograms. The enormous discrepancy between the actual retail product and the remaining weight is explained by accounting for all the materials used and the waste created during the production life cycle of the ring. The gap between a gold ring’s actual, physical weight and its ‘resource weight’ highlights the scale of physical and financial impacts that are associated with the creation of apparently simple, everyday products. The report concludes that ‘the increased cost that results from the difference between sustainable and unsustainable production is not good for anyone. It is not sustainable financially – such low resource efficiency is wasteful and inefficient. And it is not sustainable socially or environmentally – hazardous or damaging waste products are produced systematically, and resources are increasingly depleted.’

Recognising this challenge, the EU government has begun working with business to create ‘product roadmapping’ as a way of systematising what might otherwise be a more organic, haphazard approach to developing products and the policies that support them. ‘Integrated Product Policy’ (IPP) is how government describes conducting life cycle assessments with a view to potential policy interventions. The IPP of the EU, adopted in 2003, aims at reducing the environmental impact of products, instead of specific industries or processes. Two familiar products with diverse impacts were chosen by the EU to demonstrate IPP. One was a mobile phone, put forward by Nokia; the second, a teak garden chair proposed by Europe’s largest retailer, Carrefour. The result of the exercise showed that, for Nokia, energy consumption is the greatest impact, both during manufacture of components and during use – when chargers left on ‘no-load’ consume electricity constantly. It was estimated that, if 10% of worldwide subscribers unplug their chargers once their phone is fully charged, enough energy would be saved to supply 60,000 European homes for one year.

Source

This is an extract from Chapter 10 of The Age of Responsibility: CSR 2.0 and the New DNA of Business. For more information and ongoing updates, follow the The Age of Responsibility Blog

CSR Wire review of The Age of Responsibility

A Review of 'The Age of Responsibility' by Wayne Visser

Review by CSRwire Contributing Writer Elaine Cohen

The Age of Responsibility: CSR 2.0 and the New DNA of Business is possibly Wayne Visser's greatest work yet. It is deeply reflective of the state of the world, society, business and people who change our lives. It is as much an intimately personal account of Wayne's evolving relationship with Corporate Sustainability & Responsibility as it is a guide to the way these concepts have emerged to drive practices - which have in some ways made a positive difference in the world, but failed spectacularly in other ways to harness the power of capitalism into a force for positive impact.

In many ways Wayne's view of the state of CSR today is rather depressing. Wayne writes: "At worst, CSR in its most primitive form may be a smokescreen covering up systematically irresponsible behaviour. At best, even the most evolved CSR practices might be just a band-aid applied to a gaping wound that is haemorrhaging the lifeblood of the economy, society and the planet." At another level, it is quite uplifting: "We are on the brink of the post-industrial revolution and we need to decide whether we will be accomplices in slowing that transition, or catalysts in speeding us towards a better future."The core message, however, is that CSR as we know it has failed to create a demonstrable improvement in the quality of social, economic and ecological life. For CSR to succeed, it needs to transform itself into something new, CSR 2.0.

Wayne Visser's 9th book on CSR, The Age of Responsibility, is cleverly structured walking us through the "Ages and Stages" of the CSR movement. There are five ages according to the author:

The Age of Greed: characterized by "bigger is better" and shareholder rule in which unfettered growth is fueled by the concept that "greed is good" and that corporations who make more money (for shareholders) actually benefit society.

The Age of Philanthropy: characterized by the concept that business should give back to society, personified by John D. Rockefeller, Bill Gates and Warren Buffett and categorized byMatthew Bishop and Michael Green as "philanthrocapitalism."

The Age of Marketing: characterized by the concept that reputation and brand matter most, leading to CSR for PR gains, with a good measure of greenwashing thrown in.

The Age of Management: characterized by the alignment of CSR with business strategy and adoption of voluntary codes and industry standards. Embedding CSR is the name of the game.

The Age of Responsibility: characterized by what Wayne Visser calls "CSR 2.0, or Systemic CSR, based on a new set of principles." The Age of Responsibility has been heralded by iconic leaders such as Anita Roddick of The Body Shop, Ray Anderson of Interface and Yvon Chouinard of Patagonia. CSR 2.0 also makes use of the new social media era as business begins to "redefine its role in society."

CSR 2.0 is based on five principles - creativity, scalability, responsiveness, glocality and circularity. Each principle is explained in turn and a host of examples are provided to ensure we understand it can be done. Vodafone's M-PESA service for mobile-phone banking in Africa is an example of creativity.Tata's Nano car and Wal-Mart's conversion to organic cotton are scalable initiatives; while GSK, the pharma giant, showed responsiveness by creating a patent pool for developing drugs for neglected diseases. Glocality is about ensuring the right local solutions, such as the experience of SC Johnson in Kenya who reformulated cleaning products to adapt to local consumer conditions. Circularity takes us in the direction of cradle-to-cradle and examples can be seen from Patagonia, Nike and Timberland, as well as Tesco's promise to be carbon neutral by 2050.

Getting to CSR 2.0 requires inspired, committed and capable people who understand their role in leading change to make the new promise of CSR 2.0 a reality. The final part of The Age of Responsibility is a lesson on change and includes a Change Matrix which plots the many change agents who have emerged to date to advance CSR and several change models that can assist our thinking as we aspire to make it happen.

Wayne Visser distils four types of CSR change agents within the community of CSR professionals: the Expert (whose motivators are projects, systems and technical excellence); the Facilitator (who shares knowledge and creates opportunities); the Catalyst (who initiates change and gives strategic direction) and the Activist (whose motivation is related to broader social and environmental issues in the world). The point is that motivation for change in business organizations comes in different forms and driving change successfully requires recognition of individual motivators and organizational context. At the heart of it all are individuals and their actions.

What is rather unique and appealing about this book is that it is not simply an erudite chronicle of the evolution of CSR together with a nicely packaged solution to all CSR's inadequacies. The appeal is the sense you are actually working through the dilemmas and challenges at each step of the way with the author, who ultimately asks whether working in Corporate Sustainability & Responsibility is a good answer to his life's question: Is advancing CSR truly a worthy enough cause for us to devote our energies to? Or is it a hollow shell that provides capitalism with a softer face but doesn't make any substantive difference to the way businesses work?

From Wayne's early beginnings as a strategy analyst with Cap Gemini, through leadership with KPMG's Sustainability Services in South Africa and then back to academia to pursue a Ph.D., Visser has grappled with the manifestations of the ages and stages of CSR in a way that reflects his deep sense of personal responsibility to make a difference. This journey has led him to develop a vision of a new CSR, which is more holistic and "judged by its success in improvements in the overall socio-cultural, economic and ecological system." In the forward to the book, the Age of Responsibility protagonist Jeffrey Hollender writes: "The hour may be late and the clock loudly ticking, but the story of responsible business is not over yet. There's still room for a happy ending. And the time has come to write it for ourselves."

We should all read this book. We are all potential change agents. We are all part of the problem and part of the solution. We are all living in World 2.0, where CSR 2.0 can become a reality. We are all likely catalysts in the Age of Responsibility.

About Elaine Cohen

Elaine Cohen is a Sustainability Consultant and Reporter at Beyond Business and blogger on sustainability reporting and author of CSR for HR: A necessary business partnership to advance responsible business practices.

This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.

CSR & Pharmaceuticals: Big Pharma on Trial - Part 2

By Wayne Visser

This blog follows on from Part 1

It is nearly ten years later and the pharmaceutical companies are still trying to rebuild their reputations. As Mail & Guardian journalist Qudsiya Karrim reported for Inside Story in 2010: The past decade has been a public relations nightmare for big pharmaceutical companies – and deservedly so, their critics say. Activists and nongovernment organizations the world over have slated Big Pharma for putting profits ahead of people and vigorously enforcing their intellectual property rights, preventing many from gaining access to life-saving medication. It’s an ugly story told repeatedly – in the media, over dinner, at AIDS conferences and during university seminars – and it has earned the pharmaceutical industry an unmatched notoriety.

But have they learned their lesson? The latest and possibly most responsive action has been from GlaxoSmithKline (GSK). Early in 2009, CEO Andrew Witty announced a major reform in their corporate policy on drug affordability and accessibility. In particular, he said GSK will cut its prices for all drugs in the 50 least developed countries to no more than 25% of the levels in the UK and US – and less if possible – and make drugs more affordable in middle-income countries such as Brazil and India. In addition, GSK will reinvest 20% of any profits it makes in the least developed countries in hospitals, clinics and staff and invite scientists from other companies,

NGOs or governments to join the hunt for tropical disease treatments at its dedicated institute at Tres Cantos, Spain. Many NGOs remain sceptical. Michelle Childs, director of policy and advocacy for Medecins Sans Frontieres, says that in China, GSK charges over $3,000 for the antiretroviral Lamivudine in the absence of generic competition, while in Thailand, by comparison, another pharmaceutical company, Abbott, offers the Lopinavir/Ritonavir co-formulation for $500. And as for reinvesting profits, Catherine Tomlinson of the Treatment Action Campaign says, ‘Wouldn’t it simply be better to slash profits and allow for countries themselves to invest in improving health infrastructure? The GSK argument is circular: We charge so much money so that we can give you some of your own money back!’

The most interesting and radical move, however, is that Witty committed GSK to put any chemicals or processes over which it has intellectual property rights that are relevant to finding drugs for neglected diseases into a ‘patent pool’, so they can be explored by other researchers. Explaining this move, Witty said, ‘I think it’s the first time anybody’s really come out and said we’re prepared to start talking to people about pooling our patents to try to facilitate innovation in areas where, so far, there hasn’t been much progress.’ He went on to say, ‘Some people might be surprised it’s coming from a pharma company. Obviously people see us as very defensive of intellectual property, quite rightly, and we will be, but in this area of neglected diseases we just think this is a place where we can carve out a space and see whether or not we can stimulate a different behaviour.’

On this score, some critics have been cautiously supportive. ‘He is breaking the mould in validating the concept of patent pools’, said the head of Oxfam’s medicines campaign, Rohit Malpani. ‘That has been out there as an idea and no company has done anything about it. It is a big step forward. It is welcome that he is inviting other companies to take this on and have a race to the top instead of a race to the bottom.’

About the blogger

Dr Wayne Visser is the Founder & Director of CSR International and the author of 9 books on CSR, the most recent of which is The Age of Responsibility: CSR 2.0 and the New DNA of Business. He researches, writes, trains and teaches corporate sustainability & responsibility around the world, including at Cambridge University, Magna Carta College, Oxford and La Trobe Graduate Business School, Melbourne.

Source

This is an extract from Chapter 9 of The Age of Responsibility: CSR 2.0 and the New DNA of Business For more information and ongoing updates, follow the The Age of Responsibility Blog

Copyright 2011 Wayne Visser

CSR & Pharmaceuticals: Big Pharma on Trial - Part 1

By Wayne Visser

Let’s take a look at one of the biggest crises the world still faces: HIV/AIDS. According to the November 2009 UNAIDS report, more than 25 million people have died of AIDS since 1981. The number of people living with HIV has risen from around 8 million in 1990 to 33 million today, and is still growing. Around 67% of people living with HIV are in sub-Saharan Africa and Africa has over 14 million AIDS orphans. At the end of 2008, women accounted for 50% of all adults living with HIV worldwide. In developing and transitional countries, 9.5 million people are in immediate need of life-saving AIDS drugs; of these, only 4 million (42%) are receiving the drugs.

The topic of drugs presents a good case study in responsiveness (and the lack thereof). In 2001, Oxfam launched a campaign called ‘Cut the Cost’, challenging the pharmaceutical industry to address responsible drug pricing. In the same year, the Indian pharmaceutical company Cipla cut the annual price of anti-retroviral AIDS drugs to Medecins Sans Frontieres (MSF) to $350, as compared with the global industry standard of $1,000, and the Western market price of $10,400. Cipla also announced its intention to allow the South African government to sell eight of its generic AIDS drugs, the patents for which were held by other companies.

MSF put pressure on the five major pharmaceutical companies involved in the UNAIDS Accelerating Access Initiative to match Cipla’s benchmark. And to some extent, they responded. Merck cut the price of its HIV/AIDS treatments for developing countries, including offering Crixivan at $600 and Stocrin at $500. Pfizer offered to supply antifungal medicine at no charge to HIV/AIDS patients in 50 AIDS stricken countries. Bristol-Myers Squibb announced that it would not prevent generic-drug makers from selling low-cost versions of one of its HIV drugs (Zerit) in Africa. And Glaxo-SmithKline granted a voluntary licence to South African generics producer Aspen, allowing them to share the rights to GSK’s drugs (AZT, 3TC and Combivir) without charge.

So far so good. Apparently the drug companies are quite responsive. Why then, in 2001 (at the same time that they were doing all these good things), did 39 of the largest international pharmaceutical companies take the South African government to court over plans to introduce legislation aimed at easing access to AIDS drugs, arguing that it would infringe their patents and contravene the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement? Justin Forsyth, Oxfam Policy Director, said at the time, ‘This court case demonstrates how powerful drug companies are bullying poor countries just so they can protect their patent rights on lifesaving medicines.’

The pharmaceutical companies quickly realized that they had created a monster. Tens of thousands of people marched in protest all over the world, and 300,000 people from over 130 countries signed a petition against the action. Eventually, following public pressure, as well as pressure from the South African government and the European Parliament, Big Pharma dropped the case. Fanning the flames of public discontent, John le Carr_e’s 2001 book The Constant Gardener and the 2005 film adaptation depicted drug companies as corrupt profiteers. And so began the industry’s PR damage control campaign. ‘This is not about profits and patents’, said John L. McGoldrick, Executive Vice President at Bristol-Myers Squibb, ‘We seek no profits on AIDS drugs in Africa, and we will not let our patents be an obstacle.’

Part 2 to follow soon ...

About the blogger

Dr Wayne Visser is the Founder & Director of CSR International and the author of 9 books on CSR, the most recent of which is The Age of Responsibility: CSR 2.0 and the New DNA of Business. He researches, writes, trains and teaches corporate sustainability & responsibility around the world, including at Cambridge University, Magna Carta College, Oxford and La Trobe Graduate Business School, Melbourne.

Source

This is an extract from Chapter 9 of The Age of Responsibility: CSR 2.0 and the New DNA of Business For more information and ongoing updates, follow the The Age of Responsibility Blog

Copyright 2011 Wayne Visser

Promoting CSR Among the World's Brightest Youth

It is often corporate social responsibility failings, rather than successes, which get the most publicity. However, occasionally successful entrepreneurs, such as Catherine B. Reynolds, break through the cloud of negative media and show that inspiring social and environmentally responsible thinking among our youth is a battle worth fighting and winning.

This goes beyond universities requiring business majors to take courses on business ethics and corporate social responsibility. The Catherine B. Reynolds Foundation has begun to reward students for their research and work in the field of corporate social responsibility in two ways: 1) through invitations to her Academy of Achievement Summit; and 2) by providing scholarships through the Catherine B Reynolds Program in Social Entrepreneurship.

The annual Academy of Achievement Summit, which is the intellectual equivalent of the Oscars, helps promote a variety of sustainable practices comprising corporate social responsibility standards. The organization (Academy of Achievement) invites a few dozen of the most notable names in politics, art, and business. Former attendees include Bill Clinton, Colin Powell, Steven Spielberg, and CEOs of various companies. The best part: the summit holds events and discussions, in which some of the most renowned business leaders and politicians mingle and discuss issues with hand picked student attendees and young professionals.

These 70 students, usually from various backgrounds and countries, have been leaders in their respective fields, and they are nominated by the administration of their respective universities They are interested in leading initiatives in various fields, and they get to discuss their ideas about environmentalism, business ethics, and politics with some of the most successful leaders in their field.

The Catherine Reynolds Foundation also offers scholarship for NYU graduate and undergraduate students pursuing studies in social entrepreneurship. In addition to providing scholarships, the foundation also allows students to participate in a variety of panels dealing with corporate social responsibility. Towards the end of the program, the students are able to compete in a social venture competition, where the program provides winners with capital for their business idea.

This foundation, and Catherine B. Reynolds in particular, should be emulated by other wealthy individuals wanting to increase social entrepreneurship and corporate responsibility among young professionals. Indeed a similar inspiring initiative already exists: eBay founder Jeff Skoll’s Centre Social Entrepreneurship at Oxford University, along with his World Forum on Social Entrepreneurship and Skoll Awards for Social Entrepreneurship. Through leadership initiatives like these, we can make CSR the norm, instilled from a young age. If we succeed, we are less likely to see deviations from responsible, accountable practices.

About the Guest Blogger

Pamelia Brown specializes in writing about associates degree. Questions and comments can be sent to: pamelia.brown@gmail.com.

New Generation of Socially Responsible Employees Head Our Way (Guest Blog)

Guest Blog by Mariana Ashley

Paul Light, of NYU's Wagner School of Public Service, recently wrote a very impressive article at his blog at The Washington Post about how business schools and programs can serve as an excellent starting point for teaching students—the future of business—about the importance of social responsibility. Essentially, you could call his article a 'call to arms,' in that Light is attempting to inspire his readers, many of whom most likely count themselves to be his colleagues in business schools across the country, to consider requiring their students to pass courses concerning social impact.

Light notably closes the article with the following statement: "Making social impact part of every student's curriculum would send the signal that social impact is an essential skill for any destination, while telling students that changing the world is part of a life well live."

Light does address some possible counterarguments: he remarks that such an expanded requirement means that other, perhaps more traditional courses would have to be bumped; he recognizes that many programs have already incorporated courses on ethical business practices and corporate responsibility into their curricula as electives; and he points out that students interested in corporate social responsibility are also interested in, well, having a career that pays the bills.

In other words, he is aware of the difficulties that such a 'call to arms' creates for his readership.

But this doesn't keep him from making the call, of course, though it does severely limit his ability to set out a significant plan that other schools might implement should they want to follow his lead. Instead, Light points to what he perceives to be exemplary prototypes of this new impulse in business programs: NU's Kellogg School of Management and his own Wagner School, which are both "great steps" in the right direction.

So what, then, does this mean for the CSR movement? Well, should this impulse in business programs take root and grow healthily, it means that those concerned in fostering a sense of social responsibility among their companies will have a much better and more successful project due to the receptiveness of their audience. And, most likely, this same audience will also provide a great resource, bringing their own fresh ideas to that same project. Corporations would do well to seek out the most talented job candidates who have graduated from these and similar programs, as they will certainly be the next generation to lead the charge in the name of corporate social responsibility.

About the Blogger

Mariana Ashley is a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031 @gmail.com.