Philanthrocapitalism: A disaster idea that threatens CSR

Philanthrocapitalism is quite frankly the worst CSR-related idea I've come across in a long, long time. For those who aren't yet familiar with the term, it is the title of a book by Matthew Bishop and Michael Green, with high-powered endorsers like Bill Clinton and Bill Gates (hardly surprising given that both have reinvented themselves as uber-philanthropists).

Now first, let me confess that I have not read the book, nor do I ever intend to, unless someone holds an (ethically sourced, fairtrade) gun to my head. So I am reacting against the concept, rather than the content. Apart from the awful neologism, for me, the sub-title of the book - "how the rich can save the world" - says enough.

The idea that philanthropists can save the world is exactly the sort of backward thinking legacy that the CSR movement has been fighting to escape from over the past 20 years and more. Don't get me wrong, philanthropists do have a positive impact in the world (witness the progress made on diseases like Polio and river blindness) and we should be grateful for their generosity. 

But the idea that social justice, environmental sustainability, human rights and ethical transparency should be left to the whims of a few super-rich individuals is not only irresponsible, it is dangerous. They are not elected; hence there is no public mandate, nor any accountability mechanisms to control their actions. We should be looking to strengthen governance, not abdicating responsibility to profiteers.

Of more fundamental concern is that the very brand of capitalism that has made philanthropists wealthy is the root cause of many of the environmental, social and ethical impacts that CSR is trying to remedy. It is the same capitalism that breeds the income inequalities that allow philanthropists to have such preposterous wealth in the first place. It is the capitalism that has fuelled the culture of greed and excess that tipped us into a global recession. 

But that's a topic for another day. What about CSR? CSR should be about how you make your money, not whether you give it away once it's made. Companies and their leaders should be judged on who they trample on and what they destroy in the process of making money, not who they help once they've succeeded at all costs. Writing cheques is easy. Running a sustainable and responsible business is hard. 

Already the view that CSR equals philanthropy is in danger of taking hold in places like China. The last thing we need is to encourage this Stone-Age thinking. By all means, let us cheer on the philanthropists. But let us not for one moment think that this is CSR, nor that it makes these generous souls good role models for responsible business. If we want CSR to survive and thrive into the future, the idea of philanthrocapitalism must die a quick and painless death. If it doesn't, CSR will be dead and buried within the decade.

CSR Reflections on Davos (Day 2)

A year after Bill Gates famously called for a new model of "creative capitalism" at Davos, it seems that business (especially the banks) took him a bit too literally. Of course, Gates didn't mean creative loans and hedge fund activities, but his speech stands in stark contrast to this year's "crisis capitalism" mood.

Despite Tony Blair's reassurances that "the free enterprise system has not failed, the financial system has failed", the most consistent refrain echoing through the chilly corridors of the World Economic Forum on Day 2 was that capitalism needs bringing back into line. The adolescent years of free market rebels without a cause are over. (I wish I believed them!)

On Day 1, all eyes seemed to be on the bankers. On Day 2, the stakes were raised and the US was in the spotlight. A number of delegates were talking about the failure of US-led capitalism and even Bill Clinton was nodding. When asked about Wen Jiabao's thinly veiled criticism of America over the crisis, he said: "The Chinese premier was right: It all started in the United States."

Somewhat incongruously, Valerie Jarrett, speaking as President Obama's representative in Davos, told delegates that his message can be conveyed in one word: "responsibility". That's encouraging but not terribly helpful. What does it mean? Maybe the test will literally be "the ability to repond" by policians and CEOs. Too little too late some say, but watch this space.

One place to start, according a WEF report released is clean energy investment, which they claim needs to more than triple to $515bn (£360bn) a year to stop greenhouse gas emissions reaching levels deemed unsustainable by scientists. At least that's a message Obama seems to be taking on board.

At a corporate level, at least one good news story of response-ability emerged. US firm Tupperware Brands Corp said it is unlikely to lay off staff or cut costs. Chief executive Rick Goings admonished that "the last thing to cut is your talent." Let's hope other CEOs are listening, although I seriously doubt it.

The annual Philanthropic Lunch, with its predictable crowd of Bill-spotters (including the Gates and Clinton varieties), seems to me a bit like a doing a band-aid dance at a chainsaw massacre party. At least it produced a pearl from Gates - philanthropy is fun and fulfilling! Well, if anyone would know, its the world's biggest philanthropist ever, right?

Then again, wouldn't it be better to improve capitalism as a system, so that we don't need to rely so much on uber-philanthropists' need for a warm-fuzzy endorphine fix? Why don't we give responsible capitalism a try first, and then we can talk about something a bit more creative after that? How about it - do we have a deal, Bill?