The past few years has seen a slew of scandals and ethical controversies highlight the ease with which a business can go from hero to villain, landing CSR – otherwise known as doing good – a more prominent spot on the corporate agenda. But are companies doing enough?
If anything, recent events show failing to take CSR into account can have a profound and lasting impact. John Browne, the former CEO of BP, said as much in a book he wrote, entitled Connect: How Companies Succeed By Engaging Radically With Society.
In its prologue he relays how he walked through a hotel lobby, catching a glimpse of the Deep Horizon oil spill on TV. “For a second,” he wrote, “I felt relieved to no longer to be in charge. Quickly though, these images and the scathing commentary made me angry. How had this happened? BP was going to be torn apart.”
His initial thoughts were right, and numerous bosses, Browne said, could soon find themselves asking the same question. This conjecture was based off the 70 interviews he did for the book, which unveiled a perception that doing good was purely for boosting staff morale. A few bake sales for a chosen charity would thus do the trick.
No, he later wrote in a Harvard Business Review, admitting to being surprised by the results, “30 per cent of corporate earnings are at stake when it comes to relationships with society. Just look at Volkswagen. When accusations of it cheating emissions standards tests hit the news, share prices fell by almost 35 per cent in two days of trading.”
Trust is notoriously difficult to regain once lost, so it may be some time until the car company finds its way back into consumers’ good graces, but it’s not impossible. As was stressed by Browne, embedding social responsibility into both corporate culture and strategies will help you turn that tide.
Just look at Nike. It had to embrace CSR and become one of the first companies to publish a list of all its contract factories to rid itself of the reputational damage child labour accusations inflicted in the 1990s.
While implementing a CSR strategy is sound advice, Browne’s best quote involves going above and beyond for mankind: “Your business will do well when you understand your place in the world and the global situations around you. Your company doesn’t control the world. It’s the other way around. Business is there as a servant, and the winners of the future will successfully redefine organisational purposes in pursuit of great social and environmental challenges.”
He’s not the first to praise the values of doing good. Michael Porter, a Harvard professor, suggested in the below TED talk video that businesses can profit from solving the world’s problems – and should strive to tackle them for more than monetary purposes.
Read on to see why tackling issues and championing human rights will become the rule rather than the exception.