What if we stopped sugarcoating CSR and added a bit of realism to the discussion?

Written by: Nicolas Delaunay, Founder of Values Added 

What if we stop sugarcoating CSR

As I was hearing world leaders, at the opening of COP21, competing for the most earnest, lyrical declaration about the imperative to take action on climate change (“for sure this time, cross my heart!”), I couldn’t help drawing a parallel in my mind with the sugarcoating statements you often hear about CSR: “doing well by doing good” is not only a win-win, it’s “a win-win-win-win” as I read once. And, yes indeed, which organization can say ‘no thanks’ to creating value for all its stakeholders and society?

Please don’t get me wrong, I am hoping with all my heart for the most decisive possible action on climate change in and beyond Paris. By my professional activity, you can also reasonably assume I am a strong advocate of CSR. Perhaps, blame a French Cartesian mindset but too much sugarcoating makes me quickly allergic and I tend to be more receptive with a bit of salt and pepper to it (call it realism). Just as it proves somewhat more complex to translate lyrical declarations into an achievable pathway below 2C for our planet, repeating some clichés about CSR do not translate that easily into value creation and opportunities right here and then for businesses. The reality is of course more complex than that.

CSR: dead or alive…?
To many observers, the concept of CSR is at a crossroads. A look back at how little an impact CSR has achieved in society after a few decades of practice (without even mentioning major scandals like VW) is adding fuel to critiques questioning whether the concept is fit for purpose, as eloquently illustrated in a recent debate: “Is CSR dead?”. Meanwhile, notably in the Middle East where CSR is still emerging (and pretty alive, thank you!), the reality for most practitioners I see, is an ongoing struggle to get CSR through the boardroom and embed it strategically at the core of their organizations’ strategies, precisely driving (at a company level) the kind of systemic change demanded by CSR critiques. Not an easy task.

Between calling CSR dead and, at the other extreme, lyrical “win-win-win” statements, I opt for taking a few steps back and making better sense of the barriers preventing CSR to show its full potential, create value while addressing meaningful sustainability challenges in society.

Key barriers to a virtuous, value creating CSR
I have had the chance in recent months to review some 120 CSR initiatives from across the whole MENA region for several CSR Excellence awards. It struck me that the majority of them were confined to a PR or compliance exercise, reflecting a defensive or reactive approach to CSR: one limited to protecting the company’s reputation and its acceptance in the communities where it operates. They would come in most cases with a lack of (or very limited) stakeholder engagement, little ambition or simply no vision of the issue tackled and how the initiative goes about addressing it, let alone how it aligns with the organization’s core business. With no clear goals and objectives, superficial (even surprisingly sometimes, a total absence of) measurements, indicators and evaluation framework, the real impact of such initiatives or the value they bring to the organization can be anybody’s guess…

Moving beyond this reactive, defensive approach to CSR is a challenge, probably more widespread than we think. What to do? Every situation is unique and for each of them, you will invariably find a unique web of barriers and drivers to address. The initiative may not strategically align with the core value creation of the organization, revealing the need to go back and rethink the risks (opportunities) that are of most concern (benefit) to the organization and its key stakeholders. It sometimes points to an isolated CSR function, removed from the value creation or financial decision making center of the organization, either due to a lack of management support or potential knowledge gaps within dominant functions of the organization with no unified understanding of what constitutes ‘value’ (other than in terms of immediate financial gain), how to measure it, as well as no unified way to incentivize good practices and behaviors, etc.

Lack of interest from consumers or a lack of regulation are traditionally raised as other key barriers to prioritizing CSR within organizations’ business strategies. This is, however, contradicted by every new survey taking the pulse of consumers: 96% have a positive image of companies engaging in CSR, 94% are more likely to trust them and 93% to stay loyal with them . Does this actually translate to consumption? 63% of Middle Eastern consumers say they are willing to pay extra for products or services from companies committed to positive social and environmental impact (ie a +10% progression from the previous survey, and +8% from the global average…). As for the lack of regulation, it may well have been a driver for less proactive social and environmental action in this part of the world. But, a look at the trends in national environmental laws, regulations and standards in the UAE (skyrocketing since the 1980s ) makes this point less and less relevant.

The most important barriers to a virtuous value creating CSR are not external but endemic to an organization. Understanding an organization’s unique web of barriers and drivers, regularly revisiting the business case for CSR (demonstrating a clear link to the business value) and accepting that it is a continually evolving and learning process, are key pre-requisites to its success.

A strong minority of the CSR initiatives I reviewed, across sectors, social/environmental issues and countries, impressively made the point that ambitious, carefully designed, integrated, collaborative CSR initiatives had the power to deliver sustained and measurable impact, way beyond their objectives. The tide is inexorably shifting. But with issues at stake getting more pressing and such complex and interconnected barriers, it is only with a more educating and supportive approach that we can empower the CSR function within organizations and turn the tide into a tidal wave of change.

So… do we pull the plug on CSR and throw out the baby with the bathwater? At one point in the “Is CSR dead?” debate, one member of the audience made this remark: “The notion of CSR is so nascent, minimal, that it hasn’t even been born! It is still embryonic: a long way from death but a long way from birth…”

[1] Source: Cone Echo Global CSR Study, 2013 http://www.conecomm.com/global-csr-study

[1] Source: Nielsen Global CSR Report June 2014 http://www.nielsen.com/content/dam/nielsenglobal/apac/docs/reports/2014/Nielsen-Global-Corporate-Social-Responsibility-Report-June-2014.pdf

[1] Source: ESMA (Emirates Standards Metrology Authority), UAE State of the Green Economy report 2014