By: Paul Klein
I am still looking for responses to the question I asked three days ago.
London-based CSR authority Fabian Pattberg wrote in to say that he believes that in the U.S. the combination of the downturn in the economy with the “Obama Wind of Change” is being viewed as a CSR opportunity. However, Fabian sees a different picture in Europe where there are more “Back to business as usual” tendencies because CSR has been around for a lot longer then in the U.S. and the biggest challenge is for business to show that CSR is bringing in real monetary value.
Craig Smith, INSEAD Chaired Professor of Ethics and Social Responsibility believes that corporate responsibility has never been more prominent on the corporate agenda. As reported in the International Business Times, Smith believes the financial crisis and its effects on the global economy have made it clear that the stability of our global market system depends on responsible behaviour, sustainable business models and proactive management of business impacts on society, as well as regulatory frameworks.
CSR Asia reports that companies are increasingly seeking brand-building and other strategic benefits from their CSR initiatives, rather than philanthropy and charity work. Charity-based CSR activities are taking a hit whereas sustainability-driven CSR initiatives are emerging. In linking CSR to their brands corporations are also more cautious and selective in their choice of partners and are favouring NGOs with high credibility, transparency in accounting procedures and a long track record of high quality work.
In an entry on Forum for the Future’s blog, Jonathon Porritt asked “what value should we now attach to the concept of CSR in the UK banking sector? Every single one of these once-revered financial institutions have very impressive CSR programmes. Yet the truth of it is that every one of these one-revered financial institutions has been simultaneously engaged in some of most egregiously irresponsible business behaviour in the history of capitalism.”
What impact is the recession having on CSR in Canada? Please let me know what you think.
9 Responses to “ The Recession: CSR Opportunity or Business as Usual? ”
I think the ‘Obama’ effect will also resonate strongly in Canada and CSR will be viewed as a business opportunity by forward-looking companies. It will be interesting to see what kind of creativity and partnership building goes into corporate CSR initiatives.
By Jeremy on Feb 17, 2009
I actually think the answer is – both. The recession has sparked the inevitable cost cutting measures, at all levels, in corporate Canada as well as the U.S., so I don’t think companies will this as an opportunity to increase their CSR investing. At the same time, demonstrating corporate social responsibility has never been more important, at a time when most citizens believe companies are at the root of much of the mess they find themselves in. So I expect corporations to tout their CSR “good deeds” as never before, perhaps even flagrantly, even if it’s the same or less than they’ve done in the past.
By Marc on Feb 17, 2009
My sense is that you will see great movement over the coming months around CR related programs by companies across all sectors in response to the ‘Obama Wind of Change’. With such fast moving social reform, combined with increased pressure on transparency practices and social support by large corporations, I believe we will see both a reactionary move towards public announcements with limited impact and real traction for those organizations that have developed a strong framework in the field.
What will become quickly apparent are those companies that are trying to paint a picture to appease the masses, thus providing opportunities for those truly inspired companies to lead the pack. The public will see through opportunism – thus, the implementation of any strategic focus will be paramount for any corporation, perhaps adding to some trepidation to move forward the agenda.
I don’t believe this is something that is limited to North America – global issues will often be followed by a strong global response as we have seen. Although Europe is far ahead in most respects, you will see traction in response to the public’s demand for change.
The key here will be how businesses communicate their efforts. Can businesses truly “walk the walk”? Time will tell.
By James on Feb 17, 2009
For the innovative enterprise, CSR provides an opportunity, an opportunity partially enhanced by the current economic climate but also influenced by the shifting dynamic of digital based social marketing. First, ‘the corporation’ is largely seen as being responsible for the economic mess. As a result, corporations have bridge building to do and robust CSR initiatives can play this role. The call by the new American administration gives corporations a certain amount of political cover to their efforts in this regard being viewed as self serving. Second, the shifting online dynamic and rise of the participatory online environment gives corporations another reason as well as tangible metric to not only being more socially responsible, but promoting this fact as well. That said, it will only be the enterprises looking beyond the recession that will see the benefit. As with past downturns, the innovative come out the other end ahead of the game and those who bury their head in the sand don’t come out the other end at all.
By Rob Tait on Feb 17, 2009
I agree with Jeremy that the ‘Obama’ effect will resonate with Canada and CSR.
I also believe that many Canadian companies have already taken steps to ensure further CSR. I think the recession will heighten awareness around CSR initiatives and therefore Canadian companies will be more aware of the economic benefit associated with CSR. I think Canadian companies are looking more now than ever to help secure their bottom line and I believe they’ll turn to alternative partnerships etc. to help achieve that.
The same old, same old just doesn’t fly anymore!
By e on Feb 17, 2009
I think more focus will be on Corporate Responsibility rather CSR. Madoff, RIM, Enron the list of companies engaging in unethical business practices is lengthy. I feel as if the public is yearning for companies to clean up in house first…then the rest of the world.
By ash on Feb 18, 2009
I agree that there’s reason to be optimistic that the “Obama effect“ will resonate with Canadian corporations invested in CSR, as now is the time to lead by example and set goals for long-term business success through good corporate governance and social responsibility.
The unfortunate reality is businesses have been hit hard by the current economic climate. Those that have already invested in CSR initiatives will more than likely stay the course. It will be interesting to see how many make additional investments this year–for example, how the major banks adjust their CSR strategies in this recession. It will be the true visionaries that will see this as a CSR opportunity for the long-term.
Unfortunately, it will likely be business as usual for most that have yet to embrace CSR as a key business strategy. It may be difficult for them to devote organizational resources to the important task of developing CSR initiatives when leadership is focused on tight fiscal management for survival and employees focused on their own job security.
One can only hope the Canadian business sector has more visionaries than those that prefer the status quo.
By Mridula on Feb 18, 2009
In the interest of brevity, (ironically enough I’m too busy writing an MBA paper regarding the effects of the sustainable development movement on the commercialization of new technology products) instead of providing well-formed arguments on each of the following points, I’d like to offer them up as fodder for further discussion. Agree or disagree. Lather, rinse, repeat. Enjoy.
A) Canadian Energy Sector. We are a VERY oil rich country, and when oil prices were high it was profitable (albeit environmentally detrimental) to plunder the tar sands. What will lower oil prices and the downturn bring? Prime Minister Harper even mentioned unlocking the energy potential in Canada’s north in his election night speech. Canada has a HUGE role to play in the global energy game of the next 50 years, how will we play these cards in the new economic climate? And who will play them, industry or government or both?
B) Continuing the Conversation. As belts tighten around the world, the elevator pitch of the sustainable developer within corporations will certainly get harder before it gets easier. In (profitable) years past, these conversations were much easier with champions like Al Gore etc. making “green washing” a much easier sell to the bosses in order to get funding from corporate coffers for sustainable development ventures. These conversations can still continue, but will need to shift focus more to creating shareholder VALUE, rather than brand building and strategic benefits. To that end, Hart & Milstein’s Sustainable Value Framework from their 2003 article “Creating Sustainable Value” still serves as the best pitch I’ve heard to date. Admittedly, it needs a pretty long elevator ride.
C) The Detroit Three. Things certainly look bleak in the American auto industry; I’ll leave it at that. In turn, this has far-reaching effects on skilled labour (auto parts & steel to name a few) in Ontario. I personally see this optimistically, and think that the downturn may provide the perfect catalyst for these skilled labour markets to shift to the manufacturing of newer, greener products (windmill blades, solar panels, electric trains etc.) instead of inputs to big auto. We need to start investing more in the value contained within the hands and heads of Canadians, since the value of our natural resources has a finite life. But I guess we’ll have to run that one by Obama first, and then Dalton McGuinty in order to boost the funding further still for his “Green Jobs” program.
By John on Feb 19, 2009
Hi John,
Many thanks for your thoughtful posting and good questions. One the things that came to mind when I read your comments is the importance of the shift to a more creative economy (as per Richard Florida and Roger Martin).
All the best
Paul
By Paul Klein on Feb 23, 2009