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Corporate Social Responsibility -- Bandwagon or Built-in?

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There is a lot of noise these days around Corporate Social Responsibility (CSR) with some saying it's long overdue and others saying it's really just "greenwashing." Moreover, trust in corporations is at near-record lows so there is plenty of incentive for business leaders to jump in.

There is a right way but, just as importantly, also a wrong way to jump. I've been watching and collaborating with folks in the corporate sustainability world for some time, and I think it is important to put some context into how this can and must work, and when it doesn't.

Two Kinds of Corporate Players: The first are companies whose very offering comes with high social good built in. Examples of this are BigBelly (solar powered municipal trash dumpsters), Bright Horizons (child day care centers), Zipcar (car sharing), and my own BiddingForGood (online fundraising auctions). The very nature of what these companies do is for a better society.

The second category is companies whose product has nothing to do with sustainability or social good (and in fact can sometimes go in the opposite direction) but who are trying to build sustainability and responsible corporate citizenry into their DNA.

The Problem: The problems start when, as one academic said to me, "The CEO hasn't drunk the Kool-Aid" and considerations for shareholders and senior management dominate over customers and employees. Far too many companies have set up CSR initiatives simply to provide some window dressing or PR to their corporate story. I recall one CSR manager from a nationally known outdoor clothing company telling me she had never met her CEO, there was virtually no internal support for her work, and the bulk of her activity was PR-driven. Contrast that with Patagonia, whose founding CEO Yvon Chouinard has espoused his vision for a sustainable planet since the day he started the company. Every decision made at Patagonia is made with an eye toward sustainability.

The problem gets more complicated because there is much research showing that consumers favor brands that show social responsibility. So the temptation to greenwash is real and brands do the logical thing and try to ride the bandwagon. In my own space, there are any number of companies who are trying to drive incremental sales by tying themselves to a pink ribbon or a Red campaign. The percentage of revenue actually going to good works is usually pretty small (less than 5 percent) but in most cases it works. Or does it? What happens when inquiring journalists "out" the fakers? We end up with a more cynical citizenry.

Educated Consumers and Educated CEOs: They key to ensuring that companies become increasingly sustainable in an authentic way is talking about it and letting companies (especially their CEOs) know that you care. Key to sleuthing out the fakes from the real deal is a vigilant press and an educated consumer who has a healthy bit of skepticism. The more CEOs educated on the virtues of CSR (and there are many practical bottom line benefits like motivated employees, reduced supply chain costs, and loyal customers), the more they will rationally drink the Kool-Aid. But it starts from the bottom up with citizens letting companies and CEOs know that this matters and they will take their business to brands that are showing they are responsible in how they treat employees, their commitment to their own local communities, and making sure their supply chain and corporate footprint factors in sustainability.

The key is to continue to have the discussion, for citizens to engage, use their social networks and if they see bad behavior to alert the press and to write to the CEO to let them know they are being watched.