Thursday, April 17, 2008

Corporate Social Responsibility: The Latest Praxis of Greed?

As the latest buzzword in the world of business and finance that’s a few steps away from economic recession, is corporate social responsibility just a ploy used by companies to make them appear way less greedy?

By: Vanessa Uy

Sometimes I ask myself weather the current coverage by the mainstream media regarding corporate social responsibility is actually confusing the general public’s already distorted perception on why companies embraces corporate social responsibility in the first place. From the lighthearted “there just buying into the latest must have fashion accessory” perception of corporate social responsibility. To the press’s overly simplistic painting a picture that start-up companies that embraced corporate social responsibility for “idealistic” reasons are actually holding back a tidal wave of greed and corruption doesn’t help matters either. Even though I see the overall good in corporate social responsibility especially when it comes to the environmental side of things. The truth of the mater - like the one used to be tackled by agents Mulder and Scully in the TV series The X-Files – is not what it seams to be.

More than just a “look how caring we are” public relations ploy of big corporations, corporate social responsibility can serve also as a company’s unique selling point especially in today’s slowing down markets. Anything that helps your company will be tried in these somewhat desperate times I’m told, but what’s the point? Why adopt a policy that would wind up your company to lose money just to avoid the general public’s “resentment” of the financially successful i.e. rich from being directed at your company? Before we get overly philosophical, let’s first explore this concept of corporate social responsibility.

Corporate social responsibility is now currently made up of three broad layers. The most basic is the traditional corporate philanthropy which many view only big companies with relatively long history can afford. Like Google’s 25 million-dollar philanthropy, which the company announced in January 2008 to be awarded to social projects that tackle poverty and climate change. The second layer of corporate social responsibility can be thought of as a branch of risk management. This is when companies talk to Non Government Organizations and to governments regarding the current pressing problems like the cost of living, the environment, and also create codes of conduct that allow them to be more transparent in their day to day operations. Companies also talk with their competitors regarding these things as to form a collective risk management scheme and in keeping their workers “happy”. In other words “enlightened self-policing”. The third of which is how corporate social responsibility makes a company appear “caring” to the rest of the world which creates value to the company in which can also be used as a unique selling point.

For whatever its worth, companies that had adopted corporate social responsibility since the 1990’s have been aiming to improve our two most pressing problems namely environmental protection and poverty alleviation. It seems like programs that address pre-existing environmental problems can also serve to improve local economic conditions. Concepts like organic farming, which crops and animals are produced without the use of harmful chemicals and animals are kept in free range as opposed to being kept in inhumane conditions. Fair trade, which farmers / producers are paid a fair price for their products as opposed to the lowest price allowed by law. Also sustainable utilization of natural resources like the Marine Stewardship Council or MSC which help keep fish stocks at a sustainable level while providing job security for the fishing industry.

Critics of corporate social responsibility say that it is just a cover used by companies who are performing badly and want rich treehuggers to purchase their initial public offerings with a perception that their clients are making a difference. But the results speak for themselves. Even though the mainstream press seems to over hype the political correctness of corporate social responsibility, embracing the idea for environmental reasons have not only improved the immediate environment of the companies that chose to, but the social conditions also improved. Companies that refurbish pre-loved / pre-owned computers to be either donated or to be sold at a bargain to impoverished communities are not only helping the environment by reducing the amount of e-wastes going into our overloaded landfills. They’re also creating new jobs and even future employment due to the computer literacy that results from donated computers.