The Profound Business Results of CSR
It’s ten years into companies’ efforts to engage in corporate social responsibility (CSR) and the returns for business still aren’t good enough.
On the one hand, CSR isn’t going away anytime soon. It’s an important business discipline that has become the equivalent of table stakes, especially for large public corporations. No matter what the industry, failing to be “responsible” is regarded as a business risk. On the other hand, although significant amounts of time and money are spent on an area that has the potential to increase competitive advantage, improve recruitment and retention, and increase sales, the results are often inconsistent and almost always difficult to measure.
As an aside, most corporations believe that being too responsible is also a risk. How many businesses are genuinely committed to taking a leadership role with respect to a social issue? In the end, most corporations practice what I call “CSR Lite.” This is the space that falls between businesses that practice CSR because they need to and business that really want to make a difference.
I believe that every corporation has an overarching social purpose that transcends the operations of corporate social responsibility and, when well understood and effectively integrated, can have profound business and social results. It’s tricky, however, to put your finger on exactly what corporate social purpose is. To learn more, I asked seven business leaders to describe corporate social purpose in their own words. Here’s what I heard, what I think it means, and a new set of ideas about social purpose that I hope can act as a road map.
“I believe the social purpose of business is to enable all the world’s people to live lives of dignity and comfort while preserving natural resources,” says Aron Cramer, President and CEO of BSR, a sustainability consulting non-profit. BSR works with a network of nearly 300 member companies to build sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. While Cramer’s point of view goes beyond the comfort zone of what many business would say is their purpose, it raises the bar and is a crisp articulation of the societal role of businesses today.
“I believe the social purpose of Pfizer is to discover and develop new and innovative medicines that prevent and treat disease, allowing individuals to live longer and healthier at every stage of life,” says Caroline Roan, Pfizer’s Vice President of Corporate Responsibility and President of the Pfizer Foundation. Pfizer is the world’s largest research-based pharmaceutical company and has a diversified global health care portfolio that includes human and animal biologic and small molecule medicines and vaccines, as well as nutritional products and many of the world’s best-known consumer products. As articulated by Roan, the company’s social purpose is indivisible from what it does as a business.
“I believe the social purpose of Green Mountain Coffee Roasters is to leverage the power of stronger relationships in service of social and environmental outcomes and a stronger business,” says Michael Dupee, VP CSR, Green Mountain Coffee Roasters. Founded in 1981 as a small café in Waitsfield, Vermont, today the company is recognized as a leader in specialty coffee and coffee makers, and acknowledged for its award-winning coffees, innovative brewing technology, and environmentally and socially responsible business practices. Dupee’s vision of corporate social purpose at Green Mountain Coffee is helping the company to differentiate from its competitors and be seen as an advocate for social and environmental best practices.
“I believe the social purpose of the resource extraction industry is to generate returns for all shareholders and for the countries and communities where mining and metals companies operate,” says Aidan Davy, Director of Community, International Council on Mining and Metals (ICMM). Established in 2001 to improve sustainable development performance in the mining and metals industry, ICMM brings together 21 mining and metals companies as well as 31 national and regional mining associations and global commodity associations. Davy’s acknowledgement that part of industry’s purpose is to generate returns for “the countries and communities where mining and metals companies operate” is an important message for an industry that is widely regarded as failing to put a high priority on local communities. Davy’s statement was recently echoed by Peter Munk, Founder and Chairman, Barrick Gold Corporation, who said, “Today, the single most critical factor in growing a mining company is a social consensus — a license to mine”.
“I believe the social purpose of McKesson is to help organizations deliver better health to their patients while reducing costs in the healthcare system,” says Carrie Varoquiers, President of the McKesson Foundation and Vice President of Corporate Citizenship at McKesson. As the leading health care services company in the United States, McKesson provides pharmaceuticals, medical supplies and health care information technologies that make health care safer while reducing costs. The company’s vision is to help create a health care system where quality is higher, mistakes are fewer and costs are lower. Varoquiers’ view of social purpose speaks to the company’s value as a health enterprise that has the scale to foster systemic social change.
“Kashi’s company vision (which we call our dream) is: We Dream of a World Where Everyone Embraces Natural Health. So here’s how I see our social purpose enabling that broader vision: At Kashi, we believe our social purpose is to catalyze positive change for people and planet health,” say Jeff Johnson, Associate Director of Marketing (Jeff is also known as the company’s “Surfing Nutritionist at Large”). Kashi was founded in 1984 and specializes in breakfast cereal, energy bars, crackers, and snack foods based on a blend of seven whole grains and sesame. The company puts a high priority on making positive change in the food system in part by advocating for more organic agriculture and increased availability of Non-GMO (genetically modified organism) Project Verified foods. Johnson’s statement of social purpose reflects the company’s commitment to social change in the food system.
“I believe the social purpose of Askinosie Chocolate is to not only compensate our farmers fairly and treat them like the business partners they are, but to connect those farmers with our customers to build relationships of mutual understanding and appreciation, which makes our chocolate better and our business better,” says Shawn Askinosie, Founder, Askinosie Chocolate. After 20 years as a defense attorney known for winning murder cases on a national level, Shawn Askinosie realized that becoming a premium chocolate maker was his purpose and set up the Springfield, Mo. company in 2006. Since then Askinosie Chocolate has won numerous awards for its single-origin chocolates, gained 500 retail accounts and put social change at the heart of the company. As Founder, Askinosie’s personal purpose is interwoven with his company’s social purpose.
I’ve thought a lot about what I heard last week and developed seven ideas about the social purpose of business:
- The social purpose of a business should embody the purpose of its leadership and its leadership should embody the social purpose of the business.
- The social purpose of a business is based on the belief that social change is good for business and business is good for social change.
- The social purpose of business speaks to the ends (social change) rather than the means (corporate social responsibility).
- The social purpose of business is relevant to firms of all sizes and industries.
- The social purpose of a business is integrated with, and indivisible from, everything the business does to make money.
- The social purpose of a business is aligned with and supports social issues in a way that is consistent with the unique culture and character of the business.
- The social purpose of a business is genuine, ongoing, and unassailable.
As always, I welcome your input and feedback.
Paul Klein is regularly featured in the media as a corporate social responsibility source, was included in the Globe and Mail’s 2011 Leading Thinkers Series, and was recognized as one of America’s Top 100 Thought Leaders in Trustworthy Business Behavior. You can follow Paul on twitter at paulatimpakt. This article was originally posted on Forbes.com and republished with permission by the author. Klein has also written for Toronto Sustainability Speaker Series (TSSS), widely recognized as Canada’s premiere forum for dialogue and problem solving among sustainability professionals. Each year over 1000 sustainability change agents attend TSSS events to exchange ideas, to network and to be inspired by leading companies that have integrated sustainability into their business practices.
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