"If history repeats itself and the unexpected always happens, how incapable must a Man be of learning from experience" (Bernard Shaw)
Learning from the past
The history of Corporate social responsibility (CSR) should not be repeated: we need to move forward by learning from our mistakes and using positive experiences as the drivers for change. Semantic debates are no longer fruitful; instead we need a debate about the mechanisms needed at a macroeconomic, company and citizen level to encourage responsible practices.
In its relatively short history, CSR has undergone many changes. Its history has taught us firstly that the voluntary nature of CSR, supported by companies, institutions, gurus and the master texts of CSR, was once sold dogmatically as a sine qua non for its success in company practice. And that CSR as a voluntary practice was only abandoned as a result of economic circumstances.
Short-term benefits
After the environmental catastrophes of Bhopal, Exxon Valdez or Chernobyl, to name a few examples, the concept of CSR began to take hold in multinationals, mainly for two reasons. Firstly, multinationals sought to counter the potentially negative effects and the proliferation of national regulation and legal action by anticipating it with social and environmental codes of conduct. Although voluntary, it helped placate public opposition to their activities in the short-term and paralysed possible governmental initiatives to demand responsibilities. Secondly, as G. Núñez once said, the very management of multinational companies acted as a catalyst to spreading good company practices since they had well-developed management structures, standardised accounting systems and were more exposed to potential attacks on their business reputation.
Businesses began to realise that introducing CSR policies and action was a source of short-term benefits in terms of reputation and corporate image, reducing the risk of public opposition to their operations - and the threat of regulation - while also facilitating their access to new markets with greater demands on its actions.
Therefore, the motivations of multinationals in this field varied from the adoption of codes as a strategic or early defence to avoid public criticism, to reactive strategies introduced after examples of bad practice by the company itself or companies in the same sector, to individual directors being interested in CSR. We therefore witnessed a real proliferation of self-regulating codes that were then backed by business organisations, international organisations promoting CSR and organisations that set norms and standards.
Building CSR: a bumpy road
But the road to a "second level" of CSR was not an easy one.
In 1972, the International Chamber of Commerce published its "Guide for international investments" in which it highlighted, among other things, the damaging effects of enforced and restrictive codes, describing them as an obstacle to international investment.
In 1974, the United Nations Economic and Social Council (ECOSOC) created the Centre of Transnational Companies and the Commission of Transnational Companies to draw up "a series of recommendations that, taken as a whole, would form the basis for a code of conduct for transnational companies". This commission set itself the objective of proposing a code of conduct for the spring of 1978, but the announcement made little impact in business circles.
The developed countries were, however, a minority in the United Nations and it was therefore decided to define policy in terms of the transnational companies in the framework of the OECD, adopting in June 1976 the "Directives for international investment and multinational companies". The OECD consensus also played a determining role in the International labour organization which, in the framework of a consultative meeting of experts on the relationship between multinational companies and social policy, adopted the tripartite Declaration of principles on multinational companies and social policy, approved in November 1977.
Later, taking into account the binding regulation for multinational companies that was contained in the Human Development Report of the Programme for the United Nations (PNUD) in 1999, the United Nations Norms on the Responsibilities of Transnational Companies and Other Commercial Companies in the Sphere of Human Rights in 2003 included the basis for a mechanism of control and implementation. However, due to lobbying from business organisations this initiative never took off.
History repeats itself
Afterwards, as we know, came the Global Compact and the Ruggie Report... and the economic crisis. Voluntary practices were not producing results in corporate governance, equality policies, environmental policies, transparency or in the value chain where a double standard continued to be applied often with the complicity of local governments with serious institutional shortcomings.
This was the context in which the European Commission announced its action agenda for 2011-2014 on CSR in October, a communication that received lobbying from business groups, as a member of the Directorate-General for Enterprise and Industry admitted. The history of CSR began to repeat itself although the depth of the economic crisis and the search for shared solutions began to take over.
The obstacles are still great, mainly because the market incentives for CSR have still not developed. The only stakeholders to be given active roles in CSR so far have been companies. Public authorities opted until recently for timid policies to promote CSR, the market for responsible consumption is still a very small one, and responsible financial markets are even less developed.
Today's young CSR must build on this still immature status quo. All those who defend CSR must develop it, from CSR departments in companies to those working in renewable energies, development cooperation and public-private alliances; from the daily struggle of small responsible businesses to those who work to integrate disabled people or those at risk of social exclusion. Moreover, this must be done within a complex set of social and economic problems that are going to increase for the middle-classes, the workforce of companies and the lack of credit for SMEs.
The role of CSR amidst the crisis
Given this situation what should the priorities of responsible administrations, companies and citizens be? The European economy is in the midst of its worst recession for the last few decades and the perspectives for improvement for Spain are distant. CSR must serve to manage change in an urgent restructuring of the economy.
The tools outlined in the Commission's Communication are along the right lines but do not go far enough. Technological change and innovation are obvious strategies but making companies adaptable and more competitive requires, more than ever, case studies, the reallocation of fair and justifiable resources, collective efforts and the sharing of collective responsibility and education for change.
We need to create jobs, productive investments and increase productivity. CSR can help to retain talent, and its management tools can help to reinvent businesses through a new structure of costs, better customer service, new sales channels, the promotion of consumer education, better efficiency through increased transparency, wages linked to productivity, addressing the needs of stakeholders, social innovation...
In addition to all that, we need strategies that are not only corrective but also preventative, and ones that are proactive and minimise the social costs of the processes of change in the medium to long term. Especially since the crisis has also revealed, as Bernard Shaw perceptively put it, that risks are unpredictable and we cannot sustain progress without measuring their impact, nor without a strategic long-term plan and an innovative approach.
CSR has the necessary tools at its disposal and is moving in the right direction. Sustainability is a goal. Innovation is a necessary road to take; but none of the aspects of CSR can be allowed to become a means of escaping social responsibility and obliging us to return to the starting point.
CSR has two connotations that are becoming more and more important: the first is the assumption of responsibilities, both from an ethical, criminal, civil (the increasingly frequent Collective Actions) and reputational point of view. But the social component is increasingly important, not just because of the "indignados", or protesters, across the world, but also because civil society in general is more influential than before.
We cannot remain trapped in logic loops or in discussions about concepts, as in the Chumy Chúmez joke: “If there was a referendum on the death penalty, the good guys would win. And who are the good guys? Those who win the referendum". Nor can corporate action become the scapegoat for the shortcomings in CSR implementation. It certainly cannot be the scapegoat now when it is needed more than ever before. Nothing positive can come of that at the present moment. Why? Because CSR has more to gain precisely now than ever before and because beyond semantic discussions the object of analysis determines the method and not the other way round.
The road travelled by CSR is not its final destination.
And allow me to end this with a small parable. An elephant goes into a bar and orders a coffee. The astonished barman does not know what to do but after a few minutes he makes him a coffee. The elephant savours it, closely watched by the barman from a corner of the bar. The barman cannot take his eyes off the elephant. After a while, the elephant asks for the bill and the barman tells him, staring at him all the time: "Four euros". The elephant replies: "Can I ask you why you are staring at me?" And the barman replies: "It's not very common to see an elephant in a bar ordering a coffee." And the elephant says: "No, it isn't and particularly at these prices!"
In order to avoid having to reproach ourselves in a few years, we must make sure we don't sit staring at each other instead of acting. We need to get on with doing CSR in a real way.
This article was originally published on Helena Ancos' blog, hosted on the website of the Universidad Complutense Madrid.
Photo credit: Clearly Ambiguous/Flickr
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