CSR Blamed for BP and Goldman Misdeeds

Yes, according to Chrystia Freeland's July 18, Washington Post article CSR made them do it. BP was so focused on its Beyond Petroleum campaign that it allowed for a disastrous oil spill. Goldman Sachs for their part spent so much time educating women with their 10,000 Women project that they didn't realize they were profiting off of misleading their clients. Not only that, but according to Freeland "many of the business disasters" of late are directly related to "the mini-industry" of CSR. Imagine that.

Per Freeland, had these companies only focused on their core purpose of making money these disasters could have been averted. Not to mention the fact that she contradicts herself by saying that executives engage in CSR initiatives to "serve their bottom lines." Nonetheless, according to Freeland, CSR is a distraction away from core business goals and even from adhering to safety standards and legal constraints.Citing Freeland's article, Jeff Ballinger wrote recently in the Huffington Post, "CSR has been an indispensible partner to business-as-usual for the past 15 years of unprecedented corporate malfeasance." Ballinger's article was actually decrying working conditions in Cambodia wherein he referred to social auditors as "parasitic."

This would be laughable if it weren't for the fact that this is not an unusual reaction to CSR. It is a troubled acronym with an image problem. Aside from its frequent designation as a corporate PR ploy; CSR has also been conflated with philanthropy, business ethics, and compliance to the extent that is not recognized as the enhanced model of business that many in the CSR community are striving towards.

This harkens back to Clive Crook's 2006 Economist article "Good Company," in which he posited that CSR was an anti-capitalist, touchy feely movement meant to encumber economically efficient enterprises with responsibilities beyond their purview. Or former U.S. Labor Secretary Robert Reich's book Supercapitalism, wherein he referred to CSR as the shaming of corporations into public service and a distraction from truly reining in corporate power - particularly regarding lobbying practices. Then there was Daniel Yankelovich who wrote in Profit with Honor, that "it was a movement of assistant professors who didn't know anything about business and who adopted a tone of moral superiority about profits."Ex-compliance officer Cheryl Mariuh in a 2006 article in Dollars and Sense, made the point that commingling legal adherence to local laws with the more aspirational goals of CSR is partly responsible for the misconceptions. Mariuh asserted that: "Positioning legal and regulatory topics under the CSR rubric allows them to fall into an 'optional' category." Does this fusion of terms act as a mere distraction, maybe even enabling corporate misdeeds?

It is one thing to rate a company's beneficence regarding social and environmental factors or stakeholder outreach. Nonetheless, how many stories of late have been linked to intentional corporate obfuscation of harmful practices? Toyota was found to have known about its accelerator problem long before it was forced to inform its customers. The fact that regulators weren't up to snuff does not diminish the fact that BP thwarted the intent of regulatory safety standards as a cost cutting strategy. Goldman for its part assumed a fiduciary responsibility to its clients and instead profited by saddling them with toxic securities.

How can CSR's higher standards thrive when the prevailing corporate culture still embraces William H. Vanderbilt's infamous attribution: "The public be damned." Until, of course, it reaches a crisis state and the truth reveals itself. A CSR challenge, indeed.

Photo Credit: jronaldlee