Corporate Social Responsibility, Talk about the good work being done by firms in touch with their triple bottom line.

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Cluster Bombing A Responsible Business

David Connor | Thursday 29th October 2009

This morning I read a newspaper report about some of the world's biggest banks funding the trade of cluster bombs and making a more than tidy profit from doing so. Without wanting to get immersed in the bigger debating pool of the role of business ethics in Corporate Social Responsibility, or vice versa, it does beggar belief that alleged beacons of responsible business practice actively pursue profit from, at best, morally questionable transactions.

Today's Guardian newspaper (UK) said about one of the protagonists, "HSBC, led by ordained Anglican priest Stephen Green, has profited more than any other financial institution from companies that manufacture cluster bombs." This is the same organisation that you'll see involved in most of the mainstream tick boxes such as the UN Global Compact, Equator Principles, etc. and coming third in the Fortune 100 2008 AccountAbility Rating. 657 million in fees from such business may make financial sense in the short term but the damage to reputation should cost them much more over the longer run. It is the ammunition (excuse the pun) that this gives to the CSR naysayers that concerns me the most, and to be fair they'd have a valid point. HSBC is an organisation proclaiming to be pushing Sustainability as leaders, and by inference attempting to achieve a moral high ground beyond many public perceptions of the notion of Corporate Social Responsibility. This particular topic is surely an opportunity for true leadership to make a moral stand, even if the trade itself 'at the moment' remains legal.

I've been fortunate to see a good share of the wider world seeing the all-too-real need for specific tools to defend moral values against those with a lesser respect for human life. Those weapons need to be made by somebody, therefore that somebody will require payment for their time, knowledge and materials and that is where the business world begins to become embroiled in ever darkening waters. Sometimes black & white figures on an investment proposal are either too far removed from reality to stir genuine inquisition or those making the decisions are too greedy or ignorant. We all know that it is usually a varying combination of them both. Too many good people look the other way to allow peers or their own leaders to exploit weaknesses in ethical codes or laws in the pursuit of profit.

Corporate Social Responsibility without business ethics is meaningless, merely demonstrating the fragility between the intent of an organisational policy and an individual's actions in the real world.

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David Connor | Posted: 17 November 2009

Hi Ruth

Good deeds are much easier to see as they tend to lay on the surface of a company's activities. Investment strategies can be lost, consciously or not, in figures and raw data. I've too often seen high ranking CSR titled officials from companies blatantly pass the buck to investment managers for taking on accounts obviously contradictory to their public CSR policies. Not good enough, take responsibility for the company's activities or don't take the job (or leave when you find out and nothing gets done).

Hopefully as our information mad world becomes more interconnected anomolies like these will become rare occurances, but I am an unashamed optimist.

David Connor | Posted: 17 November 2009

Hi Marcia

You absolutely spot on. Whistle blowing is the unsung hero of CSR. In the rush to mitigate climate change the deeper ethics agenda got left behind. It can be an incredibly easy yet empowering area to demonstrate benefit. I've spoken to many employees that through the cultural feel of an organisation create their own limiting self-beliefs about whistle blowing even when the executives are accessible and act appropriately on information. Just bridging the hierarchical barriers, which I know can be easier said than done, can help avoid damage done by rogue employees.

As for the transparency that social media brings, I'm a very big fan but I am wary of the additional demands it can place on organisations. Organisations like Timberland are already showing the benefits of transparency with examples such as there CSR reporting approach and reaction to Greenpeace's activism around deforestation in the Amazon: - http://bit.ly/1V4vlK

David Connor | Posted: 17 November 2009

Hi Anne

I would never say that being morally upstanding is easy but sometimes corporations use profit as a justification for steam-rollering over basic right and wrong. As business owner myself, I too know how difficult it can be to do what is right when there is so much pressure to tick a box or meet a deadline, but I always put the bigger picture first, even if my accountant still doesn't quite get it, yet.

I think CSR is inherently about people. People but products, people run businesses. People hide behind company policies, codes of conduct (formal & infromal) and the crowd in larger organisations. Even with the best policies and procedures in the world an individual can still throw a spanner into the works.

David Connor | Posted: 17 November 2009

Hi Jeff

I think the point highlights the next real step change needed in the understanding of CSR - that it HAS to be an embedded ethos. You shouldn't be able to voluntarily pick and choose what makes you look good - but that debate starts to get dangerously close to using the 'legislation' word that many use as a shield to avoid far deeper issues engrained in the current capitalist culture.

Ruth Ann Barrett | Posted: 16 November 2009

Thanks for calling out the elephant in the room. It's just dawning on people that their investment strategy as individuals and corporations say more about them than the good deeds they scatter about the place. Brand is just another word for reputation and when that goes...

Marcia Stepanek | Posted: 15 November 2009

Great post, thanks for writing it. Once, when on an investigative reporting project in the 80s that uncovered evidence that General Motors was cutting safety corners in the production of its vaunted X-cars cars, individual workers and assemblers and engineers at GM were genuinely appalled. In fact, they were the ones blowing the whistle on the practice. It's not enough to be individually knowledgeable but to make sure the systems of accountability are such that ongoing transparency is possible. In today's word of social media and the Web, intranets and intrapreneurs, transparency has never been more important nor so achievable.

Anne McCrady | Posted: 15 November 2009

Integrity (doing what we say we believe) is hard for corporations and the rest of us. Just a reminder to check our own actions and portfolios!

Jeff Mowatt | Posted: 15 November 2009

David, Your post brings back a memory of 20+ years when working for a compute manufacurer. A colleague stood up at the annual staff meeting and asked how they reconciled their social responsibility statement with the fact they they also made missile guidance systems.

Our position as a social purpose org could be simplified to say that capitalism shouldn't do more harm than it does good.

Here's a point we made 6 years ago in a proposal for Crimean Tatars,

Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles.

http://www.p-ced.com/1/projects/ukraine/crimea/
http://www.iccrimea.org/scholarly/economicdev.html

The theme continues here:

http://www.p-ced.com/1/projects/ukraine/national/

Jeff