Why is CSR so difficult?

Everybody talks about CSR and phrases like 'corporate sustainability', 'triple bottle line', '3-P model' etc keep getting thrown around. Whilst not everybody really understands them, they are still talking about it. Apart from hurdling over preconceived notions about CSR, the far reaching impacts of just how it functions in the real business world is little understood.

With many companies, the biggest stumbling block for CSR is their supply chain. Where the raw material is coming from, what happens during procurement of supplies that go into manufacturing products and what happens at the end of its life. With global supply chains now so common, keeping track of sustainability along the supply chain becomes one of the most difficult things on the road to sustainable production.

This is something that Jeff Swartz, CEO of Timberland wrote about in the Harvard Business Review recently.  He wrote about the time in 2009 where he received 65,000 emails questioning Timberland's leather source. This was after Greenpeace released a report on deforestation in the Amazon. According to Swartz, the gist of the report was "(a) Brazilian cattle farmers are illegally clear-cutting Amazon rainforests to create pastures, and (b) the leather from their cows might be winding up in shoes - including Timberland's." He admitted to being angry of course, because deforestation was on the top of the list on Timberland's CSR priorities and "the company logo is a tree, for crying out loud." But then he also admitted with rare honesty, "as much as I didn't want to admit it Greenpeace was asking a legitimate question: Where was our leather coming from? Second on the list of things I didn't want to admit was that we didn't know the answer."

Every CEO faces some form of this predicament on the route towards sustainable businesses. Even businesses with good intentions slip up sometimes; it becomes a problem only when the issue is ignored or the occasional slip-up becomes a repeated offense. CSR could become a lot more easier is there was an easier rapport between the civil sector and the private sector - this kind of mutual knowledge exchange is not only essential for the growth of both sectors but also of well-rounded CSR initiatives.

Government also needs to start playing a more central role in the regulation of business. There are many environmental and social issues that businesses can solve, but unless the government starts setting up a framework of accepted ethical business practices, CSR will strictly remain a voluntary initiative with many companies.

The next industrial revolution will see all three sectors working closing together. For global business to be truly sustainable, this symbiosis needs to scale up and also man up to face the current socio-environmental quagmire. Central to this transition is a paradigm shift in the way we look at socio-environmental values vis-a-vis financial valuation.