Reading this Economist special report on Sustainability for fall CSR class that I am TAing at Annenberg.

CSR= “companies meaning (or seeming) to be good.” p. 1

“None of this means that CSR has suddenly become a great idea.  This newspaper has argued that it is often misguided, or worse.  But in paractice few big companies can now afford to ignore it.” p. 1

Why CSR?

1. protect company’s reputation 2. concern over climate change 3. attract and retain staff. p. 2

3 layers of CSR

1. traditional corp. philanthropy 2. risk management 3. opportunity/create value for company. p. 2

However, reality of CSR – not very deep, still window dressing.  Not really connected to the business.  pp. 2-3

Toyota may have Prius, but at same time they have fought higher mpg standard in US.  p. 3

“Done well… it is not some separate activity that companies do on the side… it is just good business.”  p.3

The Feelgood Factor

hunger is a logistical problem  p.3

companies using “community work” to “develop managers who understand how the wider world works”  p. 3

The Next Question (Does CSR Work?)

“It is worth pausing to consider some of the arguments of those who question the whole point of it.”  p. 4

“It is often the absence of government rules that makes firms fell they have to fill the void.”  p. 4

“Concentrate on the sweet spot where initiatives are good for both profits and social welfare.” p. 5

good CSR is more or less enlightened self-interest  p. 5

CSR must add value to the business.  p. 5

Is CSR actually adding value to the biz?  Hard to say.  Measurement is only now getting started.  Global Reporting Initiative trying to develop a standard.  p. 5

“2007 ranking of Fortune Global 100 companies by their progress on building sustainability… shows no connection with their financial performance”  p. 5

Academic review of 167 studies over 35 years does show a weak positive link, however.  p. 5

A Stitch in Time

Reality – much of CSR is risk management. p. 6

Alien Tort Claims Act – companies can be taken to court in US for human rights violations abroad. p. 6

“Risks associated with managing supply chains spread around the world” p. 6

60% of companies surveyed don’t require suppliers to enforce a code of conduct. p. 7

for new projects, CSR is just due diligence. p. 7

Going Global

Guidelines

ILO

OECD

ISO 14001 (environment)

SA 8000 (human rights)

p. 12

Do It  Right

CSR  - “a handful of leaders, a large number of followers and  many laggards” p. 13

What leading companies look like:

  • CEO who champions the policy
  • chief officer for sustainability who reports to CEO
  • cross-functional board cmmte so that strategy is coordinated thruout company (p. 13)

CSR – is it just PR or is it being “embedded” in the business? p. 14

CSR – “in time it will simply be the way business is done in the 21st century.” p. 14