When Bad CSR happens to Good Companies

6 03 2011

Corporate Social Responsibility  |  Nov 18, 2010 10:48 AM CST – http://www.justmeans.com/justmeansclickstats?url=aHR0cDovL3d3dy5qdXN0bWVhbnMuY29tL0NTUi1DaGluYS1zLUZ1dHVyZS1hcy1TdXBlcnBvd2VyLzQ2MjcxLmh0bWw=&email=bGl6ZXR0ZUBpbm5vdmFzaWFucy5jb20=&enewsid=MTAx

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CSR is a strictly voluntary action of a company to go beyond business. CSR however, is not a band-aid that you apply onto your business activities to make them look ‘good’. It is in part, connected with the way you do business. All of these are accepted statements.

However, what happens when bad CSR happens to ‘good’ companies? I use the term ‘good’ relatively here, as no business can achieve 100% sustainability. I can explain this better with the use of some examples. Three things happened to H&M recently: (a) In January this year, there were accusations that H&M was destroying and tossing clothes that were unsold (b) Later that month there was another report that H&M’s organic cotton line was contaminated with GM (c) Then in September, they introduced a clothing line featuring dresses for $4.95 and trench coats for $20 triggering the worry that it may not be sustainably produced. Up until then they have been pioneers in introducing organic cotton into main-stream clothing and over-all have a pretty decent CSR profile. However, when three newsreels of unsustainability hit the headlines in the space of less than a year, you begin to wonder.

This year Hershey’s released its first ever CSR report. This comes after the chocolate giant has battled claims of using child labour in its production claim. In 2002, it said that its supply chain was audited by a third party and it released a statement stating that they do not use under-age labour. Yet there remain some lingering doubt.

Let’s not forget Nike’s numerous CSR hurdles – sweat-shops, not paying their workers properly etc. Yet with every industry survey, the company tops the best CSR lists. What about companies like Coca-Cola and Pepsico – if one of the four prongs of CSR is responsibility towards the market place, it can be argued that consumption of their products leads to health problems. Here I also insert companies manufacturing bottled water, cigarettes etc. The same with companies like Intel, Dell, Cisco – are they all not responsible for the e-waste problem? Yet all these companies have been recognized for their CSR efforts.

Another great example in Wal-Mart: widely acknowledged as one of the most unsustainable businesses, it is now setting the standards for sustainable business and also forcing its supply chain to become more sustainable. What about companies like Whole Foods, designed on the model of a sustainable business but has now been accused of green-washing? The most recent being the endangered fish, red-dot scenario.

Is it CSR when bad companies are starting to do good? What happens when good companies slip up? What happens when the CEO, who is an integral part of company image, is sending out a message that differs from the company’s CSR values? All of these are almost moralistic questions.

Like most musings, there are more questions than answers. I have a general mistrust of companies who over-toot their green horn. My bar for good CSR performance is simple, perhaps even simplistic: (a) Is the company making an effort to constantly improve and innovate? (b) How does it respond towards slip-ups? (c) Looking holistically, how good is their sustainability profile?

CSR-image is not one single thing. It is a series of events… unfortunate or otherwise.

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