Beyond Corporate Social Responsibility, Part 1: An Overview of Why CSR Doesn’t Work

This is the first in what will be a series of posts looking at the failures of corporate social responsibility (CSR) programs and exploring what we can do to create a global economy that does actually foster the well-being of all people and the planet.

CSR sounds like a nice idea. There is, of course, a long history of large corporations donating money to charity and running philanthropic foundations. CSR seeks to go beyond this, transforming the way corporations work, so they’re not giving money to good causes through philanthropy while doing harm in their normal business operations. Advocates of CSR believe that companies can do well by addressing a triple bottom line of not just profits, but their social and environmental impacts. They argue that companies will do better financially over the long run if they foster the growth of healthy communities and ecosystems.

There is abundant research on CSR programs, however, showing that these programs don’t actually solve any of the problems they are supposed to.

In the realm of labor rights, for instance, Locke, Qin and Brause in “Does Monitoring Improve Labor Standards?: Lessons From Nike” review Nike’s own data on how successful their “social compliance” programs are—data which, if anything should be biased in favor of Nike. And Nike’s own data show that its CSR programs are a wash—things might improve in some factories, but they get worse in others, while many factories are left unchanged.

In the realm of ecological sustainability, as reported by Patrick Greenfield of the Guardian, a group of investigative journalists found that carbon offset methods used by many major corporations are worthless. Such programs do little or nothing to make the companies “carbon neutral,” that is to cancel out the impact on climate change of their normal operations?

What’s the problem here? Contrary to the philosophy of CSR, such programs do not really change how companies work at a fundamental level. Instead, most CSR programs enable companies to quite literally continue conducting business as usual. Instead, CSR programs provide cover for these companies, making it look like they are trying to alter their operations without really do so. Anti-sweatshop activists I interviewed for my book Strategizing Against Sweatshops found this deeply frustrating. In their experience, journalists and officials were very likely to buy into the idea that because companies have CSR programs, they must be genuinely trying to solve the problem but were unable to do so.

The reality is that most CSR programs only involve a change in rhetoric, not in fundamental operations. There’s an assumption underlying CSR that a change in values is enough to fundamentally shift the direction of a company’s operations. A change in guiding values and ideas is important, but to be realized, those values and ideas must be embodied in changes in how companies are actually organized and operate. And simply setting up a social compliance department or even joining a multi-stakeholder monitoring organization is not enough.

A number of scholars—including Anner in “Corporate Social Responsibility and Freedom of Association Rights,” Barrientos and Smith in “Do Workers Benefit From Ethical Trade?” and Rodriguez-Garavito in “Global Governance in Labor Rights”—have found that the central problem is that CSR programs do not change the fundamental power dynamics in a company. CSR programs typically focus on protective rights—such as health and safety standards and fair pay—that don’t change the fundamental power dynamics, rather than enabling rights—such as the right to unionize and to be free from discrimination—that would empower workers in the workplace. At best, CSR is paternalistic in its approach and this paternalism guts it of the ability to foster real change. Whatever intentions corporate executives might have in the abstract, on a daily basis their focus must be on maximizing profits for their company. Inevitably, that is sometimes (if not often) going to run into conflict with labor and human rights and ecological sustainability. At a bare minimum, workers need to be able to protect themselves through independent, democratic labor unions, with the support of regulations enforced by a democratically elected government. Even scholars generally supportive of CSR have concluded this—for example, the Locke, Qin and Browse article cited above and Locke, Amnegual and Mangla in “Virtue of Necessity?: Compliance, Commitment and the Improvement of Labor Conditions in Global Supply Chains.”?

In future installments, I will delve into the question of why CSR does work in more depth in more depth, as well as exploring a range of alternatives.

#socialjustice #systemschange #unions #sociology #economicjustice #bizhumanrights #laborrights #greenwashing #workersrights #labor