Pernicious Benevolence?

Companies today are exhorted to be “socially responsible”. What, exactly does this mean?

So asked The Economist three years ago in a survey of corporate social responsibility (subscription required). I post such an old article as the debate seems to linger on the same issues and general confusions. I’ve been thinking about this a lot as I watch people using the terms “CSR” and “sustainability” with the assumption that there is agreement on what they mean. Unfortunately, many people still call buying t-shirts for the local football club – often with a company ad on the jersey – “CSR”.

When I first read the survey, many parts rubbed me the wrong way, but I felt it had a very useful matrix:

It is worth reading the full discussion around the four “permutations” of CSR. But what the articles and many discussions on sustainability miss these days is that the CSR should be about good management, the upper left corner of the matrix. That is corporate responsibility, as I categorize it here on this blog. This is where companies work to account for their environmental and social externalities and focus on a long-term, sometimes hard to define goal. Good managment includes thinking through the externalities of “social investment” or “community development funds” that are offered with the good intentions. And, very importantly, this includes greater engagement with stakeholders (and not just shareholders) and it goes well beyond just following the law, especially when working in countries where there is no rule of law.

Debates over the other parts of the matrix leave the CSR sector – if you wish to call it that – in a spiraling argument between left and right over the role of philanthropy and business in the realm of public goods. I wish we could get past that.