The headline of this particular HBR Blog Network article was Why Social Responsibility Doesn’t Work. The article was a summary of another article, posted in The Atlantic, Why Corporations Fail to Do the Right Thing.
Finally, the subheading of The Atlantic article gives us a closer summary of the actual content: “Six reasons why international business remains dangerous to workers and the environment, even when its leaders genuinely want to do better.”
What followed was a list of possible reasons that corporate social responsibility initiatives don’t prevent things like the Deepwater Horizon disaster.
Putting aside the difficulty in identifying the amount of money that BP’s CSR initiatives did save the company by preventing accidents, the six reasons all boil down to one: CSR that’s disconnected from strategy is not particularly effective. In other words, if the culture and compensation systems are in opposition to things like environmental safety, then CSR is doomed from the start.
So maybe the over-the-top headline could have been “Non-Strategic CSR Doesn’t Work.” We would certainly agree on that.
So why are corporations still wasting time and money on non-strategic CSR or corporate philanthropy? Especially since there is no generic business case for CSR — in other words, the only way for social performance to translate into financial performance is to design programs specific to that exact firm.
Defensive Corporate Philanthropy
Is it because charities just keep on asking?
“Elaine, what do I do with these emails from charities looking for a donation?” Let’s set a policy!
This is what I call defensive corporate philanthropy, and the primary benefit is that it eliminates any difficult discussion of strategy. If there’s a policy in place (or some grant guidelines and a committee) then the activity simply becomes another transaction. Transactions are easy to process! The trouble is, these are very unlikely to translate into any noticeable financial return.