While businesses have awakened to these risks, they
are much less clear on what to do about them. In fact, the
most common corporate response has been neither strategic
nor operational but cosmetic: public relations and
media campaigns, the centerpieces of which are often
glossy CSR reports that showcase companies’ social and
environmental good deeds. Of the 250 largest multinational
corporations, 64% published CSR reports in 2005,
either within their annual report or, for most, in separate
sustainability reports – supporting a new cottage industry
of report writers.
Such publications rarely offer a coherent framework
for CSR activities, let alone a strategic one. Instead, they
aggregate anecdotes about uncoordinated initiatives to
demonstrate a company’s social sensitivity. What these
reports leave out is often as telling as what they include.
Reductions in pollution, waste, carbon emissions, or energy
use, for example, may be documented for specific
divisions or regions but not for the company as a whole.
Philanthropic initiatives are typically described in terms
of dollars or volunteer hours spent but almost never in
terms of impact. Forward-looking commitments to reach
explicit performance targets are even rarer.
This proliferation of CSR reports has been paralleled
by growth in CSR ratings and rankings. While rigorous
and reliable ratings might constructively influence corporate
behavior, the existing cacophony of self-appointed
scorekeepers does little more than add to the confusion.
(See the sidebar “The Ratings Game.”)
In an effort to move beyond this confusion, corporate
leaders have turned for advice to a growing collection of
increasingly sophisticated nonprofit organizations, consulting
firms, and academic experts. A rich literature on
CSR has emerged, though what practical guidance it offers
corporate leaders is often unclear. Examining the
primary schools of thought about CSR is an essential
starting point in understanding why a new approach is
needed to integrating social considerations more effectively
into core business operations and strategy