CSR 2.0: Embracing the Future
Let us explore in more detail this revolution that will, if successful, change the way we talk about and practice CSR and, ultimately, the way we do business. There are five principles that make up the DNA of CSR 2.0: Connectedness (C), Scalability (S), Responsiveness (R), Duality (2) and Circularity (0).
Principle 1: Connectedness (C)
In order to succeed in the CSR revolution, business has to break the hegemony of shareholders. It is as if companies are mere serfs in the kingdom of shareholder-value capitalism. They may appear to wield extraordinary power, but in reality they are subservient to invisible shareholders, bowed before the throne of financial markets and at the beck and call of City analysts. Most CEOs don’t last more than 3 years and are slaves to stock price fluctuations during that time.
The only way to take the power back is to move from subservience to connectedness. Business has to start to institutionalise (and thereby legitimise) multi-stakeholder relationships. When the chemicals industry created their Responsible Care programme in 1985, in the wake of a spree of disasters like Seveso and Bhopal, it was a typical CSR 1.0 approach – unilateral, defensive and incremental. By contrast, the emergence of various multi-stakeholder initiatives in the 1990s, like the Forest Stewardship Council and AccountAbility 1000, begins to give a glimpse of how the connectedness principle of CSR 2.0 may increasingly manifest.
In 1994, when McDonald’s took two activists to court for criticising the company, their bullying tactics backfired and ‘McLibel’ (as the case came to be known in the popular media) turned into the longest trial in British legal history (313 days), creating a public relations disaster for the company. By contrast, when Rio Tinto actively sought out a cross-sector partnership with the World Conservation Union to progressively tackle its biodiversity impacts, it showed a sensitivity to multi-stakeholder connectedness that was so patently lacking in McDonald’s approach.
Principle 2: Scalability (S)
The CSR literature is liberally sprinkled with charming case studies of truly responsible and sustainable projects. The problem is that so few of them ever go to scale. It is almost as if, once the sound-bites and PR-plaudits have been achieved, no further action is required. They become shining pilot projects and best practice examples, tarnished only by the fact that they are endlessly repeated on the CSR conference circuits of the world, without any vision for how they might transform the core business of their progenitors.
The sustainability problems we face, be they climate change or poverty, are at such a massive scale, and are so urgent, that any CSR solutions that cannot match that scale and urgency are red herrings at best and evil diversions at worst. How long have we been tinkering away with ethical consumerism (organic, fairtrade and the like), with hardly any impact on the world’s major corporations or supply chains? And yet, when Wal-Mart’s former CEO, Lee Scott, had his post-Katrina Damascus experience and decided that all cotton will be organic and all fish MSC-certified, then we are started seeing CSR 2.0-type scalability.
There have always been charitable loans for the world’s poor and destitute. But when Muhammad Yunus, in the aftermath of a devastating famine in Bangladesh, set up the Grameen Bank and it went from one $74 loan in 1974 to a $2.5 billion enterprise, spawning more than 3,000 similar microcredit institutions in 50 countries reaching over 133 million clients, that is a lesson in scalability. Or contrast Toyota’s laudable but premium-priced hybrid Prius for the rich and eco-conscious with Tata’s $2,500 Nano, a cheap and eco-friendly car for the masses. The one is an incremental solution with long term potential; the other is scalable solution with immediate impact.
CSR 2.0: Embracing the Future
Let us explore in more detail this revolution that will, if successful, change the way we talk about and practice CSR and, ultimately, the way we do business. There are five principles that make up the DNA of CSR 2.0: Connectedness (C), Scalability (S), Responsiveness (R), Duality (2) and Circularity (0).
Principle 1: Connectedness (C)
In order to succeed in the CSR revolution, business has to break the hegemony of shareholders. It is as if companies are mere serfs in the kingdom of shareholder-value capitalism. They may appear to wield extraordinary power, but in reality they are subservient to invisible shareholders, bowed before the throne of financial markets and at the beck and call of City analysts. Most CEOs don’t last more than 3 years and are slaves to stock price fluctuations during that time.
The only way to take the power back is to move from subservience to connectedness. Business has to start to institutionalise (and thereby legitimise) multi-stakeholder relationships. When the chemicals industry created their Responsible Care programme in 1985, in the wake of a spree of disasters like Seveso and Bhopal, it was a typical CSR 1.0 approach – unilateral, defensive and incremental. By contrast, the emergence of various multi-stakeholder initiatives in the 1990s, like the Forest Stewardship Council and AccountAbility 1000, begins to give a glimpse of how the connectedness principle of CSR 2.0 may increasingly manifest.
In 1994, when McDonald’s took two activists to court for criticising the company, their bullying tactics backfired and ‘McLibel’ (as the case came to be known in the popular media) turned into the longest trial in British legal history (313 days), creating a public relations disaster for the company. By contrast, when Rio Tinto actively sought out a cross-sector partnership with the World Conservation Union to progressively tackle its biodiversity impacts, it showed a sensitivity to multi-stakeholder connectedness that was so patently lacking in McDonald’s approach.
Principle 2: Scalability (S)
The CSR literature is liberally sprinkled with charming case studies of truly responsible and sustainable projects. The problem is that so few of them ever go to scale. It is almost as if, once the sound-bites and PR-plaudits have been achieved, no further action is required. They become shining pilot projects and best practice examples, tarnished only by the fact that they are endlessly repeated on the CSR conference circuits of the world, without any vision for how they might transform the core business of their progenitors.
The sustainability problems we face, be they climate change or poverty, are at such a massive scale, and are so urgent, that any CSR solutions that cannot match that scale and urgency are red herrings at best and evil diversions at worst. How long have we been tinkering away with ethical consumerism (organic, fairtrade and the like), with hardly any impact on the world’s major corporations or supply chains? And yet, when Wal-Mart’s former CEO, Lee Scott, had his post-Katrina Damascus experience and decided that all cotton will be organic and all fish MSC-certified, then we are started seeing CSR 2.0-type scalability.
There have always been charitable loans for the world’s poor and destitute. But when Muhammad Yunus, in the aftermath of a devastating famine in Bangladesh, set up the Grameen Bank and it went from one $74 loan in 1974 to a $2.5 billion enterprise, spawning more than 3,000 similar microcredit institutions in 50 countries reaching over 133 million clients, that is a lesson in scalability. Or contrast Toyota’s laudable but premium-priced hybrid Prius for the rich and eco-conscious with Tata’s $2,500 Nano, a cheap and eco-friendly car for the masses. The one is an incremental solution with long term potential; the other is scalable solution with immediate impact.
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