The Myth of Corporate Social Responsibility

Digitally rendered blue eyed unicorn isolated on blackI’ve just finished a webinar for non-profits and discussed a point that has featured in a lot of my training programs for the past several years: The myth of Corporate Social Responsibility. The problem is that many, many major corporations – companies that really should know better – go for this myth hook, line, and sinker.

The myth?

That a company can “tick the CSR box” by sponsoring causes and community organisations.

The truth?

Cause and community sponsorship have nothing to do with Corporate Social Responsibility. Both are positive activities for a company and absolutely recommended, but they are not related!

Corporate Social Responsibility has a very specific definition, and it has to do with the company’s behaviour – how they make money, not how they spend it. If they make their money in an ethical, responsible, and sustainable way, then they have already “ticked the CSR box”. Embarking on cause and community sponsorships does not further the effort – once the box is ticked, it’s ticked.

By the same token, if a company does not do business in an ethical, responsible, and sustainable way, there is no amount of cheques they can write to charitable organisations – no amount of self-congratulatory press releases they can issue – that will “tick the CSR box”.

Unlike Lesa Ukman of IEG’s premise in a recent blog, I am not saying that “Corporate Social Responsibility is irresponsible”. Not for a second. In fact, as a tree-hugging, recycling, composting greenie who donates plenty to charities like UNICEF, who work to end child labour, I am 100% behind companies being called to account about the ethics and sustainability of how they do business.

What I am saying is that cause and community sponsorship – no matter how worthy they are or how large the deal – does not mitigate unsustainable, unethical business practices.

Cause and community sponsorship is a beautiful thing in its own right, harnessing the relevance, resonance, and power inherent in this type of organisation to create marketing value for a brand. The sponsor’s leverage program often provides even more benefit to the sponsee – more income through cause-related marketing programs, more communication of key messages, access to a larger, broader audience, and so much more. Because it can provide such a strong return to brands who uses their investments well, it is financially sustainable while being meaningful to the community. It is the epitome of that industry catchphrase, “doing well by doing good”.

I love cause and community sponsorship. I’m all for it. But 99.9999% of the time, there is no relation whatsoever with CSR. Why not 100%? Because there is always the exception that makes the rule, and here it goes…

Let’s say there is a mining company who has left a trail of abandoned strip mines across the Great Brown Land of Australia. They pollute groundwater, dump irresponsibly, and are generally a blight on the environmental landscape. They decide it’s high time to clean up their act, due in part to increasing community and regulatory pressure, but don’t know where to start. They initiate a sponsorship relationship with a reputable environmental charity who will – as part of their major partnership – conduct an environmental audit, provide comprehensive recommendations for reducing their “footprint” going forward, and rejuvenating old mine sites back to native habitats. In this example, the charity is providing the objective advice and expertise to help the mining company change the way they do business, so it is more ethical and sustainable. This approach is the exception, which is possible, but make no mistake, it’s rare.

So what is with all of these huge companies, who really should know better, having Social Responsibility teams who manage – you guessed it – portfolios full of cause and community sponsorships? Is it that they don’t understand the term? Or do they really think writing cheques makes them socially responsible?

If they don’t understand the term and have simply slapped the term “corporate social responsibility” onto marketing investments that other companies call their “community portfolio” (or similar), then we’re just talking semantics. And while I wish they weren’t using the term so incorrectly, there is no harm done as long as the sponsorships are well-selected and leveraged.

On the other hand, if they think writing those cheques really does make them “socially responsible”, the investments are probably languishing, unleveraged and unrealised because the investments had already fulfilled their duty of ticking that mythical “CSR box”. What they’ve really got is a self-congratulatory waste of money, and if I were a shareholder, I would have to question how ethical or sustainable it is to waste money like that.

So, what’s the answer?

  1. Put CSR back into the governance box, where it belongs.
  2. Make the cause and community investments that provide the best marketing opportunities for your brands and leverage them for great results for your brand, your partner, and your target markets.

There, now that wasn’t so hard, was it?

P.S. I don’t believe in “strategic philanthropy”, either.

© Kim Skildum-Reid. All rights reserved. For republishing information see Blog and White Paper Reprints.

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