In the business world, the buzz surrounding corporate social responsibility (CSR) has become nearly unavoidable. Journalists report on it, analysts discuss it, and corporate executives increasingly plan ways to adopt it. As part of a graduate program at Duke University, I'm writing a thesis paper on the topic, and I've been blown away by the avalanche of CSR-related material that's appeared in just the past handful of years.
Based on my research, I'm convinced that CSR won't be a passing fad; indeed, we've just scratched the surface of its potential impact on the world. In What Matters Most, Jeffrey Hollender and Stephen Fenichell have reached the same conclusion, likening the current shift in business to the cultural revolution of the 1960s. Hollender writes:
Global and local businesses -- private enterprise -- present the largest force truly capable of providing workable solutions, not just to business problems but to the daunting social and environmental challenges facing our planet. In the absence of large-scale government-sponsored reform, leading-edge businesses and not-for-profit organizations all over the world have responded not just to the credibility crisis [recent corporate scandals] but to the greater long-term challenge of being part of the global solution by evolving a new corporate model that shifts the paradigm for the role that business can play in society.
He adds:
This is the next wave [of CSR]. It is not a public relations ploy, a new financial model, or the next management and leadership trend, but a broad social movement, centered in the corporation much as the antiwar movement of the 1960s was centered on college campuses. It will, we believe, have deep and lasting effects on our values and beliefs as well as the world's future... It has become a new way to be a fundamental part of the paradigm within which all business in the future is bound to evolve.
What Matters Most looks at some of the founding leaders and corporations in this movement, and the broad-based transformation that is under way in many of world's most powerful enterprises.
Nike "green" shoes
A variety of stories emerge from this important read. We are reminded of the heat Nike (NYSE:NKE) faced when a San Francisco-based nongovernmental organization (NGO) named Global Exchange attacked the shoe giant for its handling of contract laborers in developing countries. Nike has since embraced the principles of CSR with an almost unbelievable zeal.
One executive for Nike advised Hollender and Fenichell, "You aren't just buying a pair of running shoes; you are buying a product based on our knowledge of the people who made it, how much they were paid, how clean was the factory, how many toxic chemicals, if any, they were exposed to, what processes were used to make it, and what they will do to the air if they're incinerated, or to the soil or groundwater if they're buried in a landfill."
I think someone is listening.
Unilever's acquisition of Ben & Jerry's
Ben & Jerry's is considered one of the founding corporations of the social responsibility movement. But what happens when the company and its vision get bought out by a massive multinational corporation, as Ben & Jerry's was by Unilever (NYSE:UL)? In one story from the book, we learn that Ben Cohen's idea for Peace Pops was altered to fit the company's new, more corporate image, but was then changed back when a Unilever exec took the helm.
The authors assume that Unilever kept the Peace Pops name purely for marketing purposes. Regardless, the CSR movement has not been lost on the megacorporation. In its 2002 CSR report, the company stated, "Poverty and inequality between nations remain acute. We believe part of the answer is to realize and spread the benefits of globalization more widely." In a recent Foolish Book Review on The Fortune at the Bottom of the Pyramid, we saw other ways in which Unilever is trying to implement this solution in India.
More than "goodwill" hunting
Hollender and Fenichell discuss numerous examples of the recent dialogue between corporations and CSR advocates:
- Ford (NYSE:F) and its 2002 decision to cap CSR initiatives in the face of mounting financial difficulties.
- The debate over Starbucks' (NASDAQ:SBUX) coffee procurement.
- The question of whether Microsoft's (NASDAQ:MSFT) nearly $1 billion a year in charitable software contributions are merely a savvy strategy to increase market share.
- Whole Foods' (NASDAQ:WFMI) impact on the supermarket industry.
- Hewlett-Packard's (NYSE:HPQ) attempt to bridge the digital divide.
The change afoot in the corporate community is so much more than "goodwill" hunting. Corporations are embracing social responsibility because business depends on it -- and so does the world. This book is a call to action, quoting Starbucks CEO Howard Schultz at a 2001 CSR conference: "The opportunity to do the right thing has never been as important as it is right now."
Further socially responsible Foolishness:
- Three reviews of essays on corporate social responsibility: Part 1, Part 2, and Part 3.
- Discover why ecomagination is so important to General Electric.
- Johnson & Johnson (NYSE:JNJ) is using its corporate muscle to address the AIDS crisis in Africa.
- Ford: Scrooge or Santa?
Unilever and Johnson & Johnson are Motley Fool Income Investor picks. Microsoft is a Motley Fool Inside Value selection, while Whole Foods and Starbucks made the cut at Motley Fool Stock Advisor. Try any of our Foolish newsletters free for 30 days.
As part of a graduate degree at Duke University, Fool contributor Jeremy MacNealy is writing an ethics and law thesis paper on corporate social responsibility. He has no financial interest in any company mentioned. The Motley Fool has a disclosure policy.
