Francesca Pinzone, COO of Umbo, discusses CSR failure and how charities can push for more by holding corporates accountable.
CSR strategies that are aligned with business objectives, focus on altruism, and are values-aligned have higher chances of success not only for the organisation implementing the strategy, but also for those who will benefit from the outcomes. CSR is traditionally broken into four categories including environmental, ethical, philanthropic and economic responsibility, with a focus on positive impact on the environment, people and society.
There are various high-profile cases of CSR failures, such as Volkswagen who were found to have misrepresented car emissions during a significant marketing campaign highlighting their cars’ low emissions. This not only resulted in fines, but damaged reputation and trust across the industry, their customers, and consumers. There are also demonstrated failures in social responsibility across supply chain and human rights practices, particularly in the garment industry, where a series of tragic events have seen little change over the past five years.
So why do some CSR programs fail?
Accountability, transparency and authenticity are key requirements needed to ensure that CSR strategies are not only meeting the needs of the business, but the beneficiaries for whom they are developed. We know that companies are hard-wired to put profit above purpose, so we need to ensure that CSR is embedded across all sectors of the business with stakeholder accountability – not just a token ‘feel-good’ staff engagement strategy.
Society and in particular the for-purpose sector have a role to play in demanding accountability of businesses in the performance of their CSR strategy. Businesses need to ensure transparency and authenticity in their approach and implementation of their strategy, and they can do this by reporting on their impact and by being open and transparent around successes and failures.
There needs to be a level of responsibility among NFPs and the for-purpose sector in this process. Rather than seeking accountability at the end point, let’s ensure that for-purpose organisations are collectively engaged at initiation and throughout the process of CSR strategy development to ensure each approach is developed with a focus on the end user – i.e. the beneficiary (people, for-purpose organisations, the environment) rather than the business.
It is time to be active participants in the process rather than simply being benefactors. The expertise lies within the for-purpose sector and should be harnessed to ensure that businesses with the capital and influence can create sustained impact.
It is critical to consult with the right people in the design process and ensure that the business understands not just the impact they seek to have, but the root causes of the issues they are working towards solving. This approach will more effectively help to support CSR strategies that are values-aligned, strategic and addressing society’s most pressing issues, while ensuring there is a positive impact on society, people and the environment.