We take CSR to stand for Corporate Sustainability and Responsibility, rather than Corporate Social Responsibility. Our definition is as follows:
CSR is the way in which business consistently creates shared value in society through economic development, good governance, stakeholder responsiveness and environmental improvement.
Put another way:
CSR is an integrated, systemic approach by business that builds, rather than erodes or destroys, economic, social, human and natural capital.
Given this understanding, we argue that CSR has failed. The logic is simple and compelling. A doctor judges his/her success by whether the patient is getting better (healthier) or worse (sicker). Similarly, we should judge the success of CSR by whether our communities and ecosystems are getting better or worse. And while at the micro level – in terms of specific CSR projects and practices – we can show many improvements, at the macro level almost every indicator of our social, environmental and ethical health is in decline.
Failings of CSR 1.0
Why has CSR failed so spectacularly to address the very issues it claims to be most concerned about? This comes down to three factors – the Triple Curse of Modern CSR, if you like:
1. Incremental CSR – The incremental approach of CSR, while replete with evidence of micro-scale, gradual improvements, has completely and utterly failed to make any impact on the massive sustainability crises that we face, many of which are getting worse at a pace that far outstrips any futile CSR-led attempts at amelioration.
2. Peripheral CSR – CSR is, at best, a peripheral function in most companies. There may be a CSR manager, a CSR department even, a CSR report and a public commitment to any number of CSR codes and standards. But these do little to change the underlying growth-and-consumption model that fuels environmental degradation and social disruption.
3. Uneconomic CSR – The ‘inconvenient truth’ is that CSR sometimes pays, in specific circumstances, but more often does not. Of course there are low-hanging fruit – like eco-efficiencies around waste and energy – but most of the hard-core CSR changes that are needed require strategic change and massive investment, which the markets don’t support.
Principles of CSR 2.0
To get beyond these curses, we need a revolution that will, if successful, change the way we talk about and practice CSR and, ultimately, the way we do business. I call this new approach, CSR 2.0, where CSR stands for Corporate Sustainability and Responsibility. There are five principles that determine CSR 2.0:
1. Creativity (C) – The problem with the current obsession with CSR codes and standards (including the new ISO 26000 standard) is that it encourages a tick-box approach to CSR. But our social and environmental problems are complex and intractable. They need creative solutions, like Free-play’s wind-up technology or Vodafone’s M-Pesa money transfer scheme.
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. We need more examples like Wal-Mart ‘choice editing’ by converting to organic cotton, Tata creating the affordable eco-efficient Nano car or Muhammad Yunus’s Grameen banking model.
3. Responsiveness (R) – More cross-sector partnerships and stakeholder-driven approaches are needed at every level, as well as more uncomfortable, transformative responsiveness, which questions whether particular industries, or the business model itself, are part of the solution or part of the problem. A good example is the Corporate Leaders Group on Climate Change.
4. Glocality (2) – This means ‘think global, act local’. In a complex, interconnected, globalising world, companies (and their critics) will have to become far more sophisticated in combining international norms with local contexts, finding local solutions that are culturally appropriate, without forsaking universal principles. We are moving from an ‘either-or’ one-size-fits-all world to a ‘both-and’ strength-in-diversity world.
5. Circularity (0) – Our global economic and commercial system is based on a fundamentally flawed design, which acts as if there are no limits on resource consumption or waste disposal. Instead, we need a cradle-to-cradle approach, closing the loop on production and designing products and processes to be inherently ‘good’, rather than ‘less bad’, as Shaw Carpets does.
Making a positive contribution to society is the essence of CSR 2.0 – not just as a marginal afterthought, but as a way of doing business. This is not about bailing out the Titanic with a teaspoon – which is the current effect of CSR 1.0 – but turning the whole ship around. CSR 2.0 is about designing and adopting an inherently sustainable and responsible business model, supported by a reformed financial and economic system that makes creating a better world the easiest, most natural and rewarding thing to do. The challenge is to move companies through the Ages and Stages of CSR.
Downloads like these listed below (and many more) are free for Members. Read more about Joining.
- The Ages and Stages of CSR: Towards the Future with CSR 2.0, by Wayne Visser, 10 pages. [Download]
- The DNA Model of CSR 2.0: Value Creation, Good Governance, Societal Contribution and Ecological Integrity, by Wayne Visser, 2 pages. [Download]
- The Ages and Stages of CSR: From Defensive to Transformative Corporate Sustainability & Responsibility, by Wayne Visser, 2 pages. [Download]
- The Rise and Fall of CSR: Three Curses of CSR 1.0 and Five Principles of CSR 2.0, by Wayne Visser, 2 pages. [Download]
- The Rise and Fall of CSR: Shapeshifting from CSR 1.0 to CSR 2.0, by Wayne Visser, 8 pages. [Download]
- CSR 2.0: The New Era of Corporate Sustainability and Responsibility, by Wayne Visser, 2 pages. [Download]
- The Long Tail of CSR: Achieving Scalability in Corporate Sustainability and Responsibility, by Wayne Visser, 2 pages. [Download]
These topics are explored in detail, with over 300 cited examples, in The Age of Responsibility: CSR 2.0 and the New DNA of Business.