The Ages and Stages of CSR
The evolution of business responsibility can be viewed in terms of five overlapping economic periods – the Ages of Greed, Philanthropy, Misrepresentation, Management and Responsibility – each of which typically manifests a different stage of CSR, namely: Defensive, Charitable, Promotional, Strategic and Transformative CSR (which can also be called CSR 2.0, Systemic CSR or Radical CSR).
Our contention is that companies tend to move through these ages and stages (although they may have activities in several ages and stages at once), and that we should be encouraging business to make the transition to Transformative CSR in the dawning Age of Responsibility. If companies remain stuck in any of the first four stages, I don’t believe we will turn the tide on the environmental, social and ethical crises that we face. Simply put, CSR will continue to fail.
1. Defensive CSR in the Age of Greed is where all corporate sustainability and responsibility practices – which are typically limited – are undertaken only if and when it can be shown that shareholder value will be protected as a result. Hence, employee volunteer programmes (which show evidence of improved staff motivation, commitment and productivity) are not uncommon, nor are expenditures (for example in pollution controls) which are seen to fend off regulation or avoid fines and penalties.
2. Charitable CSR in the Age of Philanthropy is where a company supports various social and environmental causes through donations and sponsorships, typically administered through a Foundation, Trust or Chairman’s Fund and aimed at empowering community groups or civil society organisations.
3. Promotional CSR in the Age of Misdirection is what happens when corporate sustainability and responsibility is seen mainly as a public relations opportunity to enhance the brand, image and reputation of the company. Promotional CSR may draw on the practices of Charitable and Strategic CSR and turn them into PR spin, which is often characterised as ‘greenwash’.
4. Strategic CSR, emerging from the Age of Management, means relating CSR activities to the company’s core business (e.g. Coca-Cola and water management), often through adherence to CSR codes and implementation of social and environmental management systems, which typically involve cycles of CSR policy development, goal and target setting, programme implementation, auditing and reporting.
5. Transformative CSR in the Age of Responsibility focuses its activities on identifying and tackling the root causes of our present unsustainability and irresponsibility, typically through innovating business models, revolutionising their processes, products and services and lobbying for progressive national and international policies.
Hence, while Strategic CSR is focused at the micro level – supporting social or environmental issues that happen to align with its strategy (but without necessarily changing that strategy) – Transformative CSR focuses on understanding the interconnections of the macro level system – society and ecosystems – and changing its strategy to optimise the outcomes for this larger human and ecological system. Transformative CSR holds the key to making change happen, at a societal, organisational and individual level, and ensuring that we can all make a difference.
DNA of CSR 2.0
Transformative CSR represents a new holistic model of CSR. The essence of the CSR 2.0 DNA model are the four DNA Responsibility Bases, which are like the four nitrogenous bases of biological DNA (adenine, cytosine, guanine, and thymine), sometimes abbreviated to the four-letters GCTA (which was the inspiration for the 1997 science fiction film GATTACA). In the case of CSR 2.0, the DNA Responsibility Bases are Value creation, Good governance, Societal contribution and Environmental integrity.
1. Value Creation is about more than financial profitability. The goal is economic development, which means not only contributing to the enrichment of shareholders and executives, but improving the economic context in which a company operates, including investing in infrastructure, creating jobs, providing skills development and so on. There can be any number of KPIs, but I want to highlight two that I believe are essential: beneficial products and inclusive business. Does the company’s products and services really improve our quality of life, or do they cause harm or add to the low-quality? And how are the economic benefits shared? Does wealth trickle up or down; are employees, SMEs in the supply chain and poor communities genuinely empowered?
2. Good Governance is another area that is not new, but in my view has failed to be properly recognised or integrated in CSR circles. The goal of institutional effectiveness is as important as more lofty social and environmental ideals. After all, if the institution fails, or is not transparent and fair, this undermines everything else that CSR is trying to accomplish. Trends in reporting, but also other forms of transparency like social media and brand- or product-linked public databases of CSR performance, will be increasingly important indicators of success, alongside embedding ethical conduct in the culture of companies. Tools like Goodguide, KPMG’s Integrity Thermometer and Covalence’s EthicalQuote ranking will become more prevalent.
3. Societal Contribution is an area that CSR is traditionally more used to addressing, with its goal of stakeholder orientation. This gives philanthropy its rightful place in CSR – as one tile in a larger mosaic – while also providing a spotlight for the importance of fair labour practices. It is simply unacceptable that there are more people in slavery today than there were before it was officially abolished in the 1800s, just as regular exposures of high-brand companies for the use of child-labour are despicable. This area of stakeholder engagement, community participation and supply chain integrity remains one of the most vexing and critical elements of CSR.
4. Environmental Integrity sets the bar way higher than minimising damage and rather aims at maintaining and improving ecosystem sustainability. The KPIs give some sense of the ambition required here – 100% renewable energy and zero waste. We cannot continue the same practices that have, according to WWF’s Living Planet Index, caused us to lose a third of the biodiversity on the planet since they began monitoring 1970. Nor can we continue to gamble with prospect of dangerous – and perhaps catastrophic and irreversible – climate change.
CSR 2.0 also proposes a new interpretation for these terms. Like two intertwined strands of DNA, sustainability and responsibility can be thought of as different, yet complementary elements of CSR. Hence, sustainability can be conceived as the destination – the challenges, vision, strategy and goals, i.e. what we are aiming for – while responsibility is more about the journey – our solutions, responses, management and actions, i.e. how we get there. The challenge now is to admit that CSR 1.0 has failed, and to make CSR 2.0 – weaving the strands of sustainability and responsibility – into the new DNA of business.
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.