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Issue 6 / February 2009 Crunch Time for CSR
by John McCreesh,
Technology Services
Crunch time for CSR
Corporate Social
The rise of Corporate Social Responsibility On a less philanthropic note, other Research suggests that business leaders In the US, New York City is fearful for the
(CSR) was one of the more unexpected corporate strategists argued that CSR
Responsibility rose quickly
today are listening more to the argument for future of the more than 200 not-for-profit nullMake the most of your CSR
developments of the last decades of the simply makes good business sense, philanthropy rather than the argument for organisations that benefited from $39m
activities by publicising them.
up the boardroom agenda
20th century. Financial scandals at Enron with a direct impact on the bottom line. self-interest: 55% of executives in a recent in the year to November 2007 from the
and WorldCom, labour abuses by Nike in They claimed four main benefits: survey cited CSR as “the right thing to do” Lehman Brothers Foundation.
There was
Ensure that customers, suppliers
during the boom years of
Indonesia, environmental disasters at Exxon compared to 29% who believed it gained a certain irony in the award of the 2008
and the local community know
the nineties. Will it now
and Shell, and human disasters at Union
• a commitment to CSR helps in staff
them competitive advantage.
Whatever the Dragon Award from the City of London what you are doing. CSR lends
Carbide in Bhopal all played into the hands
recruitment, engagement, and retention
fall victim to the economic
motive, CSR is now firmly established on Corporation to Lehman Brothers UK for a
itself to good news stories.”
of anti-corporate, human rights, and green • in crowded markets, an ethical stance the corporate scene, with 64% of the 250 ten year old mentoring project with a local
downturn, or does it
campaign groups. Politicians worldwide can help build brand loyalty and attract largest multinationals publishing CSR school – just after the bank collapsed.
provide a way forward for
rushed to regulate – and corporations premium prices – witness Patagonia, reports in 2005.
These reports cover
UK Government advice to business
realised they must respond. Ben and Jerry’s, or The Body Shop topics such as environmental sustainability;
This last story does have a happy ending.
the beleaguered financial
What started as damage limitation rapidly • CSR can nurture a culture of risk
treating employees with respect; community
The new owners of Lehman, the Japanese
services industry?
evolved into a more positive phenomenon. avoidance within a company – for
involvement and social development; and
Bank Nomura, wasted little time in
In the US, commentators promoted example by prompting an internal
upholding and supporting universal human
announcing that they would be adopting
corporate global citizenship: they argued review of raw material sourcing before
rights. They give details of how companies
the prize-winning scheme.
When CSR
multinational corporations were so powerful the Greenpeace protesters turn up
embrace these standards themselves,
becomes one of the assets to be salvaged
that they had a responsibility to involve outside corporate HQ
require them along their supply chains,
from corporate ruin, then it is a sure sign
themselves actively in solving the great
and report to stakeholders on what they
that it’s more than a nineties fad.
CSR – In Brief
global issues of the day.
They argued that
• crucially, a commitment to CSR can help are doing. Indeed, proponents of CSR believe a
successful companies need healthy
win the licence to operate, especially for

willingness to persevere with CSR is key
societies, to create a productive workforce
companies with a potentially negative
For richer, for poorer
to the financial services industry regaining
Corporate Social Responsibility (CSR)
and provide the conditions for enterprise to
impact on neighbourhoods (e.g. mining, the respect of stakeholders. As regulated
is a concept adopted by organisations
flourish. Equally, a strong business sector
chemical manufacturing) or working in Unfortunately, no matter how strong the bodies, financial services companies can
to consider the interests of society
creates the jobs, wealth, and innovation
areas regulated by governments (e.g. case for CSR, when businesses collapse, lose their licence to operate, as Icelandic
by taking responsibility for the impact
essential for a healthy society. In this model,
financial services, pharmaceuticals). their associated CSR activities will be at risk bank Landsbanki found out to its cost,
of their activities on customers,
successful CSR generates shared value for
too, as the recent experience in financial when the UK government used sections
suppliers, employees, shareholders,
both business and society.
services has shown. This is most clearly of the Anti-terrorism, Crime and Security
communities and other stakeholders,
visible where banks have set up “arms’ Act 2001 to unilaterally seize its UK assets.
as well as the environment.
length” charitable foundations. The UK’s It had literally lost its licence to operate.
nullIn our Global Workforce Study,
Northern Rock Foundation was forced
This obligation is seen to extend
we found that CSR is the third
to slash its planned level of expenditure
beyond the statutory obligation to by a third following the collapse of its
comply with legislation and sees
most important driver of employee
parent bank.

organisations voluntarily taking further
engagement overall”
steps to improve the quality of life
for employees and their families as
Towers Perrin
well as for the local community and
who runs employee opinion surveys for
society at large.
many blue chip companies
4 / Perspectives on the future Perspectives on the future / 5
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