Corporate Social Responsibility sounds good, but does it make a difference? As it is now, not much, sez Keith Slack, senior policy advisor of Oxfam America, in Policy Innovations.
Luckily, Keith doesn’t stop there; in that nice Oxfam fashion, he gives us some ideas how to make CSR work.
What’s wrong with CSR? The prob is that often, corporations don’t do shit, except very vaguely “engage in dialogue.” Then corporations will just continue its biz as usual — and get green creds for “listening” and “caring.”
This is the problem Keith points too — It’s much too easy for corporations to greenwash their image by participating in CSR initiatives that don’t require that they actually change business practices.
So — How to solve this. Keith’s sez we need to identify what corporations are most interested in — namely, profitability — and what corporations need to achieve profitability — namely, access to capital and access to markets. Then, we need to link access to capital and markets with good corporate practices.
How? To address the access to capital, “the focus should fall on the private banks that finance transnational corporations.”
Respect for human rights and environmental standards could be made a legally-binding part of the loan agreements between the banks and the corporations. In other words, capital will be cut off from a project if serious human rights or environmental violations are found to have occurred.
But would banks do this? Keith concedes that this plan requires a big bank or two, with great foresight, taking leadership on this issue. While there’s reason to hope that this may happen, I don’t really see a way for the average consumer like me to push major banks to think ahead.
But Keith’s second idea — affecting access to markets — sounds more definite, and more like something I could actually take part in making happen:
Large institutions, such as public utilities, universities, pension funds, and corporations that consume significant volumes of materials or are brand-sensitive could adopt legally binding contracts that discontinue materials or stock purchases from corporations that operate irresponsibly. In this way, such institutions could force corporations to compete with each other to provide the most responsibly produced products.
As you know, many universities in particular have changed their buying practices in response to student activism. Coke’s been kicked out of some campuses, and Nestle’s been kicked out of many. Many universities have had to change where they get their apparel made, due to student protests against sweatshops. Starbucks and Peets — both of whom don’t care much about fair trade — have made fair trade coffee part of their product line for universities, in order not to lose marketshare to more responsible coffee companies.
And you don’t have to be part of a university to get involved; the same sort of thing can happen with local government and workplace purchasing decisions. The key, however, seems to be to try and influence these larger institutions to then influence corporations, instead of just relying solely on one’s own individual purchasing power.
What institution around you are you, or do you plan to be, influencing? Pick one, and let’s get to it.
December 1st, 2006 at 4:32 am
But the reason that these corporations suffer is because these protests cause them to lose everyones individual purchasing power. For instance if everyone decided to stop buying coke it would have a much greater effect on the coke corporation then a few universities banning coke from campus. Indeed how much difference does banning coke actually make.
I know a few universities banned coke over here. But people can just buy it out of the outside of the college anyway. To the companies bottom line the thing that it makes them act and change it makes very little difference. However making people not buy coke. Would cripple them. Imagine if everyone in America did not buy coke for a day. How much would be wiped off their stock market value.
You have to influence people not institution the only reason any institution has any power is that people give it to them.
By the way the largest investment fund in the world is the Norwegian pension fund where they invest their oil revenues in. worth about 266 billion . and they have an ethics council .
http://en.wikipedia.org/wiki/The_Petroleum_Fund_of_Norway
December 1st, 2006 at 10:22 pm
I would encourage people to remember that increasingly in this post-industrial society that companies not only need markets (ie customers) and capital (ie your savings and investments) but talent. That is to say that maybe the biggest thing you can “deny” a company and offer to an alternative purpose is YOU.
Lets take Siel as my favorite example. I’m sure that right now she could be employed for Citibank and making money for them hand over fist (and pulling down a fat salary for herself, too). BUT, she’s not doing that. To the contrary she’s running this great website that educates and motivates some many people. She’s investing _herself_ in the alternative.
For the forseeble future such choices will mean forgoing some money, maybe alot, but all such big changes require such sacrifices. Thankfully, the more people who get on board, the easy it goes. For example, it was those who were active in the very first days of the Civil Rights Movement who paid the biggest price (and too often that meant the ultimate price). But, once they had done that, and set the example, more could join them, and the burden borne by each become more tolerable - and, by the way - then, too, the sense of hope also increased in the same proportion.
December 4th, 2006 at 11:29 am
Check out http://www.globalreporting.org/Home
The Global Reporting Innitiative-well worth the read. Could be very compelling. It’s up to companies to be transparent but the development of CSR reporting standards could do a lot. Right now, there’s no way to compare one company’s CSR versus another’s. These standards would also become important guidelines for investing.
December 6th, 2006 at 9:12 am
Demian — Thanks for the link! I’ll def. explore further :)
Rodney — Back in the day before I started grad school, I actually used to work for The Capital Group, parent company of American Funds. So the not working for Citibank thing’s actually pretty close! Thanks for the kind words :)
simon — Yes, I agree that we have to get more individuals to act more responsibly. That said, I think collective action can achieve lots! Besides, you’re of the opinion that lots of people will not take action cuz they can’t afford it — a statement that may be true to some degree, but in that case, only collective action can change the structures that currently disempower people.