Why (Authentic) Corporate Social Responsibility Is Here To Stay: A Response to Robert Reich’s Guardian Op-Ed
This article was written by the team at Prodigium Pictures, a social impact entertainment and cause marketing company specializing in creating videos for purpose-driven initiatives. Learn more at www.prodigium-pictures.com.
Last week, former US Secretary of Labor Robert Reich published an op-ed in The Guardian entitled “Why Corporate Social Responsibility is BS.” The piece argued that Corporate Social Responsibility (defined in Investopedia as “a self-regulating business model that helps a company be socially accountable — to itself, its stakeholders, and the public”) is essentially a hollow marketing tactic used by companies who will ultimately always have to put their bottom line profits above social good.
A number of recent examples back up Reich’s point, such as the slew of “pro-CSR” corporations lobbying against Biden’s $3.5tn reconciliation bill, which includes provisions to alleviate poverty, increase education access, and mitigate climate change. Not to mention the overwhelming number of companies who have been recently outed as supporting politicians and policies contrary to the socially aware values they propagate in their marketing.
Our Nuanced Take On Reich’s Thesis
As a company that specializes in purpose-driven marketing, recently became a certified B-Corp, and are currently working on a CSR guide, Reich’s opinion could be seen as a challenge to our worldview. However, we don’t find ourselves entirely disagreeing with Reich: much of the CSR messaging out there is superficial purpose-washing (greenwashing, pink-washing, etc.) or performative stunts that put a band-aid on underlying systemic issues within an organization. That being said, we believe the blanket statement that “CSR is BS” needs amending. Here’s our alternative:
Inauthentic CSR is BS
Reich is correct in saying that many corporations are simply not designed to put anything above, or not willing to put anything above, their financial bottom line. This is particularly true for many large publicly traded corporations, who are incentivized to maximize short-term profits in order to satisfy shareholders.
However, there are a fair number of companies, particularly small to medium-sized companies, that actively choose to live up to a double or triple bottom line in order to be responsible not just to their financials, but also to people and the planet.
Yes, one could argue that these CSR practices still primarily serve the company’s financial interests (ex. fair wages that help retain employees, nonprofit partnerships that help attract customers, etc.) but the idea that all CSR is performative is simply not true. Real, tangible CSR practices can have a genuinely positive impact on stakeholders’ lives.
While our economic systems still are deeply flawed — and CSR alone won’t solve all the major structural problems we face — the allegation that companies can’t be more ethical is at best, highly cynical and at worst, actively harmful.
Like it or not, “business values” and practices have a direct impact on the lives of workers, customers, local communities, and the environment. Yes, larger regulations and reformed economic incentives are necessary, but the notion that companies can’t at least improve their practices within the current system tends to excuse unethical corporate practices, as companies get to claim “that’s just the way the system is designed.”
To use recent, highly-publicized examples, Seattle company Gravity Payments made headlines in 2015 when CEO Dan Price announced that the company would be introducing a minimum wage of $70,000/year for all employees, in part to help employees cope with increasing rents and home prices in the Seattle area. The CEO himself even took a personal paycut to contribute to employee wages. While the company has grown since then, and the move did lead to a good amount of positive publicity (including one of the most shared NBC news videos of all time), it’s hard to call this move “BS Corporate Social Responsibility.” Is Gravity Payments still a tech company performing well financially? Yes. Is their ultimate goal still to sell products and generate profit? Yes. Yet company leaders chose to make a decision that directly improved their employees’ lives, including those in traditionally underpaid roles, and is setting a bar for its competitors and encouraging them to do the same if they want to stay competitive.
There are also a number of comprehensive third-party CSR standards, such as the aforementioned B-Corp’s B Impact Assessment. Standards like the B Impact Assessment, and the other thorough steps in the B-Corp certification process, ensure that member companies meet a high standard of social, environmental, and economic responsibility. While most certified B-Corps are small businesses, a number of larger corporations such as Ben & Jerry’s, Patagonia, and Tillamook are certified B-Corps, and have to recertify every three years just like their small to medium-sized counterparts.
Inauthentic vs. Authentic CSR communication:
Let’s talk about this from a communications angle:
As CSR communication professionals, we are hyper-aware of the dangers of misleading customers, employees, and other stakeholders about a company’s impact.
First and foremost, misleading stakeholders about your company’s CSR practices is unethical. Secondly (and here’s what a lot of companies don’t understand), inauthentic CSR communication simply doesn’t work.
Awareness around the importance of media literacy is increasing, particularly for younger generations. While the spread of misinformation is ongoing in parallel, the fact remains that modern audiences are suspicious of what they are being sold: particularly when companies seem to be jumping on a “consciousness trend” or bandwagon to appeal to a specific demographic, when the company has shown no sign of supporting that demographic in practice, or even working against the causes they claim to support.
What qualifies as a bandwagon can change over time. For example, when Oreo first put out their famous Rainbow Oreo Pride campaign in 2012, they were one of the first major companies to use the imagery of the rainbow Pride flag in their advertising (keep in mind this was before DOMA was overturned in 2013). Oreo also kept the campaign going despite objections from major religious organizations and public threats of boycotts from angry customers, which signaled to customers that the company was willing to take a financial risk in order to take a stance. While a rainbow graphic is not as substantive as a comprehensive CSR policy or program, the campaign ultimately was well-received by the LGBTQ community and helped normalize major organizations taking a stand for gay rights.
Compare that to June 2021, when a plethora of companies changed their logos on social media to a rainbow design to celebrate Pride month. While many companies’ logo changes were still well-received, others ended up being called out for their hypocrisy. Many customers discovered, after a quick internet search, that several of the major companies that sported Pride logos were either directly donating to anti-LGBTQ politicians, or had generally poor workplace ethics.
Something similar happened in the summer of 2020, when many corporations who posted in support of the #BlackLivesMatter movement were revealed to have supported anti-police reform lawmakers and policies, or even had their own troubling histories of racial discrimination within their companies.
This form of CSR communication is “BS,” because it’s not really CSR at all, it’s a performance.
CSR communications strategies should always reflect the authentic mission and ethical standards of your company or organization. Showcasing your CSR practices can be one of the most effective ways to expand your reach as a company and direct attention to the causes you support. You just have to actually do what you say.
More resources on authentic CSR and Social Impact Entertainment:
If you’re a purpose-driven company or nonprofit looking to communicate authentically with video, we’d love to hear from you at email@example.com.