Where next for the CSR revolution?

More and more big firms are investing in corporate social responsibility rather than just paying lip service to it. Is a real cultural change now underway?

by Giles Gibbons
Last Updated: 22 Jan 2016

In the Pregnant Man pub, in the car park of Saatchi & Saatchi, 20 years ago this month, Steve Hilton and I agreed to set up a company called Good Business.

That conversation changed my life.

At Saatchi, we'd been doing work for governments that were endlessly trying to get people to change their behaviour and attitudes to particular societal issues (smoking, racism, voting ...) without much success. After all, who listens to the health minister?

And, on the other side, we had companies and brands desperately trying to stand for something more than simply a product or a service (British Airways doesn't just fly planes, it brings people together).

These separate activities challenged us to think: surely if we can get business to help society, society will help business. So we had an idea: if you want to change the world, do it through business; if you want to build your business, help change the world.

Businesses have scale and power - the way they run their operations really matters. If they are run in the right way, and have a clear sense of who they are and what they are here to achieve, and if everyone can see that they deliver social value and make things better, they thrive.

For us, this was - perhaps counter-intuitively - driven home when Naomi Klein and her influential book No Logo: Taking Aim at the Brand Bullies erupted onto the scene in 1999. She became a contradictory ally of sorts.

Beautiful, intelligent, well branded, she made people think about the role of businesses and what they did, and scared the living daylights out of corporates in the process. The media loved her (this was the time of the Seattle WTO protests) and suddenly anti-capitalism had a star. The idea that globalisation and privatisation had gone too far started gathering steam and businesses were fast becoming the bad guys.

In many ways, we couldn't have disagreed more. Business isn't bad: it was and is the greatest engine of social progress the world has ever seen. But elements of it had gone awry, which is why some of the allegations of self-obsessed, greedy and unprincipled behaviour rang true.

In the 20-odd years since, the world has changed. CSR morphed into corporate responsibility, then we had sustainability, shared value - the space where business meets society has exploded. The UK has been leading the charge.

Free from the baggage of the European social contract or the American focus on philanthropy parcelled off to the side, it has been setting the agenda around what it means for a business to be responsible and manage its impact properly.

The poster boys, big ones such as Marks & Spencer and its Plan A, and small ones such as Innocent and its mission to make natural, healthy drinks in an ethical way, are home-grown. So it might seem our start point has been validated. Job done. But in reality, it's a different story.

Most people still don't trust businesses to do the right thing. There is widespread cynicism around much of the activity businesses undertake to 'do good'. And for every company or brand or leader rallying around genuine social change, there are also examples of businesses that continue to make their profits by hammering suppliers and squeezing margins and taking raw materials from anywhere, whatever the environmental and human cost.

So it is clear that the job - and it's an unashamedly ambitious one - of making it clear to everyone that business is a force for good is very much still a work in progress.

When you think back, this isn't all that surprising. The anti-globalisation movement really shook up business people. Most of them instinctively wanted their business to be a good business.

But they didn't have the confidence to fight for change and they worried that if they put their head above the parapet to talk about something positive, they were going to end up being shot at, probably for something else negative they didn't even know was going on. Much easier all round to keep your head down.

So, Steve (who was David Cameron's strategy director until 2012) and I decided we'd try to reassure them. In 2002, we published our book Good Business: Your World Needs You. It gave us the opportunity to set out the case for business and why we believed businesses should believe in themselves and what they were doing.

The book was well received and helped make the case that profit and social good are far from being mutually exclusive. But businesses were still cautious, particularly when it came to building purpose-driven organisations.

Despite this, and although the corporate social responsibility (CSR) movement was in full swing, consumer trust in businesses continued to ebb away.

We always felt CSR as a discipline lacked the optimism about business we believe is so important and was too focused on system and structure at the expense of creativity and flair. But that focus on having a process in place to manage social and environmental impacts worked for business. They got it. Businesses are good at measuring and managing things.

As CSR developed into corporate responsibility (CR) and evolved from being a one-size-fits-all framework into a process that helped companies identify their biggest issues in the eyes of their stakeholders and address them, it helped companies get their houses in order. Pretty much every major international company now has a CR (or responsible business, or sustainability, or corporate citizenship) department, and publishes a CR report.

This made a difference. It genuinely created change in the way companies were run, to minimise their impact on the environment and society as well as restoring their confidence about business's place in the world.

So it has served a useful purpose but it hasn't gone the full distance in terms of transforming the status quo around business and building trust (and to our minds never could).

That is partly because even current corporate responsibility efforts are still organised around minimising negative impacts rather than being about maximising the opportunities for doing good.

It is also because despite preaching its own gospel of integration, CR remains an add-on in too many businesses, if only because it is set up as a separate department. And much as the CR report is never intended to be the main focus of activity, it often is the tail that wags the dog: 'We need to act on this issue because we said we would last year and need something to put in the report.'

So it's perhaps not surprising that corporate responsibility in itself failed to transform the corporate-trust picture. The cynicism might have been misguided, but you can see why it was there. What businesses were doing was necessary but it was never going to be enough.

And then came the 2008 crash. Businesses were for the main part tarred with the same brush as the investment bankers, hedgies who had played free with complex financial models, and their Libor-fixing descendants. Businesses put their heads down again, and trust reached a new low.

As we begin to emerge from those times, we are at a turning point. For one, consumers have begun to appreciate that business presents the route out of the downturn. It has cast the basic function of employment creation and economic growth in a new light.

But, importantly, businesses have also started to consider their role in society anew. They are moving beyond the nuts and bolts world of CR.

There are inspiring examples everywhere of businesses embracing the big picture and demonstrating to everyone that they have thought through why they exist and have a clear purpose. That they are always thinking about how they do things and adapting to our changing times. And that they are working to make things better: creating their place in the future and making sure they will thrive in it.

We see big companies such as Unilever putting its ambitious Sustainable Living Plan front and centre of its growth strategy (double the profits, half the impact). We see thriving new companies such as construction-toy startup GoldieBlox stating its goal as being to get girls building. We see innovative companies such as PruHealth turning insurance on its head by making it easier and cheaper for you to live healthily, and rewarding you for it.

For all of them, it makes social and strategic sense, but the two work in tandem without any delineation between them.

This is exciting. It feels like the moment we've been waiting for has come. No longer are businesses scared to put their heads above the parapet - they're desperate not to miss the boat as their competitors get into the social space.

We're post-risk, post-responsibility, post-austerity and potentially moving into a new, progressive business future. And if purpose-driven businesses come into being, we might finally start seeing the dial turning on trust.

CEOs seem to be getting this now. They're talking about how to breathe new life into their brands by demonstrating that they have substance and meaning, and putting their values into action in an authentic and human way. They feel that their consumers, and their employees, and everyone else they touch, really want this.

The values of Sainsbury's are at the heart of the revitalisation of its brand. Skincare brand Dove has demonstrated how a brand with a point of view and a purpose can effect real change on an issue and boost business at the same time. Toms shoes has built its entire business model around a social purpose. Businesses such as these are better than the model of old. See them and it's clear things have changed.

We feel progress all around us. Is it every company? No. But we see organisations embracing change and moving purposefully forward. Building their business by showing what it can do for the world. The pregnant man's moment might just have come.

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