Is "Doing Good" Good Enough?

In the past 15 years it has become clear that responsible practices have a huge impact on business and increasing number of companies engage in activities that not only bring profit, but they also provide positive contribution to their society and environment. The number of companies around the world that issued CSR or sustainability reports has increased from 837 in 2000 to 5,600 in 2010. The main reason for that could be explained through the words of professor Stuart Hart “The roots of the (sustainability) crisis and political and social issues exceed the mandate of any corporation. At the same time, corporations are the only organisations with the resources, the technology, the global reach and, ultimately, the motivation to achieve sustainability”. Event though there is no unique and commonly accepted definition of CSR, most companies that practice CSR describe it as giving back to the community that they operate in.

We ask ourselves the following questions: What is the real reason for companies to engage in CSR activities? Is corporate social responsibility a tool that company uses to create more value for its shareholders or is it really what it represents – giving back to the community that allowed the company to become successful in the beginning? If the real motivation for CSR is giving back to the community, why is Coca – Cola Enterprise ranked 3^rd on Goodness 500 list of the most responsible companies when its main product is actually bad for consumers’ health? What kind of message can we get from the sustainability report of the biggest American chocolate producer Hershey’s, if we know that most its cocoa is sourced from the region plagued by forced labour, human trafficking, and abusive child labour and the company refuses to embrace Fair Trade certification of all of its products?

With the increase of companies that engage in CSR, this concept falls in the eyes of customers as they start to look at it as a marketing trick and doubt the real values of the company. The greenwashing concept is no longer a secret and companies cannot simply donate funds to some association or replace the light bulbs in their branches with the eco-friendly ones and call that socially responsible.

The questions that came across our minds surely came across the minds of a large number of consumers. Therefore, it is od immense importance for companies to reformulate their CSR activities and aim for accomplishing truly sustainable global community. Awareness on sustainability has already entered the mainstream of business. The challenge today is to convert the vision of sustainable world into reality (this was the main topic of annual The Business of a Better World conference, one of the biggest and most influential events dedicated to sustainable business, held last month in New York).

Today, companies need to approach their CSR activities strategically. They need to form their strategy in a way that will allow the community that it operates in to qualitatively grow together with the company in short term, but in the long term as well. This is the only way that CSR will become the source of new business opportunities and the tool to achieve sustainable competitive advantage.

We believe (and we hope!) that climate change and social responsibility issues will be the decisive factors of sustainability of future companies. If so, perhaps our children and grandchildren will not live in the world where 1 billion people lie in bed hungry every night, 800 million people don’t have access to clean water, ¾ of world’s poor don’t own a bank account and capital access and children finish school without knowing how to read, write or do basic math. The time has come for the managers to care about the future of our society and planet in order to ensure the future of their companies.