Tag Archives: csr

Some businesses shouldn’t bother investing in CSR

What is common in Starbucks, Google and Amazon? They all have been in the news for the wrong reasons: corporate tax avoidance. Last year the British government claimed that it lost more than £1 in every £10 it tried to collect from companies to tax evasion and avoidance.

Corporate social responsibility has become a buzz word in the business word, yet a lot of corporate companies still act like they do not get the essence of it. A socially responsible company should act responsible on all areas, otherwise it will only do what is called ‘greenwashing’, just with CSR in general.  Spending huge amount of money on CSR focusing on helping social sub-groups will lose its value, if the company dismisses legitimate societal needs on other areas, such the expectation of paying corporate tax in countries businesses operate. In their 2013 book The PR Strategic Toolkit, Alison Theaker and Heather Yaxley refer to Peach’s model of the impact of business on its environment, where the initial level of impact includes paying taxes, observing the law and dealing fairly. So paying corporate tax should be an absolute basic for a company.

For example, Starbucks spends a vast amount of money on CSR, including backing youth and reducing their environmental footprint.

starbucks website responsibility

Yet, they have been failing to pay the right amount of corporate tax, sending the message that they are rather interested in profit than giving back to society. It is not a surprise therefore that traditional and social media have been full of their corporate tax avoidance and not with their CSR programme.

With the rise of social media businesses are even better scrutinised by the public on every areas where they should be responsible. A number of CEOs have recognised this – but unfortunately not all. Steve Holiday, CEO of National Grid Group Plc., thankfully belongs to the first group:

“The regulator and government have always been major stakeholders but today there is a very different new set of stakeholders , right down to you and me. The public at large are stakeholders because they can take part in discussions on social media. The can influence our decisions and we actually want them to do that.”

According to PricewaterhouseCoopers’s Annual CEO Survey 2013, 62% of CEOs say that the tax burden is considered to be the top business threat to growth.

pwc ceo survey

The motivation behind minimising the paid tax is therefore understandable. However, if they would like to have a sustainable business and they do not want to lose the business’ social license to operate in the long term, they have to acknowledge that giving back to society through taxes is essential. Otherwise, they can save money by not doing CSR because it won’t be worth anything anyway.

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Why CSR programmes will never be ideal

So what’s in the dominant paradigm nowadays on the land of PR? The systems theory, that is! Are you still here? Please don’t leave! It may sound like a bit far-fetched term for the first sight, but in fact it is a very useful framework that can be applied to many disciplines to explain how things work in practice. In PR it relates to its function. In her influential book Public Relations: Concepts, Practice and Critique, Jacquie L’Etang (2009) describes the systems metaphor as an approach that “sees the world as a living, interacting organism” where PR constantly helps organisations to adapt to their environment (p. 71). In PR it simply means that organisations and publics need to interact effectively with the goal of reaching mutual understanding and benefiting both sides. That is to say, they need to interact symmetrically to develop an ideal relationship. This resonates with Grunig and Hunt’s (1984) four communications models where the two-way symmetrical model is regarded as ideal.

systems theory t shirt

The fact that this is the prominent best practice organisation-publics relationship model in the UK is well reflected in the definitions of the most influential trade bodies. The CIPR states that PR’s aim is “to establish and maintain goodwill and mutual understanding between an organisation and its publics”, while the PRCA definition suggests that PR is „to gain trust and understanding between an organisation and its various publics”.

What strikes me in this theory is how impossible it is to put it into practice. It is simply because organisations have numerous publics that are highly segmented. It is impossible to satisfy everyone’s needs or meet each public’s expectations without hurting the organisation’s interest.

Corporate social responsibility campaigns are great examples of this.

Let’s look at Unilever. Paul Polman, CEO of Unilever, declared in a recent International Business Times article that the systems approach is the way forward.

“We need to begin now, to work across the value chain and across the systems we touch and which touch us. This is what we are doing in our own business, as well as in collaboration with others…catalysing global business action on a focussed list of priorities.” -Paul Polman

Polman begins his article by noting that extreme poverty, unemployment and climate change are among the most pressing issues today’s society has to face. He suggests that businesses need to recognise that they are obliged to play their role in tackling these problems. This is a valuable suggestion, which bears some problems, however, both on a practical and a theoretical level.

keep-calm-and-be-cynical-5

It is a conscious decision from organisations that how they would like to give back to their (social) environment. PR practitioners spend an awful lot of time and effort to develop a CSR strategy and to find out what kind of CSR programme would be the most beneficial for their organisation. Yes, for the organisation. I might be a cynical budding PR practitioner, as some would certainly hiss at me here, but I am sure no CSR programme has been developed based on objective criteria of where help is the most needed. It would be impossible anyway, because it is a subjective view whether, say, terminally ill children or newly diagnosed dementia patients are more in need of help, or whether money should be invested in preventing climate change and thus help future generations or should be invested in improving sanitation facilities in India and thus help the current generation. As Polman writes organisations has to write a “focussed list of priorities”. My view is that priority list will be highly selective and subjective and will be prepared in accordance with the interest of the organisation.

Unilever’s Project Sunlight initiative has various components. Just having a glance at one of them for the sake of an example, the ‘Destroy germs and create smiles’ campaign associated with Domestos improves sanitation facilities in 9 countries: Gambia, Ghana, Nicaragua, Nigeria, Pakistan, Philippines, South Sudan, Sudan and Vietnam. How were these countries selected? Are they really the ones that need improvements in sanitation the most? Is it improvements in sanitation that they need the most?

Don’t misunderstand me. It is an absolutely valuable and valid CSR campaign that probably improves thousands of people’s life. Obviously, a company cannot support everyone and everything in the world because it would hurt its business goals (and would go bankrupt). The point is that systems theory supposes that an organisation and ALL its publics can mutually depend on each other. It is idealistic, however, because when it comes to CSR campaigns for example, an organisation has to decide which publics to favour over one other.

This should be acknowledged in order to have a clear picture on how exactly organisations and publics interact and how organisations hold the power to decide about the level of interaction with each public. Thanks for staying with me! Any views are more than welcome in the comment box below.

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