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Flagship blog - eng

For the CSR sceptics - part two

1. Big businesses reporting on sustainability are a rare exception. The most effective leaders do not lose time with similar things.

The debate is no longer about whether to report on CSR. The debate is now about how to report on it. Some of the most successful companies are those, that devote their time to strategic CSR. It is only when there are transparent and comprehensive data, that the company can move forward, grow and innovate in a meaningful way.

According to a recent KPMG study more than 90% of the world’s biggest companies (G250) report on CSR. These companies are setting a trend that will soon be impossible to avoid. Nike, Unilever, IBM or Coca Cola are among the most notable businesses. In the Czech Republic, there are known reporters such as Škoda Auto, ČEZ, ČSOB, Heineken, Severní energetická, PwC or KPMG.

2. CSR should be dealt with by politicians, not businesses. Businesses will always act in line with what the legislation permits. Only well-established regulations will prevent them from doing wrong things.

There are still many businesses like this. But we should realize that business is the driver for solutions to the global problems our world faces at the moment. Any company that wants to make profit, have competitive advantage and grow, has to innovate in the interest of society and be transparent towards its employees, customers and investors. Moreover, it is companies that have more power to execute important societal change more than any government does. They also come forward with innovative solutions for social issues sooner than the government even starts to deal with it.

A successful business takes notice of where our society is heading and in which direction therefore customer preferences will shift. Their goal is to be a step ahead and be able to answer customer trends even before they start to emerge.

3. CSR is only used for justifying businesses and their actions, that are actually in no way responsible. CSR is only a greenwashing tool.

Yes, there are companies that use CSR to justify their activities or hide other irresponsible behaviour. On the other hand, a few wrong examples do not represent everyone. If CSR is used wrongly by some companies, what should the rest of us do? Give up the years of building responsibility and sustainability? Just wait for governments to come up with a solution?

We cannot ignore all that CSR has helped to change. Thanks to CSR, businesses are more responsible to their employees, their environmental impact has been decreased, supply chain child labour is being eliminated and diversity in the workplaces has been improved.

A company that wants to do big business will never be perfectly ethical, ever. There is always a ton of things to improve. But when you go out for a run, do you also give up after a few metres because you haven’t reached the finish line yet? Or do you focus on running the next mile?

4. CEOs often put CSR ahead of the interests of investors and ahead of projected profit growth.

The business mantra of today is maximization of short term profit. Times are fast. Money is fast. There is no time to deal with what might happen in a year. That is why CEOs implementing CSR are just wasting investor’s money and time.

This is one of many basic misunderstandings about CSR. Implementing effective sustainability strategy and performing well-planned CSR activities leads to long term reputational and financial health of a company. It is, therefore, misleading to claim that CSR and sustainability are secondary concepts, that only take the attention away from the real business, on the contrary – they form the essence of the business that leads to long term prosperity.

Not only do these concepts lead to desired sales, they also create added value with positive impact on their stakeholders. Well-designed CSR is about leading a successful business, not a green charity. The proof can be found in specific financial and non-financial CSR results based on established goals and careful monitoring.