allAfrica.com: Zambia: Corporate Social Responsibility Should Go Beyond Cameras

EXTRACT: “… the unprecedented expansion of power and influence of transnational corporations over the past decades has not only accelerated global trade and development, but also environmental damage and abuses of human rights in factories and corporate agriculture. The Union Carbide in Bhopal, the Exxon Valdez oil spill, Royal Dutch/Shell Group behaviour in Nigeria, Nike sweatshops in Vietnam, Nestle marketing of powdered milk formula in developing countries, among others, energised the newly vibrant community of non governmental organisations. These groups began to demand accountability from the corporation’s annual reports of profit and loss to include the economic, legal, environmental and social impacts of their businesses, backing up their demands with boycotts, publicity, and litigation.”

THE ARTICLE

The Times of Zambia (Ndola)
OPINION
6 December 2007
Kelvin Kachingwe
Ndola

Over the past few years, one of the most over-used terms by the corporate world has been corporate social responsibility. It has blossomed as an idea, if not as a coherent practical programme.

Almost every time some company is making a donation to some charity or indeed any other cause for that matter, they will talk about how they are fulfilling their corporate social responsibility. With the festive season on, just watch how so often this phrase will be used by the corporate world.
 
The debate about corporate social responsibility or in short, CSR, started in the early 20th century amid growing concerns about large corporations and their power. The ideas of charity and stewardship helped to shape the early thinking about CSR in the United States. Ida Tarbell’s 1904 work The History of the Standard Oil Company helped lead to the decision of the Supreme Court of the United States to break up the company on antitrust grounds. Standard Oil was a predominant integrated oil producing, transporting, refining, and marketing company that was established in 1870 and operated as a major company trust, one of the world’s first and largest multinational corporations.

American industrialist and philanthropist, John D. Rockefeller was a founder, dominant partner and major shareholder, and the company made him a billionaire and eventually the world’s richest man. On the other hand, Tarbell, an author and journalist, was one of the leading “muckrakers” of her day, work known in modern times as “investigative journalism”. Her father was an oil producer whose business had failed due to Rockefeller’s business dealings. After extensive interviews with a sympathetic senior executive of Standard Oil, Henry H. Rogers, Tarbell’s investigations of Standard Oil fueled growing public attacks on Standard Oil and on monopolies in general. Her work was published in 19 parts in McClure’s magazine from November 1902 to October 1904, then in 1904 as the book The History of the Standard Oil Company.

Therefore, as matters stand now, a lot of writers on corporate social responsibility trace its American roots to the 19th century when large industries engaged in philanthropy and established great public institutions. However, by and large, the notion that corporations should be required to return more to society because of their impact on society was driven by pressures from the civil rights, peace, and environmental movements of the last half century. This is because the unprecedented expansion of power and influence of transnational corporations over the past decades has not only accelerated global trade and development, but also environmental damage and abuses of human rights in factories and corporate agriculture.

The Union Carbide in Bhopal, the Exxon Valdez oil spill, Royal Dutch/Shell Group behaviour in Nigeria, Nike sweatshops in Vietnam, Nestle marketing of powdered milk formula in developing countries, among others, energised the newly vibrant community of non governmental organisations. These groups began to demand accountability from the corporation’s annual reports of profit and loss to include the economic, legal, environmental and social impacts of their businesses, backing up their demands with boycotts, publicity, and litigation.

Some institutional and mutual fund purchasers of transitional corporations’ public stock began to screen which shares to buy under the rubric of “socially responsible investing”. In response some corporations began to issue expanded public reports variously named “social reporting”, “triple bottom line” (economic, legal, social), “corporate citizenship”, and “corporate social responsibility”. Such accountability receives the imprimatur of the world community through the United Nations’ Global Compact, which brings together UN agencies, business, labour, and civil society organisations around nine principles modelling voluntary corporate social responsibility for human and labour rights and the environment.

But attitudes towards corporate social responsibility range widely. Milton Friedman, free-market guru and Nobel Prize winner in economics, dismissed the entire notion some four decades ago. “Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible,” Friedman is reported to have said. More recently, free-market advocates like David Henderson deride corporate social responsibility as “global salvationism”, leading to undesirable regulation of business, raising costs and diminishing both economic freedom and profits.

Indeed, some theoreticians of CSR do argue that powerful corporations should act like citizens, with a moral conscience, being socially responsible because “it is the right thing to do,” even if it lowers profits (at least in the short term). But a more middle ground has been taken up by leaders of transitional corporations belonging to the World Business Council for Sustainable Development; they promote corporate social corporate responsibility as both good for the world and for business. They argue that “companies do well, in fact, by doing good,” by creating “incredible goodwill and customer loyalty”.

Still, transitional leaders insist that corporate social responsibility be a voluntary gesture, not imposed by governments or international treaties. But whichever way one looks at it, it should be generally agreed that many business houses have taken-up corporate social responsibility less out of conviction and more to deflect criticism from civil society and the general public at large. A point in case is that of the 1990s, a decade full of “negative surprises” for the tobacco industry: multiplying law suits, discovery and release of millions of pages of internal company documents, increasing restrictions on public smoking, legislative investigations, and growing political pressures to regulate the industry; all having dire implications for investor confidence and share price.

With the average citizen already having a low opinion of the industry, most tobacco companies turned to the concept of corporate social responsibility. And indeed that is what most business firms have done. The exception, on the international scene is Salesforce.com, a global on-demand software services company, whose commitment to corporate social responsibility is very difficult to question.

As a policy, it gives one percent of its profit in form of products, one percent of its employee’s time and another percent of its equity to charities and other non-profit organisations. Little wonder when Google floated on the stock market, founders Larry Page and Sergey Brin, spelled out to investors that they would follow the model developed by Salesforce.com founder Marc Benioff. With all Salesforce.com staff able to do six days of charity work a year on full company pay, they are invited to come up with their own ideas for which organisations to support. These have included helping to rebuild tsunami-damaged schools in Sri Lanka, fund-raising for arthritis charities and supporting projects that help deprived children start up their own companies.

Isabel Kelly, one of the directors of the Salesforce.com foundation, says that in addition to helping a wealth of good causes, such a commitment to corporate social responsibility helps the company attract and retain the best staff. Yet Ms Kelly warns that some companies can appear to miss the point of corporate social responsibility. “A lot of firms make the mistake that corporate social responsibility means just writing a big cheque once in a while, or a company boss asking his secretaries to do voluntary work once a year at Christmas,” she says.

“We prefer to get much more involved and have a model of partnership with non-profit groups. Otherwise it could across as rather patronising.” Perfect approach one might be tempted to say, but perhaps rightly so. The situation on the local front, while with a few commendable cases, is sometimes not genuine. From the look of things, it seems companies are only willing to do some philanthropy as only a public relations exercise, one to look good in the public eye. This is the more reason why in most cases than not, they insist on having camera’s on site whenever they make some donations. But if indeed, it is their social responsibility to support these respective causes, why insist on cameras?

With that, it can only be hoped that as more companies embrace corporate social responsibility, even during this festive period, they will do it out of their moral obligations, than just for publicity’s sake.

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