Is Corporate Social Responsibility an outdated concept?

POSTED

23rd January 2024

AUTHOR

Leigh-Ann Hewer

Reading time

3 minutes

Cath Harris, Director at Ipsa Consulting is an Ethical Marketing Consultant and specialist in sustainability for businesses. We recently spoke with Cath about the evolution of ethics in business and how she feels corporate social responsibility (CSR) is an outdated concept, despite still being frequently used by both journalists and organisations. We’ve shared her thoughts below.

 

Often in the world of business, PR, marketing and advertising are mistakenly conflated with one another when in reality, each of these things has its individual purpose and garners slightly different end results, despite working alongside one another effectively. Similarly, the concept of Corporate Social Responsibility (CSR) is conflated with being a sustainable organisation. Over the years CSR has been used as a bolt-on way of being a considerate business. Since the concept was coined, over 70 years ago, a lot has changed…

 

What is CSR?

Traditionally, it’s a concept where for-profit businesses can score karmic brownie points by doing social good. For example, traditional forms of CSR might look like: organisations allowing employees to do a volunteer day with a local charity, financially sponsor a community sports team or donate a percentage of their profit to a cause.

 

This all sounds quite positive so why might CSR not be relevant today? 

Cynically speaking, CSR used to be more of a publicity exercise for companies to demonstrate their ethical credentials by creating opportunities to generate a newsworthy story. 

As humanity and our planet are increasingly under threat from climate change, natural disasters, religious and cultural polarisation, and instability of the global political climate – leading businesses are beginning to understand and take action toward their culpability in how to make the world a better place for future generations. 

We’re no longer in a space of ‘nice to have’ and feel-good CSR stories but in a place where its critical to have legitimate environmental improvements, social policies and good governance as a core part of every organisation’s strategy. CSR sounds like it assumes that the rest of the organisation isn’t responsible. As thought it needs this little fraction to take responsibility for being a good business. CSR has connotations of being ‘for PR purposes only’ and not part of the business’s overall strategy which, in this day and age, comes across as greenwashing – doing something to ‘look’ sustainable. 

 

What is replacing CSR?

Today, ESG is an entire business discipline. Here in the UK, we have a legal requirement for large organisations to record and mitigate their carbon emissions and it’ll only be a matter of time before smaller organisations will be required to follow suit. There is a coalition of British businesses recommending a change the Company Act legislation making it a requirement for Directors to align profit with people and planet called The Better Business Act

Whilst both CSR and ESG hinge on the concepts of ethics and sustainability, the latter is a more rigorous, measurable and impactful way of doing better business. Organisations that aren’t reevaluating and adapting to include ESG are a core strategy now will be far behind their competitors in the years to come. 

 

What can your organisation do to be more ethical? 

Without conducting an ESG audit and creating a strategic plan of action there are still a few things organisations can do to become more ethical. For example, changing to a more ethical banking account, creating a commitment to selecting more ethical suppliers, creating a fair pay and fair hiring policy to ensure equity among all types of people, changing to renewable energy suppliers and switching to public transport, bikes or walking to work. 

Whilst CSR is well-intentioned, it’s not fit for purpose in today’s challenging world. It lacks depth, misrepresents what responsibility means in business, and puts organisations at risk of greenwashing. Businesses must move beyond ‘bolt-on’ CSR and embed ESG principles into their core to thrive in the future. Failing to do so risks falling behind competitors and facing increasing legal and ethical scrutiny.