GeoffLamberton Ethically Speaking

The responsible way to do business

In a recent article in The Economist (Just good business, January 19, 2008) it was acknowledged that corporate social responsibility (CSR) is now a mainstream business activity. Large companies are producing glossy CSR and sustainability reports which together with their websites are promoting their good behaviour to the rest of the world.

Examples of good corporate behaviour include a vast array of environmental activities, local community investment, charitable donations and poverty alleviation programs. This type of business is booming! Universities are also jumping on board with many new courses in CSR. Southern Cross has a corporate sustainability MBA stream as well a new undergraduate sustainability program. Graduate surveys are showing that corporate reputation including CSR is now a significant factor when selecting suitable employment.

Is this a reflection of an evolved business conscience?

No doubt some of the CSR growth is in direct response to the fallout from large scale corporate scandals in recent times which have undermined public trust in the corporate sector. Its often forgotten but corporations exist for the public good.

Corporations are also increasingly aware of consumer watchdogs and environmental groups that report their misbehaviour. Little can they afford a drop in sales from yet another piece of bad publicity beamed out to the global market place. And of course everyone is spruiked by climate change.

The Economist article made some interesting points about CSR. It acknowledged that most of the activity is defensive; that is in response to negative publicity and public mistrust, and a strategy for managing risk. No hint of a conscience here; just trying to protect market share.

Other companies recognise that it makes strategic sense to embed CSR throughout the corporations activities so that social and environmental impacts are considered as a routine part of corporate decision making. But in reality CSR is still an add-on. But what impressed me in this article was the final statement: Done well, though, (CSR) is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue: it is just good business.

The authors recognise the obvious. Business has no long-term future if it destroys its ecological life support system and the social fabric of the society that it exists to serve. Weve been doing business in this destructive manner for 200 years as we are stuck in the first industrial revolution.

Its the take-make-waste system of production. We mine enormous volumes of natural resources, inefficiently turn them into economic goods and services with a high proportion of waste and pollution. After a short economic life the product is thrown into landfill or maybe the ocean.

CSR is about finding our way to the second industrial revolution, the environmentally and socially sustainable business revolution. Actually its already begun. Next time Ill provide some examples from around the world showing a better way to do business.

Geoff is a senior lecturer in ethics and sustainability at Southern Cross University.

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