What is corporate social responsibility, and what does it look like in practice? Let’s take a look at some examples.
Fair Trade certification, especially popular among coffee drinkers in the West, is among the best-known corporate social responsibility programs in agriculture. And millions of farmers have adopted conservation agriculture practices, which reduce tillage and help to build healthy soils, with no certification system and little public recognition.
Thermo Fisher Scientific has a well-developed CSR program that focuses on climate change and sustainability, among other areas. The company monitors its water use and conducts annual “water scarcity assessments” to see where it can do better.
Illumina, a genomics company, orients its CSR activities toward reducing plastic use in its products. The company also says it has embraced the United Nations’ Sustainable Development Goals and uses the SDGs to measure its CSR progress.
Land O’Lakes Inc. launched Land O’Lakes Venture37 as a means of driving agricultural development in smallholder farming communities. The company also established the Land O’Lakes Foundation. Last year, the foundation donated $10 million to nonprofits and other causes. Land O’Lakes supports food banks and encourages its employees to volunteer their time for good causes. “Our annual employee giving campaign raised over $1.7 million for nonprofits nationwide,” the Land O’Lakes Foundation says on its website.
This is CSR in action, and it’s very common. But why?
The “why” behind CSR
CSR has been alive and well for decades. It is firmly established in mainstream business practices.
Some economists still argue that a corporation’s first duty is to its shareholders. This outdated thinking was abandoned long ago. For some time now, major corporations have come to accept that their circle of stakeholders extends well beyond their shareholders, C-suite executives, and employees. But why do companies donate time and money to good causes–except of course where it’s required, as in India?
Some theorists say CSR exists because it’s good for business; companies do well by doing good, they argue.
Others say companies engage in CSR for public relations; that corporate philanthropy is a form of advertising and image management.
It may be time to lean on a lesser-known area of international relations theory to best understand CSR. This line of thinking says CSR exists because companies are run by people, and people want to be constructive and make positive contributions if they can.
Do well by doing good?
In 2002, the European Union Commission defined CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” That last bit is key—companies engage in CSR voluntarily; no government forces them to do it.
The US Agency for International Development offers a broader definition of CSR. Explaining how it relies on CSR to support its global health programs, USAID explains that it sees CSR as “transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment.”
But why would they voluntarily engage in activities outside the primary goals of generating profits and staying in business?
CSR is voluntary, but it’s implied that there’s an expectation for companies to do this; that it’s their responsibility. “Beyond making profits, companies are responsible for the totality of their impact on people and the planet,” as a USAID overview says.
There’s some good evidence that companies running active CSR campaigns have good public reputations and good public images. Thus, the argument that companies should embrace CSR for public relations. The Harvard Business Review says companies face increasing pressure to embrace CSR for better PR. But this is the wrong attitude to take, HBR argued in a 2015 article.
“If in doing so CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good,” HBR said. “But for many CSR programs, those outcomes should be a spillover, not their reason for being.”
A more constructive explanation
CSR is good for business. CSR is good PR. There are certainly other arguments in support of corporate social responsibility.
Here’s another one: CSR is just a part of human nature.
Political scientists and international relations scholars sometimes struggle to explain why governments engage in activities that have nothing to do with providing national defense or directly serving their citizens. It’s a good question.
One school of thought called “constructivism” offers a good answer.
Governments focus on things like improving the environment or fighting malnutrition, constructivists say, because people run these governments, and the people running governments want to use the resources at their disposal to help make the world a little better.
“Beyond making profits, companies are responsible for the totality of their impact on people and the planet."
USAID
The same almost certainly goes for companies.
People run successful companies, and successful companies have resources that can be used for other causes, not just for business operations. Core business functions still happen, but as companies come to understand their impacts on society and the environment, they better appreciate that their “stakeholders” are not just the shareholders or staff.
In other words, CSR is just a catch-all term for how the people running successful companies try to give back, in both big and small ways.
Thus, it’s not Archer Daniels Midland engaging in CSR, but rather the people at Archer Daniels Midland helping smallholder farmers in India adapt to climate change or producing training videos for farmers in Uganda. Constructivism explains why the people running John Deere say their company will spend $19 million in grants to a variety of nonprofits, including the One Acre Fund and the Nature Conservancy.
CSR happens because people make it happen.
Grow Further exists thanks to the generous support of individual donors and the generosity of the companies partnering with us to connect people and ideas for a more food-secure future.
We’re focused on funding research and development into innovations that will improve the lives of smallholder farmers. We are lucky to be partnering with companies and individual donors helping us deliver grant support to agricultural R&D in developing countries.
CSR works because of companies’ commitments, but more so because of the people behind these corporate philanthropic programs. — Grow Further
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