In 2013, Amazon launched AmazonSmile, a charity initiative that sees the company donate 0.5 percent of the price of a bought item to a charity of the buyer’s choice on their behalf, at no extra cost. ‘Is Amazon beginning to embrace CSR?’ commentators asked. Seven years later, in 2020, Amazon posted its biggest ever European sales, amounting to a figure of €44 billion. Despite that, the company paid no corporation tax.
Taken in tandem, this is only one of the many examples that suggest CSR—‘Corporate Social Responsibility’—is a myth.
The belief that corporate bodies play a social role has existed in various guises since the advent of corporatism itself, but CSR as we know it is a product of the mid-twentieth century. American economist Howard Bowen, author of Social Responsibilities of the Businessman, contributed to the formation of this arena when he expressed a belief that since the increasingly concentrated power of large corporations had a major impact on society, those corporations should therefore take contextual factors into account when making business decisions. Managers began to be seen not just as the trustees of profit-seeking, but as trustees for a range of external relations with a company.
Today, as well as being a major industry in itself with an army of dedicated consultancies, CSR refers to the need for companies to hold themselves accountable for the impact they have on society and the environment. Twenty-first century manifestations of this responsibility include charitable donations, staff volunteering, or use of sustainable packaging. Starbucks’ recent pledge to prioritise the health and wellbeing of their customers and employees and to support supporting health and government officials in their efforts to mitigate the impact of Covid-19 is a prime example.
The development of the concept of CSR has not, however, been without dispute. Free-market apostle Milton Friedman was of the view that a corporate executive may have responsibilities to their family, to their conscience, or to wider charitable causes, but ‘there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits’. And while today’s CEOs might speak the language of CSR, the evidence—not least ongoing climate collapse—suggests they’re more likely to think like Friedman.
Ahead of writing this piece, I spoke to a disputes lawyer at a London-based firm about her experiences with firms navigating the growing CSR landscape. Her clients, she says, care more and more about social responsibility, including environmentalism and staff equality and diversity. One growing trend sees corporations offer staff one annual day off to ‘do something for the community’ – something that’s ‘quite progressive’, she adds.
My interviewee believes that the growing interest in CSR comes down to the fact that firms simply can’t afford to be exposed for bad practice, and that clients, consumers, and shareholders all love socially responsible credentials. The problem, she says, is trying to decipher what’s CSR and what’s PR – or, indeed, if there’s any difference.
This image-consciousness means brands are sometimes susceptible to campaigns which target their lack of CSR in the press and on social media. Non-profit environmental organisation Greenpeace is well-known for its strategic use of shame, for example, which in the past has seen shares impacted to the point that corporations have no choice but to comply.
In 2010, Greenpeace hosted a campaign against Nestlé for sourcing palm oil from unsustainable suppliers in the Southeast Asian rainforest, home to the orangutan. In a parody of Kit Kat’s slogan ‘Have a break; Have a Kit Kat’, Greenpeace published a video of an office worker unwrapping a chocolate bar on his break, only to find an orangutan finger inside; indifferent, he takes a bite, unbothered by the horror of his colleagues who watch as blood spurts out. The video ends with a call to action: ‘Stop Nestlé buying palm oil from companies that destroy the rainforests.’
After the story was picked up, Nestlé witnessed a significant dip in the share price for Sinar Mas, one of its major palm oil suppliers responsible for deforestation and peatland clearances. Two months later, the company announced a new sourcing policy for their products. HSBC also ditched its investment in Sinar Mas, and subsequent pressure on the paper and pulp industry followed.
This was, in certain respects, a victory. But while some companies dropped their association with Sinar Mas, others, including Pizza Hut, KFC, and Dunkin Donuts, buried their heads in the sand. Positive divestment stories ultimately provided cover for the damaged reputation of the palm oil industry and the frequency of its abuses. As Jennifer Jacquet writes in Is Shame Necessary?, ‘exposing all the slumlords or polluters [can] communicate that these behaviours are common and normalise behaviour.’ After a brief reputational blip, Nestlé, of course, remains a multinational worth many billions of dollars.
Evident in this story is the fact that CSR pressures can sometimes lead to a situation in which a few corporations take the fall for the bad practices of many others. Studies looking at moral licensing theory have found that superiors within a team are sometimes able to act immorally because of the moral credit they’ve accumulated in the past, and this translates to a corporate level: sometimes corporate social irresponsibility gets a pass because of prior positive achievements through CSR. In other words, the moral deeds of a few companies allow others to resume business as usual.
Nonetheless, these NGO campaigns are one of the few pressure points available in a political landscape dominated by those in the pockets of big business. While my interviewee assures me that corporate regulation is picking up and pressing for increased accountability on pollution, human rights, and tax avoidance, such scrutiny falls to a regulatory system that is under-financed and under-resourced. After all, ‘the city still follows the money,’ she says.
Perhaps the most acute, individualised form of modern CSR-style reputational management is the tendency of corporate billionaires to donate large sums of their personal wealth to charitable causes. In 2010, Bill Gates and Warren Buffet launched The Giving Pledge, which publicised the mega-wealthy who had agreed to give the majority of their wealth to charity, and immediately ran into a problem: their assets were simply growing too fast. According to ‘Gilded Giving’, a 2020 report by the Institute for Policy Studies, the wealth of the 62 living US pledgers who were billionaires in 2010 had increased from $367 billion to $734 billion by July 2020. Philanthropy of this kind, like the kind of environmental self-sacrifice in which Jeff Bezos likes to partake, is evidently not designed to actually affect fundamental change to the system that sees massive wealth concentrated into the hands of a few.
At the other end of this spectrum are those individuals first entering the corporate job market with an intent to change the world. Decades of neoliberalism have turned this goal into an individual rather than collective pursuit, meaning it comes as no surprise when well-meaning start-ups like ‘ethical Indeed’ For Purpose Jobs (FPJ) appear in an attempt to cater to it. Lizzie Hasling, co-founder of FPJ, tells me that in the standard job market, the only options available to these jobseekers are often ‘bullshit CSR positions for E.ON or Shell.’
The current lack of standard metric for measuring impact and ethicality, Hasling says, means there’s a grey area corporations can slide into which is part of the reason greenwashing, for example, is so easy. The use and abuse of CSR, however, suggests that any such metric would be open to manipulation.
As the most recent Pandora papers exposé reminds us, these kinds of measures rely on a corporate conscience that has been shown time and again not to exist. History proves that an option for a slightly more responsible capitalism is not enough to undo decades of devastation, the consequences of which we currently face. In the fight for a more just and equitable world, it goes without saying that the sacrifice of wealth by those who already have too much of it should be our last concern. Corporate acronyms won’t save us – system overhaul is the only ‘responsible’ course of action.