Heading for Divorce?

So the honeymoon is over. After a decade of increasingly closer relations between business and NGOs, which contributed to the birth of a revitalised concept of corporate social responsibility (CSR), the strains are beginning to show. In the UK, which is seen by many to have been at the forefront of this area, many NGOs are now turning their back on CSR initiatives, or even making them the focus of criticism and campaigns. For example, international development groups like the World Development Movement, Action Aid, New Economics Foundation, War on Want and Christian Aid are not as active in the Ethical Trading Initiative (ETI), which they all helped to found and which brought them together with companies to work on improving labour conditions in corporate supply chains.

"Key NGOs have now turned their back on the opportunity that [corporate citizenship] represents, to fall back on easy anti-corporate messages that play well to their core constituencies," said Mallen Baker, of Business in the Community, in February.1 He was commenting after the British charity Christian Aid, had made criticism of CSR initiatives the mainstay of its campaign to push for global regulations for global corporations. "The image of multinational companies working hard to make the world a better place is often just that - an image" said Christian Aid's report Behind the Mask, published in January. "What's needed are new laws to make businesses responsible for protecting human rights and the environment wherever they work," they said, and that CSR initiatives are used by many companies to undermine progress towards such laws.2 That some people involved in, or commenting on, initiatives that might be labelled CSR, sometimes use their existence to push a neo-liberal economic agenda was identified as a key challenge in previous reviews (JCC 12), as was the need to see corporate support for, or lobbying against, mandatory mechanisms for improved social and environmental conduct as a key dimension to a company's social responsibility (JCC 11).

Some criticised Christian Aid's report for not engaging with the companies it was attacking or not conducting a more systemic analysis of the impacts of CSR. For example, Mallen Baker suggested that as the report featured just three case studies, even if everything Christian Aid said about those were true, it wouldn't mean that the wider CSR or corporate citizenship community discourse and practice is defunct.3 However, Christian Aid is not the only one whose methodology can be criticised. Much academic management research employs case studies to build concepts, arguments and theories, while think-tanks, corporations and consulting firms often use case studies as the basis for positive assessments of the potential and reality of corporate social responsibility and corporate citizenship. The use of case studies must be tempered with the knowledge of their particularity, partialness and, possibly, partiality. Case studies are useful for allowing a richness and depth of undestanding, and for their powers of explanation or evocation. However, it difficult to generalise from a sample of one, or even three. Therefore quantitative studies may add another dimension to our understanding of the nature of corporate responsibility. One person who attempted such work is Professor Richard Marens of California State University. He suggests that if corporations in the United States have indeed been tending to the interests of their diverse stakeholders, especially over the past 20 years since Ed Freeman published his articulation of the stakeholder concept of management, then it should be reflected in key statistics.44 However, he notes that nation-wide statistics show average wages have declined and working hours increased in America, while employee security and benefits have declined.5 Considering tax-payers to be a key stakeholder, he notes how corporate taxes have fallen and more public funds been spent on private corporations. In addition to these indicators of corporate impacts on society, we could consider pollution levels. Carbon emissions in the United States have increased by over 15% since 1990 - globally carbon emissions have increased over 10% in the past decade. The release of toxic chemicals has fallen, but this can be attributed to the Emergency Planning and Community Right to Know Act of 1986 (which requires companies to register information on their use, storage and release of toxic substances), rather than a voluntary responsibility effort alone.6 These statistics suggest that if we leave aside case studies, there is little evidence to suggest that those practices we label CSR or corporate citizenship are having a significant effect on the big picture - as yet.

Christian Aid's criticism of CSR is not unique or novel. Many people and groups are "sceptics", regarding corporate responsibility as old-fashioned public relations (PR) with the aim of distracting society from the need for more effective regulation of corporate activity and transformation to an economic system grounded in the ecological and social realities of the planet. On the other side of the political spectrum there are the critics of corporate responsibility who see it as distracting business managers from securing profits for the owners of corporations. "From an ethical point of view, the problem with conscientious CSR (as opposed to fake) CSR is obvious: it is philanthropy at other people's expense" said the Economist, in an article commenting on the Christian Aid report.7 Between these negative poles there are people who are fairly evangelical, pragmatic or ambivalent about CSR, as described in Box 1.

To be defensive when criticised is an understandable reaction. However, our hope is we might see more corporate responsibility professionals engaging with critics and sceptics. The critics make it more important for us to be clear on what we believe to be the business case for corporate responsibility. The sceptics make it more important for us to be clear on what we believe to be the people's case for corporate responsibility - in other words, the benefit for society. We need critics and sceptics to help us reflect on our own practice, assumptions and interests, and ensure we are authentic in what we do.

We have come a long way since the mid-1990s when business and NGOs were thought to be risking Sleeping With the Enemy8 by working with each other, and the turn of the millennium when they were said to be Getting Engaged9 and then enjoying a "honeymoon period for corporate responsibility".10 The word honeymoon comes from the tradition of a married couple drinking fermented honey for a month after their marriage. Might business and NGOs be realising they've been drunk on the hope and novelty of their initial engagement? Could this sobering up lead to a permanent divorce, with fights in the courts of law and public opinion?

As we suggest above, we hope that conflict will not be the only outcome, but that it might lead to a transformation of the relationship between business and society, and perhaps even a new level of collaboration and dialogue that focuses on how to drive systemic changes in the global political economy.