Generating Business Value through Corporate Social Responsibility: Myth or Reality?

Corporate social responsibility (CSR) is a term that has evolved in recent years.  Those who follow the pattern in which corporations engage in social issues have noted how the role of CSR has grown from that of mindful compliance to one of strategic importance.  I was reminded of this recently while chuckling at an episode of the NBC sitcom “30Rock.”  In it, one of the show’s characters sports a t-shirt with the corporate slogan, “Sheinhardt Wig Company: Not Polluting Rivers Since 1997.”    

30Rock Shirt Front Side30Rock Shirt Back Side
Source: nbcuniversalstore.com

While seemingly trite, I couldn’t help but think it representative of the CSR of the past-do good by doing less bad.  This “CSR 1.0,” was the first step that for-profit corporations took in moving toward corporate social responsibility, producing the charity and compliance-oriented programs we still see among some businesses today.

CSR Spectrum

Source:  Mission Measurement

In recent years, many corporations have not only become more proactive in their social investments; they’ve also adopted a more strategic approach.  Taking a step toward “CSR 2.0,” companies develop more strategic objectives, focusing on specific social impact goals that are meaningful in the communities they serve and to the employees that work for them.  For example, when OfficeMax teamed up with Adopt a Classroom for the first “A Day Made Better” event in 2007, the company provided over $1M in free supplies to teachers across the country, involving hundreds of employees, engaging a key group of potential customers and significantly increasing media attention for their nonprofit partner and for itself.

Knowing that companies are both capable and powerful when it comes to generating social impact that has an underlying strategic imperative, it seems logical for them to continue moving toward “CSR 3.0.”  At this end of the CSR spectrum, companies understand that social change is a key driver of business growth, not just an obligation or a nice thing to do.   Mission Measurement refers to this as “corporate social innovation,” making social change work for the business, not the other way around.

The challenge I’ve encountered is uncovering companies that use corporate social innovation both proactively and well.  It is likely that the approach is novel enough that it is not yet widely adopted.  It is also likely, however, that companies simply do not recognize some of their endeavors as examples of new age CSR because the strategies are actually designed to generate economic value, to leverage business resources, and to address commercial opportunities or obstacles.  Social change, in fact, is an enabler or result of the commercial strategy and happens in harmony with the business pursuit.

In a recent post, I highlighted Wal-Mart’s $4 prescription drug program and Coca Cola’s recycling efforts as examples of corporate social innovation.  McDonald’s also recently announced its intent to test “green restaurant models” that significantly reduce energy consumption and waste production, a strategy that will undoubtedly reduce cost and benefit the environment, if successful.  However, given the broad array of social issues that could be taken on in pursuit of business opportunities and the volume of corporations capable of adopting such an approach, the few examples I have encountered to-date seem insignificant.

The questions I am left with are these:   Which other companies have used corporate social innovation?  Have others come across examples of corporations that have successfully linked business value and social change?