In an opinion piece in last week’s Washington Post, the respected author and global editor of Thomson Reuters, Chrystia Freeland, blasted corporate social responsibility as a “cult” and a “fetish.”    At first glance, I found Ms. Freeland’s messages not wholly accurate, the connections somewhat shaky and the language most certainly lamentable and overly instigating.   Overall, the article is a disappointing and alarming step in the wrong direction.

Ms. Freeland states that corporate social responsibility merely “muddies the waters” in business, making business leaders “forget the core goal” and “principal job” which is to “make a buck.”   She cites both BP and Goldman Sachs as examples, noting that BP’s “Beyond Petroleum” campaign, which was lauded as a success, did nothing but distract BP from the exacting safety standards that may have prevented today’s literal mess.   Goldman Sachs, on the other hand, is scolded by Ms. Freeland for its unwillingness to hold fast to profitable business as its singular goal and for instead falling prey to the pressures of the social sector as evidenced by the launch of a program focused on underserved women.

Whoa!  This argument moves too fast for me.  Unlike many in the social sector, I agree with Ms. Freeland’s premise that the core objective of companies is to make a profit.  I, along with Milton Friedman, don’t waver on that point.  I can also agree that some CSR programs are nothing more than cash outlets designed to satisfy social contract and make companies “look less bad.”  This is where our agreement ends.

Corporate social responsibility is not a cult or a fetish forced upon corporations.   Rather, corporate engagement in social good can and should tie directly to business value.  It’s not a distraction from economic return; it’s a driver toward it!  Corporate social responsibility is a movement that has evolved in three phases from 1) basic compliance and charity to 2) strategic investment in social causes and finally to 3) business-driven strategies that overlap with social outcomes.  Many companies are still stuck in the first bucket and to some extent could be characterized in the way that Ms. Freeland describes.  But let’s not throw out the baby with the bath water here!  All three of these types of corporate social responsibility are valuable both to corporations and to us as the general public.

Basic compliance with is defensive and protective:  companies are legally required to comply with certain regulations, which are designed to protect the public.  Imagine if financial and environmental regulations did not exist – we’d be in a far worse situation than we are today.

However, being “less worse” is not enough – not in the eyes of the public and not with regard to the bottom line.  Companies are faced not with an obligation but an opportunity to do more - a chance to go on the offensive.  This is where phases two and three come in.  Companies have recognized the burgeoning market for social change and are making better, smarter, more focused use of philanthropy in ways that matter to their partners, customers, and many other stakeholders.  This is phase two and includes real business strategies such as OfficeMax donations to teachers (a core customer), Walmart’s investment in sustainability (which matters to regulators and partners) and, likely, both the “Beyond Petroleum” and “10,000 Women” campaigns which aimed philanthropy at brand equity and corporate reputation.

There are a few bold, sophisticated and innovative companies that have achieved phase three.  These companies don’t just use programs, grants and smart communications to protect their reputation.  Rather, they harness the core of their business to address social issues that, not coincidentally, enable profitable opportunity.  This is the new era of CSR and a trend that Ms. Freeland’s article ignores.  Wellpoint offers affordable (and profitable!) insurance to young adults.  Walmart steals share in pharmacy by offering the $4 prescription program.  Amway builds economic stability while penetrating markets in Africa.  McDonald’s maintains volume because of new healthy food options.  And hoards of energy companies are making money with smarter, environmentally friendly technologies while banks are profitably tapping previously underbanked populations as new customers. 

I challenge the readers of Ms. Freeland’s article to focus on the future of CSR:  a means to profitable business rather than a distraction from it.