What comes to your mind when you hear those words of ‘social business’, ‘corporate social responsibility’, or any other noble things that seem too idealistic to do? The middle line between business and social charity?The marriage between capitalism and socialism?
Since CSR term coined years ago, it suddenly became such a ‘happening trend’. Corporations started to engage CSR projects into their annual strategic plan and realise that somehow it can boost their reputation among community–and target market of course.
However, business is business. They suppose to make money, they are not charity foundation. They will not do something without any cost/benefit analysis behind. It’s a common argument I’ve used to hear about people who are skeptic about CSR. Corporation’s bosses might say, “Just let the government and NGOs take care of society. Our job is to make money. And this is the way we contribute to society. By making money, we provide employment, we create living for our workers.”
Well, somehow that’s not entirely wrong–yet not completely true.
When I was still an idealistic fresher college student, this idea of CSR was so ‘sparkling’ that I feel mad to those irresponsible companies ruining their environment and communities. However, as I worked in a commercial corporation for 2 years and get to know how the business is actually run, I began to understand businesspeople point of view.
It’s not that I’m at the side of Freeport with their Papua nature devastation, or Nike with their ruthless labor condition. They still do unforgivable things. However, CSR projects somehow draw a border line between business and society–which make it even worse. By thinking that CSR is a marriage between business and society, we are deliberately considering that the two parties are exactly different. And why should we differ business from society? Why can’t we think of it as the whole entity?
It’s like business is ‘evil’, and society is ‘good’. Business can do anything to earn profit as long as they share (tiny) portion of the profit to community. Nike can continue enslave their workers as long as the owner donate to education charity. Danone Aqua can keep exploiting East Java springs as long as they build a kindergarten for local people near the factory. Those giants can still do all the evils–as long as they commit those CSR projects to ‘erase their sins’.
The truth is, society is the part of business, and vice versa.
I once read about The Five Capitals. It is the concept invented by British NGO, Forum for the Future, as the framework for understanding and achieving sustainable development of organisation. Basically it says that all organisation (corporations) can do sustainable business as long as they maintain their five capitals in balance: natural capital (environment, climate, resources etc), human capital, social capital, financial capital, and manufactured capital. As long as company carefully source and manage those five capitals, they can run sustainable business.
For example, you can source as much financial capital, but you can’t harm another capital (such as natural capital & human capital) in doing so–because in long term it will negatively affect your own company. Your business can’t run without healthy climate condition–for instance. Your business can’t run without satisfied suppliers and workers. This way we think business and society as a blending entity. As long as they do business in this sustainable way, I think companies do not need to compensate their ‘sin’ by doing CSR charity merit.
In a last week seminar, the Head of CSR in Innocent Drinks, UK’s leading smoothies company, frankly said that she didn’t like the term ‘CSR’. She prefers to do a community program that directly impact their business. For instance, they set up mango plantation improvement project in India to enhance their productivity and quality. They did it because, aside of benefiting community farmers, they knew they will get quality raw material (fruit) for their end product (smoothie).
In the end, CSR has no point if it’s just used as a mask to cover your unfair business practice. As long as company behave well and fair in their business process, they don’t need to spend additional budget for ‘charity’. They already did the charity.