Beyond CSR: Being Sustainable

There is growing evidence that CSR as commonly practiced is not an effective use of corporate resources.

In a recent McKinsey poll of 391 CEO’s whose companies participate in the UN Global Compact, the CEO’s listed “competing strategic priorities” as the most significant barrier to implementing an integrated strategic approach to CSR. This was followed by:

• complexity of implementing their strategies across diverse business functions and divisions
• lack of recognition by financial markets
• differing definitions of CSR across regions and cultures

…companies aren’t using that tool [CSR] as well as they could. Executives doubt that their philanthropy programs fully meet their social goals or stakeholders’ expectations for them.

their corporate philanthropy programs are very or extremely effective at meeting social goals and stakeholder expectations. Their companies take a somewhat different approach than others do: their programs are more likely to address social and political trends relevant to the business and to be influenced by community and business needs. Executives…say that efforts are already more likely to involve collaboration with other companies. Finally, these companies are much likelier than others to say they are achieving any business goals they have set for their philanthropy programs in addition to social goals.

So, what’s happening here?

We are seeing a clear difference between companies that see CSR as a “tool” or one of many competing strategies and those that are embedding CSR priorities into the business. It is a story of commitment. Or, as Charlie Parker said, “If you don’t live it, it won’t come out your horn.”

Companies that aren’t “living it” are doing CSR for other reasons. Generally they fall into one of three categories: Compliance, Conformity or Cooperation. What these categories have in common is fragmented, frequently externally driven, adoption of CSR behavior. 

Organizations that are “living it” have found a way to integrate CSR and their business. They usually show up in the categories of Collaboration, Coherence and Constellation.

Further, organizations that are “living it” frequently aren’t doing CSR at all. They are being sustainable and, at best, targeting abundance. By “being sustainable” I mean generating value for a wide range of stakeholders within the company and in the communities, regions and countries in which they operate.

This is a big difference. What the McKinsey polls point to is this: being the change you want to see in the world is good business. Doing CSR, while not a bad thing, as a strategy (competing with other strategies) is ineffective, inefficient and, basically, not good business. 

Don’t get me wrong. Giving and philanthropy are good. These acts help people, communities and the environment, a lot. Doing philanthropy and CSR as a strategy is good. Being sustainable is better. Better return on investment, better use of resources, better, bigger impact.

Beyond strategy, being sustainable is a way of thinking, seeing and doing business. Being sustainable is living it and enjoying the value we create. Being sustainable is, simply, better business.

Tags: CEO's, Charlie Parker, Co-operation, Coherence, collaboration, Compliance, Conformity, Constellation, corporate philanthropy, csr, McKinsey, stakeholders, strategy, sustainability, UN Global Compact