Corporate Social Responsibility or Consumer Social Responsibility

In it’s recent Value Line 2006 Annual Fund Managers’ Survey, Barron’s ranked Winslow Green Growth Fund Manager, first in the aggressive growth category. http://www.csrwire.com/pressrelease.php?id.6273.
Winslow Management Company, LLC, invests in the clean technology, renewable energy and natural foods’ sectors and credits it’s performance to “thorough research” and to integrating environmental considerations in it’s financial analyses.

The concept of Corporate Social Responsibility (CSR), the nemesis of most businesses, especially that of big corporations, has been around for some time now.

Besides, it is now widely recognized that businesses need to cooperate actively in helping achieve the Millennium Development Goals (MDGs) by the year 2015 http://www.un.org/millenniumgoals/

And many are. Well documented are the examples of Pfizer, Cadbury-Schweppes and even the much-maligned British Petroleum - to name a few - who are taking concrete measures to do socially responsible business.

However, is socially responsible business necessarily profitable business ?

Companies like Google and Levi Strauss capitulated to profitability considerations by reining back on altruistic ones; Google when it allowed for censored search results in China, and Levi Strauss, when it started producing again in China in 1998, five years after phasing out operations.

The bottom line for these companies has been to remain competitive.

In his recent book "The Market for Virtue – the Potential and Limits of Corporate Social Responsibility", David Vogel of the Berkeley Haas School of Business, while discussing the examples of Google and Levi Strauss, also points out that there is no conclusive evidence to the effect that CSR impacts a company’s profitability.

In an insightful paper, Allen L. White of the Business for Social Responsibility (BSR) discusses the “grasshopper” personality of capital markets which discourages most businesses from making long-term investments to improve energy efficiency, the quality of human capital and supply chains, for example. Capital markets, as White tellingly observes, are generally driven by quarterly earnings’ forecasts which by definition are short-term. CSR, on the other hand, must be driven by long-term considerations of intergenerational equity and demands the careful husbanding of resources, an exercise that requires an ant-like assiduity and the effects of which are not completely tangible. http://www.bsr.org/meta/200605_patient-capital.pdf

Simply put, most businesses just cannot afford to tackle the CSR bugbear.

However, it would appear that in the face of current global imperatives, businesses cannot afford to ignore CSR either.

There are no standardised business models which can measure the "hedonic" or intrinsic social value that businesses add to society in the long run. However, can brands reflect or capture these intangibles?

Now to the demand dimension of this issue.

Consultant gurus like Landor, Interbrand and Wolff-Olins have been around for a long time marketing brand wisdom and market positioning to corporations world-wide.

In it’s 2005 survey, Business Week magazine picked 100 major brands from across the globe. Companies from the United States included Apple, Google, Levis and Pepsi.

Apparently, the CSR botches made by Google and Levis have not harmed their brand images.

Recently, Pepsico attracted considerable negative publicity in Chennai, India for using polluted groundwater in manufacturing Pepsi.

Even more recently, two Chinese journalists reported alleged human rights violations in China by Foxconn, the company that manufactures the Apple iPod.
http://www.emsnow.com/npps/story.cfm?ID=21721

It remains to be seen whether these reports will tarnish the global brand images of these companies.

In his book, David Vogel concedes that socially responsible business practices do help the image of the company positively.

If so, can and should not attitude branding, which captures a feeling, an experience surrounding the consumption of a product, be designed in such as way as to reflect; whether or not a business is socially responsible, and therefore to affect share prices and thus the profitability of the business ?

This would mean that businesses would no longer be enticed by short-term profits and would harness their goals to long-term considerations which would add real economic and social value to communities.

However, brands reflect the public’s perception of a product. Which in turn implies, that it is the market/consumer who is the culprit. Consumers, in general, are not socially responsible. What are businesses to do ?