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Can CSR be taken at face value?

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Heidi Siegelbaum’s take:

I have nothing against Jack Daniels, though I favor wine myself. Corporate social responsibility represents a range of complex, intersecting influences: the need and desire to support the communities in which companies have a presence, supporting pride, motivation and participation in a demonstrably positive side of corporate life, a desire to improve performance and good will, enhance shareholder value, and yes, sometimes — it is defensive.

But defensive strategies can lead to long term, positively fabulous results as in the case of Nike which initially got into the corporate responsibility game due to pressure related to its overseas manufacturing processes and conditions.

We could approach corporate responsibility and its corollary in Corporate Social Responsibility (CSR) reporting through the whole enchilada lens. “What is the weighted balance of the evidence between what a given company is doing and reporting” and:

An interesting example is Dole. In a news feed that ended up on CSR Wire, the
venerable clearing house of all things CSR, Dole Food Company was recognized for its corporate social responsibility programs in Costa Rica and Thailand. However, a few weeks earlier, a California jury awarded Nicaraguan farm workers $3.3 million because they were sterilized by chemicals Dole used in its banana plantations. The pesticide, DBCP (1,2-Dibromo-3-Chloropropane) had been banned by EPA since 1985, and according to court documents, Dole had known since the 1960s and 1970s that DBCP was strongly linked to infertility based on epidemiological studies.

So what’s a mother to do? We need not argue against the value of corporate responsibility because any positive action surely is better than its absence, but as in product claims generally, the critical analyst is going to have to spend a goodly amount of time researching the balance of words against action, integrity, money flow and intent… and this is where light will shine upon the thrones of corporate responsibility.

Janne K. Flisrand responds:

I read Heidi’s post with fascination.

I’m a practical investor – I invest money for retirement. And I want to invest in companies that reflect my values.

But honestly, I only hope to invest in companies who oppose my values less often than others, because I don’t have the money or patience or knowledge to invest in individual companies.

My personal experience is one of frustration. I keep hearing about ethical investing, which I imagine means investing in socially responsible companies.

When it’s time for me to write the check, I sit down at my laptop with a cup of coffee to do some research. Over the course of about 90 minutes, I get more and more frustrated. Maybe I find a company that sounds great… but I’m an index fund investor, pretty committed to my low-fee investment firm. I find little relevant to my choices.

Heidi’s resources are great. As December ends, I’m likely to go through my semi-annual ritual of frustration again soon. Maybe with her links, it will be easier… but my expectations haven’t changed. For the moderate-income investor (mantra: reduce fees), the options are pretty limited.

Dennis Markatos-Soriano responds:

Good call, Heidi!

Business is more about verification than trust. When I go to a used car lot, I don’t trust that the car works before I buy it — so I turn the ignition. And when the product is less tangible like the carbon offsets market (I don’t directly see the product of lower global emissions), they have to certify their product via an independent third party. Corporate responsibility is a similar sort of product for investors and consumers.

If I see an ad that says BP is Beyond Petroleum, it makes me feel good. But then when I look at the amount of money it invests in renewables versus producing polluting fossil fuels such as the tar sands of western Canada I realize that they have plenty of room for progress. Actors in the nonprofit sector from Greenpeace to Environmental Defense help to give us information and signals when certain companies commit abuses or go the extra mile to support the Earth and its people. We need such information that cuts through the glitz.

It’s a sign of progress that social and environmental responsibility is hip and a desired marketing tool for corporations throughout the US. But we all have to make sure that the institutional commitment to sustainability is more than a small side office that writes press releases and has little power within the company. Nonprofit allies can help us determine that because, again – quality products are attained through verification mechanisms and not by blind faith in advertisement campaigns.

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