An Introduction to Corporate Social Responsibility

DavidProfile-02Columnist: David Willson 
David's Beyonder Story

Even thinking about writing this article depresses me.

It depresses me because I have believed passionately, for over two decades now, in the power of companies taking authentic action to build a better world for us all. Genuinely implemented corporate social responsibility (CSR) impacts us all in incredibly real and positive ways. Yet, I know, with total certainty, that this subject will get only a fraction of the attention that the restaurant reviews and stories of pop-star scandals it competes with will get.

Very few people care about this subject or pay any attention to it. It is not sexy. There are no beautiful women or handsome men to include pictures of. No food-porn to show. So it is largely ignored. Rarely discussed. That depresses me.

Nevertheless, I will be writing about CSR monthly and will try my best to make it as ‘sexy’ as possible. Actually, I have no idea how to do that! But I will try to make it as interesting and relevant as I can.

My intention is to write about the people and companies here in Taiwan that are doing a great job with CSR. There are so many who are not, but I hope that by focussing on those who are, that eventually the others who are just faking it, or doing nothing, will finally ‘get’ why real CSR is so important, not just for the world and all of us, but also for the success of their own companies.

As this is the first article I want to do just two things. I want to explain my background with CSR, so you know my position in what I am writing and I want to explain what it is and why it matters so much to all of us.

 

Companies are just collections of people and most people, when given a choice, do not deliberately do evil.

 

My first experience with CSR was almost twenty-five years ago. At the time I was the young CEO of a pension management company and also handled most of the investment strategy for our funds. I was aware that I didn’t have the experience of my much older peers and so I read everything that I could get my hands on to try to gain that experience.

Very early a new trend caught my eye – ‘responsible’ or ‘ethical’ investment. This was a movement that advocated for investors to not just have an eye on returns, but also to look at the ethical practices of the businesses they were investing in and to actively shun those businesses who were damaging our environment, harming people or otherwise behaving in an unethical fashion.

I was very attracted to the premise and wrote a white-paper for our investment committee proposing that we implement this approach in all of the funds that we managed. I was apprehensive about the response to this paper, but as it turned out, I shouldn’t have been.

After some discussion of the basics, the support for adopting this approach poured out. Smoking had killed a Board member’s brother, he was happy to stop investing in cigarette companies. Others couldn’t abide animal cruelty and were very happy to move our money away from cosmetics companies who conducted animal testing. We took still more money out of companies that were logging pristine rainforests. The list went on.

We took tens of millions of dollars out of companies that were destroying our world and put it into companies that were more responsible towards it. It turned out that our tens of thousands of fund members also fully supported this approach and we started looking around for more that we could do.

We looked next at ourselves. By law we had to send out numerous statements and reports to members in the post. We sent millions and millions of pages of information to our members every year. Although it almost doubled our associated costs at the time, we shifted all of it to sustainably produced paper – one of the very first financial institutions in Australia to do so. Again, our members and Board fully supported it.

As one of the older Board members said to me “Of course we are supporting you in this. I have grandchildren and what we are doing is our bit towards giving them a better chance at a better world. That is worth a small amount of money now.”

It was then that I had a fundamental realisation. Companies are just collections of people and most people, when given a choice, do not deliberately do evil.

Despite what the media would sometimes have us believe, even the CEO’s of major companies are parents and grandparents and live in the same world we do, and if they can, they will choose doing good over doing bad.

Corporate social responsibility is exactly that. It should not be a special program aimed at gaining public relations attention to a program or two made to look like the company cares – faking it. It should be embedded in the culture and all decision making of the company that when given the choice, people should choose the option that they could look their children in the eye and proudly explain.

Ever since those early days I have been actively engaged in promoting responsible ethical and sustainable corporate behaviour. Much of my focus has been on environmental sustainability issues, including implementing sustainability into schools in Australia.

Over time however I have broadened my focus to general corporate responsibility and last year I was a primary organiser of one of the most successful conferences on Strategic CSR in Taiwan, where we brought in expert speakers from around the world to educate companies on global best practice in implementing strategic corporate social responsibility practices.

 

Self-interest is a powerful motivator and companies are motivated by it to ensure that they can continue to generate profits into the future.

 

Why do I care so much about CSR? Why should you?

There are two main reasons that I think that CSR is vital to building a positive future for all of us.

The first of these is that I believe that our political systems are fundamentally broken. The last twenty years has proven, without any doubt, that, almost universally, politicians are completely unable to grapple deeply with the issues affecting our world. Virtually complete inaction on climate change issues (“Ah, but Paris” I hear you say. A whole other subject, but basically, ‘nope’ – it is just window dressing); an inability to grapple with educational reform; deal with systemic poverty issues or stem the flood of compounding environmental issues such as catastrophic species extinction, massive deforestation, rising desertification and other issues.

It is simply not worth it for a politician, motivated mostly by power, to grapple with issues that will not affect their next election results. Their time horizon rarely extends beyond a couple of years and their next election campaign.

This equation is different however for a company. Companies are largely motivated by profits, but only a very short-sighted company is focussed solely on short term gains. Well managed companies plan for an extended future and work hard to build sustainable companies, capable of creating profits well into the future. Doing this involves looking at and many times, dealing with, the very real issues impacting negatively on the capacity of the company to generate profits into the future.

Self-interest is a powerful motivator and companies are motivated by it to ensure that they can continue to generate profits into the future, by helping to ensure that we have a future and that they have consumers still able to buy their products. It helps, in an era of substantially increased transparency, that consumers are very active in voicing their disapproval of both company inaction and of negative actions (at least in the Western world). Think Nike or Chanel and child-labour. Think PETA and mink coats. The list is endless and even if not themselves the target of consumer action, other companies watch and learn and proactively become better global citizens.

The second reason that CSR is such a powerful force is that it is companies, not governments, which drive our economies and create the money that is needed to effect change. Taken together, companies have far bigger budgets than any government and are able to more effectively and arguably, more efficiently, drive change.

This is not to say that governments have no part to play in dealing with the growing number of issues that are affecting us all, they do, and I hope during this series to have the chance to talk to key regulators about what they are doing to support businesses, and society in general, in creating a positive future for us and our children.

 

Having set the scene to an extent, over the rest of this series I hope to showcase companies here in Taiwan who are grappling with CSR and doing a good job of it. By showcasing the best examples, I hope that people are motivated to demand better from the many many companies here who do nothing and also hope to inspire the companies doing nothing, or even worse, doing negative things, to realize that the ability to create long-term sustainable profits actually lies in them stepping up and creating positive change, not just for society, but for their own future and the future of the company shareholder’s and employee’s children.

I want to inspire by looking at the best examples, rather than depress by looking at the worst.

 

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