CSR has nothing to do with charity? - The EIU debate summary paper

  • View
    913

  • Download
    0

Embed Size (px)

DESCRIPTION

The Economist Intelligence Unit held an online debate in March on the motion "CSR has nothing to do with charity"? To lead the debate, the EIU invited two advocates to make their cases for and against the motion. Peter Lacy, managing director at Accenture was for the motion and Margaret Coady, executive director of the Committee Encouraging Corporate Philanthropy was against the motion. Sarah Murray, an Economist Intelligence Unit contributor, moderated the debate. The EIU also invited eight individuals from the corporate sector as well as from civil society and non-governmental organisations to set out their views in guest posts published throughout the duration of the debate. This paper includes summaries and extracts from each of these contributions to the debate: arguments for and against the motion, guests articles and incisive comments from the floor posted by members of the public. Any of these contributions may be read in full by visiting http://ccdebates.eiu.com. Full biographies of all contributors are also available on this site.

Transcript

David Line - Debate summary.indd

The Corporations and Communities Debate SeriesCSR has nothing to do with charityMarch 4th-March 15th 2013A summary paper from The Economist Intelligence Unit

Sponsored by

The Economist Intelligence Unit Limited 2013 1

CSR has nothing to do with charity

Contents Introduction 2

Opening round 3

Rebuttal round 8

Closing round 12

Conclusion 15

2 The Economist Intelligence Unit Limited 2013

CSR has nothing to do with charity

Should giving to charity be part of a companys social responsibilities? This was the question the Economist Intelligence Unit (EIU) sought to explore in the first round of its Corporations and Communities Debate series. The motion chosen was: CSR has nothing to do with charity. The idea was to provoke discussion on whether or not companies should treat philanthropic contributions as an important part of their social responsibilitiesor whether businesses can have a greater social impact by leaving charity to others and doing what they do best: making money.

The need to debate the role of corporations in society, and the part charity should play in this, is growing, as the activities and responsibilities of corporations come under increasingly intense scrutiny. On one hand, a sense is emerging that leading companies are starting to pay closer attention to their social and environmental footprintsand that savvy organisations recognise that this is good business. Yet on the other, as was clear at the height of the 2011 Occupy movement, deep suspicions of the corporate sector linger. A series of scandalsranging from corporate tax avoidance to continuing evidence of labour abuses in factories in developing countrieshas since added fuel to the anti-corporate fire. Amidst this controversy, some see companies charitable efforts as, at best, exercises in public relations and, at worst, smokescreens for irresponsible behaviour.

To lead the debate, the EIU invited two advocates to make their cases for and against the motion. Each wrote an opening statement, a rebuttal to their opponents statement and closing remarks to sum up their position.

Stating the case FOR the motion was Peter Lacy, a managing director at Accenture, a global management consultancy. Based in Shanghai, Peter leads Accentures strategy practice and its sustainability services businesses in Asia Pacific and Greater China. Over the past 15 years, he has advised a range of senior leaders from the public and private sectors on strategy and sustainability.

Opposing him and arguing AGAINST the motion was Margaret Coady, executive director of the Committee Encouraging Corporate Philanthropy, a CEO membership organisation. Based in New York, Margaret leads CECPs long-range planning. She writes research reports, runs the organisations annual excellence awards, manages its team of programme specialists and directs its partnership initiatives.

Sarah Murray, an Economist Intelligence Unit contributor, journalist, author and specialist writer on sustainable business, moderated the debate. With 20 years experience in journalism, Sarahs work explores a broad range of topics related to the relationship of business to society and the environment.

To add further richness to the conversation, the EIU also invited eight contributorsindividuals from the corporate sector as well as from civil society and non-governmental organisationsto set out their views in guest posts published throughout the duration of the debate.

During the debate, anyone was able to contribute by both voting, either for or against the motion, or by setting out their points of view in the comments section. Every day, a winning comment was selected and awarded a six-month subscription to The Economist.

This paper includes summaries and extracts from each of these contributions to the debate: arguments for and against the motion, guests articles and incisive comments from the floor posted by members of the public. Any of these contributions may be read in full by visiting http://ccdebates.eiu.com. Full biographies of all contributors are also available on this site. The EIU would like to thank all contributors and participants for helping create a truly stimulating and insightful debate.

Introduction

The Economist Intelligence Unit Limited 2013 3

CSR has nothing to do with charity

Opening round

Moderators introduction Sarah opened by exploring the term corporate social responsibility or CSR, as it has become known. CSR, she said means different things to different people. Those who see it as a companys efforts to act responsibly in the way it conducts its business might see CSR as having nothing do with charity. Yet many now equate CSR initiatives with corporate philanthropy and might therefore argue that CSR and charity are inextricably linked.

So what did this mean for the debate? The real question participants should be asking themselves, Sarah argued, was whether they considered charity part of being a responsible business. Should companies address their social and environmental footprints through philanthropic donations and community investment programmesor should they stick to their business operations, thereby stimulating the economic activity creating jobs and producing the goods and services people need?

Many commentators have taken the latter view in the past. However, this approach arguably failed to take account of the fact that companies have negative as well as positive impacts on

society. Their activities can deplete natural resources, spark labour abuses or even, as the presence of big oil companies in parts of Africa has demonstrated, spark conflict, Sarah wrote.

Moreover, addressing their social and environmental impact can bring companies business benefits, whether through saving on their power bills, building loyalty among their employees or contributing to the prosperity of society, which ultimately builds a robust customer base and a skilled workforce.

If this is the case, the question then becomes how they should approach these issuesthe question at the very heart of this debate.

Sarah Murray Contributing Editor, Economist Intelligence Unit

Opening statement: For the motionPeter Lacy began his opening statement by examining the evolution of corporate responsibility. At one time, he pointed out, corporate responsibility meant charitable giving. This, he stressed, was no longer the casecorporate social responsibility, he argued, was a means of both bringing value to both society and giving companies a competitive advantage.

While he acknowledged that corporate philanthropy could have a powerful impact, he stressed the need to separate charitable activities from the way companies conducted their business. Charity cannot replace and must not be allowed to substitute for the positiveor negativeimpact companies can have through the goods and services they produce and the way they manage their operations, supply chains, core strategies and business models, he wrote. Companies are now

treating responsibility as a real business issue. Peter said companies could have a positive impact on society while also enhancing their commercial

success and cited examples such as how Vodafones M-PESA mobile banking solution in developing countries helps smallholder farmers increase their incomes. He also highlighted the fact that, in these

Peter LacyManaging Director, Accenture

4 The Economist Intelligence Unit Limited 2013

CSR has nothing to do with charity

Opening statement: Against the motionPhilanthropy alone cannot solve all the worlds problemsbut not all the worlds problems can be solved without it, either, Margaret said in her opening statement, before going on to argue the case for philanthropy as a foundational element of corporate behaviour.

Margaret acknowledged the fact that companies make significant contributions to society by providing goods and services, creating jobs and generating wealth and tax revenue. However, she said, if companies were to limit their investments in society to these business-related activities, it would leave a lot of value on the table. Since companies had both a stake in society and the resources to help address its biggest challenges, positive involvement in the broader world would be a much better long-term strategy.

Margaret went on to explain how social issues are relevant to companies, whether that is a shortage of skilled employees at home or absenteeism as a result of malaria in overseas markets. Meanwhile, the top college graduates companies seek to hire are asking whether potential employers have values that match their own. Consumers also want to see their values reflected in the brands they associate with.

Philanthropic investments, she said, also help build trust in the communities where companies have their operations and give them the ability to access new markets, create new products, gain a better understanding of untapped customer segments and pilot new technologies.

In concluding, Margaret expressed approval of the concept of shared valuethe idea that, for mutual benefit, companies should invest in the communities that are their customers and suppliers. However, she said, not all societys challenges could be solved by business models. Can you really turn a profit on ending domestic violence? she asked. In fact, she argued, shared value depends on philanthropy, and ended by promising to explain this statement in the next round of the debate.

Margaret CoadyExecutive Director, Committee Encouraging Corporate Philanthropy

Opening statement: For the motion (continued)and other initiatives, companies are forming closer relationship