Time to give up on Corporate Social Responsibility?

By jb94|April 1, 2016|Europe, Global, Latin America, South Asia|0 comments

By Ilona Kelly. Ilona graduated from the MSc in Labour, Social Movements and Development at SOAS in  2012-2013. She is now the Campaigns Director at Labour Behind the Label, an organisation working to improve conditions and empower workers in the global garment industry. Find out more about Labour Behind the Label here and on Twitter @labourlabel. All the views expressed in this article are Ilona’s own, and don’t necessarily reflect the views of Labour Behind the Label, or of the SOAS Department of Development Studies.

When you think about corporate social responsibility (CSR), what comes to mind?

Perhaps images of young girls going to school in some war torn country, or something similarly endearing. I suspect your initial thoughts were not related to brand management. But perhaps they should be.

A survey published in 2007 found that 94% of European-based CEOs believe communication about CSR initiatives significantly impacts a firm’s reputation.

Little wonder then that CSR is increasingly incorporated into business models. I challenge you to find 10 major global companies who do not address CSR in some fashion.

With most companies, their brand is their business and as such CSR is a strategic necessity – a business imperative. CSR provides an avenue for companies to illustrate the high regard with which they uphold their responsibilities to society. Through CSR, companies can project a positive brand image, build a reservoir of social goodwill and increase their public legitimacy. Therefore, ultimately CSR is a tool – an implicit form of “global brand insurance” (Werther Jr. and Chandler, 2005) – through which companies can build their brand and more importantly minimise any potential damage to it when bad things happen. Not if, but when, since bad things happen all the time. Some things are truly horrific.

As in 2006, when the multinational oil company Trafigura exported their toxic waste instead of paying for its proper disposal, and this toxic waste was eventually dumped in the Ivory Coast, significantly affecting the health of tens of thousands of people.

Or, in 2012, when over 250 people died in the Ali Enterprises factory fire in Pakistan– many burning alive, behind barred windows and locked exits.

Or,  in March 2016, when Berta Cáceres, a Honduran indigenous and environmental rights campaigner, was gunned down just a week after she received threats for opposing the company Desarrollos Energéticos S.A. (DESA)’s hydroelectric dam project.

These examples are merely a snapshot of what can and does regularly happen. It is important not to dismiss them as one off actions by particularly vile companies. There are so many more examples – just ask the growing number of organisations working on corporate accountability. So many, in fact, that we have long since passed the point of emerging patterns of corporate behaviour and are living in times of systemic corporate abuse.

I would like to draw your attention to the word ‘communication’ in the survey I cited at the beginning of this article. As we all know there is a distinct difference between words and actions. Regardless of the original intentions of CSR, it is now a business in itself; the business of smoke and mirrors. Measures that would truly prevent human rights abuses – regulations – and hold companies accountable – criminal liability – are vigorously opposed and even blocked by companies.

What we are left with are meaningless and often ridiculous voluntary codes of corporate conduct coupled with shiny feel good CSR initiatives, distracting consumers from ongoing systemic human rights abuses. This is how H&M can profess a commitment to use natural resources responsibly and to engage in ethical business standards that respect human rights including living wages, freedom of expression, and collective bargaining. This is the epitome of meaningless CSR rhetoric. Meanwhile in reality, the textile industry is among the world’s leading polluters. Human rights abuses in the garment industry are endemic: poverty pay; hazardous working conditions; short-term contracts and other precarious working arrangements; sexual and other forms of workplace harassment. Unions are few and far between.

H&M is a leading global retailer in the industry and its chairman Stefan Persson – son of the company’s founder, Erling Persson – has become one of the world’s richest billionaires. Lest we forget, the clothes are cheap and this man is rich because of environmental and worker exploitation.

In 2013, H&M launched its garment collection initiative – a true testament to CSR’s theatre of the absurd. One of the great orchestrators of fast fashion – a relatively new sourcing model that produces more garments, more quickly, and at lower cost, causing the further denigration of working conditions in the global garment industry – is now encouraging consumers to bring their old clothes back to an H&M store. Their agenda should be crystal clear. Returning old used garments encourages the consumer to purchase new H&M garments. H&M is hoping that by making consumers feel good about ‘closing the loop’, they will continue to perpetuate this return-more-buy-more cycle, ensuring the company’s continued revenue growth, and consolidating H&M’s leading market position. I am at a loss in trying to understand how an increase in consumption can eventually lead to less waste. More is more in this regard, especially when H&M is only making some products with “at least 20 % recycled materials”. That leaves about 79% of new materials. Lest we forget, H&M and their fast fashion enterprise is the reason why there has been a huge increase in textile waste.

CSR is grounded in an implicit assumption that in business everybody can benefit – epitomised in the phrase “it’s a win-win”. With blinding bursts of smoke and meticulously constructed mirrors of altruism, CSR seeks to disguise the fact that business is the engine of capitalism and has an overriding profit incentive. Capitalism reinvents itself when it is threatened and there is a profit incentive to change. The exponential growth of CSR is part of this process.

There will never be a win-win with unregulated capitalism. Someone has to lose so that someone else wins, especially if they win big. This is why human rights violations have been, and continue to be, a direct and intended consequence of capitalism. These human rights violations vary in degree, from the most extreme – slavery, genocide – to the seemingly more acceptable labour abuses such as long working hours, low minimum wages, precarious work arrangements in unsafe environments. Capitalism in the United States, for example, was built on the US-Atlantic slave trade, and the US would not be the great power it is perceived to be today without this. Stefan Persson is one of the world’s richest people precisely because of the banal exploitation of garment workers around the world. Essentially, capitalist production and accumulation are inseparable from violence and exploitation, and no amount of CSR can change this reality.

And yet, the private sector continues to be perceived as an important and neutral stakeholder in the fight against poverty and other systemic human rights abuses. Private-public partnerships are increasingly the norm, and the UN even identified private financing as an essential element in ensuring the success of the UN sustainability goals. There is a clear problem here: namely the private sector is not a neutral actor – it is ruled by the drive for profit. Therefore letting business engage and lead such efforts puts them fundamentally at risk, particularly if they are in need of financing. Just as companies co-opted CSR into their business models, if given the opportunity companies will also co-opt the human rights and development agendas in order to perpetuate their power. The great expansion of CSR discourse reflects the speed with which its bandwagon has been barreling down the CSR path, marginalising alternative responses to corporate abuse: with every twist, navigation becoming ever more difficult, and with every turn, becoming increasingly difficult to turn around. We urgently need to pause, survey the landscape, and question the evolving role of business in international development and the fight for global human rights, spawned out of traditional CSR approaches. Thankfully we are presented with just such an opportunity.

In December 2015 a group of researchers identified 100 of the most pertinent research questions to “the post-2015 international development agenda”.  Among them are a whole range involving the private sector, including those which address the role of business in protecting human rights. While I am relieved to see this issue highlighted, I hope it doesn’t bear with it an implicit assumption that there should be a role for business in protecting human rights. That’s not to say business should not respect human rights. Of course it should, and the UN has said as much in its Guiding Principles on Business and Human Rights. However, we must be very wary of any role for business in the protection and promotion of human rights. The ruling classes do not seize and maintain power in order to feed the hungry and shelter the homeless (Eagleton, 2011: 39). Rather they are driven by the imperative of their own material self-interest, and if aiding the poor and powerless happens to be a convenient by-product, even better. The growing number of social projects initiated by some of the world’s billionaires speak to this point, and highlight the growing complexity of the CSR landscape.

Last year during the United Nations General Assembly, Bill Gates and Mark Zuckerberg announced their ambition and support towards the goal of universal Internet access by 2020. While this is a just and noble cause, what about the goal of universal access to safe water? According to Water.org, 1 in 10 people lack access to safe water and 1 in 3 or 2.4 billion people do not have access to adequate sanitation. What about the eradication of malaria? According to the World Health Organisation, malaria causes close to half a million deaths each year. I think we should seriously heed the prospect of every person on the planet having access to the Internet before water and sanitation or cures for malaria, tuberculosis and other treatable diseases. Or perhaps the hope is that a person can use the Internet to install a well, construct a toilet, and locate the nearest treatment center – just google it. Moreover, the real question is who should get to decide these priorities? And why do billionaires – the ruling class – get to pick and choose which issues get dealt with and which do not, and through which means?  At the risk of seeming trite, it’s not as if universal Internet access does not also benefit the founders of Microsoft and Facebook.

Here’s the thing – as seemingly great as it is for companies like H&M or individuals like Gates and Zuckerberg to give back, even when investing thousands and millions of dollars in various initiatives, they ultimately are not challenging the system that provided them with their excessive wealth and power. If anything they are strengthening it, as they are able to foster resources that the majority in class-society are shut out from, and are only accountable to themselves and their shareholders (Eagleton, 2011: 39). This is why upon closer inspection, CSR does not address power imbalances but rather affirms them. This is why workers are rarely asked what they want and need. This is why the poor are generally treated either with contempt or with paternalism. It is essential to remember that workers and the poor have agency. Only in affirming their agency and providing resources for the poor to assert their agency through exercising choice do we step on the path to a fair and just society. This would be true CSR. Everything else is an illusion – including the belief that we can harmoniously walk hand in hand with the private sector.

References

Eagleton, Terry, 2011. Why Marx Was Right, New Haven & London: Yale University Press.

Werther Jr., W.B., and Chandler, D. 2005. ‘Strategic Corporate Social Responsibility as Global Brand Insurance’, Business Horizons 48(4): 317-324.

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