The Oil Spill in the Gulf: An Argument for CSR, Not Against It

Authors

• Faris Natour

  Former Managing Director, Advisory Services, BSR

Ever since the extent of the environmental, economic, and social damage of the oil spill in the Gulf of Mexico became clear, blame has been assigned to BP, its business partners, the U.S. government, and, perhaps most appropriately, all of us. Then, earlier this week, Chrystia Freeland, global editor at large for Thomson Reuters, offered a new theory in the Washington Post: The “cult of corporate social responsibility” is to blame for the spill, and for that matter, for the financial crisis and many more unnamed “business disasters of the past 24 months.”

As a 10-year veteran of this “mini-industry” of CSR, as Freeland calls it, I took offense. The oil spill and the financial crisis happened despite CSR not because of it, so we need more—and more effective—CSR, not less.

As is often the case with editorials questioning the value of CSR, Freeland bases her arguments on a definition of CSR that is anywhere from outdated to just plain wrong: She equates CSR with green marketing and philanthropy and argues that it detracts from what really matters to business and society—the core business.

Instead, Freeland argues, companies should focus on their core responsibility of making a profit in ways that benefit rather than harm society. I fully agree—and so do many in my field, as that is the very definition of CSR.

Indeed, an increasing number of companies understand that sustainability is key to their long-term success and are integrating CSR into core business strategy. This is evident in my daily work: All of the projects I am working on right now involve not just the CSR champions at the company, but representatives from legal, human resources, product strategy, health and safety, marketing, and other functions.

One oft-cited example of this approach is General Electric. In the company’s latest Citizenship Report, CEO Jeffrey Immelt states that “the key question is, where can GE apply its innovation, knowledge, and expertise to create new products and services while helping to solve these tough problems?” CSR is defined as innovating new products and services; it does not get more “core” than that.

Freeland closes with a very important point: It is the role of government to ensure that companies operate in a manner that benefits rather than harms society. I could not agree more, but it’s wrong to assume that CSR and effective government oversight are mutually exclusive, or even diametrically opposed. Business and society share an interest in avoiding environmental and other disasters through a combination of rigorous management systems at the company and effective regulation by government.

Unfortunately, the media do not publish stories about disasters averted, but if they did—and if they looked at the reasons why—they would find that the credit was often due to CSR. Rather than causing disasters by distracting companies from their primary functions, CSR can actually help prevent them by helping companies perform their primary functions well and more sustainably. Therein lies the primary business benefit of CSR. After all, for business, the cost of avoiding a disaster is always much smaller than the cost associated with the disaster itself. We would be hard-pressed to find a better example of this than the BP spill.