Cast Your Vote: Do Firms Need Prodding on CSR?

♠ Posted by Emmanuel in at 6/21/2008 02:58:00 PM
The Economist website has a debate going on regarding this question: "Without outside pressure, corporations will not take meaningful action on sustainability." It follows the rules of the "traditional Oxford-style debate." As I write, the "yes" votes outnumber the "no" votes 72% to 28%. I am not particularly keen on the phrasing of the question for a host of reasons. For instance, "pressure" implies an antagonistic stance between civil society and corporations when opportunities for collaboration do exist and may in fact outweigh this negative framing. In many respects, the CSR debate has moved beyond this combative approach.

On the "yes" side we have Mindy Lubber, president of Ceres, which bills itself as "a national [American] network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges such as global climate change." Her opening statement is somewhat predictable--subprime, SUVs, Nike, etc:

The recent subprime mortgage meltdown is a painful example of how companies and whole industries can delude themselves into ignoring even the most fundamental issues. If anyone outside the financial markets had been scrutinising the risks from easy mortgages, they could have helped avert millions of foreclosures and an economic recession, and saved themselves a fistful of dollars.

It is the same with global climate change, which presents far-reaching risks and opportunities that many companies—their heads stuck in the sands of the quarterly business cycle—are not grasping on their own. Outsiders warned Ford and General Motors for years that their gas-guzzling high-polluting cars were too big, but the carmakers did not listen. Now their large sports utility vehicles sit unsold in car lots and the companies' very survival is at stake.

Outsiders—investors, environmentalists, public interest groups, other industry experts—have an essential role in pressuring companies on their handling of environmental and social threats. They should be asking tough questions; they should be offering creative, out-of-the-box ideas; they should be demanding real action; and they should be holding companies accountable.

On the "no" side, Bjorn Stigson, president of the World Council for Sustainable Development (WBCSD), makes a more compelling argument from my POV:
Going out of business is never a good move in the quest for sustainability.

Not only is it impossible to imagine business without external pressure, it is increasingly difficult to make out a clear line between what is external and what is internal. It may be too early to say that the internet, open-source technologies, extended value chains and network marketing have turned the corporation inside out, but certainly it is becoming harder to find, with precision, the fence-line.

It is not only in commercial relations that boundaries have become entangled. The World Business Council for Sustainable Development is a coalition of some 200 leading international companies. Our members recognise that rising temperatures, damaged ecosystems and the exclusion of 3 billion people from prosperity are business issues. They know that they cannot solve these problems alone, but have to work with others to develop solutions, even when this means learning to listen to their critics and those who oppose their actions.

While I am more sympathetic to the arguments of the WBCSD, the phrasing of the question is not so ideal that I may actually vote "yes" despite the weaker arguments offered by Ceres. It will be interesting to see how this debate evolves, though it looks like the "yes" vote has either convinced more people or their legions of voters are in rather larger numbers. With online polls, it's difficult to say.

What sayeth thee? Head over to the Economist site and cast your vote.