Is Corporate Social Responsibility a Scam?

Cartoon of person yelling a businessman who has money plugging their earsCorporate social responsibility is all the rage. But, will corporations realistically confront the way profitability and ethical practices for social change are diametrically opposed?

The BP oil spill, FIFA corruption scandal, Turing Pharmaceuticals price gouging, Fyre Festival, CBS sexual harassment scandal, and Facebook-Cambridge Analytica data mining debacle. How many of these acts of corporate negligence and perversion of power are you familiar with? Over the last few decades, corporations have committed an unprecedented number of transgressions. To counter their transformation from symbols of American progress into objects of public derision and repulsion, firms sought refuge in touting their corporate social responsibility (CSR) programs.

From GlaxoSmithKline’s donation of antiretroviral medications to Africa to Starbucks’ high-volume purchases of Fair Trade coffee, corporations’ CSR initiatives are being met with unadulterated public support and applause. However, we must challenge the merits and premises of their efforts in promoting social progress. As companies funnel money into social movements, announce new green policies, and boast about diversity, I am hesitant to see CSR as anything more than a facade of disingenuous policies and practices to conceal the horrifying realities of corporate scandals tangled in greed and exploitation.

As a concept, corporate social responsibility is a self-regulating business model that encourages companies to move towards becoming more socially accountable to the stakeholders and general public. Ideally, by practicing CSR, companies can be conscious about the social, economic, and environmental impact they have on society. However, the reality of CSR undertakings is disappointing.

Numerous scholars perceive corporations’ shallow engagement with CSR as a duplicitous tactic allowing them to display bogus socially conscious values and practices. The CSR framework gives businesses the opportunity to curry public favor while prioritizing decisions that solely maximize profit (often at the expense of social concerns). As self-centered corporations continue to engage in exploitative practices, I remain skeptical of whether firms can authentically engage in CSR initiatives to inspire social progress.

Without significant exposure to – or experience in – the corporate world, I often wonder if my general disdain toward large corporations exaggerates their malfeasance and discredits their potentially vital role in driving social change. To grapple with the dilemma of whether large businesses can balance profitability with social impact, I embarked on this Pathways of Change internship. As an Ethics and Compliance Intern within the SAS Institute’s Legal department, I want to discern whether corporations can effectively encourage social progress, sustain ethical practices, and turn a decent profit.

SAS Institute established itself as a powerhouse in data analytics, offering a wide variety of innovative software and services to help customers make intelligent, informed decisions to stimulate social change. As I familiarize myself with SAS’ policies and CSR initiatives, I am struck by SAS’ continued commitment to corporate social responsibility since its formation over 40 years ago. In fact, I feel comfortable acknowledging that my prior perception of CSR was flawed, and my blanket vilification of large corporations lacks nuance. My mindset seems to obscure the social change that firms, like SAS, spurred and facilitated.

SAS’ commitment to authentic CSR is compelling. For SAS, corporate social responsibility not only focuses on building a sustainable workplace, but also social innovation that connects analytics and advocacy. From preventing life-threatening illnesses to protecting endangered species to launching comprehensive global education initiatives, SAS and its customers, harness data to make a difference. Specifically, SAS has improved care and informed better health policy for cancer patients while enhancing conservation methods with artificial intelligence. At the same time, SAS has generated 3.8 million kWh of clean, renewably sourced energy. SAS has embraced the opportunity to apply its cutting-edge technology and expertise to tackle several social, economic, and environmental issues. Instead of developing mountains of policies filled with flowery language or manufacturing and contriving initiatives as a PR tactic to cover up messes, SAS’ transparency and genuine dedication to CSR encourages me to explore the possibilities and impacts of authentic CSR.

In approaching the construction of effective CSR initiatives, I realize the complexity that comes with navigating the tradeoffs that must be made between the financial health of the company and ethical, social outcomes. While many companies consistently choose profit over principles, SAS proves that it is reasonable to expect corporations to maintain a deeper commitment to ethical practices and social impact. The more realistic attitude is one that encourages and promotes CSR practices because business priorities can be aligned with societal needs.

The problem is not corporate social responsibility itself, it’s the longstanding, and seemingly acceptable, ways in which certain companies exploit this principle. SAS’ practices give me hope that, despite the shortcomings and flaws in the current execution of CSR, a genuine and steadfast dedication to CSR, combined with a mindset that balances financial viability and social good, can catalyze cultural change among corporate endeavors.

During the rest of my time with SAS, I hope to further analyze the extent to which we should and can expect corporations to prioritize social change. Specifically, over the next couple of weeks, as I research human trafficking/modern slavery in corporate supply chains, I am excited at the prospects of determining whether it is possible for corporations to fulfill their narratives of saving the world while making a decent profit. While working remotely has presented its own set of unique challenges, I remain motivated by the persevering mindsets of my colleagues, supervisor, and manager and the forthcoming meaningful contributions of our work.

While I no longer view CSR as an absolute scam, I am still not ready to embrace it in its current form and practice. With predominantly negative stories of corporate misconduct and manipulation at the forefront of my mind, I am hesitant to concede that we can achieve a society in which companies magically hold themselves accountable to ethical and sustainable practices. However, I remain hopeful that there is room for progress in light of the evidence presented by SAS.

Now, more than ever, as our world and lives change in light of the COVID-19 pandemic, it is essential that we prioritize and foster social change and innovation. Maybe, with proper oversight, regulation, and standardization, CSR can become a powerful and constructive tool for societal improvement. So, how do we tackle the fundamental problems in the corporate exploitation of CSR? Can we motivate corporations to consider social impact and financial success in their operations and practices? What can or should we expect from corporation in terms of enforcing corporate accountability?  Who should be responsible for providing regulation and oversight for CSR practices or policies? What do sustainable strategies for executing effective CSR initiatives look like?