Analyzing the Case for Corporate Social Responsibility
There is no doubt that wokeness has entered the workplace and creates challenges for ethical behavior. Some say it goes too far and politicizes the workplace. Others believe it’s simply an expression of social justice in the workplace and, as such, mirrors what’s going on in society. Discussions about wokeness in the workplace should be linked to earlier discussions about corporate social responsibility (CSR), sustainability, and conscious capitalism.
From time to time, I post a guest blog. Today's blog is by Charlie Fletcher who addresses these issues. You can contact her at: [email protected].
Corporate social responsibility (CSR) has been on the rise in the past decade. This is largely in response to changing consumer trends, as 70% of Americans now say it is important that companies actively make the world a better place.
Employees also believe that CSR is important. 88% of staff surveyed say that businesses shouldn’t make money at the expense of society, and 70% of employees say they wouldn’t work for a firm without a clear social purpose.
However, the rise of CSR has incurred something of a backlash from some prominent political commentators. These commentators smear all corporate efforts to improve society with the title of “woke-ism” and claim that for-profit businesses should steer clear of contemporary politics altogether. This claim — that companies have gone “woke” — is familiar enough that it deserves further insight and investigation.
What Is CSR?
Corporate social responsibility can trace its roots back to 1971 when the Committee for Economic Development drew up a social contract that forced businesses to serve the needs of society. This early version of CSR was designed to help private businesses reorganize their goals so that service and social needs were valued as highly as profit and economic growth.
The rise of CSR is largely due to shifting consumer preferences and the rise of social media. Instant access to news and media content means that anyone can learn about a business’s wrongdoings and share their thoughts with friends and followers.
In response, firms around the globe have invested in causes that promote a social issue and have adopted an ethos of conscious capitalism. This value-based approach to business promotes the Three Ps equally: Profit, People, and Planet. Ideally, this form of organizational governance results in higher consumer loyalty, improved brand image, and a genuine increase in quality of life for a firm’s stakeholders.
In general, companies that adopt an ethos of corporate social responsibility focus on meeting a broad spectrum of stakeholder needs.
CSR-driven firms also benefit from improved workplace culture. Ethically conscious businesses often promote the health and well-being of their staff and reinvest a significant portion of their profits into policies that improve employee motivation. A positive workplace culture can improve employee engagement, decrease turnover, and attract more diverse talent. This reduces the costs associated with running a business and gives firms a competitive advantage over their less progressive competitors.
The backlash against CSR can be confusing if you’re committed to creating a company that serves the social good. Unfortunately, recent calls to boycott Budweiser after the beer firm partnered with transgender influencer Dylan Mulvaney show that some folks choose to side against social progress and inclusion.
However, Budweiser CEO Michel Doukeris confirmed that while “anti-woke” boycotts of Budweiser had reduced sales volume in the first three weeks of April, that change only represented a 1% dip in overall global volumes. This is good news for firms that have their eye on future consumers, as young buyers show a broad preference for firms that back LGBTQIA+ rights.
The logic of anti-woke activism is faulty, too. Woke is a catch-all term used to denigrate any effort to hold people or corporations accountable for their actions. However, even anti-woke commentators struggle to define the term, calling it a feeling that doesn’t have a clear meaning. In this context, the word woke is meant to garner support from voters and consumers who no longer represent public sentiment.
In reality, wokeness in the workplace is designed to improve equality, overcome unconscious biases, reduce the risk of microaggressions, and raise awareness of systemic social injustices. These efforts to promote wokeness and CSR are designed to serve social good and improve the lives of employees and consumers alike. However, that doesn’t mean that CSR is without some pitfalls of its own.
The Real Pitfalls of CSR
A robust CSR program can reaffirm businesses’ ethical obligation to be eco-friendly and help workplaces become more inclusive and people-friendly. However, for-profit businesses that prioritize revenue over social good will always fail to truly embrace the ethos of CSR.
Greenwashing is a well-known example of companies inauthentically supporting social causes. According to Investopedia, greenwashing is a deceitful marketing tactic that businesses use to dupe consumers or investors into believing that a business is eco-friendly when it is not. Adding a green sheen to the business boosts profitability due to the growing demand for environmentally friendly products.
However, firms that inauthentically align themselves with social causes will be found out eventually. This can tank brand reputation and undermine consumer trust. Rather than deceiving consumers, companies should sidestep the pitfalls of poor CSR implementation and set genuine, specific sustainability goals. For example, a company can become carbon neutral by:
- Measuring emissions from production, energy consumption, and product life cycles.
- Taking clear action to reduce their carbon footprint.
- Purchasing carbon offsets.
- Communicating with stakeholders about carbon neutrality progress.
- Working with other organizations to achieve carbon neutrality.
Specific goals to become carbon neutral or achieve zero waste are better than simply pledging to “go green,” as they have the power to have a real impact and help firms follow through on their CSR promises. Bringing in an expert can reduce the risk of inadvertently trivializing social responsibility, too, as they’ll be aware of the common mistakes involved in CSR policymaking.
The word woke has recently been co-opted by folks who want to push back against social progress and malign efforts to make the world a more equitable, eco-friendly place. However, CSR initiatives can authentically push us all toward a better future driven by responsibility and accountability. This is particularly important today, as consumers look to connect with firms that represent their beliefs and values.
Posted by Dr. Steven Mintz, aka Ethics Sage, on July 20, 2023. You can learn more about Steve’s activities by checking out his website at: https://www.stevenmintzethics.com/. Follow him on Facebook at: https://www.facebook.com/StevenMintzEthics and on Twitter at: https://twitter.com/ethicssage.