The Age of Responsibility: CSR 2.0 and the New DNA of Business

The Age of Responsibility: CSR 2.0 and the New DNA of Business is a 2011 non-fiction book by South African author Wayne Visser. It is a critical treatise on corporate social responsibility and sustainability, which argues that these first generation concepts and practices have failed to reverse negative global trends on many social, environmental and ethical issues. Using Web 2.0 as a metaphor, the author proposes a second generation concept which he calls CSR 2.0, or systemic CSR, or transformative CSR, which manifest in the emerging Age of Responsibility.
The Ages and Stages of CSR
The evolution of business responsibility can be viewed in terms of five overlapping economic periods - the Ages of Greed, Philanthropy, Marketing, Management and Responsibility - each of which typically manifests a different stage of CSR, namely: Defensive, Charitable, Promotional, Strategic and Transformative CSR (which can also be called CSR 2.0, Systemic CSR or Radical CSR).
The author's contention is that companies tend to move through these ages and stages (although they may have activities in several ages and stages at once), and that we should be encouraging business to make the transition to Transformative CSR in the dawning Age of Responsibility. If companies remain stuck in any of the first four stages, the book argues, society will not turn the tide on the environmental, social and ethical crises that we face. Simply put, CSR will continue to fail.
# The Age of Greed is characterised by Defensive CSR in which all corporate sustainability and responsibility practices - which are typically limited - are undertaken only if and when it can be shown that shareholder value will be protected as a result. Hence, employee volunteer programmes (which show evidence of improved staff motivation, commitment and productivity) are not uncommon, nor are expenditures (for example in pollution controls) which are seen to fend off regulation or avoid fines and penalties.
# Charitable CSR in the Age of Philanthropy is where a company supports various social and environmental causes through donations and sponsorships, typically administered through a Foundation, Trust or Chairman’s Fund and aimed at empowering community groups or civil society organisations.
# Promotional CSR in the Age of Misdirection is what happens when corporate sustainability and responsibility is seen mainly as a public relations opportunity to enhance the brand, image and reputation of the company. Promotional CSR may draw on the practices of Charitable and Strategic CSR and turn them into PR spin, which is often characterised as ‘greenwash’.
# Strategic CSR, emerging from the Age of Management, means relating CSR activities to the company’s core business (e.g. Coca-Cola and water management), often through adherence to CSR codes and implementation of social and environmental management systems, which typically involve cycles of CSR policy development, goal and target setting, programme implementation, auditing and reporting.
# Transformative CSR in the Age of Responsibility focuses its activities on identifying and tackling the root causes of our present unsustainability and irresponsibility, typically through innovating business models, revolutionising their processes, products and services and lobbying for progressive national and international policies.
Hence, while Strategic CSR is focused at the micro level - supporting social or environmental issues that happen to align with its strategy (but without necessarily changing that strategy) - Transformative CSR focuses on understanding the interconnections of the macro level system - society and ecosystems - and changing its strategy to optimise the outcomes for this larger human and ecological system. Transformative CSR holds the key to making change happen, at a societal, organisational and individual level, and ensuring that we can all make a difference.
The Failure of CSR 1.0
The author argues that the first generation approaches to CSR (the first four Ages and Stages) - which he calls CSR 1.0 - have failed to address the very issues it claims to be most concerned about due to three factors - the Triple Curse of Modern CSR:
# Incremental CSR - The incremental approach of CSR, while replete with evidence of micro-scale, gradual improvements, has completely and utterly failed to make any impact on the massive sustainability crises that we face, many of which are getting worse at a pace that far outstrips any futile CSR-led attempts at amelioration.
# Peripheral CSR - CSR is, at best, a peripheral function in most companies. There may be a CSR manager, a CSR department even, a CSR report and a public commitment to any number of CSR codes and standards. But these do little to change the underlying growth-and-consumption model that fuels environmental degradation and social disruption.
# Uneconomic CSR - The ‘inconvenient truth’ is that CSR sometimes pays, in specific circumstances, but more often does not. Of course there are low-hanging fruit - like eco-efficiencies around waste and energy - but most of the hard-core CSR changes that are needed require strategic change and massive investment, which the markets don’t support.
Principles of CSR 2.0
The book suggests that CSR 2.0 is characterized by 5 principles: creativity, scalability, responsiveness, glocality and circularity (see cradle to cradle):
To get beyond these curses, we need a revolution that will, if successful, change the way we talk about and practice CSR and, ultimately, the way we do business. I call this new approach, CSR 2.0, where CSR stands for Corporate Sustainability and Responsibility. There are five principles that determine CSR 2.0:
# Creativity - The problem with the current obsession with CSR codes and standards (including the new ISO 26000 standard) is that it encourages a tick-box approach to CSR. But our social and environmental problems are complex and intractable. They need creative solutions, like Free-play’s wind-up technology or Vodafone’s M-Pesa money transfer scheme.
# Scalability - The CSR literature is liberally sprinkled with charming case studies of truly responsible and sustainable projects. The problem is that so few of them ever go to scale. We need more examples like Wal-Mart ‘choice editing’ by converting to organic cotton, Tata creating the affordable eco-efficient Nano car or Muhammad Yunus’s Grameen banking model.
# Responsiveness - More cross-sector partnerships and stakeholder-driven approaches are needed at every level, as well as more uncomfortable, transformative responsiveness, which questions whether particular industries, or the business model itself, are part of the solution or part of the problem. A good example is the Corporate Leaders Group on Climate Change.
# Glocality - This means ‘think global, act local’. In a complex, interconnected, globalising world, companies (and their critics) will have to become far more sophisticated in combining international norms with local contexts, finding local solutions that are culturally appropriate, without forsaking universal principles. We are moving from an ‘either-or’ one-size-fits-all world to a ‘both-and’ strength-in-diversity world.
# Circularity - Our global economic and commercial system is based on a fundamentally flawed design, which acts as if there are no limits on resource consumption or waste disposal. Instead, we need a cradle to cradle approach, closing the loop on production and designing products and processes to be inherently ‘good’, rather than ‘less bad’, as Shaw Carpets does.
The author argues that making a positive contribution to society is the essence of CSR 2.0 - not just as a marginal afterthought, but as a way of doing business. CSR 2.0 is about designing and adopting an inherently sustainable and responsible business model, supported by a reformed financial and economic system that makes creating a better world the easiest, most natural and rewarding thing to do.
The DNA of CSR 2.0
Using a biological metaphor, the book also describes the 4 DNA elements of CSR 2.0, namely: value creation, good governance, societal contribution and ecological integrity.
# Value Creation is about more than financial profitability. The goal is economic development, which means not only contributing to the enrichment of shareholders and executives, but improving the economic context in which a company operates, including investing in infrastructure, creating jobs, providing skills development and so on. There can be any number of KPIs, but I want to highlight two that I believe are essential: beneficial products and inclusive business. Does the company’s products and services really improve our quality of life, or do they cause harm or add to the low-quality? And how are the economic benefits shared? Does wealth trickle up or down; are employees, SMEs in the supply chain and poor communities genuinely empowered?
# Good Governance is another area that is not new, but in my view has failed to be properly recognised or integrated in CSR circles. The goal of institutional effectiveness is as important as more lofty social and environmental ideals. After all, if the institution fails, or is not transparent and fair, this undermines everything else that CSR is trying to accomplish. Trends in reporting, but also other forms of transparency like social media and brand- or product-linked public databases of CSR performance, will be increasingly important indicators of success, alongside embedding ethical conduct in the culture of companies. Tools like Goodguide, KPMG’s Integrity Thermometer and Covalence’s EthicalQuote ranking will become more prevalent.
# Societal Contribution is an area that CSR is traditionally more used to addressing, with its goal of stakeholder orientation. This gives philanthropy its rightful place in CSR - as one tile in a larger mosaic - while also providing a spotlight for the importance of fair labour practices. It is simply unacceptable that there are more people in slavery today than there were before it was officially abolished in the 1800s, just as regular exposures of high-brand companies for the use of child-labour are despicable. This area of stakeholder engagement, community participation and supply chain integrity remains one of the most vexing and critical elements of CSR.
# Environmental Integrity sets the bar way higher than minimising damage and rather aims at maintaining and improving ecosystem sustainability. The KPIs give some sense of the ambition required here - 100% renewable energy and zero waste. We cannot continue the same practices that have, according to WWF’s Living Planet Index, caused us to lose a third of the biodiversity on the planet since they began monitoring 1970. Nor can we continue to gamble with prospect of dangerous - and perhaps catastrophic and irreversible - climate change.
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