Corporate Social Responsibility: Fatally Compromised

Corporate social responsibility is fatally compromised and, in the hands of multinational corporations, often does more harm than good, according to a prominent business ethicist.

Speaking on Melbourne University radio program Up Close, Professor Peter Fleming told presenter Elisabeth Lopez that CSR was merely “a good excuse for business as usual”.

“We would argue that with the rise of corporate social responsibility we would see it more as an excuse to carry on as a for profit unregulated some would say, rather profiteering approach to their business rather than having other stakeholders have a genuine say in the way in which business is organised in society," Fleming said.  

“From its beginning, CSR as a practice and as a theory has had a kind of an inbuilt cynicism in which it's not really supposed to be taken too seriously.  In other words, ‘oh yeah, let's have some corporate social responsibility, but only up to the point where it makes us money and when it stops you know that's when we've got to be a little bit more flexible about how we use it'."  

Fleming,  a Professor of Business in Society at Cass Business School at City University, London, said increased prominence of CSR could be attributed to a growing need for businesses to prove themselves responsible.

“…I would argue that the rise of CSR in even some of the most controversial industries like the mining industry for example, is probably more of the result of a deep legitimacy crisis facing business today,” Fleming said.  

“It seems to be this kind of recurring sense that organisations are breaking the rules, are really kind of trying to maximise profits at whatever cost and I think with the financial crisis – the global financial crisis, that's really been emphasised in people's imaginations.”

Fleming said that if CSR were to be taken seriously by corporations there could be “a whole paradigm shift in the way in which business is done”, but that problems arose because such a transformation would be at odds, however, to capitalist systems of wealth maximisation.  

“…we would argue that if we really took corporate social responsibility seriously and actually integrated it into every part of the business, we would see some major transformations,” he said.  

“We can abandon the very idea of ethics in the face of the realisation I've just stated, which I would not recommend at all. Or we could start to modify the very economic paradigm that we work in to become at least possibly more aligned to some of the ethical ideals that all of us hold on to.  

“It would need a culture change in the organisation in question.  That would be very, very important rather than seeing the organisation simply as a vehicle for private extreme wealth/gain.”

Fleming said consumer pressure was limited in the amount of change it could achieve.

“I think consumer activism is important but it's probably not the only thing we would want to rely upon to try and make a difference in the way in which some of these organisations operate,” he said.  

“One of the important assumptions of corporate social responsibility is that if we make our products more ethically friendly, then we can sell more stuff.  

“The problem or the contradiction here is that selling more stuff regardless of whether it has a green label on it or not, breeds a mentality that is linked to some of the problems that we're facing now in the global system, in which ramping consumerism is unsustainable and has spillover effects in all sorts of quarters of society that we would consider to be rather problematic.”

Fleming discussed his views in the context of his 2013 book, The End of Corporate Social Responsibility.

Listen to the full program here.