Should corporations be socially responsible? The 2003 documentary The Corporation, co-written by Canadian law professor Joel Bakan, made a big impact by characterizing its titular entity as a psychopath —after American law decided that corporations have the same rights as people. This meant, among other boxes ticked off the WHO ICD-10 Manual of Mental Health Disorders DSM-IV, that they were pathologically self-interested and had a reckless disregard for the safety of others.
In the aftermath of this cultural bombshell, corporations have made a lot of noise lately (and loudly) about giving back to society. This management concept was dubbed Corporate Social Responsibility (CSR). It included a commitment to ethical business decisions; zero carbon emissions and other environmental promises; and workplace inclusiveness, equality, and diversity—implying these policies were not in place previously.
Or, as Canadian PM Justin Trudeau told the World Economic Forum during his 2018 keynote address: “Society is demanding that companies, both public and private, serve a social purpose.”
But CSR’s authenticity is being debated not just in Davos but at water coolers and on social media. Not surprisingly, Professor Bakan tackles CSR in the follow-up documentary, 2020’s The New Corporation: The Unfortunately Necessary Sequel. In it, economist Robert Reich concludes there is no such thing as Corporate Social Responsibility.
So, is CSR simply part of a PR strategy disguising the financial elite’s lust for profit and power? Or are corporations having a change of heart.
There are many examples of corporations seeming to do better. Some even have proven track records of social responsibility while, for others, CSR looks like a too-little-too-late response to public pressure.
An example of the former is Patagonia. The popular and profitable American outdoor apparel company is a trailblazer in its ethical and sustainable business practices. They pledge 1% of sales to environmental causes, and their Worn Wear program lets users trade in and buy used Patagonia wear. Meanwhile, founder Yvon Chouinard decided in 2022 to donate his family’s company (valued at around US$3-billion) and its future profits to the fight climate change.
Then there’s Microsoft. The New York Times described its co-founder Bill Gates as “an international symbol of greed, arrogance and hubris” back in the ‘90s for his company’s domination of the home computer market. Then, in January 2020—just two months before he announced his resignation from Microsoft to focus on philanthropy—the tech giant pledged to become carbon negative by 2030 and establish a US$1 billion ‘climate innovation’ fund. This was met with much media fanfare, but Microsoft continues to partner with oil companies—like its technology partnership with Exxon, which has itself pledged to expand its oil production over the coming years.
The benefits of CSR are both tangible and measurable. They include:
Improved Brand Equity and Corporate Reputation: Big companies that appear to genuinely support CSR initiatives can expect to see brand growth and improved public perception. One study by Kantar Consulting saw a 17 per cent brand value growth over 12 years in companies that the public considered “highly impactful” in terms of CSR.
Attraction/Retention of Employees: ‘People, planet, and profit’ are the values many millennials and Gen Zs are looking for in their employers these days. That means these younger employees—who will one day take over your company—are likelier to stay (and stay productive) if they believe you share their societal goals.
Impressing Investors: Investors are more likely to want to work with corporations with a plan for and track record of Corporate Social Responsibility. Taking CSR seriously can show investors that your company is interested in long-term as well as short-term growth. To that end, corporations should keep track of their environmental, social, and governance (ESG) metrics to have on hand when trying to attract new investment.
Of course, no amount of press releases about your Corporate Social Responsibility will matter if the public doesn’t believe they are authentic.
Let’s take Bell Canada’s Let’s Talk Day as an example. The telecommunication giant’s annual social media campaign is meant to de-stigmatize discussions surrounding mental health. But it was pilloried on social media in January 2023 by those pointing out the apparent hypocrisy of Bell taking $122 million in COVID labour subsidies before laying off hundreds of its employees. Some claimed Let’s Talk amounted to nothing more than a charitable tax write-off and free advertising for Bell.
Acting like a good citizen rather than a psychopath is the preferable (and at least morally profitable) path not only for people but corporations. And while Corporate Social Responsibility seems to have become part of contemporary business practice, there is also (arguably) a growing realization among big companies that big profits don’t have to come at the expense of public perception.
Sean Plummer | Contributing Writer
