Smoke and mirrors? The myth of corporate social responsibility
by Rachel Williamson
Corporate social responsibility (CSR) refers to actions that companies take which will have a positive effect on society, the environment or the economy. It exists because corporations are the real criminals when it comes to environmental degradation – yet very little is done by Western states to monitor or control their destructive behaviours.
Big businesses contribute massively to the human destruction of the natural environment, on a far larger and more dangerous scale than individuals. “Corporate Social Responsibility” as an initiative has grown in popularity in recent decades, as companies become increasingly aware of how their use of resources and treatment of the environment affects their profit potential. But is it really the vehicle for positive change it claims to be? Or are the changes superficial, with much more work needing to be done to save the planet from lasting danger?
The damage so far
Right now, corporations have a lot to answer for in terms of their negative effects on the planet and its global climate. Just 90 corporations are responsible for almost two-thirds of the greenhouse gas emissions since the dawning of the industrial age. Of these, half has been emitted since 1986. (Heede, 2013)
The destructive effects of corporate mass production are many. The global temperature continues to rise (last summer, India hit 51°C) as its climate becomes ever more chaotic. Water supplies are contaminated, air is polluted, nature is destroyed, and resources grow ever more scarce. The earth’s natural resources are depleted at a steady and alarming rate, often with minimal consideration for renewal or sustainable use.
Despite the shocking reality, governments often do nothing. When they do act, they do so at the bare minimum level to prevent the ongoing environmental abuses of big business. The growth in size and power of financial markets globally has redirected yet more influence from policy makers into the hands of their corporate counterparts. Political and corporate interests often overlap, leaving government checks on corporate power almost non-existent. The worst climate offenders are allowed to continue with their destructive practices with no legal repercussions.
The issue has not been completely ignored by politics, of course. Governments must regularly engage with organisations such as the UN in working with other nations towards a sustainable future, although it is doubtable how much real change these projects invoke.
Today, the interests of the auto, mining, chemical and oil markets are disproportionately represented in decision-making processes. The players within these markets are the main culprits of pollution and environmental degradation, yet their voices are more powerful than ever as their influence in Western politics continues to embed itself in the system. At the 2016 Marrakech Climate Talks, representatives from ExxonMobil, Chevron, Peabody, BP, Shell and RioTinto (some of the main polluters) were given “unquestioned access”, despite the talks being directly centred around affairs which were directly against their invested interests. (The Guardian, 2016) This kind of market interference in decision-making is commonplace, meaning change is unlikely to come from any formal avenue.
Companies are always on top of the desires of their consumers, and sustainability is a hot topic. Businesses have quickly realised that to keep in public favour, they must at least appear to be making an effort to behave in socially responsible ways.
A variety of groups or initiatives exist, outside of the corruption and interest-serving of government and corporate policy. CDP (Carbon Disclosure Project), for example, is a UK-based project which encourages companies to disclose their carbon usage. Their annual Global 500 Climate Change Report has become a leading resource for information about how corporations are responding to environmental issues. (Cusick, 2013) However, such projects have their limits. Companies are not legally obliged to disclose. Furthermore, there is a “public” and “non-public” option for disclosures, allowing companies to hide their practices from wider scrutiny.
More broadly, a focus on sustainability has found relevance within all disciplines. “Holistic economics”, one example of this, is centred around recognising the real economic value of biodiversity and ecosystem services and representing them properly and fully when making calculations about the future. It is estimated that if the world’s 3,000 biggest companies were forced to pay for use, loss and damage of the environment, a third of their profits would be lost. (Jowit, 2010) If figures like this are considered and incorporated into a wider plan for the future of an ever globalising social system, there may be hope.
The interest in creating a dialogue with sustainability at the core is well and truly a public issue, too. The involvement of dedicated individuals and groups has incited truly meaningful change, and holds the greatest hope for positive steps in the future. The destructive activities of big business are contested by environmental pressure groups through actions such as market campaigns and consumer boycott movements.
Such action serves a purpose which bodes well for the future of the planet in terms of corporate sustainability. If corporations know the effect collective action campaigns can have on their profits, they are more likely to adjust their actions accordingly, making them more accountable to their consumer public. In this way, the “customer is always right” mantra of business can be used in the global consumer’s favour.
Smoke and mirrors?
Although this is a step in the right direction, with corporations beginning to show transparency when it comes to their behaviour, such moves can be superficial, and more preoccupied with PR than true changes of heart. Organisations such as Earthday Resources with their annual Don’t Be Fooled report warn against “corporate greenwashing”, urging consumers not to buy into company’s false “good guy” image.
Social responsibility action from companies can be merely just smoke and mirrors. ExxonMobil, for example, spent $100million investing in the Global Climate and Energy Project at the same time as quietly dedicating a somewhat larger $100billion to further oil exploration.
Informed groups have incited real change though. One huge student boycott put pressure on Fruit of the Loom to reopen a previously closed factory in Honduras, giving over 1000 employees their jobs back and rewarding them $2.5million compensation. They concurred, proving that market campaigns can be truly effective.
It is now more important than ever to be informed consumers – to do proper research on the companies we give our money to, and take part in collective action to provoke positive outcomes from business.
Victories such as these can continue to be fought for and won while we continue to work collectively to force environmental issues into the mainstream public agenda before it is too late. Long-term, sustainable change can only come from continued pressure on both governments and corporations to unite in the common cause of saving the planet.