Can CSR survive a recession?

This was the title of an interesting debate today, hosted by Tomorrow’s Company – particularly serendipitous in its timing, given the bashing that Marks & Spencer has been getting this week.

It appears that Plan A has done nothing to protect M&S from the effects of the credit crunch, and no doubt the naysayers will trumpet this as proof positive that CR is just inconsequential fluff; an unnecessary and costly diversion from the business of maximising returns for shareholders.

If all CR means is a series of initiatives designed to protect and enhance corporate reputation, then they’re probably right. But therein, as Shakespeare once wrote, lies the rub…  

CR or CSR (call it what you will) as a vague, umbrella term is undeniably still associated with this “CR 1.0” view of the world – i.e. “CR as PR”, a bolt-on to an otherwise unchanged business model.

Break it down into its constituent parts, however, and you begin to see a very different picture…

As Andrew Wilson of Corporate Citizenship suggested, reframe the question as, “Can good corporate governance survive a recession?” (or “good employee engagement” or “trusted relationships with customers and suppliers” or “energy efficiency”) and the answer ought to be a resounding “yes”. Indeed, in a recession, these things make more sense than ever.

Perhaps the most critical observation came from renowned economics professor, Paul Ormerod. He suggested that even the worst recessions seldom last more than 3 to 4 years, few going beyond more than 1 or 2.

As such, there’s a strong case for holding on to core strategies, and it suggests that a recession might provide a useful litmus test to sort out the fair-weather friends from the genuinely committed.

Harking back to my previous post, reflecting on what companies can learn from the example of Interface Inc., companies that pull back from CR are liable to label their activities as opportunistic, rather than an integral part of a considered, long-term strategy (a perfect example of what I’ve described as Level 2 on the CR Continuum).   

And maybe that’s the silver lining to this particular cloud. At the very least, it should discourage greenwash and push companies to take the sustainability agenda much more seriously, focusing more closely on matters truly material to the business.

What will be really interesting to see is consumer reaction to a recession. As much as it will undoubtedly curb discretionary spending, it might equally provide a much needed drive towards more sustainable behaviours.

If it does, then the next economic upturn could be on a very different footing, and those companies that stay true to the cause will be well placed to reap the rewards.

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5 thoughts on “Can CSR survive a recession?

  1. kevinkeohane

    Great observations and glad you could go!

    I think the litmus test observation is quite profound – when the going gets tough, if companies pull back CR investment, they will put the nail in the coffin of any credibility they’d hope to have achieved. I wonder if their thinking has reached that conclusion yet, or whether it will be a case of “Boss says cut costs, CR must be cut back like everything else.”

    And I wonder if the same rationale could be use regarding internal communications … and marketing … and training … and …

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  2. Dan Gray

    Great point, Kevin. As ever, I suspect the so-called “soft” disciplines of internal comms, training etc. will be the first under the spotlight.

    Of course, it tends to put a dent in the claim that, “our people are our greatest asset,” and reveals it as the gem of corporate BS that it so often is!

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  3. newcsrblog

    I agree with both of you- if CSR isn’t woven into the fabric of a business, there is a good chance it will be cut back during a market downturn. At the same time, the economic slowdown we are experiencing today is also making companies reevaluate how they are allocating their philanthropic funds and whether the money they are giving away is even achieving their intended outcomes. The firm Mission Measurement (missionmeasurement.com), where I work, is helping companies measure and improve their social impact.

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  4. sree

    has any company applied the axe on their csr programmes so far? or is anyone trying to change the way they do csr? like doing stuff to be carbon neutral or paying employees to work in villages rather than donate to ngos to create livelihood programmes?

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  5. sree

    like last week in India Nokia announced a programme to provide livelihood education to people living around tiger reserves. wwf is to carry out their work. funds are unknown. no one talks about it.

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