Goodbye Corporate Social Responsibility, Hello Corporate Sustainability

February 22, 2010

I read an interesting article today in the Wall Street Journal called Good Intentions. It addresses the fact that 1/3 of companies cut their corporate social responsibility (CSR) budgets in 2009 and corporate philanthropy fell by 8% in 2008. While just looking at the numbers this may appear to be a great setback, the article discusses how it’s actually not such a great loss because random acts of corporate giving and marginal initiatives are not enough to alter corporate behavior. What’s needed is corporate sustainability.

Will Marre, CEO of Realeadership Alliance, agrees. He states, “Business is not just about making a profit anymore; it’s about creating a sustaining business culture that energizes employees, creates a unique profit edge and makes a positive impact on humanity and the environment. Anything less is a waste of valuable time and resources we need for a sustainable future” (See Leadership Development Speaker, Will Marré, Trains Business Leaders for the Future).

So what exactly is the difference between CSR and corporate sustainability? The WSJ article quotes Scott Beaudoin, director of cause marketing at MS&L in Boston, who says: “Companies are asking how they can be socially responsible in a way that also moves the business forward. It’s no longer about having one corporate social responsibility guy who is supposed to be the moral compass for the company, like a chaplain in an Army regiment. It’s about making sustainable business the standard operating procedure.”

Corporate sustainability, according to Wikipedia, is “a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments…Unlike the other phrases that focus on “added-on” policies, corporate sustainability describes business practices built around social and environmental considerations.”

A huge driver of sustainability rather than responsibility is innovation. Corporate Sustainability—It’s About Attitude discusses a paper by BT and Cisco, “A New Mindset for Corporate Sustainability.” It discusses the limitations of CSR thinking, “namely an attitude that these practices are costly to business, inhibit growth and negatively impact the bottom line.” Sustainability, on the other hand, is a catalyst for innovation. It gives ten steps companies should take to drive innovation via sustainability. Some are 1) Make innovating for sustainability a part of your company’s vision, 2) Formulate a strategy with sustainability at its heart, 3) Embed sustainability in every part of your business, and 4) Walk the talk (actions speak louder than words).

A new study, Why Sustainability is Now the Key Driver of Innovation, also discusses the mindset of sustainability. It states, “Sustainability isn’t the burden on bottom lines that many executives believe it to be. In fact, becoming environment-friendly can lower your costs and increase your revenues. That’s why sustainability should be a touchstone for all innovation.” It continues, “In the future, only companies that make sustainability a goal will achieve competitive advantage that means rethinking business models as well as products, technologies, and processes.” The paper goes on to give a five-stage process in becoming sustainable.

Marre, who has long been changing the phrase, Corporate Social Responsibility, to Corporate Social Opportunity, discusses in New Leadership Training for Strategic CSR Announced by Will Marre how business has gone through three phases of CSR. The first was the mandate for businesses to remove the toxic processes and impacts from their operations. This included practices such as eliminating pollution and labor exploitation. Phase two has been to embrace sustainability and contribute to the community. Sustainability practices have yielded huge cost savings as waste is being eliminated from core business processes. Corporate philanthropy has also become increasingly important to promote brand reputation.

Marre even takes it a step further. He says that as good as these initiatives are, phase three is a “quantum leap” in creating strategic business value for companies who see that helping humanity and healing the environment are far bigger opportunities than stopping bad practices or polishing a corporate reputation. Phase three of the CSR revolution is socially strategic leadership that unites a 21st century leadership paradigm, business models and EverGreen™ innovation to create unique value.

According to Marre, “Reinventing the world to be sustainably abundant is the greatest economic opportunity in history.” The possibilities are indeed endless for those who move beyond business-as-usual and embrace the challenge of changing our future. CSR make way for corporate sustainability.

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