Trying to keep up with developments in the field of Corporate Social Responsibility (CSR) is a bit like the unfortunate Dr Seuss character who can never finish mowing his uncle’s lawn:

Think they work you too hard…?
Think of poor Ali Sard!
He has to mow grass in his uncle’s backyard
and it’s quick growing grass
and it grows as he mows it
The faster he mows it, the faster he grows it.1

During recent years CSR has become an industry that has spawned definitions and standards that have both confused and intimidated business leaders around the world.  One indication of just how complex this moving target of a concept has become was the publication of the first CSR encyclopedia, “The A to Z of Corporate Social Responsibility”, a 500 page blockbuster with 350 CSR-related entries2.  Naturally, CSR itself is one of the key terms in the book, and is defined by Archie Carroll, professor emeritus from the Terry College of Business (University of Georgia), as “the belief … that modern businesses have responsibilities to society that extend beyond their obligations to shareholders and investors”.  CSR “encompasses the economic, legal, ethical and discretionary / philanthropic expectations that society has of organisations at a given point in time”.  But then, for the poor Ali Sard equivalent of business studies, the more they define it, the more they refine it: corporate social entrepreneurship, corporate social investment, corporate social opportunity, corporate social performance, corporate social responsiveness, corporate sustainability and corporate citizenship are only a few more of the entries in this comprehensive publication.

The increasing interest in CSR will require organizations to come to terms with these and many other dimensions of the concept.   They will also have to find innovative and constructive ways to involve their employees and other stakeholders in “doing” CSR – the days of having a big cheque book and using the simplistic “license to operate” argument on its own are over.  Of course, CSR still requires a cheque book and the “license to operate” argument remains valid, but the complexities of both the concept and the changing world within which it is situated require a more sophisticated response.  For example, KPMG has decided to focus its attention on developing sustainable communities – climate change, the environment and sustainable development form core focus areas of the firm’s global strategy.  Member firms around the world embark on projects where employees can apply their specific professional skills to make a difference.  Employees have provided economic and commercial support to attract investment to developing countries, trained and mentored staff members of an international NGO on proposal writing, project management and business planning, and provided pro bono assurance on another NGO’s sustainability report.  In South Africa the firm makes a distinction between socio-economic development and enterprise development initiatives, with an emphasis on the latter.  In one of its most innovative projects, KPMG partnered with one of its clients (ABSA, a large bank) last year – on one day more than 300 KPMG staff members, around South Africa, assisted ABSA clients with advice on good financial management, black economic empowerment, tax issues as well as employment law.  The value of time spent on the day was in the region of R5 million and this year (in 2009) key issues that were raised during these sessions will be addressed in ABSA client seminars.  Key policy issues will be taken up jointly with government by KPMG and ABSA.

In a special report on CSR early in 2008, The Economist acknowledged that CSR could no longer be ignored by large companies.  As would be expected from The Economist, it emphasised the business case for CSR: “[D]one badly, it is often just a fig leaf and can be positively harmful.  Done well, though, it is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue: it is just good business”3.  Reasons why it is good business include most of the familiar arguments: the need to manage reputation, the increasing focus on green issues, the growth in socially responsible investment activities, the need to attract and retain quality staff and – perhaps most importantly – the understanding that CSR is part and parcel of a response to a wide range of very real risks and opportunities, i.e. it should be part of the core strategy of any organisation.

This is a far cry from the concept of corporate philanthropy that used to be employed by many companies and is not uncommon today – financial contributions to worthwhile charities, donations of clothing or old computer equipment and freeing up time of employees to assist an orphanage by painting a wall or working in the garden are examples of old-style CSR.  It still has a positive impact, but it is no longer what the focus of CSR should be. 

In a very useful article entitled “Global Corporate Citizenship” 4, published last year (2008) by Klaus Schwab, chief executive officer of the World Economic Forum, he makes the following distinctions:

As we move forward, we are likely to see a shift from the traditional focus on CSR to the concepts of social entrepreneurship and global corporate citizenship.  Of course, these are all forms of corporate responsibility, hence the increasing use of the umbrella term corporate responsibility (without the “social”).   The use of this term should be encouraged –it immediately increases the scope of potential activities to be included (e.g. the natural environment) and it gets rid of the PR baggage still often associated with CSR. 

The logical conclusion of finally getting the terminology right and focusing on the right issues is that the term CSR might have reached the end of its shelf life.  The term CSR 2.0 has been mooted by some as the logical successor. Wayne Visser, co-editor of “The A to Z of Corporate Social Responsibility” uses the term as a reference to “Corporate Sustainability and Responsibility” while others have branded CSR 2.0 as the Comprehensive Strategic Response!  It might never become a mainstream definition, but neatly summarises the fluid and dynamic nature of the field.

Daniel Malan is the KPMG Special Advisor on Ethics and Governance and Head of the Unit for Corporate Governance in Africa at the University of Stellenbosch Business School. The views and opinions of the author do not necessary reflect those of KPMG or the University of Stellenbosch Business School.

2 Visser, W., Matten, D., Pohl, M. and Tolhurst, N. (2007). The A to Z of Corporate Social Responsibility.  London: John Wiley & Sons Ltd.

3 The Economist (2008). A Special Report on Corporate Social Responsibility, January 2008

4 Schwab, Klaus (2008). Global Corporate Citizenship – Working with Governments and Civil Society.