Wednesday, February 6, 2008

CSR needs bringing to scale

Dear Colleagues

CSR is getting a reasonable amount of press coverage, but CSR hardly can be identified in the financial numbers of the corporate world.

If CSR has hardly any impact on corporate financial numbers, then CSR is likely to be doing little of impact in the world at large.

If CSR needs bringing to scale ... then what does that mean. It means that there will be an impact from CSR on the corporate financial statements, and there will be impact of CSR in the affected communities. The challenge is to make these moves substantial, and to make them positive so that there is a win-win for both the corporate enterprise and the community at large.

Simple and thoughtless accounting and business strategy will end up with zero sum at best, and perhaps something exponentially worse. But with thought, in fact it may be possible for the corporate world to use its capacity to do some things that would make a very big difference to the society we live in and the planet we live on.

It might be possible to do this using conventional CSR, but probably not. On the other hand, there is a way that the corporate world could mobilize its capacity by organizing an affiliated unit that operates as a social business to provide services at cost and measuring performance in terms of the social good that emerges rather than merely the profit that emerges. Clearly this needs to be done with understanding on the part of all the stakeholders, and it is likely that an enterprise of this type needs separate stockholders to finance it ... but the option should be created and offered as an alternative to the profit maximizing model that is the only choice at the moment.

These ideas originate with Dr. Muhammad Yunus, the creator of the Grameen Bank and its microfinance services. They have proved successful in the Grameen context ... the next step is to see how well the concepts can be applied in other settings.

Peter Burgess

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