Page 36 - Materials Chemistry, Second Edition

2.3 Business sustainability 31
2.3.2.2 Corporate social Responsibility
CSR is a tool adopted by numerous companies in order to take responsibility for the
detected social and environmental impacts. It normally goes beyond regulation compliance
(Corporate Social Responsibility, 2007) and, therefore, it can be considered a sign of business
pro-activeness. Nevertheless, CSR is meant in very different ways by companies. Pless et al.
(2012) identifies two different approaches to CSR. The first one is “instrumental”. It commits
companies to CSR only if economically profitable. Whereas the second “multifaceted” one,
aims at creating shared value for both investors and stakeholders. This second approach is
the one supported by the European Commission.
According to the Prince of Wales Institute, corporate responsibility should include respon-
sible core business activities, philanthropic investments, but also business involvement in
public-private partnerships (Nelson, 2002 as cited in Labuschagne et al., 2005). Labuschagne
et al. (2005) splits the “corporate responsibility strategy” into two main components: societal
and operational initiatives. The first one comprehends corporate social investments related to
external philanthropy, while the second one is related to business core activities. The authors
underline that business sustainability performance should be assessed based on sustainabil-
ity initiatives (environmental, social, and economic) related to the core business activities.
This is a really relevant elucidation given that a lot of businesses tend to confuse business
sustainability with their contributions to external social investments and philanthropic causes
mainly enhancing their image and reputation rather than their actual operations. This is an
argument supported by Porter and Kramer (2011), who highlight the risks of investing in
initiatives that have almost nothing to do with the business core. In fact, there is a risk for
these initiatives to be quitted as soon as they do not bring business benefit anymore. Showing
limited engagement with a start and an end point, it is thus difficult to maintain sustainability
in the long term. However, the two authors are criticized by Crane et al. (2014) who, though
recognizing that CSR literature seldom goes beyond the business case for CSR, argue the
existence of a “strategic CSR,” which embeds initiatives within the business strategy in order
to benefit the sustainability of the firm’s core activities.
A reductionist judgment on CSR initiatives seems to be given by KPMG as well when
writing:

This investment [in people, communities and the environment] entails far more than corporate philan-
thropy, CSR projects or “green” initiatives—worthy and important though these may be. To do well in today’s
business environment, you increasingly have to measure, understand and pro-actively manage the value you
create, or reduce, for society and the environment as well as for shareholders. (KPMG International, 2014, p. 4)

Lastly, CSR has been criticized by Young and Tilley (2006) for referring only to socio-
efficiency, that is to say, social impact minimization and social benefit maximization in
relation to the created business value (Dyllick and Hockerts, 2002), instead of considering also
socio-effectiveness, defined as a continual societal positive impact.
However, as mentioned at the beginning of this section, for some authors and organiza-
tions, CSR should not be a bolt-on set of initiatives put in force by companies to serve their
business case. On the contrary, it should focus on shared value creation. The critiques to CSR
by Porter and Kramer (2011) bring them to the elaboration of the “creating shared value”
theory willing to reshape the relationship between business and society in order to ensure