Linking profits to CSR may not be a good idea

csr_stanford.jpgKen Chung for 3p: In an unusual twist, some are beginning to believe that the alignment of financial and social performance are not necessarily good. Deborah Doane, a respected activist in the U.K. writing in a recent issue of the Stanford Social Innovation Review, explains that many companies are hiding behind a CSR facade when in fact there is no underlying improvement in social conditions.
Doane believes that the voluntary corporate social responsibility (CSR) equals profits approach is at best a temporary measure. When profits are at risk, companies will drop CSR efforts. Instead, she recommends that companies’ social behavior be regulated and the role of the corporation be re-considered.
There may be some merit to regulation. Research suggests, however, that corporations deliver more innovation where they are allowed to excel and gain a competitive advantage. Regulations create an atmosphere of “equality” and pushes innovation away. What we really want is for companies to create more innovative solutions to social problems.
A PDF of the full article is downloadable here. This article was contributed by Ken Chung at InformedStrategy.com.

Nick Aster is a new media architect and the founder of TriplePundit.com

TriplePundit.com has since grown to become one of the web's leading sources of news and ideas on how business can be used to make the world a better place.

Prior to TriplePundit Nick worked for Mother Jones magazine, successfully re-launching the magazine's online presence. He was instrumental in the creation of TreeHugger.com, managing the technical side of the publication for 3 years as well as an active consultant for individuals and companies entering the world of micro-publishing. He earned his stripes working for Gawker Media and Moreover Technologies in the early days of blogging.

Nick holds an MBA in sustainable management from the Presidio School of Management and graduated with a BA in History from Washington University in St. Louis.