Tuesday, 30 March 2010

CSR regulation vs. CSR definition

Nowadays there is a controversial debate on whether to regulate or not the activity of CSR.

The definition of CSR given by the European Commission mentions that CSR is 'A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.'

The key word in this definition is 'voluntary'. Therefore, companies are not obliged to conduct CSR activities, but they still do it. The reason for why they are investing in such activity, though, is another discussion. Some may say that companies use CSR just to for their own reputation. It is true, but today CSR has developed in such way that it is a matter of competitiveness. Therefore, it has become more than an option, but rather a necessity. Still, not compulsory. And after all, it is a win-win situation. Companies win good reputation, and society is doing better.

But I believe it makes no sense to regulate this activity. Isn't that enough that the evil masterminds of capitalism are paying taxes to the government? And maybe they're not that evil since they voluntarily invest in society's well-being. I don't argue that they are the guardian angels, but rather pragmatic.

I think the core of this controversial discussion is to maintain the boundary between CSR and law abiding activity, which is very blurry nowadays. For example, there are laws that limit carbon dioxide emissions, but still companies describe their attempt to reduce their emissions as CSR activity. Maybe this matter should be looked at from a macro-economic perspective. History has demonstrated that after a period of highly deregulated systems which approached perfect capitalism, crises appeared which were followed by the keynesian concept of welfare state. Therefore, CSR was easier to detect in a highly deregulated environment, but today, in the context of globalization and, recently, economic crisis, laws came out that overlap the activity of CSR.

In this case, should the definition be changed?


  1. I think I tried to comment on this blog post before when it was first published at the beginning of the month but it seems to have disappeared.

    The rise in digital communications and CSR is definitely linked. Stakeholders and potential stakeholders are now able to examine organisations and individuals under a social media microscope and the standard of ethical business has been raised.

    Perhaps the definition has changed already because it isn't so much "voluntary" but engaging in CSR is more of a strategic move for corporations as it will definitely win them brownie points with their publics and maintain a respectable brand.

  2. I agree with Sabrina. It's like losing your competitive advantage if you stop publishing the qualititative and quantitiative good works of the company. Any yes of course - companies do not do this out of the bottom of their hearts. I know of CSR reports that have taken two years in the making - that's alot of time, money and human resources to bring it to life. Check out my blog post for more info on how I see managing online CSR reporting: http://prcisely.blogspot.com/2010/04/production-of-dedicated-sustainability.html Cheers