The Surprise New Consumers: Corporate Social Responsibility in a Changing World
The nature and motivations for corporate social responsibility (CSR) have been undergoing very significant changes in the last decade. Whereas corporate philanthropic activities may have once been motivated more by image-building and were thus seen as 'window-dressing,' CSR today is more often an integral part of corporate strategy.
Since October 2010, I have been president and CEO of CHF International, a non-profit organization dedicated to improving the lives and livelihoods of communities in developing and conflict-affected communities around the world. Before that, I worked in the private sector for 13 years. My re-introduction to the world of international development was in part through CSR -- but from the "corporate" or donor perspective. It began in 2002, when I was approached by an old friend from my Peace Corps days who was seeking to help raise funds for his organization's community-based development work.
The organization was CHF International. I spoke to my colleagues, explaining the organization's guiding values and work in places like Afghanistan, and they gave generously. This led to an invitation to join CHF's Board of Trustees, to later become chairman and then, eventually, president and CEO. During that time, DLA Piper, the global law firm for whom I worked, supported CHF through corporate philanthropy -- in the aftermath of the east Asian tsunami and later the Haiti earthquake -- and in providing pro bono legal services for CHF's growing micro-finance network.
My involvement during my private sector career was primarily based on the philanthropic values I shared with my colleagues and CHF -- a genuine desire to see disaster- and conflict-affected communities take charge of their livelihoods and improve their situations. But philanthropy is not the only legitimate reason for CSR. Consumers are changing. They are increasingly aware of the social performance of the corporations from whom they purchase goods or services and want to know that those corporations respect the issues they care about, from fair-trade product-sourcing to environmental concerns and investing in the communities in which they operate. Many corporations fully understand this heightened awareness of social considerations and recognize the importance of high ethical standards in their work.
This is not, however, the only change taking place today. When it comes to the developing world specifically, there is a very pressing reason for corporations to invest in CSR: they simply have to.
The global economy is changing irrevocably. Emerging economies are making huge strides, from the widely recognized BRIC countries to the less frequently touted nations of Africa, which constitute six out of ten of the fastest growing economies of the last decade. Over the past 40 years, trade has tripled as a share of the US economy , with more than 20% of jobs tied to international trade and over 30% in the manufacturing sector. And America's fastest growing markets -- roughly half of all US exports -- are in developing countries. Increasingly, consumers and other stakeholders are those living in developing countries. In other words, for many major corporations, the same communities that benefited from philanthropy in the past are now rapidly becoming their customers, a dynamic phenomenon that will only increase in the future.
At CHF, we have long partnered with the private sector, both the local private sector in the countries where we work and with the international private sector. With local companies, we have long seen this interaction of community and commercial needs -- the communities we work with have always been their customers. Now, we are increasingly seeing this with the international private sector, too.
When undertaking CSR initiatives, it makes sense for socially-conscious corporations to partner with mission-driven organizations that have long-standing relationships with communities in developing countries. We know the local environment, the culture, the people, the political landscape, and we know where the needs of the people in local communities might intersect with a company's interests -- such as providing training opportunities that enable the hiring of local people in place of a far more expensive imported workforce.
This kind of socially responsible stakeholder management can result in a win-win situation both for the businesses moving into emerging economies and for the millions of people around the world who are transitioning from "beneficiary" to "consumer."
This article originally appeared on the Huffington Post.
By: David Weiss, CEO, CHF International