This article was first published in The Gleaner (Jamaica) on October 22, 2018.
Corporate social responsibility (CSR) is a priority for business leaders worldwide, and small island states like Jamaica are no exception.
Scholars and business leaders alike sometimes disagree on the role of business in society. However, the rhetoric is leaning towards the inclusion of CSR in the strategic growth plans of companies globally. A company's reputation, branding, communication, stakeholder mapping, and stockholder interest all converge on their ability to properly include CSR in their growth strategy.
The Economist defines CSR as "the tribute that capitalism everywhere pays to virtue", but it has been an uphill task to convince the public that companies engage in CSR out of the goodness of their big corporate hearts. To customers, it just doesn't ring true.
This is a self-inflicted wound, as local companies tend to treat and communicate it as charity. It is not all about oversize cheques and photo opportunities.
Misalignment
The concept of CSR as charity is rightly frowned upon in the world of business, as not only is this approach unsustainable, the two do not align. CSR tends to only be sustainable when a win-win-win situation is engineered where people, profit and planet win - and the virtuous circle continues.
The areas of concentration in Jamaica tend to be education, sports, health and wellness. In education, for example, the NCB Group, since 2003, has been supporting qualified students at the secondary level by absorbing the full cost of business-related CSEC subjects, including principles of accounts, principles of business, management of business and, recently, information technology.
In relation to wellness, the Sagicor Group hosts the largest road race in the Caribbean, the Sagicor Sigma Corporate Run, and makes generous donations to the Spanish Town Hospital Neonatal Unit, and St Christopher's School for the Deaf in St Ann.
While these are laudable efforts on the part of these companies, I'm interested in the approach to these initiatives and their sustainability. To determine sustainability, a number of elements and questions must be considered.
How does a company trade off financial returns against strategic contributions to society? Some experts believe the best approach to achieving this balance is the use of financial returns as a filter when making investments.
Often, if shareholders ask a company to do something that only makes sense from a social perspective, the initiative will be re-engineered to respect that mandate and the mandate of producing economic returns. Nike's recent campaign with Colin Kaepernick is a prime example of CSR engineered for economic returns.
By taking a stance against social injustice, Nike appears to be strongly supporting a social cause. Don't believe for a moment that Nike would have embarked on this campaign if it would hurt its bottom line.
But at the end of the day, Nike's campaign aligns with that of the proponents of sustainable CSR. Those proponents believe it is necessary for the values and standards adopted by successful firms to act as lubrication for the cycle of opportunities, enterprise and responsibility.
Fortunately, problems that prevented the development of CSR in businesses no longer exist, one of which was shortage of capital. Today, however, CSR is understood and strategically practised by many. Citibank, for example, developed strict guidelines when assessing the environmental impact of its lending decisions. Timberland allows its employees to take one paid workweek off to work with a local charity of their choice. Such examples are only the tip of the iceberg in relation to some of the strategies that companies employ, but more often than not, CSR is employed only to the extent that it is good for business.
Jamaican companies must rethink CSR and move away from thinking of it as charity. This will allow them to realise new opportunities and perhaps gain a competitive advantage. Then and only then will the disconnection be reconciled, and both society and business can win.