Corporate Social Responsibility

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PHOTO: Codepink Women for Peace

Like most things in nature and among human institutions, corporate social responsibility (CSR) exists on a spectrum:

Evil companies, which subscribe to the “profits are everything” mantra of unfettered free market capitalism.  In this category are all the big banks which brought us such delights as “financial innovation,” the Great Recession, money laundering for global criminals, and rigging the markets in their favor.  Note that, like the next category, some of these companies may do a bit of CSR stuff, but obviously their hearts (if they have them) are not in it.

Standard companies, which do things like make charitable contributions, donating goods and services, and sometimes allowing employees time off to work for nonprofits.  The great majority of businesses fall into this category; most of them do CSR because they must, a few do it because one or more senior  executives have pet charities/nonprofits, and a few because they think it is strategic: supporting their business plans by selling more of their stuff, getting or retaining employees, or entering/creating new markets.

MooCluckMooOne recent example in this latter group is Moo Cluck Moo, a Detroit-based premium fast food company that was paying its employees $12/hour, well above the minimum wage, and raised it to $15/hr, in line with the growing demand by fast food workers for a living wage.

Good companies, which make social responsibility part of their business, but at their heart are still profit-driven (the legal definition of a corporation in the US, until recently, did not allow anything else – see the next category); a number of employee-owned companies fit into this category (and the next).

goreWL Gore, which makes a wide variety of consumer (GORE-TEX®) and industrial products, has been run since its founding in 1958 by teams of employees, rather than the usual corporate pyramid; this has made them one of the best places in the world to work. And because they are a chemical company, they strongly support environmental sustainability.

Social enterprises, which make social responsibility the heart of their business, are still profit-driven, but either sell socially-oriented products and/or services, or simply do as much as they can for social responsibility with the profits they make from their ordinary products and services.  Some of these companies are B corporations, which is a certification for existing standard for profit corporations. Recently, however, new laws were enacted creating a category, the “Benefit Corporation,” a for-profit which is chartered for social responsibility (Confused?  Don’t worry about it).

Give Something Back has sold office products for 20 years, selling sustainable products wherever possible, fosters employees, and regularly gives about 75% of their profits to nonprofits in the communities where they do business – selected by their customers.

NumiLogoNumi Tea sells only organic, Fair Trade, and Fair Labor certified products, donates money, employee time, and products to nonprofits, and uses eco-responsible packaging.

kafKing Arthur Flour Company, the oldest in the US, was founded in 1790.  It is employee-owned, one of the earliest certified B corporations, and listed by the Wall Street Journal as one of the top small workplaces.  It pays 80% of employee healthcare premiums; provides employees 40 hours paid time off to volunteer and also does company-wide service outings, and attempts to use sustainable products and packaging.

Social businesses are defined by Muhammad Yunis, founder of Grameen Bank, as not only having social responsibility at their heart, but essentially operating like a nonprofit, offering only socially oriented products and/or services, with all the profits not needed to keep operating used to grow the business.  It can also, according to Yunis, be a for-profit enterprise owned by the poor.

GrameenDanoneGrameen Danone is a joint venture of Grameen Bank and Group Danone, founded in 2006 as a social business.  It produces a yoghurt called Shokti Doi (“strength yoghurt”) containing protein, vitamins, iron, calcium, zinc and other micronutrients aimed at repairing nutritional deficits of Bangladeshi children, as well as providing local work for dairy farmers and women who sell the yoghurt.