Wednesday, 8 December 2010

Corporations with a conscience?

 N.B: This article is couched in terms of corporations’ POTENTIAL. I am not here to expound their CURRENT virtues and practices.

CSR: corporate social responsibility. You will not find any major company annual report or website without a section on CSR: what they are doing for the community, their employees and the environment. This section is often in the last pages of the financial report or tucked away in a corner online. Many regard the CSR section as nothing more than a bit of necessary PR. Now that giants such as Kelloggs, BP and Unilever have a sustainability report, everyone else needs one too or fall behind.

Many regard the content of the CSR section with cynicism. After all, how will we ever know whether CO2 emissions have fallen by 20%, short of going and performing the necessary tests. The draconian understanding of companies existing solely to make economic profit – and going to any lengths possible to achieve this aim – is expiring. Now that corporations are being forced to sit up and take account of their social and environmental impact, as well as their economic one, their potential to benefit society is massive.

Government is a blunt tool: often inefficient and ineffective, but necessary. This inefficiency arises because a very small group of people, with finite resources at their disposal, is trying to keep a population of millions (in the U.K. 62 million) happy. Go figure. The government is stretched too thin and recently even thinner owing to budget cuts and a growing population size. The purpose of such an institution is a noble one – to look after us and provide for free what have become life’s bare necessities (healthcare, education, income support).

However, to provide this support a ruling party is needed. To become ruling party a popularity contest needs to be won. Enter politics. By the very nature of elections, politics and politicians become tainted and corrupted with the desire to stop at nothing (within reason, of course, at least in this country) to get that power. And what human being wouldn’t become intoxicated with the allure of being top dog once the race has begun? While a politicians desire to positively impact society may be the inspiration for them to enter the profession, they eventually need to start playing a game. The sacking of Prof. Nutt is an example of prioritising popularity over plain common sense.

So what can the large corporations of our world do? Surely they are no better. After all, they are greedy, they just want to take our money and they pollute our air, rivers and oceans. Those things they may be, but as iterated in the introductory paragraph, companies are changing. Not only out of necessity (stricter environmental regulations) but because people are changing, too. We are becoming more self-aware and aware of our impact and the importance of these things, although there is still a considerable way to go. And people are not just the customers and consumers. They also make up the corporations.

The power of commercialism and branding, often seen nowadays as a foe of sustainability and the environment, can be harnessed to create the wealth to aid social progress. Corporations have never been stronger, more influential or well known (via their brands). The larger they become, the more they are accountable for in social, economic and environmental terms. Businesses have, possibly, even more responsibility than government and can have more of an effect than government on eliciting social change.

Not only are corporations less tainted with the power struggles apparent in government when forming policies, but each corporation’s ‘sphere of influence’ is substantially smaller than governments’ – meaning it is much more likely that all people in that sphere will benefit from any initiatives set out by that company: it is easier to provide health care for thousands than millions, for example.

Another huge advantage that companies have over government is that the consumer has chosen the company’s brand and product. Any money given to that company via the sale of those products is done so willingly. Not so with voting where the winning party may only have half the country’s support. Neither so with taxes where the products in question (public services) are often intangible.

Not only has the customer chosen Brand X, but also the core maxim of marketing – the customer is King – means that X will go to extreme lengths to make sure that their King is served. The fact that we can all changes brands and products on infinitesimal time scales when compared to how long it takes until we can change our choice of political party, gives corporations an even bigger incentive to make sure we are kept happy.

A system could arise where corporations provide us with products for which we pay – iPods/Pads/Phones, for instance. Part of the profit made is used in initiatives that benefit smaller chunks of society: in the provision of healthcare, educations, leisure centres. The end result is that we not only have the product we purchased but healthcare, too. Of course, this is a gross over simplification and I have not touched upon the difficulties and time it may take for this system to be considered, or even accepted. But there is no denying that something needs to be put in place to alleviate the colossal burden on government lest they fall victim to ever more protests and fury.

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