Global companies are beginning to look upon corporate social responsibility as a genuine business opportunity. Led by high-profile organisations such as Nestlé, Unilever, GE, HP, Aviva and Archer Daniels Midland

, they are wrapping CSR into their business strategies, rather than seeing it mainly as a reputational insurance-policy.

 

Today, most global organisations want to be seen as creators of social value as well as financial value. Whether the topic is framed as CSR, environmental responsibility or sustainability, the ambition is clear: to present themselves as global citizens as well as creators of profits, jobs and tax revenue.

 

But the majority still see CSR through a 1990s lens. Back then, shocked to find themselves named and shamed by NGOs as despoilers of the environment and exploiters of the developing world, corporations were on the defensive. They seized on CSR as a weapon in the battle for public opinion. Occasionally, forward-looking CEOs would argue that CSR was a business opportunity, but this never seemed to amount to much.

 

Now things appear to be changing. In Accenture’s 2010 worldwide CEO survey ‘A New Era of Sustainability’, 93% of CEOs agreed that ‘sustainability issues will be critical to the future success of their business’. The most important driver of change, according to 72% of the CEOs surveyed by Accenture, is still ‘brand, trust and reputation’. But ‘business opportunity’ came next – followed by personal motivation, customer demand and employee engagement. Down in 8th position, cited by just 12% of CEOs, is ‘pressure from investors / shareholders’.

 

One of the most significant recent developments in the continuing debate about CSR is Harvard business strategy guru Michael Porter’s critique of the traditional model. He argues that companies “remain trapped in an outdated approach to value creation”. His ‘Creating Shared Value’ model recognises that “societal needs, not just conventional economic needs, define markets”. It is an attempt to take corporate responsibility out of the adversarial 1990s paradigm and bring it within the mainstream of business strategy.

 

Nestlé is his highest-profile European convert and aims to create shared value in the fields of nutrition, water and rural development. Shared Value features prominently on Nestlé’s website and the company also maintains a dedicated micro-site, www.creatingsharedvalue.org.

 

Unilever’s ‘Sustainable Living Plan’ (www. sustainable-living.unilever.com) also aims to take CSR out of its ghetto and situate it firmly within the company’s business strategy. “We have ambitious plans to grow our company, creating jobs and income for all whose livelihoods are linked to our success – employees, suppliers, customers, investors, and thousands of farmers around the world. But growth at any cost is not viable,” says Unilever.

 

What would the Sustainable Living Plan mean for investors, Unilever CEO Paul Polman was asked in December 2010? His answer was surprising: “If you buy into this long-term value creation model, which is equitable, which is shared, which is sustainable, then come and invest with us. If you don’t buy into this, I respect you as a human being, but don’t put your money in our company.”

 

Polman was anticipating a sceptical response from analysts and investors: corporations have always found it difficult to persuade investment professionals to take CSR seriously. But if social value creation really is a driver of future revenues and profits, as Porter argues, we can expect that attitude to change.