Published at 2020, April 22th
After the coronavirus crisis, the economy will have to be restored. This pivotal moment in human history will likely expose the organizations doing cosmetic CSR actions from the ones truly committed to contributing to a fairer society and a healthier planet.
For years, companies have been talking about their commitment, their social responsibility, and more recently about their “purpose”, their raison d’être and their ambition to contribute to sustainability.
All these commitments, CSR reports, ISO certifications, or marketing campaigns many organizations have been doing share a common goal: to show they are changing their paradigm and actively helping to solve issues of general interest. But have they really? We will probably find out very soon.
A Crisis: The Perfect Period To Check True CSR
There are many different directions organizations can take to contribute greatly to the “success” of society and the planet. From well-being and work-life-balance policies at work to environmental policies, mitigating internal inequalities, or even philanthropy actions. It is in their hands to transform their way of producing and doing business to have a more positive impact.
But one thing is clear: getting involved is always easier when everything is going well. Paying employees better, investing in their well-being, paying suppliers better, choosing production methods that are more respectful of the environment: all of this costs money. And when you have a lot of money, because you are growing, it is obviously easier.
However, it is during times of crisis that the sincerity of CSR commitments is measured. It is when things go wrong and budgets decrease that we can measure the real willingness of companies to continue to contribute positively to society. How able they are to reinvent themselves while keeping everyone aboard.
The 2008 crisis showed that for many companies, CSR was only cosmetic: from the moment profits started to melt, good intentions flew away… which did not prevent dividend payouts, year-end bonuses, and stock options. Faced with the coronavirus crisis and its economic repercussions, it will soon be possible to see which companies are truly placing their employees and the broader community on top of individual, short term benefits for a few.
Coronavirus Is Leading Businesses To Change And Adapt
Globally, people across all spectrums of society and areas of expertise are questioning the fairness of today’s economic model. They are calling out for changes to take place, for green measures to be taken, for basic incomes, for loan payments to be postponed…
In the business sphere, some people defend some organizations should be bailed out and financially supported with strings attached – so they transition to greener and more socially-focused business models. Others are in the front line to perpetuate the business as usual world from before the coronavirus outbreak.
Across the world, lobbying pressure doing the outbreak has resulted in some countries lowering or pausing their environmental standards. In the US, the construction sector wants workers to be labeled essential so they can keep on working. Dirty companies will not face any sanctions for polluting the air or water, according to The Guardian. Some airlines are seeking to ease the regulations on carbon emissions. And in the distribution sectors, the mistreatment of employees puts other companies on the front news page for the worst reasons.
Some Companies Are Showing Fairplay And Betting In CSR
Conversely, we see some signs of openness emerging on the side of companies that agree to reduce their dividends to cope with the aftermath of the crisis, or that reduce the compensation of top executives. Some are even considering a temporary decrease in the highest wages in their company to avoid having to lay off workers.
Other organizations are considering relocating their activities, working more effectively on the resilience of their supply chains, or planning ahead and anticipating the risks of possible future crises. Some are adapting to stay relevant and profitable and started producing what everyone needs these days: masks, visors, or disinfect gel.
As we’ve seen there are two different business visions already in place. On the one hand, there are the organizations seeking to preserve the logic of the past of profitability for a few above social and environmental stability. On the other, those organizations that already understood they need to adapt and add value to society.
A Crucial Moment For Businesses And CSR
Obviously, this is not to say that we should ignore economic reality. Many companies, especially small companies but also some large companies, will have to face plenty of difficulties over the coming months. And it will certainly not be easy in this context to continue to worry about recycling, eco-design, or changing to a more sustainable business model.
But for some companies, those with large margins of maneuver and financially healthy over the last years, it will be a crucial time to make bold decisions. Where will their priorities lie? On the construction of a more virtuous model, even if it means temporarily profitability loses, or on the perpetuation of a short-term model?
For CSR, the coming months will, therefore, be pivotal. CSR departments will undoubtedly have to find a relevant place internally to reclaim their legitimacy. Faced with the crisis, it will be all the more difficult to keep having budgets, to continue to invest in cleaner production methods, or to finance co-construction actions with stakeholders.
But it is also a period of opportunity for CSR: for it to definitely show that investing in becoming a more resilient company that anticipates future risks and plays for all and for the long term. The time for CSR to impose itself at the strategic, board-level – to come out of the closet and become an integral part that co-designs the business transition, based on a core, sustainable business model.