The Continued Evolution of CSR: Strategic vs. Responsive Impact
In CSR 2.0, we outlined how the infusion of Corporate Social Responsibility (CSR) into internal stakeholder departments within organizations had the potential to catalyze social innovation in 2016 and beyond. As the field continues to grow, newer models of Corporate Social Responsibility are emerging, with applications ranging from Management Control Systems to the latest idea of Collective Impact.
When Porter and Kramer initially outlined Corporate Social Responsibility in 2006, they categorized CSR activities into responsive and strategic agendas. The authors defined responsive CSR as mitigating existing or potential adverse effects of organizational activities. Strategic CSR was defined as consistent with the firms’ strategies, leveraging their capabilities to improve their competitive advantage and benefit society simultaneously. Overnight, corporations created CSR departments that focused on reduced carbon footprints and sustainable supply chains.
Both categories of CSR work to improve the relationship between business, society and the environment in different ways. In the table below, we note the key differences between responsive and strategic CSR as outlined in a recent study by Chartered Institute of Management Accounts:
Strategic Impact Strategy vs. Responsive Impact Strategy:
Responsive Impact works to mitigate existing and potential harms from a firm’s operations through programs such as:
- reduction of waste
- carbon emissions
- energy saving goals
- environmental safety
Strategic Impact directs organizational resources and team attention to initiate and operationalize CSR agendas that:
- provide competitive advantage as well as benefits society
- use the company’s core beliefs as drivers behind the initiatives
- views stakeholders as relational partners who can amplify and affect change together
Strategic CSR, with its roots in a belief system and ambition to create competitive advantage, has become the elusive shape-shifter of the CSR world. Defining a CSR strategy that differentiates and leverages the firm’s core ideology is not simply a matter of applying accounting principles to a tenuous idea. Starbucks built its ethically sourced coffee program in 1999, and opened its first LEED-Certified Store in 2005, both before the term corporate social responsibility was invented. In 2014, Starbucks introduced an innovative, strategic CSR effort titled College Achievement Plan. In collaboration with Arizona State University, Starbucks offers full tuition coverage towards a bachelor degree for its US employees. Starbucks’ CSR is a true derivative of its mission to “inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”.
There is also another, newer iteration of CSR that is gathering momentum, known as Collective Impact. Defined by Kania and Kramer in the Stanford Social Innovation Review, Collective Impact is “commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem.” Collective impact initiatives involve a centralized infrastructure, a dedicated staff, and a structured process that leads to a common agenda, shared measurement, continuous communication, and mutually reinforcing activities among all participants. In the article, Kania and Kramer provide several examples of successful collective impact that resulted in an improved high school graduation rate in Cincinnati, cleanup of a heavily polluted river in Virginia and a reduction in childhood obesity in Massachusetts. In each of these cases, no single group was able to affect change – it required the participation of multidisciplinary stakeholders in cross-sector coordination.
At Digital Union, we help companies to create unique social impact strategies that benefit communities while elevating company brands and attracting more consumers. We strongly believe that social impact strategies work best when we tie competitive advantage to benefiting society, embedding the core ideology of a business in the planning of initiatives, and accounting for stakeholders as a relational core to the strategic process. The evolution of the field of CSR supports and complements our approach – come and be a part of it!
Maggie & Hector