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Wednesday, February 4, 2009

The CSR Debate

In his recent column in The Financial Times, Stefan Stern implied that it is okay for businesses to employ child laborers and pursue environmentally unsustainable activities so long as it is within the law and it is in the interests of being competitive. He seems to also invoke the words of Sir Terry Leahy, chief executive of Tesco (the UK’s leading retailer) as implying Sir Terry would be in agreement.

Having been a product manager with a clear set of P&L objectives in previous roles, I am fully aware of the business imperatives of cash and profit. However, I do not see the mismatch that Stefan observes between CSR and what managers have to do every day of the week. As I see it, every CSR initiative should have a clear and commercially compelling objective, whether it is employee retention, risk mitigation, customer loyalty, cost reduction or others. Additionally, every manager should be worrying not only about today’s profit but about tomorrows and next year’s profit too. Using up a resource faster than it is being replenished might deliver short term returns, but will compromise tomorrow’s business.

That isn’t to say that there isn’t sometimes a short term disadvantage when one company acts responsibly and its competitors act irresponsibly. I recall a negotiating game from my early training in management that demonstrated that if individual parties work together for the common good then all end up better off. But if either tries to undermine the other’s trust to gain at the other’s expense, both end up worse off. In the CSR world that is where leadership and common standards come in.

Contrary to Stefan’s views, I think our current recession demonstrates we need to be thinking more rather than less about the longer term implications of our decisions in the business world. To characterize CSR as do-gooders and “babies, dolphins and forest” is a disservice to the debate and will ultimately lead us to the lowest common denominator.


  1. I can obviously not agree with the FT article, and I like the comment from Kevin Moss.
    Actually, most of my customers are working in garments industry. I perfectly know about the sample taken in FT article.
    What surprise me the most in all this supply chain is that almost all the pressure is done on the last supplier (cutting-sewing step). It is not where most of the product value is added! It is only because of short term thinking as Kevin Moss said. It is easy to ask to the supplier to reduce selling cost, much more difficult but also much more profitable to reduce supply cost globally.

    Two last comments:
    --> About the law and its understanding in developing countries. You must take into account that the law as western people see it is only seen that way in western countries. I made a note on that and on its consequences on child labor recently:
    --> Huge changes in the garment supply chain in Asia is now occurring with huge consequences on workers too. I am currently making a note on that. You could read it soon on or received it by sending subscribing to our newsletter by sending an email to

    Best regards

  2. I agree with both yourself and Pierig and needed a day or two to digest the content before responding. Stefan certainly stirred up the debate, but for me, being something of a glass half full person, see it as helping reinforce the development of the agenda as a mainstream concept. Stefan has successfully and entertainingly caused a stir (and traffic to the FT blog) through what can be perceived as an easy target, especially selecting individual initiatives to suit. Yes, there are more superficial attempts at grasping the CSR challenge, but there is also some great practice to be lauded. Bad news grabs attention and sells.

    I would, similar to yourself and Pierig, like to be considered a 'serious CSR type' and think of the article as a chance for people like ourselves to reinforce the maturity and mainstream acceptance of the agenda as an integral part of all business whenever we eventually emerge from the current uncertain economic climate.

    Journalists are paid to generate discussion. We get paid to demonstrate good practice.

    My more complete response at the time is here:

  3. My thought is it's too late to dally in these old debates. The world faces huge "game-changers" -- climate, biodiversity, water scarcity, poverty (and derivative crises such as housing, employment, youth vs. aging, women's rights, etc.), health, transportation, human rights, and 10 years of governance crises across each sector. These are the strategic issues that will -- and are -- shaping commercial opportunities and markets. Call it "CSR" or call it business strategy or call it anything one wants. These are imperatives. The FT article is a distraction and waste of time in my view. Great post Kevin. Check out what we're up to at -- Steve Rochlin