Distinctions with Differences: CSR and Corporate Philanthropy

The topic for today’s #CSRChat on Twitter (hosted bi-weekly by Fenton) was “CSR and Corporate Philanthropy: Do the Two Align?” The chat fostered a lively debate and brought together a range of different viewpoints (all expressed in 140 characters!) on corporate social responsibility and philanthropic initiatives.

Reading through the discusssion, I reflected on the ways in which my role as an attorney has shaped my perspective on the distinctions between CSR and corporate philanthropy. In our practice, we advise clients on the development and implementation of policies and standards, and on strategies to manage both legal and reputational risk. Ultimately, this advice is intended to impact the management of a company’s operations.

Effective implementation of corporate CSR standards requires strong accountability and oversight mechanisms, and requires buy-in from representatives across the company, not just from the people with CSR in their job titles. When I see companies that use CSR and philanthropy interchangeably in developing strategic initiatives, I worry about the degree to which this reflects a reluctance to integrate social and environmental commitments into day-to-day business management.

Last year, I published an article in the American Bar Association’s International Law News looking at some of these issues and the risks inherent in blurred distinctions between CSR and philanthropy. In the article, Distinctions with Differences: The Lawyer’s Role in Distinguishing CSR and Corporate Philanthropy (available here, at p.11 (.pdf)), I observed that:

CSR is about the core business functions of a company, and about the increasing demands of company stakeholders that companies be held accountable for the social and environmental impacts of their operations. …The expectations of those stakeholders are expressed in forms ranging from legislation and regulation to shareholder resolutions and disruptive protests. CSR is a strategic response to the changing nature of those expectations: stakeholders increasingly expect companies to abide by a wide range of proscriptive and normative standards. Against this backdrop, there are risks for companies that claim to have embraced CSR and then point to the glossy reports of their company foundation to demonstrate the degree of their commitment.

To be sure, a company’s philanthropic commitments are often aligned with its strategic vision and values and provide critical support to a range of external stakeholders. That said, effective implementation of CSR requires a level of internal, and external, commitment and engagement that goes beyond what is required for corporate giving programs.

You can follow me on Twitter @saltschuller and Foley Hoag @foleyhoag.

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