I have never much liked the phrase, ‘corporate social responsibility’ (CSR). In many parts of the developing world, it is interpreted to just mean for a company: ‘How much have you spent on local communities, over and above your taxes, royalties, etc.?’ Governments love to be able to put pressure on with this warm and fuzzy concept (often to do things that they the government have failed to do!) Companies, in turn, fall into a trap – especially looking for quantitative measures of something hard to quantify – of assuming that this is what CSR is really about. The last thing it is really about is money!! More on this another day.
In addition, many companies overly concentrate, as proof of positive impacts, only on direct employment and taxes and royalties. I commissioned a study some years ago by Professor Ethan Kapstein and Dr Rene Kim of the impact of Newmont’s Ahafo project and mine on the Ghanaian economy. Their study revealed that by far the greatest economic impacts were the indirect and induced employment and the local supply capacity building and local spend.
CSR in practical terms is really ‘social investment’ (or in the older phrase: ‘community development’). I have always seen these latter notions as problematic too. Companies are not welfare agents. Their primary goal is not to cure the economic and other ills of the neighboring communities, or indeed of the host nation. However, before you beat me up with a ‘moral responsibility stick’, I agree that it is problematic from a number of perspectives for a billion dollar gold mine to sit in isolation next to communities in dire straits, whether from malaria, drought or similar circumstances. There are clearly things that companies can and do do simply as citizens, as civic participants. However, this is only part of the picture. The magic thing is that a focus on ‘social performance’ instead of ‘CSR’ brings about outcomes that can be catalysts for improvement in community lives and for success in the business endeavor itself. This is the OUTCOME of strategic and intelligent Communities & Social Performance implementation, not a GOAL. (To be continued!)