Companies have an ambivalent relationship with corporate social responsibility. To the extent that CSR involves commitment to compliance, environmental targets, strategic philanthropy, annual reporting and some level of stakeholder engagement, it is comfortable or at least acceptable as a risk mitigation strategy.

However, most CSR programs are starved of what Canadian Business For Social Responsibility (CBSR) calls the truly 'transformational', what I like to think of as the broader promises for accountable behaviour, transparency, community-building and dialogue (the "art of thinking together" - William Issacs). This is not to say this is for every company either easy or even desirable. Some industries and service sectors, whose products simply use up non-renewable resources, will never achieve anything even close to social assent.

Here's one idea though for companies who want to do a little more than the routine CSR hygiene activities: Explore the possibility that people may want to talk with you about what you are doing. The most productive way of doing that today is through social media. Although the risk-benefit ratio is a little higher than, say, hand-picking a stakeholder advisory panel to advise on your CSR report, the upside of creating or, better, joining social media platforms -- in knowledge-gained and friends made -- is worth it.

Some recent writings that throw a little light on what's possible:

• At 'Reimaging CSR', Jessica Stannard-Friel provides a summary of recent discussion about the part that a social media strategy can play in ratcheting up the impact of CSR in organizations. Ms Stannard-Friel herself is an observant commenter on CSR trends.
• An article in Fast Company looks at how an American bank is using crowdsourcing to select the beneficiaries of its strategic philanthropy program.
• Melissa Rowley at Mashable gives three good reasons for using social media as part of a company's CSR program . . . "getting to know your constituents", "influencing customers as citizens", and "getting your good work out there".

Anyone who has followed my posts on apologies will know how important I feel they are as a way to manage reputation in a crisis. (Forgive the self-reference, but two of the most recent posts can be found here and here.)

A colleague in my firm's Seattle office, Drew Arnold, sent me an article from the Oregon Business Journal referencing a June 2009 discussion paper called 'The Power of Apology' from the University of Nottingham's Centre for Decision Research and Experimental Economics.

Here is the paper's abstract:

After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether apologizing influences customers' subsequent behaviour. We find that apologizing yields much better outcomes for the firm than offering monetary compensation."

Based on a study of customers using eBay in Germany, the study found among other results:

1. "Customers who receive an apology instead of a monetary compensation are more than twice as likely to withdraw a (negative) evaluation."
2. "When money is offered, a higher purchase price makes it less likely that a customer withdraws his (negative) evaluation. An apology works independent of the level of the purchase price."

Why then can't we assume that the propensity to consider legal action when harm has been caused by an accidental event, even if negligence is involved, just might be mitigated by a genuine (and the key here is the word 'genuine') apology?

One of the more tangible of intangible assets is a company's corporate responsibility (CR) program. Since I consult with a number of companies and organizations on these programs, I try to stay current on new ideas and points of view.

I was in the middle of writing about the sites and blogs I use to try to stay current when a colleague pointed out I had been scooped by Chris Jarvis at Fast Company in a post on the top ten sites which encourage conversation about social media and CSR

There are some overlaps between my list and his (Just Means and Taking It Global) but here are a couple more smart websites and blogs tagged in my RSS reader. I also follow a few Twitter 'friends' who direct me to useful CR and sustainability studies and reports.

Here are some of the most valuable . . . to me at least:

• ApeSphere. . . subtitled 'primates for progress' (also available on Twitter)
• Force for Good . . . Tomorrow's Company blog platform
• Triple Pundit . . . an eclectic mix of information and opinions on CR
• Principled Profit . . . on business ethics  
• ResponsAbility . . . H&K's blog on which this post will be syndicated
• Twitter: Greenscroll
• Twitter: UNGCCritics
• Twitter: EnviroGraffiti
• Twitter: CSRTrendWatch
• Twitter: Greenbiztweets 
• Twitter: EthicalInstitute

Please post a comment if you have others to recommend.

Reputation risk for companies is an underestimated consequence of global concern about climate change. Rather than expending more inventive energy on denying a relationship between CO2 concentrations and global temperature, smart businesses should be looking for ways to gain come reputation capital by managing climate change risks in cooperation with communities and global agencies.

Last week, the UN Global Compact and the Pacific Institute released a short paper on climate change and its impact on water which recommends a number of sensible management strategies. The context for the paper is the statement that:

"There is overwhelming scientific evidence that burning fossil fuels has altered the chemistry of the atmosphere. Figure 1 shows that atmospheric CO2 concentrations are reaching levels that are likely higher than in the last 20 million years.Rising CO2 concentrations along with other greenhouse gases (GHG) are changing the planet’s climate. Global mean temperatures have increased three-quarters of a degree Celsius since 1900 and 11 of the 12 warmest years since 1850 have occurred since 1996.These climatic changes are expected to accelerate over the coming decades."

The paper argues that a significant body of scientific evidence suggests climate change will affect the scarcity, sustainability and quality of the global water supply, which
increases business risk, especially with respect to energy supply management, raw
material inventories, industrial production systems and the associated
financing costs.

Reputation risks can easily follow, for example as "people become more aware of their rights to access water . . . local businesses may find themselves using copious amounts of water in regions where people lack sufficient water to meet basic needs."

The paper outlines some business strategies which mirror two dominant themes on how businesses today need to think of corporate responsibility (CR): CR as part of business strategy discussions (integrating "water and climate change into strategic business planning and operational activities") and engagement of stakeholders in responsible planning (engaging "key stakeholders as a part of water and climate risk assessment, long-term planning and implementation activities").

The Economist, not normally a booster of corporate social responsibility (CSR) or sustainability as it  tends to be known in Europe, this week has a piece on CSR that hits the mark. The author concludes that corporate philanthropy (contributions to charitable causes) is being cleaved but the attention being paid to behaviour -- ethics and governance in particular -- is holding steady, as it should.

There is one other important reason for thinking that companies will maintain their commitments to sustainability through the downturn and beyond: the  need to restore confidence in business. The financial crisis was triggered by a bout of corporate social irresponsibility on a massive scale that has tarnished the reputations of even the bluest of blue-chip companies. Now corporate leaders have a chance to show that they are not just motivated by short-termism after all."  

 As Intel (a client) says in the management analysis and strategy
portion of its 2008 corporate responsibility report (Note . . . I agree with ridding CSR of its restrictive 'S')

"By incorporating corporate responsibility directly into our strategy and objectives, we manage our business more effectively and understand our impact on the world more clearly."

Corporate or 'strategic' philanthropy is a programmatic means by which a company contributes to its community. Philanthropy evidences a corporate recognition that profits are derived from the community and that a return to the community in the form of wages paid for labor and consistent dividend payments to shareholders as well as steady share price growth is -- at least in terms of today's social expectations -- insufficient.

Communities expect companies to give back, and companies have obliged either through random acts of kindness or more structured investments in causes which match company values or business goals.

But let's be honest. Philanthropy is unlikely to define or affect company behaviour when it comes to choosing business strategy, rewarding employees, managing supply chain relationships, committing to respectful and sensitive business principles and overseeing board and C-suite conduct. 

A generous philanthropy program, and commitment to a cause, can comfortably sit side-by-side with dishonest accounting, excessive senior executive compensation, autocratic and harsh management, deferential governance, poor labour and sourcing practices, and denial of environmental impact. Philanthropy provides a reputational sheen, but it doesn't de facto require ethical conduct or a socially astute business strategy. Philanthropy buys goodwill but it doesn't drive responsible behaviour nor build social trust.

If The Economist is right, and I think it is, and the decline in spending on smoke-screen philanthropy is NOT being matched by a retreat from investment (time, focus, intensity) in better behaviour, then maybe out of the current crisis we will see a steady push-back within companies against insular corporate boards, inappropriate rock star-like CEO salaries, and short-sighted and opaque business strategies.