Is CSR just corporates saying the right things?

This paper explores the issues behind business, Corporate Social Responsibility (CSR), and development. It questions the true impact of CSR initiatives and provides suggestions on the best way forward to maximise the potential for businesses to play a crucial role in development.

The authors core assertion is that best way to improve the development impact of business is to create mechanisms that reward businesses financially for increasing their contribution to development. Despite the focus on the role of aid in promoting development, it is business that drives the economic growth needed in developing countries. CSR has led to huge growth in initiatives as companies seek to manage the risks to their reputation. However, such initiatives are relatively limited in scope compared to what could be achieved if companies improved the development impact of their core business. Research suggests that the cost of complying with ethical standards is often passed down the supply chain to developing country producers. There is a need to look beyond ethics if companies are to make a lasting contribution to development.

The author makes a number of suggestions:

• businesses need to conduct more robust assessments of their development impact. Impact assessments should examine performance on a range of issues, such as use of local inputs, linkages with local businesses, and employment/ training of local labour forces
• an agreed set of benchmark indicators needs to be established, based on the results of impact assessments, so companies can measure, and report in a comparable way on their development performance
• suitable vehicles are needed to publicise these indicators in a clear and easily comparable way, so that investors and consumers can make informed choices