Benevolent business: what are the real benefits of CSR?

It's hard to criticize something as obviously wonderful as Corporate Social Responsibility (CSR), the current business fad. But here goes.

Companies all over Mexico are planting trees, encouraging indigenous communities to paint sneakers for sale and plugging their donations to children's charities. It's cooler than having an iPod.

What they're not doing is thinking straight.

I am not against CSR in general, but the way it is applied doesn't add much to society and, ironically, enables most companies to dodge their social responsibilities. It doesn't help to plant 3,000 trees if you're tearing 300,000 down.

The same companies that send computers to inner city schools then turn around and charge double or triple world market prices for their goods because of the monopolies they enjoy. Where does Telmex get the money it gives to charity? From us, but also from the poor.

A competitive telephone industry would provide more jobs, more investment and more opportunities for society, and the pattern is repeated across a host of industries.

The children, I bet, would prefer opportunities to handouts.

CSR does give us all the opportunity to reconsider the role of business in our society. At the moment the pendulum is swinging against capitalists in the Western Hemisphere and that may not be a good thing. They need to act before it is too late.

We rely on business for jobs, wealth creation, investment and innovation and we need to agree on the best way to get that while minimizing the negative side.

According to Ian Davis, the worldwide managing director of McKinsey & Company, CSR is too often left to the public relations department when it should be a core strategy issue. The demands of society for, among other things, less pollution are often business opportunities, for example.

Thus the smarter energy companies have been expanding natural gas production and pharmaceutical companies have belatedly realized they can make more money by selling cheap AIDS drugs to Africans than they were making by keeping prices high.

And Starbucks guarantees high coffee prices to select indigenous communities and benefits by selling us the feel-good factor along with our shot of caffeine.

As an aside has anyone noticed that Starbucks is really an ice-cream shop in disguise? It's full of young people drinking frozen frapuccinos with whipped cream and caramel. It's brilliant. Tastes sweet and delicious while containing a pleasant and addictive drug.

The point I am making is that CSR has to be more than a donation to the managing director's favorite charity. It has to strengthen a business and not weaken it as that weakens our economy and we end up throwing away jobs to pay for projects that government agencies should be funding anyway.

And the ethos of responsibility should run right through any decent company. It's no good giving a school computers if you won't give the children's parents a job because the mother is pregnant or the father has a disability.

And how responsible is it to take money from your shareholders and spend it on something with no plausible business benefit?

The social backlash we are experiencing is a result of three decades of living by the religion of "the business of business is business" made popular by Ronald Reagan and Margaret Thatcher.

This led many executives to believe that anything went as long as it made a profit. They forgot that they only exist because society allows them to and that there is an implicit contract here.

Businesses have been pushing the edges of that contract for too long now and should reconsider before society does.

John Moody has spent 10 years covering Mexico for a variety of international news organizations. He now works as a freelance consultant in the private sector and for NGOs. He can be reached at [e-mail].