Newsletter
“Bad news is good news”
At this year’s conference of the "Deutsches Netzwerk für Wirtschafts- und Unternehmensethik" (German Network for Business and Corporate Ethics; DNWE), CSR experts discussed the credibility and effectiveness of CSR activities. One central thesis was: CSR is often not only barely credible, but can also harm reputations.
Professor Kurt Imhof (founding member of ECRS and director of the fög at the University of Zurich) set the tone and course of the conference with his opening talk. According to Imhof, the reputation of companies today is much less stable than it once was, due to an increasingly prevalent “commercial cultivation of outrage”; and it is hard to improve corporate reputation with CSR. The axiom still holds: “Bad news is good news”. Media tend not to report on “good deeds”, but on scandals. According to Imhof, since the ‘dual system’ was introduced in Germany (that is, private broadcasters operating alongside public broadcasters), media no longer are geared towards raising political and social awareness but towards the media consumer. The rate of scandal, accordingly, has risen noticeably, since scandals generate the most attention and yield the greatest profits.
The theory of a “commercial cultivation of outrage” was also confirmed by Kristina Läsker of the daily newspaper Süddeutsche Zeitung. According to Läsker, it is quite rare for German newspapers to use the term CSR in their reports – and when articles on CSR do appear, it is only to highlight the contrast between a company’s misconduct and their good intentions.
The PR consultant Klaus Kocks pursued a similar argument: contrary to what many CSR experts assume, he thinks the usual efforts made by large corporations in CSR are mere symbolism and PR. CSR in Germany, he claims, has nothing to do with the core business, and pins its hopes exclusively on credibility. Credibility here is understood as an ideal form of sacrifice, a willingness to accept a symbolism (against better knowledge) that shows no causal relationship between communication and actual facts. Kocks illustrated the point with the example of an industrial company that financially supports a foundation for protecting hummingbirds – something that in no way proves that the company’s overall operations are environmentally friendly.
Even if a radical rejection of the idea of credibility sounds rather too cynical, this critique of the attempt to communicate credibility or build up reputation through CSR is justified. Studies by ECRS have shown, for example, that CSR activities appear less credible the more actively one’s own “good deeds” are publicly communicated.
However, the question of how companies should respond to the double challenge of meeting commercial expectations on the one hand and responding to reputational risks on the other, remained unresolved at the end of the day. However, Imhof’s thesis of the “commercial cultivation of outrage” paved the way for a viable solution. Also, sensible approaches are already beginning to appear on the market. For example, there are already some examples of companies deliberately distancing themselves from the traditional CSR focus on reporting, codes of conduct, multiple-stakeholder dialogues and investments in various socially problematic areas. Instead, they are moving towards CSR activities as a part of their everyday business investment. The goal is to meet social responsibilities with programmes and activities that are relevant to the company’s actual business. That is, CSR is no longer an ersatz that companies use to compensate problems caused by their (internal) operations. Rather, the idea is that CSR programmes should already help find solutions for exactly these problems.
The Deutsche Netzwerk Wirtschafts- und Unternehmensethik (German Network for Business and Corporate Ethics; DNWE) is a charitable association founded with the aim of fostering an exchange of ideas and thoughts on ethical questions relating to business, and orienting business behaviour around ethical models. In this way, it hopes to contribute to resolution of moral dilemmas arising from economic competition. At present, more than 500 members are registered, including representatives from business, politics, churches and research institutes. The DNWE’s annual conference took place 24–25 April 2009 in Bonn, with the motto “CSR in crisis: The responsibility of public players”.