Corporate social responsibility: Fair Cop or Not?

Tania Mason

NGOs are under pressure to ensure that research into corporate CSR doesn't drift into propaganda.

Researcher Lisa Rimmer posted a message to an online corporate responsibility chat group earlier this year. It read: "Christian Aid, Action on Smoking and Health (Ash) and Friends of the Earth commissioned me to research and write a report on British American Tobacco and how it uses largely ineffective CSR to block regulation as well as for PR. The report was published today."

The next day, a response was posted by Nick Jones, a researcher at CSR consultancy the Corporate Citizenship Company, but writing in a personal capacity. He said: "To start a piece of research on the basis of the conclusion that you are going to draw is not research, it is propaganda. Friends of the Earth should stop supporting such an approach, otherwise it is wasting supporters' money."

The report, BAT in its Own Words, collated excerpts from the firm's internal emails, memos and letters. After its launch, BAT protested that some of the documents quoted were more than 20 years old and complained that the NGOs had refused to meet the company, preferring instead to "recycle old, ill-founded allegations and shout from the sidelines".

In the past decade, more and more groups have made it their mission to expose the unethical acts of corporations. More recently, this has meant publicly denouncing a company's CSR report or even producing a parodic version. The trend began with the US organisation CorpWatch, which recognised how crucial it was to be absolutely sure of the statements it made, for fear of tarnishing its own reputation. But as more campaigners have cottoned on to the practice, how rigorous is their research and what do they achieve?

Jones suggests the quality is uneven. He says some NGOs do excellent work on CSR, citing Human Rights Watch's investigation into banana plantations in South America and Cafod's examination of the supply chain in the computer industry as examples. "Their approach is thorough, stands up to scrutiny and gets results," he says. "Cafod got huge multinationals such as IBM and HP to adopt a labour standards code that will help tens of thousands of workers."

But other reports by NGOs have been "weak on evidence and strong on prejudice", he says. "Some NGOs are adopting the methods of the anti-globalisation movement, but I'm concerned that they don't get to the bottom of what causes poverty in complex situations and instead just pin the blame on big business," Jones says. "It's hard to see how the welfare of tea-growers or anyone else can be improved without a more rigorous approach." He mentions concerns about ActionAid's report Tea Break: a crisis brewing in India.

This is a view shared, in part, by Leon Olsen, a senior researcher in corporate responsibility at London's Ashridge Centre for Business and Society. "I have seen some appalling NGO research," he says. "In some instances, you have to question whether their sources were that credible."

However, Olsen rejects the view that research cannot be good quality unless it is objective. "Given that CSR is by its very nature subjective, it can be argued that research on it cannot be objective, as it will always be influenced by prejudices," he says. "Talking to biased stakeholders can, for example, be valuable even if it does bias the research. Instead, the key is to be honest about biased assumptions, both to yourself and when you are presenting your findings. This will help you to be sceptical about all the findings that support your case - and will help others understand the findings in that light."

Loukos Christodoulou, news editor at Corporate Watch UK, a British version of the US CorpWatch organisation, says nobody expects NGOs to produce balanced accounts. "There's no point coming up with a report that says 'they've done some bad things here but some good things there'," he says.

Even BAT accepts that. Spokeswoman Emily Brand says: "NGOs are not there to be the choirboys of multinationals, and rightly so. Ash is not looking through our internal documents for evidence of where we have done good things."

But what is frustrating, she says, is when reports contain false accusations.

"Ash had a picture from Kenya or Uganda that it got from the literature we give to farmers - it showed someone wearing safety equipment incorrectly," she says. "Actually, the leaflet had a 'how to wear it' picture next to the 'how not to wear it' one, but Ash used the latter only. It would be much more helpful if it spoke to us. It's exasperating when NGOs won't enter into dialogue about how we can make things better."

Brand says BAT has good relationships with several NGOs, among them Earthwatch and Fauna and Flora International. "BAT is a responsible company," she says. "We do our best to reduce our environmental impacts and minimise the health risks of our products. It is disappointing when there is no recognition of this at all."

There is even suspicion in the CSR community that NGOs have begun producing reports as fundraising tools. Jones claims that Friends of the Earth gets a great response to mailshots that expose corporate bad practice. Olsen adds: "In light of the limited resources of many NGOs, you might suspect that some groups jump the gun to get publicity for themselves and, consequently, more donors."

But Dominic Eagleton, policy officer at ActionAid, says NGOs would never risk their reputations, let alone finite resources, to promote research they weren't sure about. "Time after time, NGOs have shown that companies' CSR rhetoric does not always match reality," he says. "If poor people in developing countries are telling us that these companies are abusing their human rights or destroying their environment, we have a duty to check it out."

Eagleton stresses that ActionAid does not set out to find fault regardless.

"Recently, we went to Pakistan to check out an accusation that a large British company was abusing human rights," he says. "We found no evidence that it was true."

Craig Bennett, corporates campaigner at Friends of the Earth, describes the idea that the reports are not based on sound research as "deeply ironic, given the weak yet glossy brochures that are many companies' CSR reports." Actually, he says, the spoof CSR reports tell the true story of the effects corporations have on local communities and environments.

Rimmer says those who commissioned the BAT report were clear about what they wanted. "I was looking for evidence of ulterior motives behind a lot of BAT's CSR, specifically that it was trying to block the World Health Organisation's Framework Convention on Tobacco Control," she says. "The NGOs were honest about it."

Another criticism often levelled at the campaigners is their own lack of accountability. As Brand points out, NGO counter-reports are seldom audited, whereas CSR reports generally are. Philip Monaghan, head of services at AccountAbility, the benchmarking consultancy behind the AA1000 Assurance Standard, warns that this is an emerging issue NGOs cannot afford to dismiss.

"Civil society organisations need to adhere to the same standards as those upon whom they comment," he says. In the current political and cultural climate, NGOs enjoy a high standing in the eyes of the public. But this will not last forever, Monaghan warns. "At the moment, most people will believe Friends of the Earth over BAT because they are assured by the FoE brand," he says. "But that position might not be sustainable - there are reputational risks in not having your reports externally verified."

Bennett's response to this is curt. "Shell 'verify' their reports by hiring KPMG auditors," he says. "We go and meet the people who live next to Shell's refineries and pipelines and help them tell their stories of what it's like to live there. I think that is a much stronger form of verification."

Rimmer says the BAT report was checked for accuracy and that BAT's complaints about some facts being old was merely bluster. "They are trying to direct attention from the real issues," she says.

And therein lies the fundamental question: do such reports really persuade companies to clean up their acts? Monaghan thinks they do have an effect.

"Companies in the spotlight tend to be leadership companies because they will drag the rest of the sector with them," he says. But he feels that NGOs rarely try to understand the constraints companies operate under.

"There are issues of what can be done within the nature of certain businesses," he says. "We'd like to see more attention paid to how companies can change in the future."

BAT admits that the reports do create the impulse to improve when "they highlight valid issues" and the writers are prepared to engage with the company. But their main effect, Brand says, is to "increase our commitment to our own CSR reporting".

This worries Rimmer. "I understand that the main objective of the reports is to bring issues to the public's attention," she says. "But I think they often just make companies more devious. That's why we need laws to ensure companies take more action."

And this is the real point of the mock reports, according to Bennett.

"We are not trying to change individual companies' behaviour," he says.

"There are 61,000 transnational companies - there is no way we could research them all."

Instead, he says, the reports serve to highlight the failings of voluntary CSR and provide evidence to support the campaign being co-ordinated by the NGO-led Core Coalition to bring in legislation that would make CSR reporting compulsory. "Both Shell and BAT have won awards for CSR, but if they represent the high-water mark of voluntary CSR, then we've got problems," he says. "The idea that a friendly word with BAT will stop it making products that kill half the people that use them is naive. That's why we are pressing for a legislative framework."

But Jones contends it is precisely this position that is preventing many NGOs from getting the most from their work on CSR. "The problem is that a Corporate Responsibility Bill has been put before Parliament before and soundly defeated," he says. "Beyond Core's membership, it is widely viewed as impractical and extremely unlikely to pass. NGOs that put most of their efforts into this one objective are missing the chance to campaign for changes that could be brought about today."

DO IT RIGHT

Top tips for producing a report on corporate activities that stands up to scrutiny

Nick Jones, researcher, the Corporate Citizenship Company - Ensure your team has the right expertise

Philip Monaghan, head of services, AccountAbility - Name the researchers and detail their qualifications and experience and the methodology and processes they used

- Explain how you planned the content of the report; show how you decided what information you would include and what you would leave out

- Make sure you can respond coherently to any challenges to your report from the companies you are investigating; be prepared to defend the accuracy of your data

Leon Olsen, senior corporate responsibility researcher, Ashridge Centre for Business and Society

- Be honest and critical about your own assumptions and prejudices

- Question the credibility of sources - hardly any are objective

- Be open and honest about limitations in the research - Be humble about your findings because they are rarely the full truth and might be fallible - Be open to challenge and further exploration and dialogue to get to the truth.

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