Harvard’s latest research is deeply disturbing. It examines whether CSR is a good “insurance policy” to shield companies from criticism when a crisis hits.
The paper, No News is Good News, examined a sample of American oil firms. Poor performers on environmental measures receive more negative coverage after an oil or chemical spill. But so, too, do those companies with the highest scores.
The authors conclude that “executives who wish to minimize the risk of media attention to negative events need to be careful not to place their organizations at the very top or the very bottom of CSR rankings. Being in the middle of the pack generates the least amount of coverage”.
Interesting. But it completely misses the point about responsible business practices. Some companies – by no means all – have begun to embrace CSR not as some glib, PR “insurance policy”. They implement good environmental management – including health and safety – precisely to avoid things going wrong in the first place.
It is certainly helpful to be reminded that strong CSR performers set expectations high. Bloomberg’s review of Unilever yesterday quoted an institutional investor: “If you’ve got a significant part of who you are and what you do tied into sustainability, you have to make sure you’re squeaky clean…The more you put yourself out there, the more that can go wrong.”
The key, then, is to ensure that CSR supports the business aims – any PR ‘insurance policy’ should be secondary. Rhetoric should flow from reality; expectations need to be managed carefully; and when things go wrong, the response should be open and honest.
The risk of Harvard’s research is that businesses itching to perform let a fear of negative coverage mean they settle for the “middle of the pack”. But the bigger worry is that it perpetuates the myth that effective CSR isn’t really just about better business management.