CSR: Business’s Shampoo?

To the Editor, Financial Times:

Gillian Tett notes the vogue among CEOs for “corporate social responsibility” (When Making Shampoo Becomes a Service to Society). CSR is a response to those demanding business assume responsibility for ending pollution, poverty, income disparities, discrimination, and the other ills of the world. As Tett notes, charging business with CSR is a back-handed complement.  The critics have more confidence in business’s abilities than they do in governments’.  But, should business accept this assignment? Will the CSR shampoo really wash those attacks right out of business’s hair? Market tests say no.

The marketing notion that the customer is always right — useful in enhancing brand reputation — has mistakenly been transmuted to politics — our critics are always right. CSR has been around for decades yet attitudes toward business have not improved.

CEOs might examine the approach of the American Plastics Council. In the early 1990s, plastics were blamed for threatening the environment and human health. APC responded with the “Plastics Make It Possible” campaign, marketing the myriad societal benefits of plastics. Rather than apologize for what they do, CEOs should seek to clarify that capitalism and its products and services are not only good for “me” but for “all of us.”

Fred Smith, President
Competitive Enterprise Institute