CSR, Corporate Ethics & What Can Go Wrong

Corporate social responsibility (CSR) isn’t just a buzz phrase. Nor is it philanthropy. CSR strategies such as sustainability, social impact and ethics are actionable policies that benefit all levels of society. Superficial CSR policies can shred a reputation and brand.

Consumers are paying very close attention to a brand’s social responsibility efforts – and they don’t just want to be told what you’re doing, they want to see it working.

Seems like a straightforward recipe for brand success, right? You’d think so, but lately we have seen quite a few examples of CSI – corporate social irresponsibility.

Three Examples of Corporate Social Irresponsibility

  1. Opioid overdoses have been linked to the deaths of nearly 500,000 Americans since 2000 and reached a record of nearly 50,000 in 2019. Local governments seeking to hold companies accountable for the opioid crisis in the U.S. are finally getting their day in court in West Virginia and California. The outcome could lead to broader settlements involving some opioid makers and distributors. However, this year, the consulting firm McKinsey & Company settled with most states for nearly $600 million for its role in advising OxyContin maker Purdue Pharma and others on selling opioids. And Massachusetts sued the marketing firm Publicis Health earlier this month, accusing it of designing deceptive marketing schemes to help Purdue sell more OxyContin.
  • Facebook lost users’ trust repeatedly over the last few years – the result of a data privacy protection scandal and its inability (or lack of effort) to control fake news. The company’s consulting firm Cambridge Analytica obtained the personal data of millions of Facebook users without their consent, predominantly to be used for political advertising.
  • Mylan’s EpiPen was a critical medical innovation, helping to save potentially millions of people and young children with severe food allergies. As its popularity grew, its price ballooned by 400% with few upgrades to the product. The explosive price hike was heavily criticized by consumer advocacy groups.

What Went Wrong?

Instead of showing remorse and culpability and being answerable to consumer complaints, some companies settle complaints in the hundreds of millions of dollars. Others respond, “We were playing by the same rules as everyone else in our industry; good thing this came to light – now we know we need more regulation.” Wait, what?!

So many companies, in one phase or another, lose sight of the core purpose that inspired their origin story – and as a result, they lose trust and loyalty, sometimes irreparably. In our next post, we’ll talk about how unethical behavior happens, and what consumers are looking for from CSR in 2021.

Are your CSR policies a reflection of your culture and values?

How are you making a difference?

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