Beyond csr? Business, poverty and social justice: an introduction

How far can Corporate Social Responsibility (CSR) initiatives help to address poverty, social exclusion and other development challenges? What is the balance of responsibilities between state, market and civil society in addressing these problems and meeting the UN Millennium Development Goals (MDGs)? What new tools, strategies and methodologies are required to harness the positive potential contribution of business to development and deter corporate irresponsibility? This special issue brings together a dynamic mix of academics and development specialists to address these themes in a focused and innovative way. In this introductory article, we consider some of the key cross-cutting themes and insights raised by the contributions. The aim of the introduction and the special issue is to start to fill the gap in our understanding of how, when and through what means business can help to reduce poverty, while recognising the equally powerful potential of the business community to exacerbate poverty. Taking particular CSR initiatives as a starting point, we seek to look at the broader developmental footprint of business-as-usual strategies, as well as those which fall under the banner of CSR, to gain a fuller picture of how business is implicated in the development process. Corporate Social Responsibility (CSR) has been adopted as an approach to international development. But who does it benefit, how and why? Does CSR have the potential to redefine the meaning of good business practice as meeting the needs of poor and marginalised groups? Or is there a danger that, by basing development policies around a business case, we fail to tackle, or worse, deepen, the multiple forms of inequality and social exclusion that characterise contemporary forms of poverty? International organisations such as the United Nations and theWorld Bank, and national development agencies such as the Department for International Development (DFID) in the UK, have embraced CSR in the hope that the private sector can play a key role in achieving developmental goals aimed at poverty alleviation. The UK’s DFID is confident that, ‘By following socially responsible A R T IC L E S Peter Newell is in the School of Development Studies at the University of East Anglia, Norwich, NB4 7TJ, UK. Jedrzej George Frynas is at the University of Middlesex Business School, The Burroughs, London NW4 4BT, UK. Email: g.frynas@mdx.ac.uk. Third World Quarterly, Vol. 28, No. 4, 2007, pp 669 – 681 ISSN 0143-6597 print/ISSN 1360-2241 online/07/040669–13 2007 Third World Quarterly DOI: 10.1080/01436590701336507 669 practices, the growth generated by the private sector will be more inclusive, equitable and poverty reducing’. The idea that the market is a critical vehicle for tackling poverty is emphasised both in DFID’s report ‘Making Market Systems Work Better for the Poor’ and in the report Unleashing Entrepreneurship: Making Business Work for the Poor by the Commission on the Private Sector and Development, convened by former UN Secretary General, Kofi Annan. At the same time there is also an emerging business case for addressing poverty directly. Within the business community the notion that there is a fortune awaiting those entrepreneurs who target their products at the ‘bottom of the pyramid’ (BOP) has recently become very influential. CK Prahalad and Stuart Hart, the key proponents of the idea, suggest that private firms can help reduce poverty, and make profits at the same time, by inventing new business models for providing products and services to the world’s poor—the four billion people who live on less than $2000 a year. It assumes that the poor have cumulatively a large amount of disposable income but that their needs are poorly served by firms, which are geared towards middle-income and high-income consumers. Therefore, partnerships with non-governmental organisations, development agencies and local communities are said to be able to help private firms to develop new markets, while providing the poor with access to markets and services. Although such an approach is not directly concerned with the broader social and environmental responsibilities of business, and its conceptualisation of poverty is itself problematic, the BOP idea echoes the focus on ‘win-win outcomes’ in contemporary CSR debates, namely the assumption that CSR can contribute to the welfare of ‘stakeholders’ while contributing to a firm’s financial bottom line. This win-win logic is dramatically emphasised in the title of the recent book by Craig and Peter Wilson:Make Poverty Business: Increase Profits and Reduce Risks by Engaging with the Poor. However, while there are clearly zones of compatibility between businessled CSR initiatives and efforts by the development community to engage business in efforts to tackle poverty, CSR as a business tool is distinct from CSR as a development tool. CSR emerged among leading firms and business schools as a public relations tool, a way to deflect criticism, engage critics and potentially capitalise on emerging business opportunities associated with doing, and being seen to be doing, good. This is a far cry, however, from constructing corporate strategies that are aligned with the pressing need to tackle poverty and social exclusion across the majority world. Despite recent interest in ‘new’ business models such as ‘bottom of the pyramid’, which present the business case for viewing poorer consumers as a huge untapped market for products targeted to their needs, poverty more often enters business thinking as a problem. For instance, firms producing and trading in oil or diamonds often operate in conflict zones, or areas of social unrest over contested land rights and resource revenues. There is a clear difference then between redefining the poor as business opportunity and viewing the poor as a problem, either an obstacle to smooth-running business operations or, more often than not, someone else’s problem, normally the government’s. PETER NEWELL & JEDRZEJ GEORGE FRYNAS