Part 5/13 of the Business Sustainability in Nigeria Series by Adiya Atuluku and Jennifer Uchendu
Many have continued to use Corporate Social Responsibility (CSR) and Business Sustainability interchangeably, but in practice, they rarely mean the same thing even though they are quite interrelated.
The concept of CSR has been around since the 1950’s and has been called so many other names including; Corporate Responsibility, Corporate Ethics, Corporate Citizenship, Corporate sustainability, and Responsible Business. CSR is based on the premise that a business can only thrive if it operates within a thriving society. In that way, the business depends on the community it operates within, and as such, has an ethical and moral responsibility towards that community.
Business sustainability takes this a bit further, and explicitly encompasses other factors of environment and economics. It is based on the premise that businesses operate in such a way that it uses limited resources to meet its needs today, while still ensuring that these resources are still available to meet the needs of future generations.
So right off from these premises, we see some differences between CSR and business sustainability:
Business Sustainability is futuristic while CSR is antiquated
It is very easy to notice that Business Sustainability talks a lot about the future, forward thinking plans to sustain a business and improve targets, for instance, waste reduction and innovative brand development are examples of business sustainability projects, while CSR involves deeds that have been done in the past to support one community project or the other like building a library to support literacy in a community, or providing a health care centre for a community. Major oil companies in Africa are very good at initiating CSR projects basically because they are mandated to give back to the communities where they extract their resources from.
CSR is about now while Business Sustainability is long-term
Many CSR projects satisfy a present community need, but they don’t always address the underlying issue. The oil company that builds a health care centre for a community would not take into consideration the efforts and resources required by the local government to sustain that centre by continuously paying the fees for the health workers, maintaining the equipment and facilities, managing logistics and storage of medicines, etc. In this way, many of them may not be well thought out, and in fact, provide further liabilities for the community and promote a ‘dependency culture’ (e.g. the Niger Delta situation). Business Sustainability, on the other hand, is all about long-term thinking. For example, the community may have been better off if the oil company changed their methods of extraction for the better, and carried out some measure of replenishment upon each extraction. CSR is therefore more of present philanthropy or “add-on” initiatives with limited strategic focus.
CSR doesn’t have to align with your business, but Business Sustainability does
Many businesses carry out their CSR initiatives by identifying an issue in the community, and providing something to help ease the issue. But these initiatives don’t always align with the strategy of the business. This increases the risk of the initiative being perceived as greenwashing, or as short-term with no long lasting positive implications. For example, Etisalat Nigeria has a Fight Malaria Initiative where they provide insecticide treated mosquito nets in Kano state. The project is not integrated into Etisalat’s business model, so it’s easy for them not to be invested in the long term impacts of the project. Yes, this initiative is responsible, but it’s not necessarily sustainable. On the other hand, if Etisalat analyzed their business to see where they could better utilize resources (like how they collocate towers) or partner with others to send health educational messages along with their standard status SMSs, then these could be seen as business sustainability initiatives as they are more integrated into their core business.
CSR is mostly external while Business Sustainability is both internal and external
When companies carry out CSR, more often than not, they aim it at external stakeholders. For example, it would be odd to hear an organization call an improved employee welfare system or a replacement plan for energy saving bulbs a CSR project. Most times, CSR projects are targeted at specific demographics and groups of people, e.g people living in a community (like beautification of roundabout, roads and junctions by Fidelity Bank); schools (like donations of buildings and vehicles to educational institutions by Wema Bank); sportsmen (like sponsorship of a female basketball league by Zenith Bank); etc. Business sustainability, on the other hand, also incorporates a business’ internal stakeholders as well as the way the company actually conducts its business, e.g. incorporating a policy of flexible working hours for employees (like ActionAid Nigeria has done with its staff where their work hours do not have to be the traditional 8 to 5); utilizing online training facilities to reduce travel for training (like KPMG Nigeria has done to ensure continuous learning without the need to travel or greatly disrupt staff); and building products around issues (like SME loan scheme by GTBank).
There are other differences too
In addition to the above, we have seen other little differences between CSR and business sustainability as companies attempt to practice these. For example, we find that CSR practitioners in organizations usually have communication and marketing backgrounds, whereas sustainability practitioners may have operations backgrounds in addition to the above. We also find that a main aim of CSR initiatives is to manage the reputation of the company in the eyes of the public and other stakeholders. Business sustainability, on the other hand, has the main aim of exploring opportunities for both profit and cost savings – reputation is just an additional benefit. In light of this, many business people see CSR initiatives as an expense, but they are increasingly seeing business sustainability initiatives as having a real business case that can provide their companies with positive impacts on their bottom-line.
Some say that sustainability is under the umbrella of CSR. Others say it’s the other way around. Well, we feel CSR is under the umbrella of sustainability simply because practice has shown that CSR mostly focuses on one of sustainability’s ‘Ps’ – i.e. People.
Still others argue that there really is no real difference between CSR and business sustainability; it’s all semantics. It doesn’t help that there are so many definitions of each of them, and that definitions of sustainability and its concepts are really up to the organisation and how far that organization may want to take it.
Both concepts of CSR and Business Sustainability are beneficial and highly necessary for any company regardless of their size or peculiarity in business operations. We have seen that the underlying factor in both concepts is Impact – because how a business’ decision, process and project affects people, the planet and their profit is very critical for both present and future generations. So, no matter which a business chooses in order to make an impact, whether CSR or Business Sustainability, it would require changes in the way they do business. We talk about this in our next article.
Adiya Atuluku is passionate about helping businesses be more sustainable, and she uses her experiences in both environmental and management consulting to achieve this. She is also a believer in the role of technology and good project management in helping achieve sustainability strategies.
Jennifer Uchendu is the founder of SustyVibes and a sustainability analyst with experience working on and pioneering projects for sustainability in indigenous and multi-national organisations in Nigeria, she has a passion for helping businesses practice sustainability in the ways that best fit their size, operations and budget.