Powering Up (and Redefining) Corporate Social Responsibility (Part 1)

At first, GE's "Ecoimagination" appeared to be old-school Corporate Social Responsibility (CSR), albeit a very hip and very expensive version. It involved the company making announcements about and promising investments (some $700 million) in green initiatives to bolster their reputation on a growing wave of concern over climate change.

It started out with a promise to cut greenhouse-gas emissions by 1% over an eight year period. GE caught the wave, however, and with the wind of better technologies at its back, it has apparently already exceeded that goal by 400%.

Far from old-school, however, is the very real, new CSR being driven through GE's Ecoimagination. Early in the initiative, enlightened managers worked to convert the innovations into "eco-certified" product offerings, like the new GE wind turbine.

GE's eco-certified products are "sold out to 2009," according to Bob Corcoran, the vice president for corporate citizenship of GE, as reported in the Economist's Special Report on Corporate Social Responsibility last week.

Old CSR is deficit-driven. It is about protecting your reputation, particularly against an "ever expanding list of NGOs ready to do battle with multinational companies at the slightest sign of misbehaviour," according to the Economist article, which further notes that "more than ever companies are being watched,...(any nonpolitically correct transgression) can be captured on camera and published everywhere in an instant, thanks to the internet."

New CSR puts market forces behind social innovations. When Walmart changes its light bulbs, there is much to say about the huge energy and cost savings coming from this enlightened move. But when Walmart sells only energy efficient light bulbs to its customers, the market impact is so big that the green dial truly moves.

When the three biggest cement manufacturers in the world join together to pledge to cut emissions by at least 20% for every ton of cement they make, that's news. But with the demand for cement growing 5% per year, it will be when they are able to produce stronger, more flexible varieties of cement to reduce the amounts used they'll move the dial on this industry that accounts for some 5% of the world's emissions of greenhouse gases.

When Google.org begins to invest in its newly defined strategy areas (as covered by the Economist), it will bring information distribution reach like none seen in the social sector. With investments in both nonprofit and for profit initiatives in just a few key areas, we may see game changing results.

New CSR gets ahead of the wave of what may end up being enduring demand from customers and future requirements of regulators, and builds a competitive advantage for the early movers.

We here at Philanthromedia have no problem with this form of enlightened self-interest on the part of corporations. In fact, as regards allocating precious capital in the social sector, we cannot help compare the potential impact of one GE compared to a million of the social entrepreneurs and social business enterprises that are the darlings of philanthropy today (see all the Davos coverage) but are at the extreme other end of the spectrum in their ability to scale. I hope our "discerning donors" will take a look at the potential of the new CSR, and their unique ability to harness corporate relationships, as they make their philanthropic plans in the coming years.

Carla E. Dearing

Posted at 1:00 AM, Feb 01, 2008 in Accountability | Cross-Sectoral Strategies | Global Philanthropy | Philanthropic Strategy | Scaling Philanthropy | Permalink | Comments (3)


I just came across your blog and am delighted to see your purpose 'discerning donors who want to increase the impact of their giving.'

I think it is terribly important that donors to philanthropic organizations match their investments to their ideals!

For instance, I find Bill Gates example of espousing one thing but the investments by his foundation espouse something else. My thought is that he doesn't want to align the investments of his foundation with his goals because it might have an impact on Microsoft being more carefully scrutinized as to where its products end-up!

I've been following socially responsible investing for about forty years, and some of your readers might be interested to visit my website which covers the latest global socially responsible investing news. It's at www.investingforthesoul.com

Best wishes, Ron Robins

Posted by: Ron Robins

Very interesting in hearing about the new CSR. I saw the GE commercials and figured it was just another old school ploy from a big corporation to paint an image of having CSR, but its nice to hear that they are the real deal.

One another note, I'm intrigued to find out who are the catalysts of this new CSR model. Is it coming from the top executives down to management, or up through the ranks from the everyday staffers. I have a hunch it might be coming from both sides of the field but it would be interesting to figure out exactly whom the major influencers are internally.

Posted by: Daniel Schutzsmith

As far as we've seen, there is only anecdotal information about who is doing new CSR. Does anyone know of a more comprehensive study?

Posted by: Carla Dearing