Corporate Social Responsibility: What Would Reagan Do?
By Tom Borelli
September 12, 2007
"A Time for Choosing", the celebrated nomination address by Ronald Reagan supporting Barry Goldwater for president in 1964, included a strong message about the dangers of appeasing the Soviet Union:
Admittedly there is a risk in any course we follow ... but every lesson in history tells us that the greater risk lies in appeasement, and this is the specter our well-meaning liberal friends refuse to face--that their policy of accommodation is appeasement, and it gives no choice between peace and war, only between fight and surrender. If we continue to accommodate, continue to back and retreat, eventually we have to face the final demand--the ultimatum.
Thankfully, President Reagan understood the dangers of appeasement and executed an aggressive strategy to confront the Soviet Union.
In contrast, today's CEOs follow the opposite strategy -- the path of appeasement by embracing corporate social responsibility (CSR). After years of badgering by special interest groups, CSR offers a progressive solution for companies to escape confrontation.
Over time, CSR has fundamentally changed business culture to a point where CEOs are delighted to play an active role in solving social and environmental issues. In this worldview, obeying the law and making a profit for investors is no longer a company's sole mission -- corporations must fill the gaps where government efforts have failed.
Because of CSR values, companies are being transformed into pacifists -- rarely defending their businesses from regulatory action that threatens profitability. In fact, just the opposite is occurring; some companies are actually contributing to efforts that will actually harm its business.
Today, the environmental movement is effectively using global warming fears as a way to regulate SUV sales out of existence. The problem for automakers is that American consumers prefer SUVs, large cars, and light trucks. Furthermore, these sales provide the best profit margins for automakers.
The regulatory challenges facing the automobile industry, such as corporate average fuel economy standards (CAFÉ) and greenhouse gas emission limits, were set in motion by appeasement policies established years ago.
At the turn of the century, instead of confronting the business threat posed by global warming, William Clay Ford Jr., then chief executive of Ford Motor Company, had a better idea: embrace CSR.
The company declared war on its most profitable vehicles in its first corporate citizenship report in 2000 when it said SUVs contribute more to global warming than cars. Mr. Ford expressed concern that SUVs would harm the company's reputation and he feared public opinion would turn against the company. According to news reports, the company wanted to be considered the "most environmentally responsible automaker."
CSR proponents hailed the company's retreat. The Sierra Club said, "...we applaud Ford's recognition of the environmental and safety problems posed by S.U.V.'s,'' and Business for Social Responsibility -- a CSR advocacy group -- noted that the company found itself in an "awkward situation because its most profitable products do not meet its goals for social responsibility."
>> Continued -- Page 1 2
| 
