For weeks people on both sides of the Atlantic have been speculating over who would lose his job first because of the BP spill -- Ken Salazar, the interior secretary, or Tony Hayward, the oil company's chief executive. Given last week's initial progress in capping the well, I won't try to name a favorite in that race. But I would like to suggest a third, inanimate culprit: the cult of corporate social responsibility.

As crude poured into the Gulf of Mexico and the world economy struggled to recover from the financial crisis, corporate social responsibility might seem a perverse target. Surely we need more corporate responsibility, not less. But many of the business disasters of the past 24 months have been facilitated by the mini-industry of corporate social responsibility -- known as CSR by those in the trade -- a fetish encouraged by the philanthropies that feed off it and funded by the corporate executives who have found that it serves their bottom line.

Consider BP's "Beyond Petroleum" campaign. Before the spill transformed that slogan into a punch line for late-night comedians, Madison Avenue had lauded BP's effort to position itself as the greenest fossil fuel producer: "Beyond Petroleum" won two PRWeek "campaign of the year" awards and a gold "Effie" from the American Marketing Association. Ogilvy, the firm that invented the slogan, still boasts of "Beyond Petroleum" as a successful "case study" on its Web site.

Or how about Goldman Sachs's "10,000 Women" project? This initiative to organize and fund business education for 10,000 "underserved" women around the world is the limousine of CSR drives: smart, innovative and absolutely in tune with Nicholas Kristof and Sheryl WuDunn's "Half the Sky" zeitgeist.

But the gulf oil spill and the financial crisis have taught us, rather brutally, that the heart of the relationship between business and society doesn't lie with the charitable deeds that companies do in their off-hours but whether they are doing their day jobs in ways that help -- or hurt -- the rest of us. While BP was winning plaudits for being the first oil company to accept global warming as a scientific fact, the old-school Texas oilmen at ExxonMobil were unfashionably unapologetic about their core mission: to produce oil. Chastened by the Exxon Valdez disaster, however, they also became religious about safety standards. With hindsight, that attention to safety turns out to have had much greater social value than any number of creative CSR drives.

The same story played out on Wall Street. So much of the wealth of the gilded early "naughties" trickled down into 10,000-women-style clever charitable initiatives that my friends Matthew Bishop and Michael Green were inspired to coin a term to describe the phenomenon: "philanthro-capitalism." Yet the considerable social good done by those projects pales in comparison with the destruction wreaked by the made-on-Wall Street financial crisis of 2007-08.

The problem with CSR is that it muddies the waters. Goldman's purpose isn't to educate women; BP's isn't to lead the green revolution. The job of business is to make money -- in BP's case by producing energy, particularly fossil fuels; in Goldman's case through finance. Even the most cuddly, caring chief executive is ultimately charged with a selfish central mission: to generate profit for her shareholders.

Forgetting that core goal -- which the CSR culture can tempt us to do -- is bad news for business leaders. It was a sad day for American capitalism this spring when Goldman Sachs chief Lloyd Blankfein decided that it was politically unsafe to admit to Congress that he is very good at his job: in this instance, making the right bet on subprime mortgages. Even more deplorable was the moment a year earlier when President Obama used his bully pulpit to bully business -- in this instance, the Chrysler bondholders, whose only sin was to stand up for economic self-interest and that of their investors.

But getting confused about the principal job of business is even more dangerous for the state. CSR, and the communitarian philosophy behind it, asks us to believe that the interests of an individual company and those of the wider community are fully aligned. They aren't -- a truth too many regulators forgot in recent years.

Corporate social responsibility sounds as unobjectionable as motherhood and apple pie -- and it would indeed be crazy to object to rich companies writing big checks for good causes. But we shouldn't let that distract us from the fact that the chief social responsibility of business is to make a buck -- and the social responsibility of government is to be sure that perfectly proper corporate greed is channeled and constrained for the greater good of us all.

Source: The Washington Post, 19th July 2010

The central bank has asked the commercial banks to submit statements on Corporate Social Responsibility (CSR) on half-yearly basis with mentioning the initiatives of institutionalising corporate governance."The statement should reach Bangladesh Bank (BB) within 30 days of each half-year end. Accordingly, first statement as of 30 June, 2010 is to be submitted within July 31 this year," the BB said in a circular, issued Thursday.

The banks will provide a short description of the initiatives of institutionalising corporate governance framework for the purpose of safeguarding the interests of shareholders and adding value to customers, shareholders, partners and employees, alike.

The banks will also provide a short description of the actions taken to reduce its adverse impact on environment as a result of its operation and business activity, according to the circular.

The circular said the banks will include a short description of the engagement with borrowers with regard to the environmental and social impacts of their proposed undertakings and disseminating valuable environmental know-how to customers, associates and suppliers, as well, in the statement.

"We'll monitor the adoption of CSR activities by the banks. The adoption of CSR and performance of the corporate entities will be treated as an additional indicator of their management efficiency," Executive Director of the BB Shitangshu Kumar Sure Chowdhury told the FE.

He also said the central bank wants that the banks and non-banking financial institutions (NBFIs) will move forward to implementing CSR programmes in line with the international standard.

It is being widely recognised by the corporate sector that augmented CSR designed to respond to huge unmet needs of the society can be one of the important means in the achievement of long term and persistent business value.

The high level of awareness of CSR has also come about as a result of the United Nations Millennium Development Goals (MDG), in which a major objective is the increased contribution of assistance from a range of organisations to help alleviate poverty and hunger, and for businesses to be more aware of their impact on society.

Source: Financial Express, 16th July 2010

NEW DELHI: India Inc may not get any tax sops for spending more as part of their corporate social responsibility (CSR) initiatives, an official in the government said on Thursday.The ministry of corporate affairs is unlikely to recommend any tax concessions for adoption of CSR initiatives for India Inc.

New York. Milton Friedman once said companies cannot be socially responsible because they only exist to make as much money as possible.The late Nobel laureate economist would appreciate what is going on now: A historic environmental disaster caused by a company that went out of its way to tout itself as the ideal corporate citizen.BP spent the past decade using splashy ads to promote itself as a green company. It even ditched the name it had for nearly 60 years, British Petroleum, and built an image that it was looking out for a better world.

Honda’s manufacturing plants in China were brought to a standstill by strikes early this year. After several attempts at negotiation, Honda agreed to increase monthly wages by 35 per cent to 1,620 yuan (US$235) on 4 June.

IT IS not by coincidence that the Prime Minister spoke on the importance of instilling the virtues of social responsibility "into the DNA of every company" in his speech at the Prime Minister's Corporate Social Responsibility (CSR) Award ceremony.