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Racket

Corporate Social Responsibility Has Become a Racket – and a Dangerous One by Matthew Lynn.

It manipulated the pollution levels of its cars. It deliberately designed “defeat” software to fool regulators and, more importantly, customers into thinking it was hitting targets it was nowhere close to. And who knows, as the scandal unfolds, there may well be even worse revelations about the scale of corporate wrongdoing at the German car giant Volkswagen. It is now engulfed in a scandal from which the company may never recover.

But, hey, guess what? Perhaps none of that really matters. Because it turns out that VW was also a global leader in “corporate social responsibility”. Its annual report was packed full of lovingly described projects it backed and charities it supported. It was a “thought leader” on dozens of different weighty issues, and a “change agent” for improving society. Globally, it was ranked as the 11th best company in the world for its corporate social responsibility work.

What that surely tells us is that CSR has become a racket – and a dangerous one. It allows companies to parade their virtue, and look good, while internal standards are allowed to slip. In fact, the social responsibility of companies is very simple – to make good products, to honour their contracts and to pay their staff and suppliers on time. Everything else is just a smokescreen.

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