Corporate social responsibility and inflection points

At the CAF Companies and Communities awards event yesterday, there was some interesting debate and discussion about CSR, the way it is changing, and how there has been a shift over the last two years in the way that it is viewed by the corporate sector. John Humphrys hosted (and gave out the awards later on: congratulations to all the winners) and was endearing in his contrariness. The most interesting insights for me came from Mark Kramer from FSG in the US, and I particularly enjoyed one graph he showed that looked as follows:

[click to enlarge]

Profit (or probability of profit) is on the y-axis, and consumer awareness (over time) on the x-axis. The red line represents profit from ‘harm’, and the green line profit from ‘cure’ (see below). The circled area is the inflection point.

Basically, the graph shows how companies reach a point where their ability to make money whilst still ‘harming’ or creating a problem (eg polluting, deforesting) becomes superseded by their ability to make money from ‘curing’ or creating a solution. Recognising the point where this happens (for each product / service / activity) is a key challenge for companies….or at least for those where this way of thinking can be applied. It also got me thinking that you could apply a similar graph from the charity point of view, with social impact on the y-axis: and the inflection point would be where the charity’s ability to change things through campaigning against corporates is superseded by their ability to make change by working with them.

Obviously this isn’t true for all, but it’s an interesting lens to look at this issue through. Particularly if one considers that social enterprise and social entrepreneurship might be viewed as operating at those respective inflection points from their inception.

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