China CSR, has an interesting piece about how managers will see CSR in the downturn. They write:
"In discussions over the last two weeks with executives responsible for their CSR programs in China, each of the more than a dozen managers voiced apprehension that they would see a decline in their budgets for next year and that less emphases would be placed on some of the "froth" (as one manager explained how some people in her company view some of their charitable giving initiatives) of these programs."
In particular, companies that merely engage in CSR as a type of window dressing or “green washing” will probably see the most cuts. However, they argue, many Chinese companies are likely to increase the scope of their CSR activities. First, governments at various levels have placed new importance on CSR and have linked CSR’s role to the Harmonious Society. Second, awareness of CSR is growing tremendously in China. And finally, as Chinese companies expand abroad, buying insolvent Western companies at cheap prices, having good CSR departments will help put Chinese companies more in line with international practices and will increase their trust with international stakeholders. In other words, CSR’s immediate prospects in China depend not only on how much money a company has to use for CSR, but also on how a company defines CSR itself, whether it has incorporated CSR concepts into its core business operations, and how it will use CSR to deal with the government and its future plans.
Also, the blog Reenita’s Wisdom notes the paradox that some of the most prominent Wall Street financial companies to have come under scrutiny- Lehman Brothers, Morgan Stanly, Goldman Sachs- were also companies that had decent CSR departments that seemed to have genuinely provided for the public good. This would seem to suggest that even the best CSR practices shouldn’t be seen as a substitute for good governmental regulation.
Nonetheless, even as companies are tempted to slash the budgets of CSR departments and governments are encouraged to reexamine enacting tougher regulations, there will still be pressure on companies to incorporate CSR and ethical practices throughout their business operations. As the blog Crane and Matten points out, because of the anger about these corporate scandals and the anxiety raised by prospects of a looming recession, people are more likely to focus on corporate ethics (and the lack thereof) than they would when the economy is soaring. Companies take note.