Why Don’t Companies Invest in CSR?

Even though there are many good reasons for companies to adopt a policy of CSR (two of which I’ve written about and linked to), some companies still don’t buy into the practice and don’t have any aspect of corporate social responsibility to their company culture or philanthropic efforts. There are many reasons that companies don’t adopt CSR and they all vary. That being said, here are three of the most common reasons (or at least the closest approximation for said common reasons) that companies don’t engage in corporate social responsibility.

Taken from http://www.triplepundit.com/2016/01/dont-companies-invest-csr/

Taken from http://www.triplepundit.com/2016/01/dont-companies-invest-csr/

  1. Wall Street wants profits, not sustainability: Unfortunately, one of the greatest preventers of the widespread adoption of CSR is the stock market. Investors and the market want nothing but profit (usually in the short-term), frequently ignoring the very thought of the long-term sustainability that CSR can afford a company. Investors frequently care about nothing more than maximizing their investment in the shortest amount of time possible. This makes CSR, which takes time and money to pick up, an option that isn’t very high on the priority list of many companies that have to answer to shareholders.
  2. Financial CSR benefits are hard to measure: While much has been written about how beneficial CSR can be for your company, the financial benefits are still hard to accurately measure (other than knowing they’re positive). Because of this and the aforementioned push for short-term profit, many companies are wary and unwilling to invest the time, effort, and money into effective CSR efforts. The fact that poorly done CSR can be a real drain on resources (as opposed to bringing long-term customers and their money) means that not many companies are will to take that risk.
  3. Already giving back: Many companies see the outreach work that they’re doing as already engaging in corporate social responsibility. Due to this belief, many believe that they don’t need to do anymore outreach due to the fact that they are already engaged in some sort of charity.

All of these arguments against engaging in CSR practices, while valid, can be countered by showing just how useful CSR is to a company’s bottom line. If you’d like to read more, the link is here.

Written by

Dave Pflieger is currently the CEO of Island Air and previously the President and CEO of Silver Airways. Previously, Dave Pflieger was the CEO & Managing Director of Air Pacific (later Fiji Airways). Before joining Air Pacific, Mr. Pflieger was a Founding Officer and Senior Vice President at Virgin America from 2004 to 2010.