Where Red Sludge fits with CSR

MAL Hungarian Aluminium is not a name that trips off the tongue, but to families caught up in Hungary's toxic spill disaster it's one they may never forget.

As this issue goes to press, seven people have so far died from the spill, caused by a reservoir wall collapsing, and the chief executive of the plant has been taken in for questioning by the police.

The government states that those responsible should bear the financial consequences, rather than the tax payer, while the company insists it is a "natural catastrophe", and it could not have done anything differently. And guess who gets caught in the middle?

It is not the first such tale, and it won't be the last — but for those at the sharp end it just serves to promote disillusionment with big business, and "tar" other companies with the greenwashing brush (to mix more than one metaphor). The "red sludge" disaster happened after this issue of In Depth was commissioned, which coincidentally talks about how companies need to put environmental and sustainability policies at the core of business strategy — and help overcome consumer cynicism.

It also coincided with the publication of A World in Trust — Leadership and Corporate Responsibility. The authors combined interviews with 55 corporate leaders with analysis of business trends worldwide to provide a snapshot of how corporations are dealing with such issues. It will come as no surprise that one of its findings was that an excessive focus on short-term results and bonus culture is damaging trust in companies.

Yet change is on the way. Corporate leaders are beginning to recognise that they need greater commitment to sustainability, and to ensure that they have performance measures for behaviour directly linked to responsibility and trust if they are to succeed. How is this manifesting? Well, stand-alone CSR (corporate social responsibility) departments look like a fast-declining trend as companies make sustainability core to their strategies and activities.

Will consumers view it as such? Not, claims the report, if companies don't adopt a realistic attitude as to how they tell their story. It recommends a "warts and all approach", addressing challenges as well as telling success stories. It also says independent verification of sustainability measures will be vital, as is the need to consider how the response to such issues can be incorporated into business models and to emphasise outputs rather than inputs.

In Depth goes a step further. Ruth McNeil insists that the corporate world can't wait for "ethical consumers" to achieve critical mass before pushing the environmental agenda, and warns of the dangers of expecting consumers to do the job for us.

Small consolation to those affected by "red sludge", but hopefully one more push towards change. If not now, then soon.

Louella Miles
Writers4Management

This article was first published in InBrief magazine, December 2010
Copyright © Association for Qualitative Research, 2010