How Blockchain Helps with Corporate Social Responsibility
In today’s society, multinational corporations have more power and wealth than some nations. Corporations, therefore, have the power to enact social change. After 60 years of popularization, corporate social responsibility (CSR) grew into a form of business accountability. Now, companies have to take into account their economic, legal, environmental and social care for the wider community.
Consumers now expect multinational corporations to engage in CSR. However, most companies fail their CSR goals. Their failure is often unknown to the public, who applauds their initiatives.
A blockchain network can help verify CSR goals. Increasing accountability would transform the current capitalist environment into a transparent system that holds multinational corporations, responsible for their words.
The problem with CSR
CSR sounds great in theory. However, it is a form of self-regulation that is dependent on executives running the company.
The idea that companies could contribute to sustainable development by delivering economic, social and environmental benefits for all stakeholders, while not impossible, is not the primary goal for the business. CSR is, therefore, often initiated and run by internal managers without consistent engagement from the CEO.
As a result, these programs are usually poorly executed and operate in an uncoordinated way.
CSR is also too tightly focused on specific projects. In the food and beverage industry, for instance, Oxfam argues that multinational companies tend to focus on training women farmers or addressing water usage while ignoring the root causes of hunger and poverty.
Oxfam believes that assessing and eliminating unfair exploitation of land, water, and labor is a better path. They also believe in paying a fair price to small-scale farmers. Further, Oxfam says all these factors are within the control of large, powerful multinational corporations.
Since CSR is a broad and flexible term, it allows multinational companies to cherry-pick particular initiatives, especially those that have marketing benefits. While philanthropic projects and sustainable programs are beneficial, they are not long-term solutions.
Large companies need to shift their efforts from small-scale efforts and address root problems from their industry.
The triple bottom line
Corporate social responsibility mantra states that multinational corporations should focus on the triple bottom line (3Ps): Planet, people, and profit.
This theory elevates the original CSR definition to a level of mutuality. Mutuality occurs when corporations raise people and planet measures, to the same level as profit. Now, CSR processes involve the whole business network, especially executive leaders who are forced to take the entire ecosystem into account.
Despite differing goals, NGOs should work with corporations under a form of mutuality through the 3Ps. With a clear and aligned vision, these separate institutions can leverage the blockchain network. Organizations trust that responsible individuals can carry through small projects that strategically, lead to one goal.
How blockchain can hold companies accountable
Blockchain is a tamper-proof system with one view of truth. It is a transparent system where trust is not on an individual or central entity but technology, cryptography, and mathematics.
Therefore, a business member can validate any transaction that constitutes a form of mutuality. An NGO industry veteran can verify new programs, for instance. Or an executive leader can authorize external funding for aligned projects.
If corporations are adamant about reaching CSR goals, they should incorporate blockchain technology and work with NGOs.
If Oxfam were to work with Nestle, as an example, Nestle could start disclosing the injustices in their supply chain. Nestle could document current farming conditions and outline a series of small initiatives that, measured over time, would significantly improve farming conditions.
Smart contracts also ensure groups solve problems one step at a time. Small programs can start with the supply chain and flourish into greater initiatives. They can begin with farming practices, rights of workers, women’s rights, the management of water and land use to policies that reduce the impact of climate change.
Tracking success of corporate social responsibility initiatives
Blockchain tracking and measurements hold groups accountable for their actions. With blockchain, the internal implementation would have external verification. This trustworthy proof of performance ensures that executive leaders remain accountable.
Blockchain allows future CSR initiatives to grow beyond false promises and vague numbers, as programs and progress become documented, proven and verified.
Furthermore, the public would also have access to the impact or development of a company’s CSR efforts. They can be aware that multinational corporations are taking active steps and fulfilling goals to ensure greater justice and equality in the world.
Image credit: Wikimedia Commons
Buy Bitcoin, Ethereum, XRP, and other cryptocurrencies on Coinsquare.
Get the latest blockchain and digital currency news from Canada and around the world, delivered each week to your inbox.
Your Email address