Five Questions about Corporate Social Responsibility (CSR) – Special Interview with Karen Maas, Scientific Director, Executive CSR Courses, Erasmus School of Accounting & Assurance, Erasmus University Rotterdam, The Netherlands – September 3, 2012

On the first Monday of each month Emerging Markets ESG publishes a special interview with an academic, expert or practitioner about a specific topic with relevance to environmental, social and/or governance (ESG) issues.

This month’s interview, the sixth interview in the special interview series, is about corporate social responsibility (CSR) and is with Karen Maas, Scientific Director, Executive CSR Courses, Erasmus School of Accounting & Assurance, Erasmus University Rotterdam, The Netherlands.

The Erasmus School of Economics (ESE) of the Erasmus University Rotterdam, The Netherlands, is a leading academic institution in the world.  It has a long-standing tradition of high-quality education and research. The best of its graduates have made outstanding contributions to science, government and business. The ESE enjoys great acclaim in the Netherlands and abroad for its fundamental and applied scientific research. Its two graduate schools, the Erasmus Research School of Management (ERIM) and the Tinbergen Institute (TI), are among the very best research institutes and graduate schools in the world.  The Erasmus School of Economics strategically has a clear focus on economics. It is the only school in the Netherlands which explicitly educates business economics. All faculty members are involved in both research and teaching. This allows the ESE to thrive. Just as they were 100 years ago, the economists are the pounding heart of Erasmus University Rotterdam.  Its post-experience and executive programmes offer professionals the opportunity to broaden their knowledge. Since 2007, the Erasmus School of Accounting & Assurance (ESAA) offers an executive course on Corporate Social Responsibility (CSR). The courses CSR Management and CSR Reporting and Assurance focus on theory and practice. In 2011, an international Corporate Social Responsibility Autumn School with a five-day program was organised by ESAA and CSR Expert.  Due to the success of this event, the program will be offered again from October 29 – November 2, 2012.  For more information please click here.  Karen Maas (1970) finished her studies with a Master of Science in Economics at the Erasmus University in 1995. After graduation, she worked for 12 years as a (senior) consultant and project leader in the field of environmental economics, sustainability and CSR.  Since September 2007 she works at the Erasmus School of Economics and in 2009 she defended her PhD research on “Social Impact Measurement.” She is involved at the Erasmus Centre for Strategic Philanthropy (ECSP) and conducts research in the field of impact measurement, CSR and Strategic Philanthropy. Karen is Scientific Director of the Executive CSR courses at the Erasmus School of Accounting & Assurance. She is member of the advisory board of “De Groene Zaak” and is a member of the board of the Erasmus Education Fund.

Emerging Markets ESG:  How would you define corporate social responsibility (CSR)?

Karen Maas:  CSR expresses a situation in which firms not only strive for economic gains, but in which they adopt a broader view and take responsibility for their impact on society (Carroll, 1991). Impact on society captures the total impact which includes the economic, environmental and social dimension. To be able to optimize positive impact and reduce negative impact, they have to use a long-term horizon perspective and involve stakeholders into their strategy development. In short CSR means:  steering on 3Ps (people, planet and profit); involving stakeholders; and using a long-term horizon.

Emerging Markets ESG:  What is the antithesis or opposite of CSR?

Karen Maas:  Solely focusing on direct and short-term financial profit.

Emerging Markets ESG:  What is the difference between CSR and sustainability?

Karen Maas:  Sustainability is more the overall picture (here and there, now and future a la Brundtland) for how we have to change the world to survive as human beings.  CSR is the contribution companies can give.

Emerging Markets ESG:  Does CSR require a paradigm shift?

Karen Maas:  Absolutely! Companies should not only do some add-on philanthropic things, but should change their strategies and business models and really build the CSR approach into their management accounting and control systems. What we see now is that businesses have beautiful ambition related to CSR; the question however, remains how they are going to fulfill these ambitions.

Emerging Markets ESG:  What is the business case for CSR?  Is it the same in developed economies as in emerging markets?  Would you please describe a specific environmental, social or governance issue from a business case for CSR perspective, comparing and contrasting the business case for CSR perspective of the specific issue in a developed economy and in an emerging market.

Karen Maas:  The business case for CSR can be found in all kind of indicators which do lead (in)directly to a stronger financial performance of the firm. Issues that are often discussed in academia as well as in practice are, for example: access to finance, employee retention, employee satisfaction, new markets, new products and stakeholder satisfaction.  While CSR implicates that firms take measurements that go above legal requirements, the specific issues differ for developed economies and for emerging markets. In emerging markets, issues like child labour and working conditions can be hard to address. The circumstances are so different in different countries – what is legally required in one country is high above standard in another country.

An example of the business case for CSR is the rising trend of firms developing strategies targeting the so-called Bottom-of-the-Pyramid (BoP).These firms distinguish themselves in that they seek to create new markets involving customers, employees, suppliers, and/or distributors at the Bottom of the Pyramid, which have an average daily purchasing power of $2 or less (Prahalad, 2005). It is argued that these initiatives can lead to profitable businesses and economic development for people living at the bottom-of-the pyramid as well as the multinational companies that serve them. An example is the production of affordable life-saving medicines for Africans.