Thursday, May 8, 2008

The Empathy Economy: CSR and Web 2.0

I just got back from participating in an innovative discussion this week in Orlando at SAP’s SAPPHIRE event. The workshop covered the intersection of corporate social responsibility (CSR) and web 2.0. I am posting my initial thoughts on Fairer Globalization and the Ethical Blogger because the topics are relevant to both blogs. Here are some of the points I made and heard:

From an ethics point of view, web 2.0 has the potential of dissolving the false divisions between people—whether it is between nations and communities, producers and consumers, or labor and capital. With more ownership—both in influence and voting power—of the global economy, these divisions can fall away.

I start with the premise that companies are full of people, individuals, each of whom has an ethical duty. Naturally, some of these people are bloggers and some are stockholders. Companies can find champions outside the corporate walls to force change within a company for the benefit of society beyond the simple bottom line.

An ethics of the web is needed. Without one, we could face more government regulation, creating an excuse for governments to control information and connectivity. Some of the ethics of the web are simple: link to others, log in frequently, and share content. They are the principles that speak to the scientific origins of the web. Other principles might focus on the integrity of the information on the web; those would be transparency, honesty, and disclosure.

In the case of CSR, companies should consider the principles of sincerity, innovation, and pluralism (as Mikkel Sorensen and Nicolai Peitersen have argued in “CSR 2.0”). Companies can draw on the infinite wisdom out there (in publics). They have this great list of principles for CSR 2.0:

1. Inclusiveness – involving stakeholders directly from beginning to end
2. Market driven – no longer expert driven
3. Innovation – smart companies turn market pressure into stakeholder led
4. Sincerity – you can no longer uphold an image that is not real
5. Co-ownership – a truly embedded value-based culture requires involvement
6. Dynamics – standards and annual audits replaced by 24/7 engagement
7. Quality - CSR as immersive business strategy
8. Personal - It’s about you, not your sector! What are your own ethics?
9. Pluralism – number and nature of CSR projects will expand dramatically
10. Proximity - local impact is global

Megacommunities or multistakeholder initiatives become a reality with web 2.0, producing more sustainable solutions. Not only are the solutions drawing on more information but they also get more buy-in from increased participation. Web 2.0 has empowered civil society to do its job: producing social values and fostering the positive dynamic between companies and civil society.

The convergence of web 2.0 and CSR also occurs in the need for public goods. The web is a public good much like the environment, public health, and human rights. In this way, web 2.0 and public goods can help one another. The revolution in the relationship between corporations and society is syncing up with the IT revolution in web 2.0, democratizing corporate governance (I suggest democratic wealth funds here).

Formal compliance is giving way to informal compliance measures, making ethics more important relative to strict law. As I put it, in this new business environment, what is increasingly important is empathy, not regulation. As one panelist put it, it is democracy without rules, challenging the way companies communicate. As Booz Allen has put it, companies are now “always on.”

Does the intersection of web 2.0 and CSR bring about mutual benefit? I think so. Transparency is fostered when companies are forced to listen to their stakeholders. And privacy can actually be strengthened through transparency. Some people track themselves online to preclude further surveillance, and more information availability can eliminate the need to investigate. I have suggested blogging our emails in order to deter people from writing things that are hurtful or libelous.

Making sure web 2.0 brings about a better world will be about fostering trust. Software that can facilitate trust will be a huge business opportunity in this realm. Finally, time is precious. I would assert that efficiency is ethical. Several people at the workshop dreamed of a day when our communications become more streamlined, eliminating the need of outdated methods like email. Remember when email was the future?

Channels for communication between the corporation and civil society were spelled out: blogs (topic specific); wikis (with a final goal); social networking such as Facebook (for awareness and promotion); crowdsourcing (to ask crowds to solve problems or prioritize goals); and the boycott and buycott.

Photo by linkerjpatrick.


The Relationship Economy said...

Excellent summary, well done. We are conducting ongoing research on these matters and have labled the dynamics Socialutions (see for more info

Would love to conduct a live and on demand video broadcast with you and your contributors.

Let me know at

petertparker said...
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Erik Posthuma said...

Interesting of you to CSR angle on the empathy economy. Future leaders will be heuristic ones that have to find empathetic solutions to business challenges and new product/service/experience creation. By being empathetic leaders and assuming that most people/leaders are inherently "good" wouldn't these leaders choose a more socially responsible solution?