The Little Black Book of Billionaire Secrets

Volkswagen And The Failure Of Corporate

Social Responsibility

Enrique Dans ,

Contributor

I study technology disruption in individuals, companies and societies.

Opinions expressed by Forbes Contributors are their own.

(JOHN MACDOUGALL/AFP/Getty Images)

The Volkswagen case represents above all an absolute failure in terms of Corporate Social
Responsibility (CSR). The company deliberately set out to design a means to circumvent
emissions controla stratagem known at the highest levelswith the aim of giving the
company an unfair advantage over its competitors that made it the worlds number one car
maker, in large part on the basis of its supposedly environmentally friendly cars; meanwhile it
was poisoning the planet.

This rejection of any ethical standards in engineering, which has led to the resignation not just of
the CEO, but also Audis head of R+D and Porsches engine chief, makes one thing absolutely
clear: the companys CSR department must have known what was going on. The command chain
that led to the development of certain lines of software that could put an engine into to test mode
and then return it to dirty mode are on record, all the testing that was done is
documented: those responsible can be identified, and are to be found at all levels throughout
Volkswagen. With software taking over all the complexities of a product, the only way to avoid
problems is to go fully transparent, document every step of the process and embrace open source.

We are talking about an engine here, a lump of metal, not some interpretation or shade of
meaning. Volkswagen did all it could to hide the fact that its diesel engines were highly
contaminating. How can the head of CSR deny he knew anything about what was going on?
Either that person wasnt doing their job, or they were colluding. The conclusion can only be that
for Volkswagen, CSR is a marketing exercise.

But the sad truth is that this conclusion applies to the vast majority of companies: a head of CSR
is appointed, given an air of respectability, and runs a department the job of which is to keep the
companys image clean, despite the filth it is mired in, as is clearly the case with Volkswagen.
Once again, we have allowed ourselves to be duped into believing that companies can and will
regulate themselves, when of course the sordid reality is that as their actions show, beyond the
occasional symbolic act, their sole objective is to maximize profit, and by any means.

Volkswagen decided that it didnt matter if its cars poisoned the planet by emitting 40 times the
legal limit of nitrogen oxide, as long as doing so allowed it to become the worlds leading car
maker. The parallels with the tobacco industry are notable, particularly as regards the lies that we
are prepared to believe about the effects of our actions: in the same way that may smokers still
tell themselves that the smoke they inhale is not dangerous, millions of car drivers prefer to
continue belching out dangerous gases so long as their vehicle runs faster and better.

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The only thing that Volkswagen drivers are worried about at the moment is: What am I going to
have to do to my car, and is it going to make it slower? Well, if I dont have to by law, then I
wont. Because we dont see the steady poisoning of our planet, we are more concerned about
not being able to pull away more quickly at the lights. Were simply not prepared to pay that
price for a cleaner environment. We would rather have a faster car than do something to reduce
the tens of thousands of deaths from respiratory diseases each year.

The problem with CSR pretty much comes down to this: we are asking companies to self-
regulate. Furthermore, we must be doing something wrong when the majority of people see CSR
as superfluous, a luxury that mustnt get in the way of making profits or giving us that delicious
feeling of acceleration when we put our foot down. Most heads of CSR know this reality, and
they know which side their bread is buttered on.

The Volkswagen case shows in stark contrast that we must reinvent CSR. The people who head
these departments must be made responsible for their companies actions, even if that means
going to jail. These people will have to be very well paid in return for assuming this
responsibility, as well as having budgets that will allow them to develop systems to find out what
really goes on in their companies. The Volkswagen crisis highlights the failings of capitalism, of
a system that has closed its eyes to the reality of the future, and a clearly unsustainable future.

If youre a head of CSR, you need to ask yourself whether you have any idea what is going on in
your company, or whether you are complicit in activities that go directly against your supposed
remit. Are you head of window dressing? Are you prepared to lie, to cover up, or even kill
people in return for helping your company make more profits? Which is more important to you:
the sustainability of your company, or that of the planet? Which is of greater value: tens of
thousands of deaths from respiratory disease and cancer, or sitting on the throne of the global
automobile industry?
In short, CSR has failed. What has happened at Volkswagen is so important, so real, that it
should spark companies to rethink their priorities and just what the job of their CSR department
is. They need to ask themselves if something like this could happen in their company, because
the answer may well be yes. They need to ask if their company is prepared to cheat, lie and kill
people in return for the kind of profits that Volkswagen has made. They need to ask if their board
of directors is as irresponsible as Volkswagens.

And if they work in CSR and they dont think that what has happened at Volkswagen merits
serious consideration about their own actions, then perhaps the time has come to get out from
behind the wheel, be corporately and socially responsible, and let somebody else take over.

Also on Forbes:

http://www.forbes.com/sites/enriquedans/2015/09/27/volkswagen-and-the-failure-of-corporate-
social-responsibility/#28430dcc6128