Greenwashing no longer works, but can CSR truly be profitable? The answer lies in the forgotten foundations of capitalism and the writings of Adam Smith. Just like Nike and Patagonia, discover why the sincere embodiment of moral values and the courage to take financial risks are today's most powerful drivers of growth.
CSR values at the origin of capitalism
Economic values have evolved with the social construction and education of individuals. While the Roman warlord was hailed for his courage and sacrifice in enriching a people, the clergy was widely rejected for its greed in the 16th century.
Throughout history, men and women have sought the meaning of their existence through values and the recognition of their contemporaries, whether as a celebrity, a politician or a leader. Values that transcend and inspire. But what are these values that stand the test of time and rally people to a cause, or, today, build customer loyalty?
To understand the link between humanist values and economics, let us go back to the Scotsman Adam Smith: the father of capitalism. Although he is hailed today for his work The Wealth of Nations (1776), he saw himself above all as a moral philosopher. His work, probably his most important, has been left out of our teaching since the 1970s. Indeed, The Theory of Moral Sentiments, written in 1759 as a preamble to The Wealth of Nations, insists on the importance of the collective, of everyone's empathy, and of the State's role in educating people in these values.
Unfortunately, the Chicago school exploited his writings to defend its own vision of capitalism and make him a champion of self-interest alone. An idea taken up at the highest levels, as shown by the portrait available on the French government website gouv.fr. By contrast, the UK government website restores the full responsible and sustainable scope of Smith's approach.
Because in reality, it was a certain Bernard de Mandeville, a contemporary of Smith, who wrote The Fable of the Bees: Private Vices, Public Benefits in 1705. His work defends the idea that individuals' selfish or immoral actions, such as greed, pride or vanity, paradoxically contribute to collective prosperity. A work long since forgotten.
For Smith, on the contrary, our moral values, which he calls "sympathy", must influence all our actions, even when no witness is present to recount these humanist efforts.
According to his analysis, for a society to prosper and for the economy to regulate itself, the famous invisible hand, every individual must show empathy and every transaction must allow everyone to benefit. He notes four virtues in particular:
- Prudence: the ability to take care of oneself.
- Justice: respect for the rights of others and the preservation of social order.
- Beneficence: doing good to those around us.
- Self-command: control of one's passions and desires.
In his day, the question of how the rich should contribute to collective prosperity was already being asked. Two schools of thought stood out: make the rich feel guilty to force them to redistribute, OR tax high incomes. In the 18th century, borders were porous and many fled to make their fortune in the New World. He therefore abandoned the idea of taxing great fortunes more heavily, since it would take little for them to cross the Atlantic, and supported another mechanism to force them to redistribute.
He notes that beyond a certain level of comfort, the wealthiest are not necessarily seeking more money. Above all, they are seeking public recognition of their merits.
His approach echoes our contemporary society. Governments still use his vision to refuse to tax the wealthiest, despite a very different geopolitical context, and ignore his solution of recognition, legitimate though it is. Because in our time, recognition no longer really comes from the population, although some people on modest incomes still support billionaires' vision, but from close social circles. Among the richest 1%, the race to reach the highest valuation and the top of the Forbes ranking motivates more than public admiration or the materialisation of that figure.
Yet for Smith, it was fundamental that government understand these motivational mechanisms and use these levers of ego to relay them to the population. For him, the role of the State, alongside educating the population, is to put in place power dynamics that encourage redistribution: "The great secret of education is to direct vanity to proper objects", he declares.
In this way, he believes, everyone benefits: the people rise, and the richest finally reach the pantheon of glory, securing themselves a place for eternity.
You will find Adam Smith's whole moral approach summed up in this video
Money, the new religion that can cost your company dearly
The economy as imagined by the father of capitalism therefore depends on a complete education and access to cultural, intellectual and also emotional knowledge. This last aspect, linked to the humanities and social sciences, has been widely disparaged in France. Yet it was the subject of extensive research behind the worldwide success of American marketing during the post-war boom.
However, with the liberalisation of the economy and the withdrawal of the State, cultural reference points are shifting. Many economists and sociologists, such as Jean-Michel Servet and Pierre Bourdieu (Distinction, 1979), note that people now see money as the cement of our modern societies, whereas universal moral values had made it possible to build a solid social structure since the industrial revolution.
This new belief now defines the criteria for success and the associated notion of value, but above all, it shapes our behaviour.
In 2016, in his book The Money Cult: Capitalism, Christianity, and the Unmaking of the American Dream, journalist and author Chris Lehmann looks back at American values and their drift towards ostentatious wealth at the expense of moral values. In a BBC article the same year, the well-known British journalist Claudia Hammond explores the complicated ways that money messes with your morals. She reviews a series of studies showing that the richest have become the least inclined to give, and the least trustworthy.
Sociologist Paul Piff, a researcher at the University of California, Berkeley, studies the effects of money on morality. Spoiler: his tests conclude that wealth corrupts moral values.
Because by relieving individuals of responsibility, what Milton Friedman did not see coming was that the appetite for gain at the expense of moral values would not be confined to a few leaders profiting from a nation left behind. PwC's 2022 study shows the disastrous economic consequences of the trickle-down effect of an image perceived as negative.
According to its report on economic crime and fraud, 5,000 audited companies lost 42 billion dollars in 24 months because of wrongdoing across the whole value chain. In 31% of cases, the fraud stemmed from internal collusion. This financial threat spreads even faster at a time when the younger generations denounce corporate cynicism and galloping technology further destabilises the framework.
As Adam Smith observed in The Theory of Moral Sentiments: the obsession with wealth acts as a vicious circle, in which the insatiable appetite for money always ends up corrupting morals and spreading bad behaviour. Quickly, through a mirror effect, this lack of morality is found everywhere, well beyond the company alone.
If lying, stealing, cheating and exploiting the weakness of others become part of our business practices while education erodes, does that not multiply economic risks? Is that why so many financial crises have followed one another since the 1970s?
Generosity: the only value beyond the market's reach
The irony of the vicious circle Smith anticipated is that, many years after him, several studies support other parts of his vision. They demonstrate scientifically that beyond a certain level of income, the impact on wellbeing and personal comfort becomes marginal, if not non-existent. First, the Easterlin paradox, formulated by economist Richard Easterlin in the 1970s, states that the more incomes rise within a country, the less impact this has on individuals' overall happiness.
Next, a 2010 study by economists Daniel Kahneman and Angus Deaton at Princeton (USA) showed that emotional happiness and overall life satisfaction increase with income, but this levels off once income reaches $75,000 a year. Beyond that amount, a pay rise has no significant impact.
This study prompted Dan Price, of Gravity Payments, to cut his pay from 1 million dollars a year to 70,000 dollars.
In 2018, another study published by researchers from Harvard University and Princeton University also revealed that people who earn enough to meet their essential needs and wants do not seem to gain much more satisfaction as their income rises.
On the other hand, some educated high earners do take real pleasure in redistributing. In 2023, 200 billionaires, mostly Americans, signed the Giving Pledge: a commitment to give at least 50% of their fortune to charity during their lifetime or in their will.
In his official letter, legendary investor Warren Buffett explains that keeping his fortune would bring him no happiness, whereas giving it away is a source of pure pleasure: neither he nor his family will give up anything they need or want by giving away 99% of his wealth; the pledge leaves him no poorer, giving brings him immense joy, and his children are glad to see these resources used to improve the lives of millions of people.
For those not in search of happiness, fame can also be a powerful argument for success. Carnegie may be the father of modern philanthropy, with the maxim "The man who dies rich dies disgraced", but it is his donations to build 2,500 libraries around the world that have made him famous through the ages. Just as the names "Rockefeller" and "Ford" will endure.
Corporate values: a lever for commercial performance
According to the lessons we can draw from history and from Smith's priorities, the priority is to reinvest massively in education and collective moral values. Their teaching, notably through lessons in good manners and civility, was quickly abandoned in France after May 1968.
And yet, knowing how to live together not only allows us to live in a calm climate of social peace, but also to sell better.
The first obvious example is found in the commercial success of books and films that stand the test of time. Certain recipes hit the mark every time:
- Surpassing oneself and one's limits; courage and the idea of being a pioneer.
- Knowledge of and respect for nature.
- Humility, moderation or temperance.
- Passing things on to future generations, embodying hope and a better tomorrow.
- Honesty and integrity, justice: the absence of deceit, treachery or privilege.
- Contribution and resilience for a cause greater than one's own interests.
Modern economic and behavioural science confirms that these moral sentiments and the pursuit of happiness are no longer mere philosophical concepts, but powerful commercial drivers when they are perceived as sincere and consistent.
Taylor Swift's worldwide success is one illustration: beyond her artistic talent, she has built an exceptional relationship of trust with her audience, capitalising on an image of resilience and the idea of karma. She is now one of the highest-paid artists in the world.
In the business world, Nike experienced a comparable dynamic after choosing in 2018 to publicly support Colin Kaepernick, despite the risk of controversy. Although the campaign prompted calls for a boycott, the brand's online sales rose by more than 31% in the 3 days following its launch, and the brand's value strengthened among its target audiences.
For its part, Patagonia made its mark with its "Don't Buy This Jacket" campaign, inviting consumers to think about the environmental impact of their purchases. Seemingly at odds with any commercial objective, this approach strengthened the company's credibility, consolidated customer loyalty and accompanied strong growth in its business.
On the human side, organisations perceived as purpose-driven also enjoy higher employee engagement: according to Gallup (2024), companies with the highest engagement levels record 23% higher profitability, 78% lower absenteeism and 51% lower turnover than the least engaged organisations.
However, to have an effect, these values must be perceived as authentic and free of commercial ulterior motives. According to the principles developed by Smith, this credibility rests in particular on the conviction that the company acts in the interest of all its stakeholders, so that each of them can draw a legitimate benefit.
It is precisely in this spirit that CSR standards and frameworks, notably the CSRD and mission-driven company status, recommend broad consultation and the active involvement of stakeholders in the company's projects and development strategy.
A profitable CSR strategy: stakeholder inclusion and risk-taking
One question comes up far too often: the ROI, return on investment, of CSR. The answer is crystal clear and comes from the father of capitalism himself: build shared values that serve stakeholders, and take the risk of serving ONLY societal wellbeing and your own.
Because in every example of a perfectly profitable CSR strategy, we find that it was initiated selflessly. In the various cases mentioned, embodying beliefs, values, takes precedence over commercial success, and the risk of failure is very real.
Several decades of research in behavioural finance and cultural economics show that nationality plays a decisive role in boldness, and that France does not shine in this area. Since the French Revolution, thinkers such as Alexis de Tocqueville and sociologist Philippe d'Iribarne have pointed out the paradox of French culture: an aversion to collective initiative without the impetus of a central power, combined with a strong herd instinct ("individualistic conformism").
This paradox partly explains France's poor performance on the Uncertainty Avoidance Index (UAI) of Dutch sociologist Geert Hofstede, an international benchmark for measuring a society's tolerance of uncertainty and the unpredictable. On this scale of 0 to 100, France scores 86, a very high level that reflects a culture of control, planning and distrust of the unknown. By comparison, the United States scores only 46, and the United Kingdom drops as low as 35. In other words, where an American or British investor sees an opportunity, their French counterpart tends to see a risk to be avoided.
This cultural observation is not merely theoretical: it materialises in real investment behaviour. According to an IMF analysis of more than 50,000 companies in 51 countries, financial risk-taking is systematically higher in countries with low uncertainty avoidance, strong autonomy from group pressure ("individualism") and the ability to coordinate around horizontal rather than vertical power, all characteristics that describe the United States and the United Kingdom more than France.
The French Treasury itself pointed to this phenomenon in a note on fundraising and unicorns: European, and particularly French, institutional investors structurally invest less than their American counterparts in venture capital, owing to a more pronounced risk aversion and prudential legislation (Solvency II) that restricts the allocation of savings to risky assets.
Researchers point out that uncertainty avoidance is not the same as risk avoidance. Above all, it reflects a preference for well-marked, documented risks governed by clear rules. Which explains, according to the OECD's analysis, the cumbersome administrative and regulatory procedures in France and the additional constraint this represents for innovation.
Because despite its historic access to science and education, France ranks only 13th in the world for innovation. The picture is even harsher when it comes to the resources deployed ("innovation inputs"), where France drops to 18th place. This confirms that insufficient investment and aversion to financial risk directly weigh down creative results.
So the success of Anglo-Saxon models in turning CSR into a performance lever rests on specific cultural dynamics. Among these major assets, we can note in particular:
- Strong financial boldness: a natural propensity to take risks and invest for the long term.
- A virtuous circle of innovation: this acceptance of risk frees creativity and stimulates the introduction of new processes.
- A balance between the individual and the collective: a deep-rooted attachment to individual responsibility, combined with a real ability to unite around shared values.
- Decentralised governance: the ability to organise decision-making collectively and horizontally, without depending on the impetus of a central power.
Did you know?
France was once the source of considerable soft power and international influence. Right after the Protestant Reformation, which challenged the abuses of power and corruption of the authorities, came the Enlightenment (17th and 18th centuries), inspired by openness to the world. Thinkers from all over Europe gathered in Paris. A major intellectual movement challenged traditional power structures in favour of reason, science and philosophical and moral values. This cultural mixing and mutual enrichment gave birth to one of France's finest achievements: the metric system, adopted by 99% of the world's population.
Why did the French metric system work so well?
- It simplified the other systems of measurement, even if it is not scientifically perfect.
- It was designed selflessly, not to make money but to make trade easier.
- It was created by a revolutionary group that embodied universal values: the societal ideal of a rational and just republic.
Did you know? The Monopoly test
Among 100 people, some are chosen at random to start the game with twice as much money. On top of this advantage, they collect double what the other players get each time they pass Go, ultimately guaranteeing them victory.
Quickly during the game, the privileged players' attitude changes: they become proud, authoritarian and domineering towards the other players. At the end of the game, when the scientist asks them to explain their victory, they attribute it to their own merit: not one player mentions the advantage they were given at the start.
"As these players earned money, their compassion and empathy decreased. Their sense of entitlement and the feeling that they are owed something grew," says Paul Piff.
