As media attention to the many fervent protests prompted by the Beijing Olympics continues to grow, senior executives at many of the world’s leading corporations and ad agencies must be agonizing about how to handle the hundreds of millions of dollars in corporate sponsorships they have invested in the games.

They no doubt intended to launch advertising campaigns linking their companies to the idea of Olympic excellence, not human rights abuses, tainted drugs, lead-painted toys, and the independence of Tibet.

And now it may all go horribly wrong. So what to do? Should they hope the protests will die down by the time the games start and stay with their plans? Should they take the moral high ground and side with the protesters but risk offending the government of the world’s largest emerging market? Or should they follow a middle path, quietly dialing down the promotions and pretending they never had big plans to begin with?

This dilemma is a great example of why the corporate refrain of “doing the right thing” offers so little help in the situations where it matters most. It also demonstrates the profound change in the way companies must now think about their corporate social responsibility.

Any serious examination of China’s record on human rights, the environment, and free speech should have tipped off corporations to the risks of Olympic sponsorship long ago. But like so many other social and environmental issues that companies confront, the easy answer was to ignore the risk, hoping that it would go unnoticed, or attract only a few radical activists.

But the world has changed. No longer can we continue to ignore known social costs when making our business decisions. Instead, we must act as if every possible social or environmental issue that our business touches has the potential – in fact, the likelihood – of attracting global attention, and then build our strategies accordingly.

And we must find ways to capitalize on the opportunities those issues create. Even here, even now, the controversy around the Chinese Olympics might become a teachable moment. After all, China’s entrance into the world economy has brought more people out of poverty than any other event history. It is the know-how of global corporations and the pressures they face to set fair labor standards and create safe products that provides much of the impetus for better regulation and improved working conditions. And it is the global flow of information that China finds so hard to control that has increased the pressures for it to more fully recognize human rights.

In short, the global corporations that are sponsors of the Olympics actually have a positive story to tell. They should not pretend there is no controversy, nor should they even shy away from it. They should claim credit for the progress to which they have contributed while publicly recognizing that there is still a long way to go.

It is a much harder story to tell than merely associating the company with Olympic excellence, but that is precisely the point. The stories we need to tell today about the interaction between business and society are subtle and complex. They must acknowledge hard truths just as they claim credit for genuine achievements. We have moved beyond the flimsy pretense of “right choices” and simple claims of virtue to embrace the true interdependence between corporate success and social responsibility. And that is a much tougher game to play.