By Mokutima Ekong
Engaging in corporate social responsibility (CSR) is like writing a Choose Your Own Adventure book. The writer determines the rules and outlines the guidelines for readers. In the case of companies, they’re writing the rules for themselves.
CSR is not new. The term dates back to the 1950s when American economist Howard Bowen, known as the father of CSR, coined the term in 1953. Bowen’s book Social Responsibilities of the Businessman defines CSR as “the obligations of [businesses] to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society.”
The definition of CSR has evolved since Bowen’s coinage. Most notably, in the 1970s, the nonprofit the Committee for Economic Development (CED) introduced the idea of the “changing social contract” between business and society. The CED’s report Social Responsibilities of Business Corporations asserts that companies operate and exist because of public consent, which obligates them to address societal needs.
In the 1990s, Donna J. Wood, a University of Pittsburgh professor, built on the ideas expressed by Bowen and the Committee for Economic Development. In particular, Wood published “Corporate Social Performance Revisited,” a paper suggesting ways to measure the impact of CSR.
Over the years, scholars have refined what CSR means to form a general definition, providing context for companies across industries. Today, businesses around the world engage in CSR, from Disney to Microsoft. Since CSR is such a broad term, however, companies are free to decide how they wish to implement it.
Broadly, businesses implement CSR through the following vehicles: environmental sustainability, diversity and labor practices, philanthropy, and volunteerism. Companies leverage these activities to address various issues. However, these vehicles can assume different forms depending on the company, industry, business size, and access to capital.
Many of today’s issues—and the vehicles used to address them—aren’t new. In the 1800s, the Industrial Revolution engendered concerns related to unsafe working conditions, leading to worker welfare movements. During this time, philanthropy developed, and philanthropists such as Andrew Carnegie, who funded education and scientific research efforts, emerged.
Additionally, the relationship between business and society is ever-changing, as reflected in the ongoing Friedman vs. Freeman debate. Global issues continue to evolve, and with this change comes the constant need to evaluate how businesses should operate. Now more than ever, people are listening, watching, commenting, and expecting companies to act in response to society’s issues.
Ideally, a company’s CSR should align with its mission and business model. Moreover, a company that practices genuine CSR incorporates it throughout its organization, extends it beyond one-time donations and volunteer days, and doesn’t minimize it to a marketing tool or reputational buffer. That said, CSR doesn’t have to hurt a company’s bottom line if it’s an innate aspect of an organization.
In a modern context, 2020 has increased the need for socially responsible companies. From Covid-19 to the Black Lives Matter movement (BLM), this year has exhibited why businesses should be conscious of their role in society. Both Covid-19 and BLM have uprooted the nation’s flaws: inequitable healthcare system, police brutality, and systemic racism.
This year has tested the relationship between business and society. Companies have acknowledged the issues that have dominated news headlines throughout this year. Corporate responses to Covid-19 and BLM have included commitments to diversity and inclusion, donations, employee mental health and wellness resources, public statements, and social media posts.
2020 has birthed successful CSR campaigns. The popular music streaming app Spotify, for example, used its platform to address the BLM movement by elevating Black voices. Through podcasts and curated playlists, Spotify leveraged areas in which it excels to support an ongoing social justice movement.
The extent to which companies have fulfilled their end of the social contract has varied. Lukewarm responses in the form of empty corporate statements aren’t the answer to today’s issues; denouncing societal problems is only part of the equation. Society needs businesses equipped to address social concerns through their core businesses in both the short term and long term.
Businesses may write the rules, but society members possess the power to check them.