Corporate Social Responsibility – Definition and History
Corporate Social Responsibility (CSR) has become an increasingly important driving concept behind business success today. However, the CSR definition has changed across time as people’s senses of social conscience and social awareness have evolved.
The basic idea behind CSR is “doing well while doing good” – in other words, earning high value from investments that also have positive social outcomes. Today it’s virtually impossible for any business to capture market share without some form of CSR strategy.
What is Corporate Social Responsibility?
The basic idea of CSR has been around since the early 1900s, but its definition has evolved along with the social, economic, and political context of the times.(1)
In 1979, business scholar Archie B. Carroll posed the first unified definition of CSR by writing, “The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.”(2)
History of CSR
The foundation for the modern definition of corporate social responsibility (CSR) was laid in the first half of the 20th century. In the 1980s, the CSR conversation turned to the operationalization of the concept, as global social concerns began focusing on environmental protection and sustainable development.
As recognition of the growing threat of climate change intensified in the 1990s, so did interest in CSR. Multinational corporations came to view social responsibility as a pathway to balancing the challenges and opportunities of globalization. The notion of the “Triple Bottom Line” – measuring a company’s social, economic, and environmental impact – emerged as a framework to increase corporate accountability.(3)
Also during the 90s, Burke and Logsdon (1996) posed five dimensions to strategic CSR: centrality, specificity, proactivity, voluntarism, and visibility.(4)
In 1991, Archie Carroll updated his CSR definition to include four dimensions that build in significance, calling it the CSR Pyramid:
Carroll’s Pyramid of Corporate Social Responsibility(5)
CSR Agencies Emerge Around the World
Multiple agencies have cropped up across the years in response to the evolution of CSR. In the 1970s, social and economic upheaval in the US sparked a federal response that led to the creation of the Environmental Protection Agency (EPA), Consumer Product Safety Commission (CPSA), Equal Employment Opportunity Commission (EEOC), and Occupational Safety and Health Administration (OSHA), all agencies designed to address – to some extent – the social responsibilities of corporations. Those agencies remain in force today.
Business for Social Responsibility (BSR) was established in 1992 with an initial membership of 51 corporations with a shared vision of becoming a force for positive social change.
The United Nations Global Compact (UNGC) was launched in 2000, gathering 44 global companies, 6 business associations, and 2 labor and 12 civil society organizations with the goal to create an institution that would fill governmental gaps in human rights, social, and environmental issues and to incorporate universal values into the global marketplace. The UNGC defined 10 principles for corporate behaviors of its members, aimed at creating company cultures of integrity with long-term aims.(6)
New Definitions up to the 2020s
As the modern era unfolds, changes to corporate policy in response to the public interest have inspired new definitions of CSR, including N. Craig Smith who defined it as “…the obligations of the firm to its stakeholders – people affected by corporate policies and practices. These obligations go beyond legal requirements and the firm’s duties to its shareholders. Fulfillment of these obligations is intended to minimize any harm and maximize the long-run beneficial impact of the firm on society.”(7)
Similarly, McWilliams and Siegel’s definition says CSR is “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.”(8)
Aguinis defined CSR as “context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance.”(9)
CSR Today
Corporate sustainability now refers to the level at which CSR is integrated into company policy and structure. Thus companies have a new role in society and must conduct calculated CSR that adapts to the evolving social context – i.e., CSR has become a strategic necessity. The emphasis is on creating shared value: for the companies themselves, for their stakeholders, and for the social context within which they operate. Today, generating sustainable value has been identified as the primary CSR objective.