Corporate Social Responsibility (CSR): In response to social concerns

Corporate Social Responsibility (CSR): In response to social concerns

Let’s begin with the basics. Corporate Social Responsibility, CSR, is the deliberation of social concerns and public interests in vital business decision-making. Each corporate is responsible for the impact of their actions and activities, on the environment, on their consumers, communities, employees, stakeholders, and all others, who are directly or indirectly under the impact. CSR, for all intents and purposes, endorses public interest, by eliminating harmful practices and implementing development and growth of the community.

The World Bank explains Corporate Social Responsibility as the:

“…commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development.”

The Evolution:

CSR evolved in North America, steadily spreading through Europe to the rest of the world. It is said to have initiated as philanthropic and charitable donations in the US, a totally different picture from the existing integration model that strives to resolve social concerns through the main business of a company.

The CSR model in the UK evolved during the 1970’s, when the Conservative Government, under the leadership of Margaret Thatcher, initiated the privatisation of national utilities to reduce spending and to achieve a smaller government. This move revived the economy gradually, although with an increased number of social problems such as poverty, pollution, unemployment, etc. To mitigate the loss, industries as a whole, and individual concerns, set up CSR committees to compile codes of conduct and annual CSR reports. However, a closer integration of CSR with corporate management occurred much later.

In the 1990’s, the CSR model developed in Britain to address the key social issues raised by a company’s main operations, steadily spread across various other countries. The notion that social problems were beyond the corporate management domain changed. As a first step towards integration, corporations adopted guidelines to address social issues as a part of corporate management.

GRI: The first draft of Global Reporting Initiative (GRI) was published in 1999 by the Coalition for Environmentally Responsible Economies (Ceres) in partnership with UN Environment Program. These guiding principles included the concept of “triple bottom line” that evaluated the performance of a company, financially, as well as socially and environmentally. This enabled each individual firm to compare their degree of integration with the efforts of other corporates.

The GRI guidelines helped companies to strategise socially responsible policies for their business activities.

SRI: However, the Socially Responsible Investment (SRI) brought in the fundamental changes that closely impacted business operations. The regulations were more binding than GRI guidelines and it spread across Asia, although the idea originated in Europe. Apart from introducing new guidelines, SRI also offered new approaches to the existing frameworks and guidelines. This policy required an institutional investor to voluntarily incorporate the environmental, social, and governance (ESR) standards in the decisions of investment. This was done in order to enhance the long-term returns of beneficiaries. These approaches to SRI helped companies to address social issues.

Thus, we can call the evolution of CSR, as the decision to do the right thing while channelling a business towards sustainable growth and financial profits.

Today, the motivating part of the evolution is the growing popularity of CSR. Recall any brand name today, and you might find the most integrated business policies. Say Google, Timberland, Sainsbury’s, Sony, and much more. However, it is not just the bigger brands, even the smaller concerns are following suit and reaping major benefits.

Corporate Social Responsibility (CSR) Today

In the socio-economic context at present, the issues related to economic sustainability and social responsibility are of high importance, particularly in the business sector. The business goals are inseparable from the environmental and social objectives. Short-term profits might seem lucrative, but a failure to account for the long-term impacts can make a business unsustainable.

Some of the CSR Trends in today’s scenario

Effective CSR allows you to distinguish your brand, and your products from the rest in the market. Here are a few new-age CSR trends that created a lot of noise in the business sector while inspiring many to follow suit.


While keeping in mind the disappearance of honeybees, who are responsible for one-third of the food we consume, Haagen-Dazs donated a portion of the profits made from their honey bee brand for a research on this issue. Not only did they aid a key investigation, but also launched a product, giving the company a positive exposure. They used the social media wisely to spread the campaign across Twitter, gaining 640,000 tweets and $7,000 within two days. A massive publicity and inspiration for “doing good”.

Molson Coors

Selling alcohol might not be accepted as a socially responsible activity unless someone closer in the circuit proves otherwise. Molson Coors invested money in the education of responsible drinking. They went ahead and sponsored “TaxiGuy”, a transportation initiative that offer a safe ride to those under the impact of alcohol. An initiative to change the common perception about alcohol sellers, and “doing good” while earning high profits.

Transparency in cosmetics business

Transparency, today, has become an expectation. The trend is more with luxury brands, wherein the consumer expects the brands to act more responsibly, ethically, sustainably and openly. Any use of animal bi-products are condemned by the educated consumers.

Socially responsible activities

Companies such as Nike, IKEA, General Motors, and Unilever united to work against climate change through their “We mean business” initiative. Additionally, top names, such as FedEx, Pizza Hut, Walmart, Starbucks, JCPenny, and others, joined forces to build the “100,000 Opportunities Initiative”, a pledge to employ young Americans out of school and yet to land a job.

Doing good to the community comes back in the form of positive press coverage, and an improved brand image. From organising a charity event to hiring the jobless, any form of CSR activity can boost a company’s reputation. One responsible action has the potential to draw more customers. Understanding the future impacts of a business, and taking required actions, can also help a company to offer effective solution to rising social concerns and simultaneously increase business.

If you would like to find out more about CSR you can take our course on International Sustainability and Corporate Social Responsibility (CSR).