Corporate Social Responsibility was introduced back in the late 60’s-early 70’s as a somewhat self-regulated model for which businesses could comply and monitor their actions, and create a positive social impact outside of what is legally required. This may include initiatives to support the environment, consumers, employees, stakeholders, or the community-at-large.
Some of the drivers that motivate CSR include:
Triple bottom line (people, planet, profit) –
People: Fair business practices toward labor and how a business conducts itself;
Planet:Avoiding production of harmful or toxic weaponry and chemicals; generally practicing sustainable environmental practices;
Profit:Value created to the economy (not company profit, but more relative to economic benefit).
Human Resources –
Providing equal opportunity work environments, supporting graduates and interns; staff involvement in charitable endeavors, etc.
Risk Management –
Taking a preemptive approach to avoid unwanted attention from the government, media, regulators, etc., by creating a positive halo effect around your corporation.
While the general notion of corporate social responsibility seems like a positive one, others have argued that a business’ primary purpose is to maximize returns to shareholders, having no obligation outside of the legal parameters. Or, that these initiatives are undertaken by companies to distract the government/regulators, media and general public, who may question the ethics of their core operations, such as British American Tobacco (BAT), British Petroleum (BP), and McDonald’s.
What’s your take on CSR? Do you think the majority of corporations are adopting CSR to make a genuine social impact, or are simply in it for the PR spin?
If you find this topic interesting, check out this article recently published by the the Economic Times. It discusses why companies engage in corporate social responsibility following the collapse of the Rana Plaza factory in Bangladesh. The disaster exposed the unsafe working conditions that garment workers endure across the developing world, along with inconsistencies of some companies with respect to corporate social responsibility (CSR).