Firstly, let’s break the term into individual words and their definitions:
When you place them side by side, it’s hopefully quite explicit that it’s to do with big companies thinking about the consequences and impact of their business conduct.
The concept of corporate social responsibility has been mainstream as far back at the 1950’s, when Howard R. Bowen published his book, Social Responsibilities of the Businessman.
In it, he describes how the largest companies impact on the lives of a vast majority of the world’s population.
He questions to what degree ‘businessmen’ in powerful positions should consider business ethics and social responsibility, not just company profit (interestingly, as much as the book explores equality, perhaps the title would be businesspeople in 2019!).
Other literature over the following decades, argued the obligations of those with corporate power, to acknowledge a wider societal conscious.
Subsequently, this has been formalised as many large organisations have adopted business conduct guidelines and policy, including all the big tech names, such as Google and Facebook.
Four overarching areas of Corporate Social Responsibility can be seen as:
The United Nations Global Compact group, arguably the biggest initiative for CSR, defines 10 principles within these areas on their site.
These values may include, but are not limited to, how their business affects the environment, the communities in which they trade, culture within and outwith their company and doing so in the most sustainable manner. Why? Because it’s considered by them, the morally correct thing to do and comes with it a degree of conscious.
The ramifications of not considering these aspects are prolific and far-reaching. From an environmental standpoint, we’re already seeing the negative effects of big business decisions, from temperatures rising globally, to plastics ending up in the food chain.
Large companies have the power to set cultural trends and standards, from equal rights in the workplace, through to influencing consumerism with global ad campaigns.
Collectively, as a society, we all contribute towards these trends and issues. However, the power that large corporations wield in setting an example to smaller companies and individuals alike, is justification for why corporate social responsibility is so important.
Where there may be sincerity in using ethics as an incentive in CSR, ethical reasoning may also act as a guise, such as in the Seaworld example below.
Whether the reasons for implementing CSR rules and standards may overlap from an ethical or political standpoint, boardroom members and shareholders may also see CSR as also being important in business sustainability.
If good practices are imposed politically or through moral conscious, why would corporates choose not to uphold such standards?
Simply, money and bottom line. Negative social responsibility may be the reason why a company can exist as they do and be as profitable as they are. Cutting corners and turning a blind eye may give competitive advantage, if not, be a driving contributor to a business model.
However, sustainable business practises can see corporations reinvesting profits into areas which seek to increase environmental sustainability, positive impact on equal rights, communities and avoid corruption.
In doing so, it can allow businesses to adapt to changing environments, technologies, trading standards, but also to changing perceptions. This way of working can therefore create opportunity to gain market share and dominance.
However, while CSR may be presented for ethics and social responsibility, it’s not to say that companies implement CSR to offset the potential reputational impact to customers and shareholders.
One example might be the contributions SeaWorld has made to animal shelter and rescue groups, which could be a knee-jerk reaction and communications strategy to alleviate concerns of critics.
It probably goes without saying that other reasons companies determine ethical and social responsibility guidelines can be derived from external influence. Legislatively, much of a businesses’ conduct will be imposed by government and trade bodies, whether they align with the business values and beliefs or not.
In creating such legislation, generally, the laws are created to allow a level playing field for commerce to exist, all whilst setting national or international standards of responsibility.
These are far from perfect or indeed comprehensive, as we’re beginning to see from movements such as the ‘Exctinction Rebellion’, which seek to put political pressure on the Government to do even more for CSR.
The Deloitte Global Millennial Survey 2019 makes for an interesting read in which it discusses the global views of Millennials and Generation Z, whose members generated the results. Among the main topics were growing dissatisfaction in areas such as politics and the economy. The report also sheds light on business motives and impacts on society.
At 29%, both generations see the environment as being the top concern in society for the future - something difficult for big business to ignore. With only 37% of millenials believing that business leaders make a positive impact and 26% feeling that they don’t trust business leaders as sources of reliable information - businesses have to start paying attention to what their current or future customers think.
The report highlights that “social impact and ethics are the most common reasons why millenials change their relationships with businesses”.
With these attitudes so prevalent and growing, it’s undeniable that businesses need to think about why sustainability is important for the planet and society.
Without CSR, long-term society as we know it may not exist, let alone profits and dividends.
So as we’ve now gone over, there are various reasons why CSR exists. It serves to protect our values, societies and even planet, or may even act as a diversion to less favourable business practises. The incentives and degree to which big business create, monitor and reinvest in CSR differs from company to company, from industry to region.
While we might look to corporations and the political systems which govern their methods of business, it’s not to say that we don’t all make a contribution. How we align with which businesses and the actions we collectively take also help shape the world of the future.
An example of the effect social responsibility filtering through from government precedent to individuals taking responsibility, can be demonstrated in the below example:
In England alone, 7.6 billion plastic bags were given away in 2014, this equated to 61,000 tonnes of single use plastics. This is bad news for the environment, wildlife and the communities which they litter.
The UK government stepped in and imposed a 5p charge in October 2015 which meant that any business with 250 or more employees (in England), would have to levy a charge of 5p per bag as a disincentive for buying them.
The introduction legally imposed upon retailers of a certain size forced a corporate social responsibility.
Since the law was introduced, the number of bags usage has dropped by 90%.
Proceeds from the levy have also gone towards good causes such as charitable organisations, some supporting environmental issues.
In England, smaller businesses haven’t yet had the law imposed upon them (although this is expected for businesses of less than 250 employers in 2020).
However, the wider awareness and conscious of the charge and it’s wider benefits has initiated a voluntary response, with approximately 40,000 small retailers also taking part in the initiative.
Ultimately, it’s the consumers at the bottom of this chain which have the direct correlation to the positive headlines we see. In less than 4 years, the average consumer has gone from buying 140 plastic bags per year to 10 in 2019.
There is undoubtedly a direct impact from the disincentive of the charge, but also stimulated an awareness and collective moral conscious.
From a government level, law has forced CSR to large businesses, giving rise to choice architecture and ‘nudging’ consumers to personally and socially desirable behaviors.
Whatever the incentive for creating Corporate Social Responsibilities, there’s no denying how wide reaching they can be to creating a fairer and better and more sustainable environment and society.
Whether from an ethical standpoint, or from an incentive of more profit, CSR activities can positively affect the environment, communities, quality of life and human rights.
We at Dodo Digital work with companies of different sizes; what matters to us is that we align on our principles of sustainability for the future. If your business offers a more sustainable social and environmental offering over that of your competitors - let’s talk about how we can generate you more leads or sales.