History

Corporate Social Responsibility (CSR) has a deep and rich history that has been faceted by many philosophers, members of government, businesspersons and individuals over the years. It’s a concept that has been broken down and rebuilt countless times, believably in part due to its great significance. However, if something can be dismantled and revised so many times across centuries and continents, a good question to be asked is what truths about CSR remain today?

  • Corporate Social Responsibility Before 1900
    • Corporate social responsibility, in its archaic form, can be traced back to ancient Roman laws, as some corporations (asylums, hospitals etc.) were designed for a social service rather than profit. This continued through the Middle Ages in English Law. Eventually, company leaders in the 19th century turned to philanthropy, indicating a new concern for public wellbeing in the corporate landscape. In the United States, corporate structures for social benefit were imported from England. 
    • During the 18th and 19th century, religious sentiment was a strong driver to combat the moral failures of society. Philanthropists sought welfare systems and benefits for the working class, and institutions such as the YMCA in Europe and the United States demonstrated applying Christian values to business. 
  • Corporate Social Responsibility in the 1950s and 60s
    • Corporate social responsibility as a concept was defined by Howard Bowen in 1953. As rising concerns for social issues stirred in the 1960s, it became more and more apparent that there needed to be principles by which corporate leaders can follow and act responsibly toward society as a whole.
    • In the 1960s, an influential writer named William Frederick analyzed the last century and came to the conclusion that as economic and industrial thinking changed over the first half of the 20th century, there came an increase in economic power and scale. He enumerated 5 principles of business responsibility
      • The criteria of value
      • Use the latest business concepts and knowledge
      • Acknowledge historical and cultural traditions
      • Recognize individuals as part of the whole business
      • Recognize that corporate responsibility is not automatic and must be done consciously
    • McGuire recognized that companies were expanding at breakneck speeds, and identified that they have responsibilities beyond their economic purposes. Walton similarly found companies to be potential solutions to social problems at the time.
    • Milton Friedman, in a famous 1962 speech said that CSR was actually a hindrance, and companies should limit themselves to economic interests so they have justifiable expenses.
  • CSR in the 1970s
    • In the 1970s, the general public distrusted companies’ ability to fulfill societal needs. 
    • In 1970, the first Earth Day demonstrated the public’s concern for environmental causes. In combination with a recession that began as a result of the global energy crises, several government initiatives were created to regulate businesses. The Environmental Protection Agency (EPA), the Consumer Product Safety Commission (CPSC), the Equal Employment Opportunity Commission (EEOC), and the Occupational Safety and Health Administration (OSHA).
    • The Committee for Economic Development (CED) published A New Rationale for Corporate Social Policy and Social Responsibilities of Business Corporations, both asserting that corporations exist primarily for the benefit of society.
    • The Club of Rome released in 1972 The Limits to Growth, which called attention to the environmental harms of unchecked growth in businesses.
    • The era of the 1970s is considered the first time many companies used the term “Corporate Social Responsibility” in their policies and discussions. The definition was debated over during this time.
  • CSR in the 1980s.
    •  In response to rising inflation rates, Margaret Thatcher and Ronald Reagan sought ways to jumpstart their countries’ economies without seeking outside help. They decided to lower the tax rate and restrictions for domestic companies. This resulted in different interest groups advocating for social benefits from corporations. The term stakeholder, which means the people assuming the effects of business decisions, became prominent during this time. 

For the next 40 plus years, the search for a true model of CSR would continue and the long lists of arguments and rebuttals, revisions and publications would only grow in number. Today, one of the latest editions to CSR research is the integration of Sustainability into its model. This has become increasingly more popular since the Paris Agreement of 2015 that set goals for CSR and Sustainability by 2030. Given what we’ve seen so far, it’s not crazy to believe that the basic idea of CSR will only continue to grow and shift in coming years. 

In essence, that’s kind of its point right? To use a company’s resources to meet the current needs of its community and stakeholders while behaving ethically in practice. The truth is, there will always be new issues, movements and challenges that come about, which is why one specific definition or structure of CSR probably won’t be the same one our grandkids will use in the future. However, CSR at its core will always remain intact. The world will always need solutions and/or assistance and by taking this into consideration corporations will likely always be ready to help out. That’s what CSR is, it’s a solution and helping hand reached out by those trusted by consumers to handle their resources well. How it will continue to be applied is something we’ll just have to be around to witness. 

Source: Andrés Latapí Agudelo* , Mauricio, et al. “A Literature Review of the History and Evolution Of …” Agudelo: The History of CSR, International Journal of Corporate Social Responsibility, 22 Jan. 2019, jcsr.springeropen.com/counter/pdf/10.1186/s40991-018-0039-y.pdf.