Corporate Social Responsibility

Corporate Social Responsibility

In a relatively short amount of time, the term corporate social responsibility has gone from being "tech speak" in business and management books to becoming one of the most widespread practices in the world of business. There is virtually no field that cannot benefit from implementing the principles and practices involved in corporate social responsibility. Whether you own a small business or a large company, the benefits involved in this practice are plentiful, and range from improved funding opportunities to lower staff turnover. In this article we take a look at the development of corporate social responsibility and at the latest trends observed in this field.

Corporate social responsibility: a brief history of its development

The term corporate social responsibility began to be used in business circles during the 1950s. In 1953, American economist Howard Bowen published a book entitled "Social Responsibilities of a Businessman". In this book, Bowen affirmed that business activity inevitably affects the lives of citizens, so he called for responsible decision making. Therefore, the appearance of the term corporate social responsibility was closely linked to another key concept in the world of business: the idea of stakeholders. Since stakeholders refers to the people upon which a business has an effect, corporate social responsibility appeared as a way of managing an organisational business model that aims to increase the benefits offered to its stakeholders.

Corporate social responsibility continued to gain supporters in the business world. This trend was especially marked during the 1980s, when several academics and consultants proposed that social issues could be transformed into economic opportunities through socially responsible corporate practices.

The development of corporate social responsibility was also closely linked to globalisation. During the late 1970s, globalising trends went under public scrutiny, and it soon became obvious that there were many ethical and moral issues arising from the implementation of global business operations. In 1976 the Organisation of Economic Cooperation and Development outlined a series of guidelines aimed to regulate the impact of trade and business transactions across the global economy. The rise of social activism and the increasing awareness about environmental issues were other factors that contributed to the widespread adoption of socially responsible corporate practices.

Trends in corporate social responsibility: from reporting to engagement

Since the business world is an eminently practical field, the theory surrounding corporate social responsibility soon started to be turned into practice. During the 1980s, many businessmen and academics began to look for ways of measuring the effectiveness of corporate social responsibility. This led to the development of corporate social reports, the first of which was published in 1989 by ice cream company Ben and Jerry's. For 24 years, this American company has made its social reports available to the public, so that consumers gain a better understanding of the company's efforts to improve their social and environmental performance. The first multinational to follow the reporting trend was oil giant Shell, who published its first social report in 1998.

However, as time goes by, businesses have seen a need to go beyond simply reporting, becoming more engaged with pressing social and environmental issues. Nowadays, many companies incorporate social responsibility as one of their key long-term strategies, both in marketing and in human resources. According to a survey by Forbes, 35 per cent of employees want to work for a company that is committed to implementing corporate social responsibility.

Combining profits with sustainability

Another key trend in corporate social responsibility involves the adaptation of business models to allow companies to increase their profits while developing sustainable products and services. Consumers are increasingly more aware of social and environmental issues, and therefore there is a growing demand for products and services that meet the criteria of social responsibility. A carefully designed corporate social responsibility strategy helps create value for customers and enhance brand reputation. A recent global survey carried out by Nielsen showed that 50 per cent of the consumers interviewed said that they were willing to pay more for products sold by socially responsible companies.

Companies and organisations as global citizens

The last trend worth mentioning is the progressive shift that the corporate world has experienced since the late 1990s, in which companies and organisations are abandoning their typically defensive or reactionary approach to corporate social responsibility and taking a more proactive role as global citizens. As a result, companies are becoming more personable and changing the perceptions and buying behaviour of consumers around the globe.

In our days, businesses have redefined the early approaches to corporate social responsibility, which claimed that companies have an obligation to contribute to the social development of the societies in which they operate. Instead of seeing corporate social responsibility as an obligation, many businesses today have gladly adapted their practices so that they fine-tune corporate behaviour with social needs.