Businesses Have Been Practicing Social Responsibility for Decades, but is that Really a Good Thing?
The jury is out on whether corporate social responsibility (CSR) programs will one day make the world a better place. But this much is pretty clear: They're already benefiting the companies that have implemented them. And in some unexpected ways.
Specifically, CSR has become the weapon of choice for what is known as, in corporate speak, the three R's: Investor Relations, Human Resources, and Public Relations.
But before we dive into details, a CSR mini-lesson is in order. First off, CSR isn't an overnight sensation. Over the past couple of decades, companies have been embracing the idea that they need to do more than just make a profit for shareholders. Do-good efforts slowly evolved from passive and limited corporate philanthropy programs—giving to the United Way, for example—to broader and more active CSR programs. Those would take on major social issues like Goldman Sachs' 10,000 Women program, which in partnership with the International Finance Corporation (World Bank) has delivered $1.45 billion in loans to women-owned businesses in developing countries.
Now, they have evolved even more. Many companies are now incorporating impact-on-society considerations into core business activities. For example, Starbucks only uses "ethically-sourced coffee." Programs like these are often focused on "sustainability." In August, 181 CEOs of the country's largest corporations signed a Business Roundtable statement committing to managing their companies not just for shareholders, but also for customers, employees, suppliers, and communities.