This post was originally posted on Vault’s CSR Blog - a great resources and a huge thank you to Aman Singh! It was part of a discussion between Alberto Andreu (Chief Reputation & Sustainability Officer at Telefónica) and I on CSR and Sustainability. He countered with a great post. Great guy and great thinker. It was an honor to have such a constructive discussion with someone like him.
I am afraid Alberto and I violently agree with each other on the most important aspects of CSR: Where it comes from and where we are today. Where we might not agree as much is whether this is still CSR.
In my view, CSR is not a revolutionary process but one that continues to go through many changes—an evolutionary process. The graphic below is my first attempt to describe this evolutionary process.
Phase 1: Philanthropy
In its initial phase back in the 1970s, CSR was all about philanthropy and what business should do with some of its profits. Small shifts in thinking pushed this early form of CSR forward. Companies became more strategic with philanthropic initiatives and tended to focus on projects in their local communities. This eventually grew into Corporate Social Investment that brought a business sense to philanthropy – focusing on results and outcomes.
Phase 2: Globalization Forces Standards
Slowly, globalization started shaping our world more and the impact of business in this globalized world became an increasing focus for activists. From a narrow focus on philanthropy we moved into an era of citizenship. Companies became business players in a globalized world, or, as it became known, Corporate Citizenship.
They started developing standards to manage their risks. This led to the need for global standards – from extractive companies and human rights to how we report on CSR today.
Phase 3: Citizenship-led Cause Marketing
When the term cause marketing was initially floated, CSR became something business could benefit from for the first time. It was a huge shift in how we perceived CSR,– not just risk management. This benefit-based approach brought operations back on the table leading to the development of CSR as a business strategy.
Now, CSR was suddenly not about cutting costs but about increasing profits.
Phase 4: CSR & Sustainability Tied with Future Business Growth
The latest evolution of CSR, or sustainability, has taken this concept of business benefit even further and started looking into the future of business and society—the heart of CSR. Sustainability today looks at finding mutually-beneficial solutions to the challenges we face as society as well as future challenges.
But CSR, even today, is still about how business can operate profitably within this role as a responsible citizen toward society.
From Reactionary to Risk Management
We have moved from a reactionary model of philanthropy to a crisis-led model in the early stages of globalization to a risk-based model in citizenship to a mutually-beneficial business model in sustainability.
We might have seen our understanding of CSR deepen throughout this evolution but the definition of CSR hasn’t changed much over time—CSR is the way a company manages and communicates its impact on society and the environment.
Many of the individual parts of this evolution (Philanthropy, standards, etc.) remain with us today but these are not the only parts of CSR anymore. We’ve adapted and moved on – keeping the good stuff, improving on them and adding to it.
The world of CSR is very, very different today. But it is still CSR.
An Argument for Terminology: Corporate Social Responsibility Fits Best
While this might be somewhat semantic in nature, it is still an important part of the debate: We should look at the description of CSR itself. Why do we use these very specific three words to describe what we do?
I would argue that the concept is actually a very good description of what we do today. Here’s why:
Corporate implies that this is about business.
- It not only describes that we are busy with a discipline involving business but goes deeper.
- It is about profits – how we make them and how we can make more of them today and tomorrow.
- It is not about charity.
- It is about building a sustainable business model that will continue to deliver business results for stakeholders – especially shareholders.
Social tells us this is about society.
It is about the impact business has on society and how we can manage this impact to ensure both business and societal benefit.
Even the environmental part of CSR is about society – how we can minimize environmental impact to benefit society in the end of the day.
The new developments in CSR – sustainability – further continue to prove that CSR is about a mutually beneficial relationship between product and service development, and societal value chains.
Responsibility reveals that business does carry a responsibility in this world – to do business in a way that benefits both business and society. Further, this responsibility gives business the opportunity to create new solutions to the needs of society. I would even argue that it is their responsibility to develop these new solutions and benefit by capturing new avenues of sustainable profit.
All three concepts—Corporate, Social and Responsibility—tell us exactly what we do today. CSR is also the perfect reminder of the relationship between business and society, and the responsibility they have towards each other. None of the other concepts proposed today actually tell us what we are doing and what we should be doing.
I say, long live CSR, and may it continue to evolve and change our business world for the better.