The Evolution of Corporate Social Responsibility

Zoltán Kozma

Verified writer

PUBLISHED ON January 25, 2024

CSR has come a long way since the 1800s and its official inception in the 1950s. As businesses have become more conscious of their impact on society and the environment, the concept of CSR has evolved to cover a broader range of practices and initiatives.

TLDR:

• CSR has evolved significantly since the 1950s and initially, it focused only on philanthropy and charity
• It expanded to include environmental sustainability, ethical practices and social impact
• In the modern world, CSR is crucial for businesses, going beyond compliance and embedding in core operations.
• Collaborative partnerships and technology play a pivotal role in CSR strategies.
• 5 tips for taking your strategy further

The roots of CSR trace back to the late 1800s, a time when philanthropy emerged alongside worsening working conditions, prompting some businesses to reassess their practices. Firstly focused on community donations and labour conditions, this early form of CSR set the stage for responsible corporate behaviour.

At this point, you might ask ⬇️

What Corporate Social Responsibility (CSR) is about? 💭

At its core, CSR involves businesses taking responsibility for their impact on society and making efforts to address social and environmental issues. 

The history of CSR 📜

This notion first gained traction in the 1950s when companies started to view themselves as stakeholders in society. Organisations recognized that they had a duty beyond simply maximizing profits and the idea of CSR was born. (Howard Bowen gave us the term "Corporate Social Responsibility in 1953.")

At first, CSR focused primarily on philanthropic activities and charitable giving. 

Companies recognised the importance of giving back to the communities in which they operated. They understood that their success was intertwined with the well-being of the society around them.

Things got more interesting in the 1960s when scholars started looking at CSR as a response to society's issues, prompting businesses to integrate responsible practices.

While businesses embraced responsible practices, the scope remained relatively narrow. Some scholars argued that businesses are only responsible for the direct results of their actions. 

As we moved into the 1970s and 80s, businesses slowly made CSR part of operations, especially with less government regulation. They had to regulate themselves and think about the bigger social picture.

Still, during this time, CSR was mostly about human rights, labour conditions, and being environmentally friendly.

In the 1990s, globalisation came into the picture. International events and agreements, such as Agenda 21 and the Kyoto Protocol, compelled multinational corporations to broaden their CSR focus beyond local concerns.

Integrating Social Impact into CSR ⚙️

Over the past decades, CSR's evolution didn’t stop at environmental sustainability and ethical practices. It continued to grow, embracing the concept of social impact as a core element.

This means that businesses have come to recognise their potential to create positive changes in society through what they do. They've moved beyond traditional philanthropy and have started thinking more creatively.

Instead of just donating money, they're using their products, services, and business models to address critical social challenges. For example, they're working on solutions to fight poverty, reduce inequality, and improve access to education. 

Social impact has become a driving force for CSR. This approach creates shared value, meaning that companies are making a profit while also advancing social causes.

The landscape today 🧭

CSR is no longer seen as a “nice-to-have” but rather as a crucial aspect of responsible business practices. Companies are expected to go beyond mere compliance and prove a genuine commitment to social and environmental sustainability.

The leading thought is that businesses are integral parts of the societies in which they operate. They have a broader role beyond profit generation, encompassing social and environmental stewardship. 

Here are some aspects of why CSR plays an important role today:

It needs to go beyond compliance 

Businesses must understand that societal expectations have evolved, and stakeholders demand proactive engagement in addressing pressing issues such as climate change, social inequality, and ethical business practices.

Integration into core Operations is a must
Today, successful companies embed CSR principles into their core operations and company culture. CSR should not just be a separate department or an add-on; it should be baked into the DNA of the organisation. This integration extends to product and service design, supply chain management, and employee engagement.

Collaborative partnerships take it further

Companies are partnering with non-governmental organizations (NGOs), governmental bodies, and other stakeholders to increase their impact. These collaborations enable them to tackle complex social and environmental challenges collectively.

Leveraging tech helps put it into context

Organisations are embracing tech as a powerful tool to progress on CSR initiatives. From managing, measuring and scaling social impact programmes to digital platforms focusing on sustainable supply chain tracking, tech is there to execute CSR strategies with success.

Additional benefits

CSR enhances reputation and brand equity, attracts socially conscious customers, and fosters innovation. Moreover, volunteering (as it is part of CSR) boosts employee retention and productivity.

If you think about it, information is so easily accessible through our smartphones. So it is not surprising that people are increasingly looking at a company’s CSR commitments and activities before making purchasing decisions. They want to support businesses that align with their values.

Where does CSR fall short today? 🚩

Now as we’ve seen what transformation CSR has been going through in the past decades, we must not ignore the flaws neither that come with the concept. More specifically, when it comes to executing the strategy.

Measurement lacks clarity and transparency

One of the biggest issues is that many of these efforts are kind of like trying to measure fog – quite tricky. Companies usually don’t have the right tools to measure the social impact they’re making which makes evaluation difficult.

So when things don't go as planned or even make things worse, it's hard to hold anyone accountable in those scenarios.

For example, how do you set up metrics and a baseline for your measurement if you don’t see where you stand and where you’re heading? (To rely not just on own data reporting, but on objective ‘outside’ measurements as well)

Goal setting is usually too broad

When companies set their CSR objectives, they tend to fall into the trap of setting up too general and vague goals (e.g.: “Progress on social good”).

A better approach is if we strive for outcome-focused goals that are more specific.

Something like: “Increase well-being by XX% for our 60+ old community members in 2024” (measured through self-reported surveys).

[If you have previous benchmarks, you can use the ‘increase X from Y% to Z%’ concept as well to be specific with your goal setting] 

Missing feedback from those who matter

While goals look great in the plan, many CSR initiatives do not address the basic needs of the public and don’t get input from those they’re supposed to be helping. 

The reason behind this is that objectives are often made on the top level. So in practice, C-level executives might not always be in tune with what communities truly need.

5 tips for taking it further 🏗️

To wrap up this article, we’re sharing some of the key tips we believe are important when implementing a CSR strategy, because it requires the involvement of key decision-makers (e.g. Community Engagement Managers, Social Value Coordinators, Sustainability Officers, Board Members and Senior Executives). 

Their decisions impact the social and environmental performance of your organisation, ensuring that CSR remains a priority at both strategic and operational levels:

1) Define clear objectives 

Establishing specific and measurable objectives is essential. These goals should align with your company's values, mission, and the expectations of stakeholders.

2) Align with Company Culture

Your strategy should reflect your organisation's culture and values. When CSR is embedded in the company's DNA, it becomes an inherent part of how your company operates and interacts with the world.

3) Measure impact in a transparent way

Defining key performance indicators (KPIs) and monitoring the impact of your initiatives is a must-have. This collected data helps in assessing the effectiveness of the strategy and making improvements as needed. (We wrote more about this here)

4) Engage Stakeholders

Don’t sleep on engaging with employees, customers, suppliers, and the wider community. Their input and feedback can inform the development of CSR programs and improve their overall impact.

5) Look for continuous improvement

CSR strategies should be adaptable to changing environments and evolving societal expectations. Regular evaluation and adjustment are necessary to keep the strategy relevant.

Overall the evolution of CSR has been remarkable in the past decades. Despite its flaws, CSR has grown to encompass not only philanthropy but also environmental sustainability, ethical practices, and social impact. 

Companies must recognize CSR’s significance in the modern world and the benefits of being a responsible business. By doing so, they contribute not only to their own success but also to the betterment of society as a whole.