Corporate social responsibility

Authors: Marleen Christ, Nick Fischer, Lisa Gerdes-Röben, Joern Hoppmann, Ann-Kathrin Sieberns
Last updated: March 27, 2023

1 Definition

The term Corporate Social Responsibility (CSR) describes a firm’s commitment and activities related to the pursuit of societal and (more reecently also) ecological goals.¹KOM Grünbuch – Europäische Rahmbedingungen für die soziale Verantwortung der Unternehmen. KOM(2001) 366 endgültig. (2001). In addition to social and ecological concerns, economic aspects continue to be part of the idea of CSR.²BMAS CSR – CSR-Grundlagen https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/csr-grundlagen.html (n. d.). In contrast to the prevailing definitions of Corporate Citizenship or Corporate Philanthropy, CSR often describes activities that are related to a firm’s core processes and go beyond donations, volunteering or other add-on activities. This focus on a company’s core processes is a feature CSR shares with the concept of Corporate Sustainability. However, while Corporate Sustainability is rooted in the observation of ecological systems and the resulting limits for economic growth, CSR has its origins in a philosophical debate on the broader purpose of firms as well as their moral obligations toward society. In recent years, the terms CSR and CS are used synonymously in both research and practice.

2 Background

The origin of the CSR concept can be found in the USA in the middle of the 20th century. As a reaction of a strong corporate focus on profit optimization at the expense of society (in particular worker‘s rights, consumer rights) in the 1950s, researchers started to ask what role companies should play in society. In particular, researchers from the fields of philosophy and ethics started to question the dominant view that the purpose of firms was to generate profits and, taking a normative approach, engaged in a debate about the moral obligations companies have.

While the concept of CSR thus emerged in the time after World-War-II, the question of whether and how firms should and can integrate social issues is much older and dates back to the time of the industrial revolution. Already in the mid to late 19th century, companies were concerned about the social well-being of their employees, as they feared social unrests and were concerned with how to motivate their employees more. A welfare movement emerged in which John H. Patterson played a major role.³Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008).

In the 20th century, on can identify different periods of CSR, each characterized by different foci. In the period from 1953 to 1967, the general responsibility and commitment of companies were increasingly strengthened. This was followed between 1968 and 1973 by corporate approaches to issues such as environmental problems, racial discrimination, etc. Corporate responsiveness became very pronounced within this phase. This was followed by management measures from 1974 onwards to integrate CSR issues into corporate structures and to introduce organizational means accordingly.⁴Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008). Initially, the focus was on the social challenges of the environment, but in the mid-1990s, the ecological aspect increasingly moved into the foreground.⁵Loew, T. Corporate Social Responsibility – Hintergrund und Entwicklung https://www.4sustainability.de/corporate-responsibility/hintergrund/ (2021).

Due to globalization and the accompanying increase in problems such as climate problems, poverty, and lack of medical care, the topic of CSR has become more and more present. Business models of companies are being designed in such a way that they assume social responsibility. Both the understanding of CSR and international requirements have continued to develop.⁶BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.). Guiding Principles on Business and Human Rights and Guidelines for Multinational Enterprises have been in place since 2011 to uphold human rights and ensure human rights due diligence.⁷BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.).

3 Practical implementation

The International Organization for Standardization (ISO) published a guide for CSR that can be used across topics and industries in November 2010. Previously, no standard of a guideline nature like this existed. The contents of ISO 26000 are recommendations for action to be applied voluntarily by companies to help and contribute to social responsibility.⁸Hardtke, A., Weiß, D., Irmler, I.& Lössl, S. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2014).^{, 9}Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011). ISO 26000 provides general knowledge of sustainable development, international standards of conduct, the environment, and the stakeholders involved. All areas of CSR are thus covered.¹⁰Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011). However, there is also criticism of this standard. Companies deal with the topic of CSR with the help of ISO 26000, but it isn’t easy to use this standard across borders. For this purpose, ISO 26000 is too general and broad to make it applicable to every situation.¹¹Sethi, S. P., Rovenpor J. L. & Demir, M. Enhancing the Quality of Reporting in Corporate Social Responsibility Guidance Documents: The Roles of ISO 26000, Global Reporting Initiative and CSR-Sustainability Monitor. Business and Society Review 122.22, 139-163 (2017).

The United Nations Global Compact (UNGC) Global Compact Management Model is based on the UNGC’s ten guiding principles and serves as a tool for integrating CSR issues into a company’s organizational structures.¹²Wickert, C. & Risi, D. 2019. Corporate Social Responsibility. (Cambridge University Press, 2019). More than 5000 companies have already incorporated these principles into their structures to promote a better world. The aim is to avoid future opportunities and risks and to achieve sustainable and long-lasting value creation for the companies.¹³United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010). The comprehensive tool is divided into six different steps which are intended to promote communication between the company and its stakeholders so that internal company processes can be communicated to them.¹⁴United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010). Companies commit to the UN Global Compact, which ensures the continuous and dynamic change in companies.¹⁵United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).

In addition, there are the OECD Guidelines for Multinational Enterprises, which set out principles as well as benchmarks for companies to voluntarily implement responsibly and in accordance with the standards. Participating countries can commit to the guidelines set out in the OECD Council Decision.¹⁶OECD. OECD-Leitsätze für multinationale Unternehmen. (2011). However, next to the UN Global Compact, the OECD’s Guiding Principles have received little attention, as the implementations of these Guiding Principles are not widespread. This can be attributed to the voluntary nature of the implementation, and the lack of sanctions also contributes to the following.¹⁷Schank, C. & Hajduk, T. Compliance in den OECD-Leitsätzen für multinationale Unternehmen in CSR und Compliance (eds. Kleinfeld, A. & Martens A.) 79-90 (Springer Berlin Heidelberg, 2018).

References

• 1
  KOM Grünbuch – Europäische Rahmbedingungen für die soziale Verantwortung der Unternehmen. KOM(2001) 366 endgültig. (2001).
• 2
  BMAS CSR – CSR-Grundlagen https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/csr-grundlagen.html (n. d.).
• 3
  Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008).
• 4
  Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008).
• 5
  Loew, T. Corporate Social Responsibility – Hintergrund und Entwicklung https://www.4sustainability.de/corporate-responsibility/hintergrund/ (2021).
• 6
  BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.).
• 7
  BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.).
• 8
  Hardtke, A., Weiß, D., Irmler, I.& Lössl, S. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2014).
• 9
  Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011).
• 10
  Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011).
• 11
  Sethi, S. P., Rovenpor J. L. & Demir, M. Enhancing the Quality of Reporting in Corporate Social Responsibility Guidance Documents: The Roles of ISO 26000, Global Reporting Initiative and CSR-Sustainability Monitor. Business and Society Review 122.22, 139-163 (2017).
• 12
  Wickert, C. & Risi, D. 2019. Corporate Social Responsibility. (Cambridge University Press, 2019).
• 13
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 14
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 15
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 16
  OECD. OECD-Leitsätze für multinationale Unternehmen. (2011).
• 17
  Schank, C. & Hajduk, T. Compliance in den OECD-Leitsätzen für multinationale Unternehmen in CSR und Compliance (eds. Kleinfeld, A. & Martens A.) 79-90 (Springer Berlin Heidelberg, 2018).

• 1
  KOM Grünbuch – Europäische Rahmbedingungen für die soziale Verantwortung der Unternehmen. KOM(2001) 366 endgültig. (2001).
• 2
  BMAS CSR – CSR-Grundlagen https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/csr-grundlagen.html (n. d.).
• 3
  Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008).
• 4
  Carroll, A. A History of CSR – Concepts and Practices in The Oxford Handbook of Corporate Social Responsibility (eds. Carroll, A.) 19 – 46 (Oxford University Press, 2008).
• 5
  Loew, T. Corporate Social Responsibility – Hintergrund und Entwicklung https://www.4sustainability.de/corporate-responsibility/hintergrund/ (2021).
• 6
  BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.).
• 7
  BMAS CSR – Historie https://www.csr-in-deutschland.de/DE/CSR-Allgemein/CSR-Grundlagen/Historie/historie.html (n. d.).
• 8
  Hardtke, A., Weiß, D., Irmler, I.& Lössl, S. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2014).
• 9
  Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011).
• 10
  Franz, P., Kleinfeld, A., Thorns, M. & Vitt, J. Gesellschaftliche Verantwortung von Unternehmen – Eine Orientierungshilfe für Kernthemen und Handlungsfelder des Leitfadens DIN ISO 26000. (2011).
• 11
  Sethi, S. P., Rovenpor J. L. & Demir, M. Enhancing the Quality of Reporting in Corporate Social Responsibility Guidance Documents: The Roles of ISO 26000, Global Reporting Initiative and CSR-Sustainability Monitor. Business and Society Review 122.22, 139-163 (2017).
• 12
  Wickert, C. & Risi, D. 2019. Corporate Social Responsibility. (Cambridge University Press, 2019).
• 13
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 14
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 15
  United Global Compact and Deloitte UN Global Compact. UN Global Compact Reports. (2010).
• 16
  OECD. OECD-Leitsätze für multinationale Unternehmen. (2011).
• 17
  Schank, C. & Hajduk, T. Compliance in den OECD-Leitsätzen für multinationale Unternehmen in CSR und Compliance (eds. Kleinfeld, A. & Martens A.) 79-90 (Springer Berlin Heidelberg, 2018).