The Origins of Corporate Social Responsibility: From the Gilded Age to Today
Updated: Mar 2
Corporate social responsibility (CSR) requires companies to be accountable not just to their bottom line, owners, and shareholders, but to the communities they do business in, the broader public, and the environment. It may sound like a wholly contemporary notion, but the roots of CSR date back more than a century.
Origins in Gilded Age philanthropy
You could argue that modern CSR programs represent an evolution of the philanthropy pioneered by prominent "captains of industry" like Andrew Carnegie and John D. Rockefeller. These corporate leaders used their wealth to fund universities, libraries, public buildings, and scientific research. Carnegie's famous article, "Wealth," published in 1889 in the North American Review, detailed his philosophy about the role wealthy individuals should play in society. The article contains ideas that would influence the development of CSR. Carnegie argued that the affluent had a duty to use their surplus wealth in a way that would benefit others and narrow the gap between rich and poor.
Real-world examples of CSR at the time might include the Hershey Company and its company town of the same name. Company founder Milton Hershey built an entire town for his workers, with a free school, community center, amusement park, and trolley transportation. Despite the paternalism of such company towns (and of Carnegie's philosophy), it relates to CSR as an example of a company expanding its remit beyond profit.
The "obligations of businessmen"
One of the major points in the development of the concept of CSR was the publication of Social Responsibilities of the Businessmen, a book by the economist Howard Bowen. Sometimes called the "father of CSR," Bowen focused on "the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society." He was among the first to seriously examine business ethics in a comprehensive, scholarly way. His work was not considered groundbreaking at the time, but in years since, it has increasingly been recognized as laying the foundation for the modern concept of CSR.
Greater expectations for businesses
The growing visibility of social movements, like the civil rights movement, brought the idea of corporate responsibility to the fore during the 1960s. Rachel Carlson's Silent Spring was a seminal work in the modern environmental movement, but it also contributed much to the concept of corporate responsibility, as it focused on the harm caused by the chemical industry's pollution and deceptive marketing.
By the 1970s, corporate responsibility was receiving mainstream attention. Early in the decade, the Committee for Economic Development, a nonprofit, business-led think tank, published Social Responsibilities of Business Corporations.
Focusing on large, publicly-owned, professionally managed companies, the latter publication examined "how business can respond to the changing requirements of society." It was a landmark work in the history of CSR because the authors acknowledged that businesses function by public consent, to serve society's needs—and although businesses had historically fulfilled this function by supplying needed goods and generating wealth, the public now expected businesses to "contribute a good deal more to achieving the goals of a good society."
Also during the same decade, the social movements of the 50s and 60s came to fruition in the form of new government regulatory regimes and federal entities like the Environmental Protection Agency, Consumer Product Safety Commission, and Occupational Health and Safety Administration, all of which mandated corporate responsibility in their respective areas.
A firmer concept of CSR
By the late 70s, it wasn't novel to suggest that businesses had a responsibility to more than their bottom lines, but what exactly did "corporate social responsibility" mean? Business management professor Archie B. Carroll offered a definition in 1979, writing that, "The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time." Carroll's contribution was important not only because it was a concise, universally applicable definition, but also because he saw social objectives as compatible with business, instead of a trade-off.
Later, in the 90s, Carroll would create the "Pyramid of Corporate Social Responsibility" to help executives build and implement CSR programs while balancing their need to be profitable. This framework is still a guiding point for many organizations creating CSR initiatives.
By the 80s, major companies were adopting CSR programs. It may sound surprising, but President Ronald Reagan likely helped encourage the development of CSR—his administration's deregulation of many industries removed some of the legal mandates for good behavior, leaving it up to companies themselves to enact responsible policies. He also publicly called on companies to act with responsibility. Later, President Bill Clinton created the Ron Brown Corporate Citizenship Award, popularizing the concept of a good corporate citizen.
In 1992, the Business for Social Responsibility nonprofit was formed by 51 companies who joined to become a "force for good," with founding members including Ben & Jerry's, The Body Shop, and Stonyfield Farms. Two years later, business writer and consultant John Elkington published his concept of the "triple bottom line," a framework that allows businesses to evaluate their social, environmental, and financial performance. It continues to be a popular way to think about CSR today.
Throughout the 90s, increasing environmental awareness, growing knowledge of climate change, and globalization all influenced CSR. As companies continued expanding across borders, their potential impact grew and stakeholders increased, accelerating frequency of discourse about CSR . By the early 2000s, multinational companies like Disney, Coca-Cola, and Pfizer had well-established CSR programs or explicitly included CSR in their business strategy.
In 2022, CSR is essentially mandatory for large companies. Its benefits—including greater brand recognition, increased employee engagement, effective risk mitigation, and enhanced competitive advantage—are well known. One of the most significant indications of CSR's continued relevance may be the fact that, despite a two-year-plus global pandemic that threatened many industries, companies still embrace CSR. Going forward, we can expect the major social movements of our time, like Black Lives Matter and the climate action movement, to continue to push the concept of CSR in new directions.