Corporations have the power to change things for better or for worse.
Corporate social responsibility, or CSR, is a movement that emerged in the 1970s that focuses on the need for corporations to go beyond the interests of their shareholders and address the impact their activities have on a broader social and environmental spectrum. CSR attempts to counteract any negative effects that corporations have on society and replace them with constructive influence.
Employees
The treatment of employees by large corporations has often come under scrutiny by political organizations and human rights groups. Particularly in developing countries, where many resource extraction industries have extensive operations, there are ongoing questions about just how equitable working conditions and pay levels are. CSR seeks to assist corporations in treating both domestic and foreign employees equitably by providing safe and comfortable working conditions and a fair wage. This approach continues the ongoing transformation of a corporate mentality that was common in the nineteenth century, in which the rights of employees barely registered among the concerns of company owners.
Customers
Corporations have an obligation to provide safe, effective and good-quality products and services to their customers. A purely free-market analysis of this responsibility would state that these requirements will be met by the dictates of the market. The philosophy of CSR questions the truth of this belief, and advocates more proactive intervention into the relationship between corporations and their customers. Consumer protection initiatives, such as those advocated by Ralph Nader, help to provide the legal backing under which consumers can challenge what they see as questionable practices on the part of corporations.
Environment
Growing public awareness of environmental challenges involving toxins, resource depletion and climate change is forcing corporations to reconsider the traditional corporate view of the natural world as an unending cornucopia of resources. Environmental aspects of CSR encourage corporations to consider the finite nature of the natural world, and to take much more stringent measures to reduce waste, address polluting or destructive practices and integrate alternative energy systems and innovative waste-reduction programs. This shift in attitude is particularly critical in areas of South America and Africa, where corporations have extensive operations but are not subject to strict oversight and regulation.
Society
In addition to their responsibilities to employees, customers and the natural world, corporations are responsible for their impact on human society. Many millions of people who are not employed by a corporation and who do not purchase its products are nevertheless affected by its activities. CSR recognizes the interrelated nature of society, and acknowledges that no individual or company can exist totally isolated from the rest of society. Therefore, corporations need to critically analyze what impact their activities have, for good or ill, on surrounding communities, and take steps to maximize the good and minimize the ill.
