Is Your Corporate Social Responsibility Stuck in the Past?

Posted on January 3, 2019

In 2016, the number of women applying for jobs at Australian-based software company Atlassian stood at zero. Atlassian’s head of Diversity and Inclusion, Aubrey Blanche, knew that something had to change. Blanche, and others in D&I roles, know that there is two-way value in developing a diverse workforce. Research shows that gender diversity improves corporate performance as it creates opportunities for women, who are underrepresented in the tech industry.

A surprisingly simple change to their hiring process made a big impact. Blanche and her team tried a new program called Textio, which helped them rewrite every job description to eliminate gender-unfriendly language. The result was an 80% increase in the number of women hired across all roles over two years.

Cascade Engineering, based in Grand Rapids, Michigan describes their approach as a “triple bottom line.” People, planet, profit are their metrics for success. As part of an effort to transform the lives of people in the community, Cascade launched a program to actively recruit and hire welfare recipients and homeless workers. To support these initiatives, Cascade and other local employers collaborated to hire a full-time social worker who could provide direct support and assistance to help workers with barriers to sustaining employment find solutions and resolve issues so they could maintain steady jobs.

Atlassian and Cascade are just two examples that highlight how businesses have changed their approach from simply giving some of their profits to support a cause or social need to a far more nuanced approach that is baked into the culture of the organization.

In the late 19th century, the American economy was booming. Between 1860 and 1890, real wages grew by 50-60%. The second wave of the industrial revolution was creating unprecedented economic growth. But while businesses were making record profits, many workers were living and laboring in poverty. It was in this environment that several of the world’s wealthiest individuals and families began to use their capital for social good.

A “man who dies rich dies disgraced.” This quote, taken from Andrew Carnegie’s 1889 article “Wealth” published in the North American Review, encapsulates his philosophy on the moral obligation he and other prominent industrialists felt. The one-time richest man in the world invested nearly all of his earnings into the creation of foundations and charitable trusts aimed at improving education, healthcare, and other causes that had been historically the province of government or the church. This was the beginning of corporate social responsibility.

Over the course of the twentieth century, social responsibility evolved. While wealthy individuals continued to contribute to foundations and charitable organizations, another urgent responsibility became apparent: the preservation of the environment. While early industrialists tended to view the world’s resources as an endless supply of opportunity, it became increasingly evident that those resources were, in fact, finite. In addition, new concerns regarding the impact of pollution and the potential for long-term, irreversible consequences of industrial activities became part of a national conversation.

In 1970, economist Milton Friedman famously wrote that the social responsibility of corporations is to make profits. This, he opined, resulted in wages for workers and benefits to the community. However, it was increasingly clear that without regulation, few corporations were choosing to consider the environmental consequences of their activities, and as a result, governments began to implement more strict regulations to protect and preserve the environment.

In the latter part of the century, some companies began to look at social responsibility in a different way. While for some there had always been a moral imperative to use corporate profits for the benefit of society as a whole, organizations also saw an opportunity to differentiate themselves and to attract customers who prioritized social issues in their purchasing decisions. Socially responsible businesses began to shift their marketing as well as their practices to highlight sustainability and other social impacts of their work. The landscape of social responsibility had shifted from simply funding projects for the benefit of the community to ingraining that community sensibility into the culture and operations of the organization.

As the momemtum of this movement grows, a new trend is emerging in how organizations are thinking about social issues. This involves a more direct form of social investment in the form of equitable workplace practices, investments in development for underserved populations, brand activism, and more. Social responsibility has shifted from using corporate profits to build hospitals and schools to using the functions of the organization itself to create human opportunities and solve social challenges directly.


Topics: workforce equality, diversity & inclusion,

 

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