What is corporate social responsibility (CSR)? Where does it come from?
The corporation is a concept born in Western capitalist society. In classical economics, it should be, like the rational “economic man” of a private ownership society, a machine solely focused on maximizing profits. As society developed, economic activities became increasingly complex. Unscrupulous merchants exploited every means to amass wealth through deduction and exploitation, while responsible businessmen were charitable, aiding others and contributing to their hometowns. Thus, scholars and entrepreneurs gradually recognized that business operations inevitably encounter issues beyond economic relations and that corporations inevitably establish various non-monetary connections with all aspects of society. They began to ponder: what social role should corporations play? Do they also have obligations to society beyond making money?
After the industrial society, debates on corporate social responsibility intensified. The emergence of environmental issues and the rise of the environmental protection movement played a crucial and decisive role in this. An increasing number of industrial enterprises discharged pollutants during production, causing ecological damage and health problems for surrounding residents. This led to waves of public and societal demands for corporations to be held “accountable.” Simultaneously, the labor movement and consumer rights protection movement emerged. Large corporations, led by multinational companies, faced multiple internal and external pressures and had to respond to societal expectations and demands. They were compelled to begin constraining their own behaviors, implementing corresponding improvement and governance activities, which gradually evolved into CSR management under third-party standards or certification models. In 1999, the United Nations formally launched the “Global Compact” initiative, encompassing ten principles across four areas: environment, labor, human rights, and anti-corruption, officially promoting the concept of corporate social responsibility to global enterprises.
By the late 19th century, human destruction of natural resources and environmental pollution had become extremely severe. During President Theodore Roosevelt’s administration in the United States from 1901 to 1909, the first large-scale natural resource conservation movement emerged. The 1973 energy crisis made environmental protection a sweeping trend across the United States. In 1982, the burial of 60,000 tons of polychlorinated biphenyl (PCB) waste in Warren County, North Carolina, gained significant influence because it involved densely populated African American communities, intertwining the concepts of “environmental protection” and “racial justice.” This resonated in many countries across Europe, Africa, and South America, and the environmental justice movement has since become unstoppable worldwide. Countries successively enacted environmental legislation, making pollution control and environmental protection a key social responsibility for corporations. Concurrently, the consumer rights movement arose, with consumers beginning to demand environmental and human rights standards from companies. In 1962, U.S. President John F. Kennedy first proposed the concept of “consumer rights” in his “Special Message to the Congress on Protecting the Consumer Interest.” The United Nations adopted the “Guidelines for Consumer Protection” in 1985, and the consumer rights protection movement became one of the primary driving forces promoting corporate social responsibility. Consumers exerted pressure on corporations through their purchasing behavior, thereby driving companies to protect the environment and assume social responsibilities.
Is environmental protection part of social responsibility? Or is social responsibility part of environmental protection?
A significant part of the genesis of corporate social responsibility stems from environmental issues. The demands for corporate social responsibility and humanity’s understanding of environmental problems have developed in tandem. Today, the concept of social responsibility encompasses increasingly more content, and environmental responsibility is no longer merely about pollution control. For corporations, environmental protection and social responsibility are two tasks that are not entirely the same but often quite similar.
Regarding the relationship between the two, some viewpoints hold that corporate environmental responsibility is an important component of corporate social responsibility—an extension of the simple “doing good deeds” of merchants in ancient times. The expansion of corporate social responsibility from labor welfare and charitable donations to include environmental protection is an inevitable development of contemporary CSR. Other perspectives argue that if understood through the concept of “responsibility to stakeholders,” then the scope of corporate social responsibility is far narrower than that of corporate environmental responsibility. The former includes both internal and external stakeholders directly related to the corporation; the latter has a broader scope, encompassing not only all stakeholders related to the corporation but also those without direct links, such as residents of other regions, foreigners, and even other animals, plants, and the entire ecosystem—including the corporation itself.
For corporations, social responsibility is external; assuming social responsibility entails a significant amount of work coordinating with external parties. Although environmental issues are also external, much of the work is done internally. Reducing corporate pollution emissions and ecological impact requires control and improvement of internal production processes, not simply planting trees externally. In practice, handling methods vary widely. Some companies place environmental work within social responsibility work; others treat them as parallel tasks; still others, to highlight their focus on environmental protection, incorporate other aspects of social responsibility work as part of their environmental efforts.
Reflecting on Chinese Enterprises’ Social Responsibility: Everything Ready Except Environmental Protection?
Currently, many Chinese enterprises, especially listed companies, have begun implementing social responsibility management. However, most focus their efforts on protecting employee rights, maintaining community relations, safeguarding client interests, and supply chain management. Some companies are enthusiastic about public welfare and charitable activities as the main content of social responsibility, while simultaneously leveraging these for brand promotion and corporate image display. Many mistakenly treat social responsibility as public relations management and corporate image beautification, often neglecting the origins of the CSR concept and overlooking the “E”—environmental work—which ranks first in ESG (Environmental, Social, and Governance).
Research on the social responsibility of listed companies nationwide shows that most companies’ ESG management remains at the vision level or merely involves producing reports to meet compliance disclosure requirements, lacking substantive work. Among the three dimensions of environment, social, and governance, the environment receives the least attention. In studies where 39% of listed companies achieve a Grade A in social responsibility, only 1.2% achieve a Grade A in environmental aspects—a staggering gap. Among manufacturing listed companies, 6% have experienced negative environmental events (mostly penalties for environmental violations by subsidiaries of listed companies).
This situation is almost incomprehensible from a global perspective. For any Western company, when speaking of social responsibility, the first thing that comes to mind is undoubtedly environmental protection. In China, when corporate social responsibility is mentioned, many might first think of donating money to disaster areas. This is due to historical reasons and China’s unique national conditions. Chinese enterprises, whether private or state-owned, fundamentally do not involve the exploitation of surplus value, and issues related to human rights and labor are rare. Most Chinese entrepreneurs are not profit-seeking capitalists but pragmatic individuals filled with love for their country and hometown. Especially among the vast majority of small and medium-sized entrepreneurs in basic manufacturing, many come from humble backgrounds as workers or farmers and naturally consider worker welfare and hometown development as理所当然 (a matter of course). The characteristics of Chinese interpersonal society also make them attentive to stakeholders like clients and supply chains. Therefore, when the CSR concept was introduced, much work could seamlessly align. Consequently, some argue that enterprises in our socialist country do not need that set of CSR practices. However, it is easy to see that even if Chinese enterprises’ habits and merchant traditions cover most CSR content, one issue remains: environmental protection.
Thus, regarding corporate social responsibility, we return to the starting point: the primary focus for enterprises undertaking social responsibility work should still be environmental protection. The social responsibility of contemporary Chinese enterprises essentially constitutes environmental responsibility for the most part.
From Environmental Protection to Sustainable Development…
Today, when we speak of corporate environmental issues, it is no longer simply about “industrial three wastes” or “water, air, noise, and solid waste.” It encompasses a comprehensive concept including pollution and waste emissions, resource and energy consumption, climate change response (carbon emissions), and internal corporate environmental management. With ecological civilization written into the constitution and sustainable development becoming a consensus, corporate environmental work should not be satisfied with mere legal compliance and meeting emission standards. Instead, companies should fully recognize that environmental work is part of corporate social responsibility—a significant issue affecting comprehensive corporate evaluation, survival, and development.
Approximately 62% of American companies have a lifespan of no more than 5 years, with only 2% surviving 50 years. The average lifespan of small and medium-sized enterprises is less than 7 years, while the average for multinational corporations is 10–12 years. The average lifespan of Japanese companies is 30 years. In China, the average lifespan of group companies is about 7–8 years, and for small and medium-sized enterprises, it is generally between 3–4 years. Nearly 1 million Chinese enterprises close down each year. How to ensure a company’s continuous survival is an answer (eagerly sought) by the entrepreneurial community. Contemporary management master Peter M. Senge (1990) believed that the more a company can assume social responsibility, the more capable it is of sustainable operation and continuous growth. This assertion has also become a consensus for an increasing number of enterprises.
Contemporary corporate environmental work is far more than just environmental work. Internally, it involves (all aspects) of energy consumption, production processes, product quality, and production efficiency. Externally, it is a major part of corporate social responsibility and the most important battleground for corporate social responsibility activities. For the future, it (constrains) corporate strategy and influences the风向 (trend) of whether a company can achieve sustainable development.
The social responsibility of contemporary Chinese enterprises is essentially green responsibility. For contemporary Chinese enterprises to develop, it can only be through green development.