The CSER movement draws on a history of corporate accountability to society. Although there is no general consensus on what constitutes CSER and how much of it ought to be prescribed for businesses so due to this uncertainty and because of business ethics it becomes necessary to understand CSER and implement it correctly.

The history of CSER is as old as the history of business itself, even though the concept is not formally formulated until recently and thus CSER is identified as a controversial subject. The concept of CSER is still evolving and there isn’t complete agreement as to what the concept is all about. The history of CSER is divided into two broad periods – before 1900 and from 1900 to present.

Table: Concept of CSER according to code of conduct.

CSER activities before 1900-s

As earlier stated, the history of social and environmental concerns about business is as old as trade and business itself. For example, commercial logging operations and laws to protect forests can both be traced back almost 5,000 years (BRASS Centre, 2007). CSER was seen as a very Christian concept as the Catholic Church also supported sustainable development, a concept which was found to be closely linked with CSER.

CSER activities from 1900 to present

As early as the 1920s, discussions about the social responsibilities of business had evolved into what could be recognized as the beginnings of the “modern” CSER movement. There are new concerns about the role of business in society. The Kellogg Company (established in 1906) is a good example of how CSER has been practiced by a modern company for over a hundred years. The company understands that its social responsibility extends to the quality of its products.

Broad areas of the Kellogg’s company’s CSER activities include: protecting environment; selling nutritious products and advocating healthy lifestyles; acting with integrity and adhering to the highest ethical standards; promoting diversity in its work force and partnering with diverse suppliers; and ensuring a safe, healthy workplace. Due to all these factors it has been suggested that Kellogg Company has a robust CSER program.

The current emphasis of CSER is on the role of businesses in society that can be promoted by increased sensitivity to and awareness of environmental and ethical issues. CSER as a strategy is becoming increasingly important for businesses today because of three identifiable trends:

1) Changing social expectations

Consumers and society in general expect more from the companies whose products they buy. This sense has increased in the light of recent corporate scandals, which reduced public trust of corporations, and reduced public confidence in the ability of regulatory bodies and organizations to control corporate excess.

2) Increasing affluence

This is true within developed nations, but also in comparison to developing nations. Affluent consumers can afford to pick and choose the products they buy. A society in need of work and inward investment is less likely to enforce strict regulations and penalize organizations that might take their business and money elsewhere.

3) Globalization

The growing influence of the media sees any ‘mistakes’ by companies brought immediately to the attention of the public. In addition, the Internet fuels communication among like-minded groups and consumers—empowering them to spread their message, while giving them the means to co-ordinate collective action (i.e. a product boycott).

1. Standardization.

Business standards cover a broad area of corporate activities such as financial returns, human rights and labour standard, ethics, health and safety, environmental protection and product standard. Companies adopt their own set of standards and obtain certification from the relevant authorities. Standards imply compliance to the standard specification and independent verification of the compliance, which contradicts the essence of CSER. Some guidelines have been made which assist the design and implement CSER company programmes. A few of the guidelines are- ISO SR guideline, global reporting initiative (GRI), OECD guidelines for multinational enterprises.

2. Measurement and bench marking.

CSER related measuring and reporting approaches are the GRI (global reporting initiatives), SA 8000 Social Accountability International, and the AA 1000 from accountability as well as ISO standards. The most important function of these standards is to identify indicators of social performance as well as methodologies for measuring and auditing. Triple bottom line (TBL) accounting is also popular in CSER related auditing.

3. CSER reporting.

There are a number of pioneering efforts on the part of socially responsible companies to implement social and ethical auditing. A number of companies promote environmental and social reporting. A number of reporting initiatives were established in 1990s to develop standards for CSER related reporting. The main ones among them are: Global Reporting Initiative (GRI) and Corporate Impact Reporting. Sustainability reports are now including qualitative discussions of the linkages between sustainability and shareholder value with few reports on benefits the company has received.

1) Aligning CSER with business principles

CSER and business principles are not mutually exclusive. This philosophy is becoming a strategic force that is shaping successful businesses in developed countries. A number of surveys have been done, which show that companies that rate highest on ethics and CSER are the most profitable. The best way to align CSER with business strategy is by recognizing and managing the following 5 capitals: natural capital (environment), intellectual capital (human resources), manufactured capital (fixed assets), financial capital (profit, loss, shares, cash).

Cause-related Marketing

A commercial activity by which businesses and charities or causes form a partnership to market an image, product or service for mutual benefit.

Corporate Foundation

Private foundation that receives it’s funding from the for-profit company whose name it bears but is legally an independent entity.

2) Fair trade globalization

Companies in particular industries pay a ‘fair’ price for the goods they purchase, over and above the market-driven price, directly to the producer. This is particularly the case in many food industries, where world market prices may well have decreased over time, while costs have either remained the same or increased.

3) CSER around the world

CSER has become a popular business concept, especially in developed countries. Companies make profits fulfilling their duty to pay taxes, and then they donate a certain share of profits to charitable causes. Sustainability strategies are been integrated into companies core business. New principles in codes of conduct, wider scope and coverage of environmental and social performance measurement have been adopted. Corporate governance is improving by increasing the number of boards that split the role of CEO and chairperson. A report on sustainability is being integrated in annual reports.

4) CSER- corporate sustainability- corporate governance

Brands today are one of the key focal points of corporate success. Companies try to establish popular brands in consumer minds because it increases leverage, which is directly reflected in sales and revenue. All aspects of a company’s operations today feed into helping build the corporate brand. Crucial is how a brand is perceived by all stakeholders. Three benefits indicate the positive value for a company in striving to come in tune with the community within which it is based by implementing a strong CSER policy: positive marketing, brand insurance and crisis management.

When these points are considered the prevalence of CSER seem to be bright. Given the large amount of time, money and effort companies invest in their brands; a good CSER policy is an effective means of protecting that investment and maximizing its impact.

This proves that the concept of CSER is not new. However, it only became a serious academic discipline being taught in most business schools within the last decade. The history of CSER has not been exhaustively treated thereby giving an opportunity for researchers to further look into this aspect of the subject.

Companies should be encouraged, if not forced through regulations, to improve their operations to become more environmentally sound, to create programs that benefit their community, and to push for practices that develop the society. CSER may have a few kinks to iron out, but it should not be eradicated, rather it should be advocated and improved to benefit more people globally.