More CEOs are prioritising corporate social responsibility as they come to understand its benefits, both for their company’s image and its long-term success.
The need for this shift is not new; likewise forward-thinking executives have been committed to CSR initiatives for years. But over the past few years many more mainstream executives, particularly CEOs, have come to recognise that taking a longer view and considering the consequences of their business activities can help ensure their company’s success. There is a business case to be made.
Rebecca M. Henderson of Harvard Business School sees two primary drivers of this shift, beginning with the rising prominence of millennials in the workforce. “My students today are more likely to focus on a business’s impact on the environment or society at large, and to insist that companies have a positive social mission,” she writes in Harvard Business Review. The second trend Henderson points to is declining confidence in the government as a source of solutions, both within the general population and among executives.
The central challenge of CSR is the tug-of-war between a corporation’s short-term self-interests and those of society. The primary focus, in Henderson’s view, should remain on the work of building a profitable business. But at the same time, she acknowledges, “there is growing recognition that over the long- or even the medium-term, the interests of companies and the interests of society are more aligned than many people once thought.”
Tellingly, there are socially responsible companies that are equally, if not more profitable than their less engaged counterparts. Henderson adds that there is also “some evidence to suggest that a focus on the long-term pays off. Moreover, many shareholders care about more than short-term profits.”
Companies that are taking bold steps towards greater social responsibility – such as Apple, Facebook, and BlackRock – are among the biggest and most powerful. Companies of this scale are generally in a better position to up their CSR game. They are also in a position to lead, and affect change in their entire industry. Henderson asserts that in order to induce more companies to be socially responsible and implement meaningful CSR initiatives, big companies like these need to “demonstrate that you can be a successful business not just in spite of but because of these commitments.”
