Essay: Historical Perspectives of Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) refers to the ethical obligation of businesses to contribute positively to society and the environment while conducting their operations profitably. It involves the commitment of companies to support sustainable development, social justice, environmental protection, and the welfare of communities. Though CSR is widely seen today as a modern corporate practice, its roots run deep in history. The concept of CSR has evolved over centuries, shaped by different religious, cultural, economic, and legal frameworks. This essay traces the historical development of CSR, from ancient societies to the present, with a special focus on India’s unique contribution to CSR practices.
1. Ancient and Pre-Industrial Era
a. CSR in Ancient India
In India, the essence of CSR can be found in Vedic literature, dharmashastras, and religious traditions. Ancient Indian philosophy emphasized dharma (duty), daan (charity), and seva (service).
- Kings and wealthy merchants built temples, wells, rest houses (dharmshalas), schools (pathshalas), and hospitals.
- The concept of “Sarva Bhuta Hita” (welfare of all beings) guided economic and social decisions.
- Kautilya’s Arthashastra advocated ethical business conduct and fair treatment of workers and consumers.
- Merchant guilds during the Maurya and Gupta periods undertook social welfare activities, like disaster relief and funding education.
Thus, CSR in ancient India was deeply embedded in ethical, religious, and community obligations.
b. Global Ancient Civilisations
- In ancient Greece and Rome, large landowners and traders supported civic life through philanthropy and infrastructure building.
- In Islamic societies, Zakat (compulsory charity) played a role in wealth distribution.
- In medieval Europe, Christian ethics encouraged businesspeople to support the poor and donate to the Church.
These early examples show that social responsibility was largely moral or religious, not institutional or legal.
2. Industrial Revolution (18th–19th Century)
The Industrial Revolution marked a turning point in the history of CSR. Rapid industrialisation in Britain, Europe, and North America led to massive social and environmental problems, including:
- Poor working conditions in factories
- Child labour
- Urban poverty and pollution
- Unsafe living conditions
During this period:
- Philanthropy became a way for industrialists to “give back” to society.
- Pioneers like Robert Owen (UK) introduced welfare programmes for workers (schools, healthcare, housing).
- In the U.S., industrialists like Andrew Carnegie and John D. Rockefeller donated heavily to education, libraries, and science.
However, CSR was still voluntary, charity-oriented, and individual-driven, rather than a structured responsibility of the company.
3. Early 20th Century: Rise of Business Ethics
In the early 1900s, there was growing concern that business must serve society, not just owners or shareholders.
- The concept of business ethics emerged, focusing on fair wages, ethical practices, and stakeholder welfare.
- In India, Tata Group set early examples of CSR. Jamsetji Tata (1839–1904) and later J.R.D. Tata invested in worker welfare, education, housing, and scientific research.
In the West, writers and thinkers began calling for corporate accountability, and trade unions demanded social justice from employers.
4. Mid-20th Century: CSR Becomes a Formal Concept
After World War II, global reconstruction and social movements shaped CSR in new ways:
- 1940s–1960s: Companies started reporting on social performance along with financial results.
- 1953: American economist Howard R. Bowen published “Social Responsibilities of the Businessman”, often considered the birth of modern CSR.
- During the civil rights movement, anti-colonial struggles, and women’s rights movements, expectations from corporations grew.
Multinational companies began facing pressure to adopt fair labour practices, avoid environmental harm, and contribute to community development.
5. Late 20th Century: CSR as Strategic Business Practice
By the 1980s and 1990s:
- CSR shifted from philanthropy to strategy. Businesses began integrating CSR into core operations.
- New concepts emerged, like:
- Triple Bottom Line (People, Planet, Profit)
- Stakeholder Theory (focus on all parties affected by business, not just shareholders)
- Sustainability and Corporate Citizenship
In India, many companies (e.g., Infosys, Wipro, ITC, and Reliance) began institutionalising CSR, forming foundations and taking up education, rural development, and health initiatives.
The growing influence of globalisation also made companies accountable to international norms and standards (e.g., UN Global Compact, ISO 26000).
6. 21st Century: Legal and Sustainable CSR
Today, CSR is no longer optional; it is seen as essential and legal in many countries, especially India.
a. CSR Becomes Mandatory in India (2013)
- India became the first country in the world to legally mandate CSR under the Companies Act, 2013.
- Companies with net worth of ₹500 crore or more, or turnover of ₹1000 crore or more, or net profit of ₹5 crore or more must:
- Spend at least 2% of average net profit over the previous 3 years on CSR activities
- Form a CSR Committee and report activities annually
b. Focus Areas for CSR in India
- Education and skill development
- Health and sanitation
- Environment protection
- Gender equality and women empowerment
- Rural development
- Disaster relief
This legal framework has led to a surge in CSR spending, project innovation, and partnerships with NGOs and government schemes.
Conclusion
The journey of Corporate Social Responsibility from religious duty and philanthropy to strategic and legally mandated responsibility reflects a deep evolution in how businesses relate to society. Historical perspectives show that CSR is not a new concept; it has been practiced in various forms across cultures and times.
Today, CSR is about more than charity — it is about creating shared value, empowering communities, ensuring sustainability, and building ethical enterprises. For countries like India, with vast developmental needs and deep cultural values of seva (service) and daan (charity), CSR offers a powerful platform to align business success with social progress.