Why is CSR Increasingly Relevant Today?

A variety of forces are heightening interest in CSR. Among these are increased affluence, ecological sustainability, globalization, the free flow of information, and brands. Affluence means choices. Citizens of wealthy countries can make choices based on considerations that are more varied and complex than simple survival and economics.

Ecological sustainability matters, from both the reality of a shared planet and the public’s perceptions of a firm’s commitment to the health and well-being of the communities in which it operates—especially since more people identify themselves as supporting ecological concerns than either major political party in the United States. And, of course, firms that do obvious ecological damage are increasingly penalized by high profile protests from activist groups such as Greenpeace, which have become particularly adept at gaining media attention.

Globalization increasingly strips down geographical and cultural barriers, so that actions in one place (even if legal and proper) are subject to evaluation from the perspective of multiple cultures, laws, and societal expectations. Globalization combined with the ever increasingly free flow of information, further underscores the “shrinking planet” metaphor. Actions and practices in one locale can jump across the globe.

Perhaps nowhere is the impact of CSR more obvious than when it comes to brands. The equity built up from customer use, advertising, and other image-shaping actions represents an often-huge investment and an important “asset” to the firm. Maltreatment of workers, defective products, and related problems can tarnish, even destroy, a brand and the investments made to create it.