Corporate Social Responsibility or Recklessness?

Written by Cheryl Bai (W’25); Edited by Saya Desai (C’25)

My understanding of corporate social responsibility was rejected even before attending Penn. Having recently learned about the topic in my high school class, I was eager to discuss its benefits with my admissions interviewer when he asked me to bring up a business topic for debate. His Milton Friedman-Esque argument that companies should solely follow the shareholder maximum theory brought me both dismay and disbelief – I was certain that corporate social responsibility was necessary to businesses in today’s day and age. 

Corporate social responsibility - the practice of integrating social and environmental considerations in business operations and stakeholder interactions - has been growing in popularity for the last several years, with about 90% of the companies on the S&P 500 Index publishing a CSR report in 2019. Disney boasts many programs and opportunities promoting diversity, equity, and inclusion. Ben and Jerry’s may be known best for their delicious ice cream, but they have also demonstrated involvement in various social causes for decades. The movement of businesses doing good for the world is both a lucrative sales strategy and seemingly the moral thing to do. 

But with a closer look, the cracks in CSR begin to form. For one, many companies don’t seem completely committed to the concept. One major concern is the phenomenon of “greenwashing,” where companies only highlight the positive efforts they have made while ignoring the negatives. One example is Starbucks – in 2018, the company released strawless lids, which used more plastic than before. Hiding the ugly head of unethical practices certainly hinders the impact of CSR and wedges a sense of distrust between the public and the corporation. 

Authenticity is yet another issue. When the cashier at CVS asks if you want to donate to charity, do you feel uneasy about where the money goes? Research finds that employees were more impressed when a company donated to charity without previously researching the benefits it could contribute to the business. From the consumer perspective, it can be difficult to assess whether a company’s charitable efforts are actually well-intentioned or if they’re just another marketing ploy. 

And CSR is hard to quantify, plain and simple. Many corporations have vague goals and make blanket statements about doing good without a set plan. In 2019, H&M was criticized by the Norwegian Consumer Authority for not providing enough detail about its claims of sustainable manufacturing. Furthermore, any initiatives aren’t aligned with issues pertinent to the public, and without tools to measure social impact, a company’s actions are simply not valuable. 

So what can be changed in the world of social responsibility? For one, companies should develop clear, actionable goals that are measurable. These goals should be transparent to the public to ensure companies are being held accountable. Next, clearly demonstrate a commitment to specific policies. Companies should “put their money where their mouth is” – go beyond performative statements and focus on donations, education, and outreach. In a world abuzz with social issues, it’s simply impossible and maybe for the better that companies don’t tackle them all, but instead ones they can positively contribute to. Last, own up to mistakes. Not every company can be 100% perfect, and that’s okay. By admitting wrongs and seeking improvement, companies can establish trust with consumers and increase profit while maintaining moral and ethical standards. 

My Penn interviewer might have been right that corporate social responsibility has its caveats, but I argue for a more optimistic outlook as I finish my first year. With a push in the right direction, CSR can benefit society after all.