Key Drivers Behind the Development of Corporate Social Responsibility (CSR)

According to the Public Relations Department of the Khorasan Razavi Chamber of Commerce, sociologist Talebian explains that although Corporate Social Responsibility (CSR) is inherently voluntary, several powerful factors have consistently supported its creation and growth.

He identifies four major drivers:

1. Ethical Drivers

Organizations, in pursuit of profit and business growth, cannot justify using practices that endanger human life or damage the environment. Ethical responsibility forms the moral foundation of CSR and sets essential boundaries for corporate behavior.

2. Legal Drivers

Regulatory frameworks—both domestic and international—compel companies to align with legal obligations, including those related to sustainable development. Compliance helps organizations prevent penalties, sanctions, and reputational damage.

3. Economic Drivers

Ignoring workers’ welfare, workplace safety, or risk management can lead to costly incidents and disruptions. These economic factors encourage companies to adopt CSR practices as a mechanism for securing long-term business continuity.

4. Philanthropic Drivers

Humanitarian values such as supporting human rights and community welfare have also played a significant role in expanding CSR across industries.

Evolution of CSR: From Profit Focus to Social Accountability

Talebian notes that in the early 1970s, economist Milton Friedman argued that a company’s only true social responsibility was profit generation—not addressing social issues. This perspective gradually shifted, and by 1979, economic responsibility was recognized as a component of a broader CSR framework.

During the 1980s, researchers began searching for evidence that ethical companies could also be financially successful. This period marked the emergence of studies linking business ethics to financial performance.

In the early 1990s, researchers developed methods to evaluate the social performance of firms using a set of ten indicators, including:

local community impact, diversity, employee relations, product responsibility, environmental protection, overseas operations, nuclear energy, military contracts, alcohol, gambling, and tobacco.

Foundational Principles of CSR (1991)

In 1991, three fundamental levels of CSR were recognized:

• Institutional Level

A business earns legitimacy as a social institution by exercising its power responsibly.

• Organizational Level

Each company must minimize the negative impacts of its operations.

• Individual Level

Managers are expected to act with foresight and contribute positively to society.

CSR in the 21st Century

Between 2000 and 2010, CSR became closely integrated with stakeholder theory, business ethics, sustainability, corporate citizenship, and social performance metrics. Global organizations also began influencing CSR practices.

For example, the World Bank announced that companies failing to adopt CSR principles would no longer qualify for its financial support.

Talebian clarifies that sustainable development aims to avoid harming future generations, while CSR extends further, emphasizing that companies must actively contribute to sustainable progress.

Dimensions and Core Principles of CSR

CSR encompasses five key dimensions:

economic, legal, ethical, environmental, and humanitarian.

Its core principles include:

• Accountability for social, economic, and environmental impacts

• Transparency

• Ethical conduct

• Respect for stakeholder interests

• Respect for the rule of law

• Adherence to international norms

• Commitment to human rights

CSR performance can be observed across leadership structures, internal processes, workplaces, industries, environmental practices, and broader society.

Role of Major Organizations in Advancing CSR

Ali Shariati‑Moghaddam, Chairman of the Knowledge‑Based Business and Digital Economy Commission at the Mashhad Chamber of Commerce, emphasized the need for large organizations to lead the way in institutionalizing CSR principles.

He stressed that by setting clear standards and fostering CSR culture across industries, major organizations can pave the path for other businesses and ensure that society as a whole benefits from responsible corporate behavior.