Article by Charlotte Bowler

Photo by Kenny Eliason on Unsplash

In today’s society where consumers and stakeholders are more morally aware and conscious than before, Corporate Social Responsibility (CSR) should be virtually unavoidable, however it is often treated as an avoidable rule if large corporations wish to do so. As corporations operate within the capitalist market, profit maximisation is seen as the key goal for many shareholders and CEO’s. Therefore within the neo-liberal thought process their responsibility lies not with society, stakeholders and the environment but with profit and dividends. But why do companies, such as Shell, still treat CSR as an avoidable practice despite it’s potential to enhance their reputation and society as a whole?

For much of the 20^th century corporations saw their only social responsibility to be increasing profits and perhaps providing employment. Ideas of what we now know as CSR began to appear in the 1930’s reacting to the great depression as corporations were seen to have caused the struggle that society experienced. Despite these efforts and introduction of legislation by social actors such as President Rosevelt, much of it was largely unsuccessful due to hostility and resentment from corporations.

As corporations moved through the 20^th century they saw the General Agreement on Tariffs and Trade introduced, as well as neo-liberal governments taking control of the most dominant economies. These factors, combined with increasing globalisation, allowed corporations to boom like they never had before instilling them the power and ability to undermine factors of CSR. Yet, not all corporations disregarded their social responsibility within the 20^th century, however it was not normalised and society as a whole was less environmentally concerned. This all changed in the 1990’s as environmental ethics began to appear in reports of some corporations and the theory of ‘social contract’ between business and society blossomed despite it being introduced in the early 1970’s .

One of the first major mainstream cases of CSR in the 90’s was with Shell. In 1995 the MNC planned to sink Brent Spar Oil Platform due to it being a low cost, legal disposal method, however Greenpeace activists quickly settled on the platform in protest which gained large amounts of media coverage. This combined with Shells involvement with the execution of Ken Saro-Wiwa, as well as eight other Ogoni activists in Nigeria led to large levels of consumer boycotts and media pressure on the business. This made Shell adopt what is known as Elkington’s “triple bottom line” which concerns economic, environmental and social ethics which creates CSR. In focusing on the “triple bottom line’ Shell conducted interviews with 10,000 people including media, academics, activists and consumers to improve its reputation and create a more informed decision-making process. However it is debatable whether Shell changed its actions because of a genuine concern for the environment and society or because the boycotts of 1995 had a dramatic effect on their share price and in turn the shareholders profits.

Although it would be nice to believe their motivations were moral, their actions in the years since point towards the latter. In 2024 alone Shell is developing two new oil and gas fields in the North Sea which will cause major destruction to the natural world and won’t  help reduce energy cost during the cost-of-living crisis. This shows a disconcert for both society and the environment and therefore CSR. Furthermore similarly to 1995 Shell is receiving backlash from Greenpeace via legal action however the NGO had not been able to have the same effects on profit and share price, with shell reporting $14 billion profits in the first half of 2024 alone. This evidence suggests the company only incorporates CSR into their actions when money, profit and dividends is at risk and not due to genuinely considering the interests and what’s best for the society they operate within.

Shell is not unique when it comes to disregarding CSR as many companies such as Unilever, BP are all seen to act similarly in the name of profit. Therefore when we consider the question proposed earlier, why CSR is ignored despite the vast positivity it can create for all parties the answer seems obvious when we consider the evidence above and that answer is money. More often than not CSR is less profitable than the alternative and whilst corporations operate within capitalism it is sadly inevitable that we will see this prioritised above the greater good for society and the environment.

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