A hot topic in the 21st century business landscape, Corporate Social Responsibility is actually a centuries old practice.
The roots of Corporate Social Responsibility (CSR) stretch back to ancient times, but what we know today as CSR was born in the Industrial Revolution.
A major turning point in human history, the Industrial Revolution was a period of stark contrasts. For some, living conditions improved dramatically, while for others, particularly the working classes, life was often full of misery and hardship.
Yet, out of this era of sweatshops, pollution, disease and squalor, we find the earliest examples of CSR. Known as ‘corporate paternalists,’ industrialists of the late 19th and early 20th centuries used their new-found wealth to help those less fortunate in remarkable ways.
In the United Kingdom, Cadbury is a particularly sweet story. The successful family-owned chocolate maker pioneered employee welfare, establishing a medical department, pension funds and education programs. Their Bournville factory became an exceptional success.
The Early CSR
At the turn of the 20th century, the Cadbury brothers established Bournville Village to promote housing and environmental reform. They emulated the ideals of CSR and demonstrated the connection between a successful business and a successful community.
The American steel magnate Andrew Carnegie is another outstanding example of early CSR. Carnegie felt it was a duty of the rich to distribute their surplus wealth and he set up a vast number of charitable and educational institutions to endow libraries, educational trusts, pension funds, music and the arts, and public parks. His social activism was important in establishing the principles of corporate charity and stewardship, seen today in many modern CSR initiatives. The wealth Carnegie acquired from his company, Carnegie Steel, which he later sold to U.S. Steel, was used for great social philanthropy and set an example for many other wealthy industrial magnates.
Even in the budding country of Finland one can find examples of industrial patronage. The Verla mill in southern Finland experienced a renaissance of sorts under Gottlieb Kreidl, and a visit to the museum at the Verla mill shows Kriedl’s concern for his employees and the surrounding village. He provided his employees with medical care paid by the mill and he established trust funds to cover illnesses, pensions and funerals.
Education was also important to him, and under Kriedl, the mill founded an elementary school for the village which he actively supervised himself in the school’s early years, keeping a watchful eye on the children’s behaviour and seeing that they each received a bag of sweets for Christmas.
Companies today are bigger and more influential than ever before, which is all the more reason for us to emulate the philanthropy of the early industrialists.
PROFILE MAGAZINE 2/2013, page 27