Going Beyond CSR: A Necessity
In this article, originally published in EDHEC Vox n°15, Ludovic Cailluet, Professor, Associate Dean, Centre for Responsible Entrepreneurship, and René Rohrbeck, Professor, Director of the Centre for Net Positive Business, look back at the concept of corporate social responsibility (CSR), which they call for to be surpassed thanks to the new framework of the net positive company.
Some concepts have reshaped the business world, and one of them is the recent — and decisive — corporate social responsibility (CSR), a true driver of modern business transformation. But how does this framework fit into the broader history of economic thought, and why is it urgent to move beyond it today?
'We could certainly trace earlier roots, but the first ideas about responsible business really emerged in the 19th century, under the influence of the utopian socialism of Robert Owen and Charles Fourier,' explains Ludovic Cailluet, Associate Dean of the Centre for Responsible Entrepreneurship. These included improving working conditions, addressing basic needs outside the factory (i.e., healthcare, housing and children education). Fourier went even further by inventing the concept of “phalansteries,” cooperative self-managed communities.
This mindset was later reflected in companies such as Pechiney in the French Alps, which, from the early 20th century, built housing, schools, dispensaries and even sports facilities for its employees.
Meanwhile, similar ideas were developing in the United States with the rise of modern management, as professional executives — who were not company owners — began to question the social contract between business and society. ‘One representative example is Alfred Sloan, president of General Motors, known for his philanthropic efforts,’ adds Cailluet. In terms of charitable giving, John D. Rockefeller and Dale Carnegie also come to mind.
CSR: A Decades-Old Concept
In the beginning, these good intentions were often linked to religious convictions, as demonstrated by American economist Howard Bowen in his book Social Responsibilities of the Businessman (1953). Often regarded as the father of CSR, Bowen was a practising Protestant, inspired by a Christian ethical tradition that emphasised social justice, integrity and responsibility towards others. For him, businesses should not only focus on maximising profits but also contribute positively to society.
However, it wasn’t until the 1970s that environmental issues became a part of the public consciousness, with growing awareness of the harmful impact of human activities on the planet. In 1979, CSR gained wider recognition through Archie B. Carroll’s book Corporate Social Responsibility: Will Industry Respond to Cutbacks in Social Program Funding? In it, the management professor introduced the idea of the CSR pyramid, which he divided into three levels: economic, legal, and ethical/philanthropic responsibility.
'With CSR, executives were no longer solely focused on satisfying shareholders but had to consider all stakeholders. This was an important theoretical foundation, but it now needs to evolve to meet today’s challenges. The problem is that CSR is often reactive when it should be proactive,’ says Ludovic Cailluet. In other words, a polluting industry might plant trees to offset its negative externalities, but its overall net impact remains harmful.
Another major limitation of CSR is that it’s often seen as a peripheral activity within the company — evidenced by the absence of CSR representatives on most executive committees.
Net Positive Business: A New Theoretical Framework
Without dismissing the legacy of CSR, it is now crucial to build on these foundations and focus on new theoretical frameworks. These frameworks are already being structured: the circular economy, mission-driven companies or the concept of netpositive business, developed by entrepreneur and theorist Paul Polman.
‘The concept of net positive business encourages us to think about all the impacts a company has on the planet, people, and the company’s surrounding ecosystem,’explains René Rohrbeck, professor and Director of the Chair of Foresight, Innovation and Transformation. ‘It’s a company that gives back more than it takes. The narrative here is different from CSR, which had a more negative framing. With this new mindset, a company can actually regenerate its ecosystem.’ Rohrbeck is currently setting up the Centre for Net Positive Business at EDHEC.
Beyond climate and biodiversity concerns, companies must also measure their impact on health, education, nutrition, knowledge creation and even social infrastructure.
‘Accounting now needs to integrate dual materiality, which means not only traditional financial metrics but also environmental and social considerations,’ adds Cailluet. This shift is already being supported by tools such as those developed by Finnish startup Upright, which, in 2017, created a platform that distinguishes different categories of impact (society, knowledge, or health and environment).
These are measured using publicly available data compiled into a few key indicators that can be compared over time, between companies in the same sector and across sectors. ‘One of the key challenges in moving towards this model is to provide leaders with the necessary information to adopt the right business model and scale the positive effects they can have on their environment,’ concludes Rohrbeck. ‘And it’s not about size — whether we’re talking about a startup or a large corporation, everyone can make this transition in concert with the broader ecosystem.’
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This article was originally published in EDHEC Vox magazine n°15 on the theme of net positive companies. To read it in full, click here:
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