Keywords

1 Introduction

The establishment of the North American Free Trade Agreement (NAFTA) on January 1, 1994, marks one of the earliest records of a regional trade agreement encouraging aspects of CSR across borders (Cohen, 2011). The creation of a North American commercial block has represented opportunities and challenges for Mexico, the United States, and Canada in terms of tariffs and trade, but has also shaped environmental policy, workplace safety standards, ethical reporting, and corporate communication. Although NAFTA has been studied extensively, one aspect that remains relatively unexamined is the comparative development of Corporate Social Responsibility (CSR). More than 20 years after the establishment of NAFTA, North America presents an interesting case study for CSR, and more specifically CSR communication. The United States and Canada have highly developed markets which host numerous multinational corporations (MNCs). These MNCs often have robust strategic CSR programs, both in their home and international markets. Additionally, many small to mid-size firms are committed to varying levels of CSR. In contrast, Mexico maintains the status of a developing country, host to fewer MNCs committed to strategic CSR, and has lower levels of CSR participation in its small to mid-size domestic firms. Thirteen of the top 100 and five of the top ten MNCs are located in the United States, with an additional two of the top 100 in Canada, and all of them have strong CSR initiatives and communication. Additionally, the culture and implementation of CSR are more advanced in the United States and Canada than in Mexico as evidenced by consumer response to CSR communication, development of CSR as a business model, and trends in CSR implementation. These economic and developmental differences allow for an interesting illustration of the challenges faced by firms that operate across the area as they strive to implement strong CSR programs.

The objective of this chapter is to examine the historical development of CSR in the United States, Canada, and Mexico to better understand how and why CSR and its related communication have evolved, and where it might be headed in the future. Thus, the chapter is broken down into four distinct sections: life-cycle review and general context, the past, the present, and the future. First, a general context for the chapter is developed via review of the CSR lifecycle model followed by Andrew Carnegie’s Gospel of Wealth, Milton Friedman’s “The Responsibility of Business is to Increase Profits,” and the ideology of a Global Civil Society in which firms are responsible contributing actors. Second, Sect. 3 presents a traditional historic review of CSR from the beginnings of industrialization through the 1970s, illustrating issues related to industrial growth, urbanization, consumerism, and associated challenges of work place safety, pollution, social inequality, and regulation. In response to industrialization and business growth, firms begin to develop CSR-based communications as the fields of publicity, advertising, and consumer advocacy are simultaneously developing. Next, Sect. 4 looks at more contemporary CSR development and issues from 1980 through 2015, focusing on the shift in CSR from a response-based model to a more strategic proactive business model. This shift in perspective is the result of slower growth in domestic markets, concern about resource utilization, and the magnification of the role of global social equity and resource allocation. During this time, CSR for large firms becomes less about opportunistic events and more about sustainable business practices. The advent and fast adoption of the Internet and new media platforms radically shifts models of CSR communication by firms and consumers. Section 5 makes some predictions about CSR, the role of firms, and discusses issues of innovation, thought leadership, and the use of consumers as CSR business partners via social media networks. Lastly, we examine the paradox of responsible consumption in which consumers in highly developed markets such as the United States and Canada want firms to produce inexpensive products using responsible business practices that contribute to sustainability and the related communication difficulties this paradox presents.

2 CSR Lifecycle and Development Overview

Today CSR is a mainstay for any large corporation, and most often extends beyond philanthropic activities and mandated compliance, to proactive solutions that not only build brands and strengthen firm reputations, but also provide thought leadership and innovation for sustainability and social issues. However, this was not always the case. In this section we use the CSR lifecycle model as a frame for understanding the broad development of CSR across North America and then present a general review of that development.

2.1 CSR Lifecycle

The CSR lifecycle model (Guzmán & Becker-Olsen, 2010) provides a framework for examining the development, current position, and even future of CSR across North America. According to this model, CSR will evolve in tandem with market development such that in developed markets, such as U.S. and Canada, CSR is likely to be fully absorbed into all facets of business operations, be a part of the mission and values of the company, and be a regular focus of corporate communication via CSR reports, internal and external communications, package and product design, and advertising messaging. However, in less developed markets like Mexico, the model suggests CSR is less likely to be integrated into the core business model, more likely to be opportunistic or philanthropic, less likely to be a regular part of the corporate communication messaging strategy, and more likely to be met with skepticism by consumers. This is not to suggest that CSR does not have a place across all of North America or that it is not valued or even expected by various stakeholders, but simply to suggest the role of CSR communication, the specific messages, and stakeholder responses are likely to vary across markets. In developed markets CSR and its related communication are expected, while greenwashing and CSR infractions are likely to be met with skepticism and consumer backlash including boycotts and social media campaigns against the firm (Guzmán & Becker-Olsen, 2010). In contrast, in developing markets CSR is not as common and is not generally expected. However, CSR communication can be used to create consumer-based value for CSR and a culture in which CSR is the norm, thus, forcing other firms to engage in responsible business practices.

Within the lifecycle structure, the importance of specific issues changes with time and across cultures, as well as the perceived importance of businesses’ commitment to society and the communities in which they operate. Conrad and Abbott note, given the “ebb and flow of actions and reactions, control and resistance, between corporations and their critics, the history of CSR has been a somewhat cyclical one” (May, Cheney, & Roper, 2007), further reinforcing the idea that CSR has evolved in many levels across all three markets. In order to more fully understand the dichotomy that exists across North America, it is important to understand the development of CSR and the movement through the lifecycle across the United States and Canada as compared to Mexico.

2.2 CSR Development: From Carnegie to a Global Civil Society

Early industrial development in both the United States and Canada is often said to be responsible for the widespread poverty, moral decay, political corruption, pollution, and other social issues in these countries (Mayo, 1949). Although some might still make that case today, others would argue that the growth of businesses provides jobs, creates wealth, and sets the stage for modern developed markets. In 1889, Andrew Carnegie wrote The Gospel of Wealth, in which he broadly and vehemently advocated for business executives to use their personal wealth for the good of society. Although the idea of private individuals using personal wealth to build a more just community was not a new idea, Carnegie suggested that individuals, through the wealth created by their firms, were “duty bound” to improve the world. Carnegie himself donated $350 million (almost 90 % of his total wealth) and was particularly interested in using education as a vehicle for the poor to change their plight (carnegie.org), and when his business partner caused the Johnstown flood, Carnegie donated millions to rebuild the town. In stark contrast to this picture of Andrew Carnegie as an advocate for social justice, is a man who was ruthless in business, paid low wages, offered workers no job security, opposed unions, and used every means possible to cut costs. This represents the conundrum that exits even for today’s firms, and is representative of the age-old Machiavelli-Friedman debate which questions not only the means for accumulation of wealth, but also the dissemination of that wealth, the responsibility of those with wealth, as well as the inherent purpose and mandate of capitalism (Buttery & Richter, 2003).

Understanding how the existence of corporations is intertwined with the development of communities and social goods, is critical for understanding the role that firms, governments, and individuals play in shaping more modern CSR initiatives and communication. There are deep philosophical undertones in the entire notion of corporate social responsibility, and many of these address the concept of a “civil society.” A “civil society” is associated with the philosophical notion of ‘the good society,’ in which classical political thinkers espouse the idea and characteristics of good citizenship as manifested by all actors and agents in the community. More specifically, the idea of a civil society is that the common good rests in the hands of all the actors within that society; thus, businesses have a responsibility to work toward the common good. As societies grow and entities become more sophisticated, the intertwinement of the common good with the market and business actions becomes inevitable and more intricate. Today’s mega companies can trace their roots to the late 1800s when large firms monopolized markets, and their activities increasingly affected other realms of society, including poverty levels, environmental degradation, the rights of workers to safe working conditions and livable wages, and education.

In the 1990s the emergence of active global NGOs and new social movements spurred by the Internet and its ability to connect people worldwide, led to the more formal conceptualization of a global civil society as an ideology which builds a platform for activities aimed at creating a social world order in which all actors, including businesses, accept shared responsibility for the health and welfare of the planet and its citizens. The idea of a civil society ties closely with CSR concepts, especially those involving active citizenry. As CSR has developed, the number of firms and individuals that support the idea that businesses act outside of ‘society’ is diminishing, while the number of individuals and firms that support a more active role in society by firms is growing (Bemporad & Baranowski, 2007; Rayapura, 2014). In this latter case, businesses are seen as potential contributors to the social good as they work with governments and non-government organizations (NGO) to promote sustainable healthy communities (Davidson & Novelli, 2001; Guzmán & Sierra, 2012).

3 The Past: Historical Perspective on Development of Corporate Social Responsibility in North America

With the understanding that the central tenet of civil society yields sustainable healthy communities, we turn our attention to the historical context and perspective for CSR development in the United States and Canada. In this next section and throughout this chapter, unless otherwise noted, the United States and Canada will be discussed simultaneously, while Mexico will be juxtaposed against these two countries.

The notion of CSR began with earnest ideals rooted in a philosophical mindset over a century ago with the rise of industrialization, and since then has blossomed into a more mature structured mainstream business model in the United States and Canada, but remains less developed in Mexico. It could be argued that historically CSR was a given. A company would set its roots in a community, help create jobs, distribute wealth, and, overall, increase a community’s well-being. However, around the turn of the century, as the immigrant population exploded and urbanization was solidified, companies and their owners prospered, established operations outside their local realm, and firms became publicly traded, increasing the interests of investors over communities. Thus, this original raison d’être got diluted as firms responded more strongly to profitability measures demanded by owners and shareholders and were disconnected from their original community based roots. As a consequence, companies paradoxically became externality generating machines that slowly began to realize the importance of community health and welfare.

3.1 The Early Years: 1800s–1920s

The rapid growth of industrialization in the 1800s created a firestorm of activity and public interest surrounding businesses and the ideas of capitalism. Consequently, the growth of railroads, steel, petroleum, and other industrial corporations quickly achieved monopoly status with little to no government intervention. However, as markets developed so did public outrage; the U.S. government responded with the Sherman Anti-Trust Act and the development of the Interstate Commerce Commission. These new regulations came in an era of previously unchecked industrial growth, thus necessitating the passage of laws which addressed trust formations, child labor, workplace safety, and minimum wage standards. The U.S. Progressive Era, from 1900 to 1920, saw additional legislation and agency development related to societal transformation and income tax with the passing of the Clayton Act, and the creation of the National Safety Council, the Department of Labor, and the Bureau of Labor Statistics. However, firms retained a great deal of power.

As early as the 1920s, the search for the delicate balance between societal good and corporate interests was tested, as industrialists found themselves in the precarious position of advocating for a system of factory laborers that was proving detrimental to society. As pressure from advocacy groups and muckrakers mounted, some firms developed “industrial welfare programs” in order to curb the passage of additional government regulations and attenuate the swell of anti-business sentiment. Critical events such as the Triangle Shirtwaist Fire, Jacob Riis’ photo expose, and Upton Sinclair’s publication of The Jungle forced corporations to think about their interactions with society. In essence, firms were being pressured into socially responsible practices particularly related to labor issues. It was at this time that many firms hired public relations specialists to create publicity campaigns and press releases which attempted to portray corporations as indispensable to national interests and economic growth, as well as responsive to their communities’ needs (May et al., 2007).

Meanwhile Mexico was living the last years of the Porfiriato—Porfirio Diaz’s 35 year presidency/dictatorship (1876–1911) which was characterized by a strong centralized state and paternalism. During this period of time, although economic growth was rampant, the middle and lower classes suffered severely as companies in Mexico enjoyed governmental protection, dispossessing the poor from their land and properties and then exploiting them to increase profits. There was no sense that corporate responsibility or its associated communication was necessary, as the power was retained with Diaz’s regime and a few corporate leaders. The growing social inequities generated during the Porfiriato led to the Mexican Revolution (1910–1920). Paradoxically, during this period Porfirio Diaz strongly promoted charitable causes and created la “Junta de Asistencia Privada” (Private Assistance Board) which still operates today (Perez, 2009), though this was not enough to alleviate marginalization of the poor and prevent the revolution to come.

3.2 Beginnings of Stability and Globalization: 1920s–1950s

The fallout of the folly of the 1920s led to the greatest economic downturn in history, the Great Depression. Its effects were felt worldwide and had a profound impact on the way firms reacted to social and economic issues. It was in this time that Edward Bernays first linked brands to prominent social issues. After World War I, while working for the American Tobacco Company, Bernays organized the “Torches of Freedom” march to raise not only cigarette sales, but awareness for the feminist cause and women’s voting rights by having women march down the streets of New York City holding cigarettes which represented their “torches of freedom” (Burton & Lamme, 2011). The Second World War also shaped the ways individuals and firms reacted to social needs and causes. Firms responded quickly as the U.S. sought goods to sell to overseas markets and when the U.S. entered the war, firms rallied around the war effort increasing production, hiring women, and maintaining a positive interaction with the government and their communities. In this time employees, government agencies, communities, and firms all worked for a single cause, defeating Hitler. Firms such as Coca-Cola, General Motors, and Lucky Strike ran campaigns depicting soldiers using their products and wrote press releases about product donations they were making to the front lines, all in an effort to highlight their good deeds and build their brand’s patriotic reputation (Heide & Gillman, 1995).

However, the concept of “corporate social responsibility” first emerged as a namesake in the United States shortly after WWII. The Cold War led to a re-endorsement of capitalism that was sought to be humanized by the expectation that corporations have the ability and responsibility to serve societal needs (May et al., 2007). The idea was that only in capitalistic markets could businesses act responsibly and build strong communities with opportunities for all. As such, CSR communication focused on highlighting how the firm’s good deeds helped communities. Howard R. Bowen captured this ethos when in 1953 he wrote, “we are entering an era when private business will be judged solely in terms of its demonstrate-able contribution to the general welfare…The acceptance of obligations to workers, consumers, and the general public is a condition for survival of the free enterprise system” (Bowen, 1953, p. 127). Bowen and many of his contemporaries, charged businesses not only with producing products and making profits, but increasing their social and ethical behaviors ensuring that the doctrine of capitalism and free-enterprise prevailed over communism.

During this period of time, business in Mexico was being conducted under very interesting circumstances. American businesses were trying to enter the Mexican market partly because of the growing population and wealth, and partly in fear of a perceived growing Nazi influence (Moreno, 2004). However, driven by early twentieth-century American imperialism practices—a capitalist missionary approach—American business practices, not surprisingly, clashed with Mexican culture. Most businesses in Mexico were family partnerships that heavily guarded their market information and company records. Overall, the business environment in Mexico was characterized by being closed, nationalistic, and even paternalistic—particularly driven by the national oil company PEMEX. However, by the mid 1940s companies in the north of the country, primarily motivated by religious faith, were addressing workers’ housing and health care needs (Perez, 2009). This movement in Mexico is similar to the earlier “social-gospel” movement of the Progressive era in the United States and Canada which began to shine light on the social inequities driven, at least in part, by industrialization. There is no evidence that the movement was supported broadly enough in Mexico that firms were systematically publicizing their good deeds; CSR, as we know it today, was not on the radar of Mexican business practices until later in the mid-1980s, thus CSR communication was virtually non-existent.

3.3 Accountability, Foundations, and the Environment: 1960s–1970s

As the field of CSR grew in prominence, new theories and ideas emerged and research expanded. In 1960 Keith Davis reinforced previous arguments espousing CSR as not only a way to maintain social and economic power, but as a responsibility of firms with power and excess wealth. In his piece, the “Iron Law of Responsibility,” he notes the “social responsibilities of businessmen need to be commensurate with their social power,” in essence reiterating Carnegie’s and Bowen’s shared mandate. He further suggests that CSR can create a level of social capital for both firms and agents or officers of the firms whose impact must be understood holistically and as a means for maintaining both political and economic power. However, there was little overt attempt to link social responsibility to financial overall performance. Ten years later, Milton Friedman entered the debate with his essay, “The Social Responsibility of Business Is To Increase Its Profits” (Friedman, 1970). Unlike his predecessors, Friedman believed the greatest social good would occur if businesses made ethical decisions based solely on increasing shareholder value, not on philanthropic contributions, social causes, or voluntary social spending. From Friedman’s perspective, firms were acting in a socially responsible manner if they provided jobs and allowed market forces to work without intervention. Many investors supported Friedman’s perspective as the business case for CSR was minimal.

Concurrently, government regulators (e.g., FCC, FTC), and public interest groups began to hold corporations to a new level of accountability as they tried to shift power away from firms. From 1969 to 1972, three of the major regulatory agencies in the U.S., the Occupational Safety and Health Administration, the Equal Opportunity Commission, and the Environmental Protection Agency, were founded to create greater disclosure and transparency of corporate actions, including funds for workplace safety, employment practices, and environmental clean-up.

In an effort to placate consumer advocacy groups and satisfy investors, many firms created corporate foundations, and fulfilled their “social responsibilities” through local and national philanthropic programs and grants. These foundations were branded with the firm’s name, thus they could operate outside of the firm, but still generate positive publicity and advertising. Foundations prepared annual reports which would serve as a precursor for CSR reports. These reports focused on how much money was given to specific organizations; they were shared with media outlets and a few socially conscious investors. The idea that CSR communication could do more than relay feel-good messages or create ‘insurance’ if the firm experienced some social infraction was further cemented (Manheim & Pratt, 1986).

Of great interest during this time were energy and environmental issues such as pollution control, dumping, and toxic waste removal. In both the United States and Canada, the debate regarding corporate social responsibility shifted from mere compliance to responsiveness and began emphasizing what companies needed to do better in order to limit future regulations and fines. Thus, there was a new emphasis on political action and lobbying as a form of communication; public affairs departments became more active, and public relations was directed towards “strategic philanthropy” and “cause-oriented marketing” (Manheim & Pratt, 1986). The hope was strategic philanthropy and cause-related marketing would detract from the negative publicity regarding energy consumption and environment degradation. The energy industry itself presents an interesting case in which CSR initiatives were initially used to fix a poor image, but have since transformed to a more innovative model in search of global sustainable energy solutions. Hooker Chemical and the Love Canal incident represent some of the first modern large-scale environmental disasters directly attributed to corporate irresponsibility. These events both received national media attention motivating firms to think more strategically about their CSR communication and forcing firms to understand that stakeholders were going to demand action, accountability, and transparency. The response of Hooker lacked transparency, accountability, timeliness, and truthfulness, and would start a spiral of skepticism on the part of consumers that continues today. At this time, it was not the norm for firms to engage in proactive CSR programs, thus there was no positive CSR record to counter the negative publicity. Firms would learn quickly the value of a strong proactive CSR program that provided innovation and leadership to the industry.

In Mexico, the 1960s and 1970s were characterized by the formation of multiple organizations focused on procuring social development, and for the first time the focus moved away from the church and began to put the responsibility on business owners. Two prominent examples are the Fundación Mexicana para el Desarrollo Social (Mexican Foundation for Social Development), created by Catholic businessmen searching for solutions for the living conditions of farmers, and the Consejo Coordinador Empresarial (Business Coordinating Council), that grouped multiple chambers—industrial, commerce, etc.—to provide guidance on how companies could focus on social responsibility (Perez, 2009). Unlike their northern counterparts, businesses in Mexico were just starting to think about corporations and businesses as a force for social development, and thus they were still in the response mode of communication, publicizing good deeds that showed their responsiveness to pressing social issues. However, given that CSR was in the very earliest stages in Mexico, there were low consumer expectations for actual corporate responsibility limiting the need or usefulness for CSR communication.

4 The Present: Corporate Social Responsibility Reaches Acronym Status and Communication Is Institutionalized

Modern CSR in the United States and Canada has evolved from companies using CSR programs as a form of opportunistic short-term public relations and marketing campaigns (Pirsch, Gupta, & Landreth-Grau, 2007), to an institutional commitment to long-term sustainable businesses practices that are supported by a strong business case (Guzmán & Becker-Olsen, 2010). This corresponds with the last phase in the CSR lifecycle where CSR becomes absorbed into all aspects of business operations. Interestingly, in this more contemporary era CSR goes beyond being a good investment that is rewarded by customers and investors, in fact the lack of CSR becomes a liability to the firm. In Mexico the CSR market is one of expansion and growth in which the focus is on building consumer awareness and creating differential advantage with groups of consumers that care about various CSR initiatives.

4.1 The Business Case for CSR

Twenty years after Friedman’s pronouncement that firms should engage in business practices that increased investor profits, Archie Carroll advocated for a “triple bottom line” which called for firms to account for profits, regulatory influences, and social impact. These seemingly competing ideologies create a disconnect in the way firms manage their CSR communication. Industrial business-to-business firms tend to adhere to Friedman’s ideology and engage in little CSR beyond being compliant on environmental and work place issues as their stakeholders are less likely to value CSR (Friedman, 2013). However, firms that are heavily involved in consumer markets, tend to adhere to Carroll’s ideology and continue to develop their CSR programs and publicize their CSR commitment, as well as institutionalize their CSR reporting. The latter of these companies begin to more closely monitor the business case for CSR, and think about long-term customer loyalty and brand differentiation, as well as program efficacy, not just short-term expenditures. Vancouver Savings was one of the first Canadian financial institutions to advocate for “people, planet, and profit” (macleans.ca) by significantly reducing their carbon footprint, repeatedly showing that there is a strong business case to be made for integrated strategic CSR in the personal financial sector.

CSR is no longer an add-on managed by the foundation or even the marketing department; it is a business model that positions the firm as a proactive industry leader concerned with global sustainability and community health and well-being. Interestingly, this transformation occurred in the late 1990s, in an economy characterized by increasing unemployment, greater global dependence, a widening poverty gap, financial deregulation, and the rise of the Internet. Investors were moving capital freely from one country to another, creating economic instability around the developing world, bestowing unprecedented power on corporations over governments. Paradoxically, as their power increased again, so did their collective social conscience. It is during this time period that CSR moved from being a public relations or marketing ploy to an “almost universally sanctioned and promoted [activity] by all constituents in society from governments and corporations to non-governmental organizations and individual consumers” (May et al., 2007). There is no doubt that the Internet helped to encourage firms to act more responsibly as it was increasingly easy and fast for consumers around the globe to discover a firms’ socially irresponsible behavior and organize a boycott. Thus, irresponsible firm behavior could be easily punished by large groups of consumers. Conversely, acts of social responsibility were also shared quickly with millions of customers and investors around the globe.

4.2 Ethics and Transparency

As the necessity of CSR became apparent, CSR progressed to a model in which businesses developed a normative approach centered around ethics and values (May et al., 2007). As noted it is no coincidence that the increased attention to ethics came in conjunction with an increase in the number of corporate scandals and an increase in global connectivity allowing employees, customers, and other stakeholders to act as whistleblowers on firms that violated responsible standards. Nike in the late 1990s was embroiled in numerous social irresponsibility scandals involving child labor and work place safety standards, which were highly publicized allowing the news to spread rapidly. Although most of the infractions were with contracted manufacturers in the supply chain, Nike needed to answer for the infractions quickly. The case set a standard for corporate crisis communication and made it clear that consumers would ultimately hold firms responsible for their supply chain partners. Nike responded quickly with a program for improved oversight, and most importantly with their CEO Phil Knight delivering the message that “consumers did not want to buy products made under abusive conditions.” (Nisen, 2013); Nike was able to recover from the scandal and establish itself in a position of leadership for fair labor practices in the South East Asian garment industry (Nisen, 2013). Similar incidents with Gap, Mattel, and Apple breathed new life into a strategic CSR model and once again reinforced the notion that a history of strong CSR initiatives and communication could provide reputational insurance (Peloza, 2006).

The new millennium ushered in an era of global struggle and even greater oversight by developing markets via new regulations and the UN Global Compact; by the end of the 1990s, close to 90 % of Fortune 500 firms had included CSR as part of their organizational mission, discussing such activities in their annual reports (May et al., 2007). Firms began hiring dedicated CSR professionals whose job was to manage CSR events and initiatives, as well as communication. Additionally, firms began publishing separate CSR reports as a way to communicate with groups of stakeholders that were not necessarily customers, thus stockholders, employees, and even advocacy groups could easily access firm specific CSR information.

Web-based communication allowed firms to update CSR information in a timely manner and respond more quickly to social issues, increasing their CSR presence. Within 3–5 days of the World Trade Center bombing, U.S. firms communicated with a variety of stakeholders adding patriotic images and slogans to advertisements and web pages. Although the images and message were similar to those during WWII, the Internet allowed firms to respond to this national crisis within days. In 2010 when Haiti, and more recently in 2015 when Nepal, were hit by catastrophic earthquakes, firms again responded, but this time, they were able to showcase their CSR efforts within hours. In 2010 Hanes, AT&T, and other multinational firms kept employees and customers updated on their recovery efforts and donation programs via the corporate website, twitter, and text messages. They were even able to involve customers in the relief efforts so the Hanes and AT&T could create a stronger connection between their brand and their customers as they worked together to assist the people in Haiti.

4.3 More than Expenditures

In addition to the increased presence of globalization and timeliness of communication, contemporary CSR is subjected to a mandate that CSR initiatives and programs demonstrate efficacy and impact for both the firm and the program. To this end firms look to comprehensive programs, with integrated communications that not only have a positive business impact such as reducing costs (e.g., hotel linen programs which ask guests to reuse towels) or increasing loyalty, but also yield a measureable social impact (e.g., reduce water use by 20 % and energy by 15 %). Starbucks is not only committed to financial success, it also provides customers with Fair Trade coffee, uses 100 % ethically sourced suppliers, encourages employees to volunteer in the local community, uses low flush toilets in all outlets, monitors its carbon footprint, and incentivizes customers to use reusable tumblers for their coffee as well as supporting hundreds of local charity events. In Canada, Starbucks piloted LeadersUp as a way to give job skills to disadvantaged youth and committed over $1 million to the program, as well as providing financial and man-hour assistance to a program that recycles shipping containers into small store spaces for cottage businesses. These CSR efforts are communicated with a CSR annual report, posters in the cafes, signage on tables, labels on packages, and strong social media messaging.

4.4 Contemporary Growth and Development in Mexico

In Mexico, the leading cause triumphed by firms during the last decade, like that of their northern counterparts, has been sustainability. As in other developing markets, there is strong pressure on firms to more fully engage in CSR activities, implement stronger supply chain sustainability standards, and be more accountable with CSR activities via reporting. Recent research suggests that of the top 25 companies in Mexico 18 address CSR in their corporate communications, but only 6 have it as a core element of their business strategy, mission or value statement (Perez, 2009). Although there is progress by many large Mexican firms, consumers are not necessarily convinced that these CSR efforts are worth paying for (Garza, 2013) and thus the business case incentive is minimized in Mexico. To date, consumers in Mexico are more interested in philanthropic endeavors that support social services, education, and the arts (Perez, 2009). Perez (2009) concludes that although there is clear evidence of progress in terms of companies adopting CSR practices, there is still a lag in terms of effective communication strategies which help to build consumer support and create a stronger business case for CSR investments. Outside of the very largest MNCs, firms do not typically publicize their responsible business practices and CSR programs.

4.5 Special Case of Small to Mid-Size Businesses

Small businesses in the U.S. and Canada may not so easily fit into the life-cycle model, yet they make up a large portion of both employment opportunities and GDP; in the U.S. 99 % of all businesses are considered small and thus are important in fully understanding CSR. These companies may not have CSR officers, budgets, or communication specialists, however they are taking their social commitment seriously and see themselves as vital to their host community’s economic and social health (Besser, 2002). Although small to mid-sized firms might not achieve the profound global impact of large MNCs, they can inevitably impact their community and minimize downside risks (Smith, 2013). Most small to mid-sized firms report being firmly entrenched in their community with a strong connection and commitment to local community providing leadership on numerous community-based initiatives, with community NGOs, serving on local boards, and sponsoring local events (Besser, 2002; Besser & Miller, 2001). In these cases the CSR communication is likely to be word of mouth communication, posters for local events, and social media posts; small to mid-size firms are not likely to issue a CSR report or spend advertising money promoting their CSR initiatives (Besser & Jarnagin, 2010; Besser & Miller, 2001). This type of CSR is more limited and more likely to be reflective of what is seen in the expansion and growth stages of larger firms.

CSR in small firms in Mexico has a limited history grounded predominately in philanthropy finding its roots in the church. In 1988 the Mexican Centre of Philanthropy, Cemefi, was created to advise small to mid-size firms, foundation personnel, and community leaders on the benefits of CSR. To date, the organization has consulted with numerous firms, and reports that more than 55 % of mid-size domestic firms are engaged in CSR (Garza, 2013). Cementos Mexicanos (CEMEX) program Patrimonio Hoy, which offers micro-credits and technical assistance to build low-income housing, provides proof of the advances in the adoption of CSR (Guzmán, 2014).

4.6 Contemporary CSR Messages and Tools

As CSR continues to grow, the focus within mid-sized to large firms in U.S. and Canada is on CSR communication that is fully integrated into shareholder reports, employee communication, supply chain partnerships, package design, traditional advertising, corporate websites, and social media. As noted, the messages and focus have shifted from ones in which firms attach a band-aid to an issue in a local market, or support a local charity, to one in which firms take a leadership role seeking out solutions to large global issues and exhibit a consistent commitment to issues with a long-term strategic fit with the firm’s mission. The messages have also moved from simple awareness brand building messages to ones that highlight efficacy of given programs and offer strong strategic fit with the mission and values of the firm.

CSR communication is critical in that consumers generally report an interest in purchasing products from firms with strong CSR records (conecomm.com), but in order for them to make socially responsible decisions, they need to have product, brand and company information. Extant research shows firms that use strong consistent CSR communication are able to engender strong positive affect for their brand (Bhattacharya, Korschun, & Sen, 2009; Brown & Dacin, 1997). Cone Roper’s 2013 Global CSR report supports the academic research and shows when price and quality are comparable, CSR becomes the next attribute of choice (conecomm.com). Determining which firms have responsible and ethical business practices and support initiatives of interest needs to be easy for consumers. Thus, clear, easy to access, consistent messages that do not overstate a firm’s position are likely to be most effective. Given that contemporary consumers are more skeptical than ever (Forehand & Grier, 2003), and have access to large quantities of information, firms need to be cautious with their CSR communication and ensure the claims, both explicit and implicit, are genuine. General Motors was repeatedly criticized in the global press for changing the color of its logo from blue to green in an effort to portray the company as more eco-friendly, when it is in fact one of the top ten most polluting car manufacturers in the world (Aggarwal & Kadyan, 2014). Contemporary CSR communication messages are most likely to be found in four key areas: CSR reports, traditional advertising, social media, and point of purchase (POP).

4.6.1 CSR Reports

CSR reports are designed for a myriad of stakeholders, but require significant investment of time and effort on the part of the reader, thus they are best for investors or consumers that are highly committed to CSR. Most reports prepared by large MNCs follow the Global Reporting Initiative format, making it easier for investors to compare initiatives and efficacy. In 2012, more than 6600 Annual CSR Reports were prepared by firms globally, with more than 50 % of those being prepared by U.S. MNCs (Scott, 2013), while in Mexico less than 20 % of the top companies prepare CSR reports (Perez, 2009). CSR reporting, like CSR itself, focuses on environmental issues of waste management, emissions, and sustainability. However, as the spectrum of issues and projects has expanded, so too has the content in the reports, with many large firms reinforcing missions, values, and consumer propositions with social partnerships and programs creating strong brand connections (Becker-Olsen, Cudmore, & Hill, 2006; Simmons & Becker-Olsen, 2006). Today CSR reports are an integral component of many published annual reports providing investors details on the firm’s CSR activities. Although CSR reports provide a wide range of information, including details on specific programs, CSR impact, and carbon footprint, they often are more detailed than most consumers would like, and more importantly they are not easily or quickly accessible, thus limiting their usefulness to consumers.

4.6.2 Traditional Advertising

The use of traditional advertising venues such as newspapers, magazines, and billboards all provide an opportunity to showcase the good deeds of firms. Given that most U.S. consumers want to know what firms are doing on the CSR front, these traditional venues are still a great way to let consumers know that the brands they desire are not just providing high quality products or services, but they are doing so in a responsible manner. Traditional advertising platforms are best for firmly established partnerships or programs in that the lead-time for communication development is longer than with social media. Panera Bread uses the slogan, “Baked before Sunrise ….Donated before Sunset,” to let customers know that Panera Bread is “more than great soup, salad, and bread, it is a firm dedicated to feeding people—all people.” (Elliott, 2013) Chipotle Mexican Grill serves as another example; their billboards and printed communication are all tagged to remind consumers they serve “food with integrity.”

Event sponsorship and cause marketing are two additional more traditional venues that allow a firm to leverage their CSR and philanthropic efforts. Often events provide a link to the local or regional community and create a sense of brand community as well as help a brand develop strong positive brand associations. Event sponsorship and cause marketing are different from traditional mass media advertising or communication, in that a firm willingly engages with a cause for direct commercial gain. In contrast, charitable giving or inter-firm activities such as carbon reduction are activities that may indirectly benefit the firm, but do not have a direct or intentional commercial gain component. Events and sponsorships are typically supported with integrated communication campaigns including advertising, public relations, social media, and even product labeling.

4.6.3 Social Media

Social media is having a transformational impact on corporate communications, with CSR communication being one of the biggest areas. Firms are tweeting, posting on Facebook, snapping, and using other digital platforms to showcase their CSR efforts. There is no doubt that social media is increasing awareness for CSR and changing the baseline expectation for consumers. It is also a space where firms can engage with customers, listen to their passions, and ultimately bring them onboard via CSR projects and initiatives. Social and other digital platforms provide the added advantage of being agile, allowing a firm to respond within seconds with a new message.

Twitter, with over 500 million members, provides space for 140 character messages that get information out quickly. It is timely, easy to read and process, and can be linked to other more traditional media or images. Tweets can also be linked to celebrities, top corporate officers, special occasions such as Arbor Day (@dell buy a laptop plant a tree), Clean Water Day (@anheuserbusch most efficient global brewer in water use 3 years running), or specific brands in a firm’s portfolio, to increase reach and build specific associations and awareness. Although twitter does not allow for a rich conversation around an issue, it potentially gives consumers just enough to tip the competitive scales and forces firms and consumers to think about CSR, not in a static once and done manner, but in a dynamic continual fashion that centers around an open authentic conversation.

For greater depth on CSR issues, CSR impact, and creation of a dialogue around specific issues, other platforms like Facebook, LinkedIn, DevelopmentCrossing, YouTube, and even blogging provide an avenue for sharing and building meaningful conversations. These more interactive platforms can also lend themselves to crowd sourcing and greater engagement from consumers. Procter and Gamble used Facebook to implement “The Future Friendly Challenge” which helped to promote water conservation. The program included online commitments via Facebook, a custom app and invitations to friends to participate. In the first 3 months, the program had nearly 50,000 followers and estimated over 20,000 days of clean drinking water donated to Children’s Safe Drinking Water fund. Chipotle again provides a strong exemplar with their “Scarecrow” campaign which uses multiple digital platforms to engage consumers and communicate their social responsibility message. Their YouTube short film has been viewed over 14 million times and their scarecrowgame.com can be downloaded as an app on iTunes, showing that CSR communication has moved from stiff scripted public relations to interactive digital platforms which engagingly embed CSR messages in the minds of consumers without sounding like an advertising message.

4.6.4 CSR Labeling at Point of Purchase

Although corporate reports, traditional advertising and even social media provide information for a variety of stakeholders, most consumers are not willing to take the time to research a firm’s sustainability record, charitable contributions, or other community involvement; hence, point of purchase information provides easy cues for consumers. Cone Communications reports that the preferred methods of CSR communication in point of purchase can range from package labels, to seals, to displays, and even sales pitches which incorporate CSR information. Industry Canada surveyed member firms and found that most used some form of POP communication to maximize the benefit from CSR activities, particularly sustainability (ic.gc.ca). These benefits include creating brand relevance, building customer relationships, and disseminating information about how consumers can also minimize environmental impact. Procter and Gamble, H&M, and Levi Strauss have all run informational campaigns on the environmental impact of clothing, both in terms of recycling and laundering. As part of the campaigns, they have not only talked about their own sustainability efforts, they have also shown consumers ways to decrease their environmental impact by using high efficiency detergents, line drying, washing in cold water, and donating used clothes. These messages are on laundry detergent boxes, on tags on the clothes, and part of in store displays making it easy for consumers to not just see what the firm is doing, but understand how they can magnify the environmental impact with own responsible practices. Aveda, a U.S. based beauty product MNC, has used package labeling to enhance its position in the market as an environmentally friendly organic product, and Bimbo bakery in Mexico also leverages its bio-based packaging to communicate their commitment toward sustainability.

5 Looking to the Future

The future of CSR, like the future of anything, is unpredictable. In a world that is increasingly and globally connected, a tremor in one part of the world could cause an earthquake in another, however current trends point toward slow and steady development as global issues of resource use, sustainability, and widening poverty gaps interact to shape the social and environmental landscape. On the firm side, companies will need to adapt CSR practices so they meet strategic needs, but also show cultural understanding in various global markets as well as position themselves as innovative leaders that are providing creative solutions to global issues. On the customer and investor side, it is likely that as Millennials age, they will reshape the CSR frontier, demanding more responsible business practices, wanting to be a part of those initiatives, and making consumption choices that allow them to alleviate some of the guilt of overconsumption.

5.1 Corporate Innovation and Leadership and Cultural Understanding

Even though many would agree that the United States and Canada are in the absorption phase of the CSR lifecycle, there is a continuum that exists within that phase, where some firms operate in industries that are simply compliant to the lowest level of regulation, while others operate in industries that demand innovation for survival, and within those industries, there is an even further delineation across firms as they search for the strategy that best fits their mission, values, and ability to compete in the marketplace. It is likely that all firms will move toward higher levels of CSR as global competition increases and awareness of social and environmental issues parallels this growth creating a business imperative for firms operating in developed markets. However, the question regarding consumer-based value for CSR in less developed markets remains unanswered. Although dumping technology and apparel waste in third world countries has been standard practice, it is likely that firms will need to have a stronger commitment to simply creating less waste and recycling waste. For Dell to run tree planting programs in the United States and then dump their computer waste in India, creates a strong disconnect for consumers and investors, and potentially tarnishes the brand’s reputation and attenuates brand associations. In the future firms will need to think more about product life-cycle and focus on the disposal component.

Creating a strong regional or global brand with strategic associations that resonate across cultures is also going to be more important. Issues of poverty, sustainability and even body image and bullying have received worldwide attention. Cartoon Network’s latest effort to fight bullying serves as an interesting example of the challenges an MNC faces when implementing a program across borders. The international campaign, that expands to other Latin American countries, is called “Stop Bullying: Speak Up” in the United States, “Stop Bullying: Stand Up” in Canada, and “Basta de Bullying: No te Quedes Callado” in Mexico. In each country, Cartoon Network, with the support of Facebook, established partnerships with different local organizations to successfully develop a program that integrates messaging through television, online media, social networks, and community education programs to help protect children and teenagers from bullying at schools and in their on-line lives. Regardless of the economic and developmental differences among all countries involved in this effort, the promoted cause is relevant across borders. Cartoon Network’s effort to “localize” this international campaign—in each country different communication tools were developed and local celebrities recruited to send out the message to kids and parents—serves to illustrate the kind of CSR communication efforts that are becoming more common and are more effective in that the use of local partners allows for cultural sensitivity to issues and images more relevant in specific markets.

5.2 The Millennial Paradox of Consumption

As Millennials become the most powerful economic force in the marketplace, companies will have to increasingly respond to their collective values. A worldwide study from Edelman (2012) suggests that Millennials’ buying power will be more than $2.5 trillion by 2018. Millennials are strong advocates for CSR and sustainability (Greenberg & Webber, 2008), and this generational trait is not exclusive to Millennials of advanced economies (Guzmán, 2014; Rayapura, 2014). Based on this generation’s commitment to sustainability, it is naïve to think that companies will not need to step up to the challenge and meet Millennials with messages that resonate with their interests on media platforms that are interactive and engaging.

Keurig Green Mountain (KGM) coffee embodies many of the consumer-based CSR related challenges faced by firms in the future. Green Mountain claims to “brew a better world,” and was the first coffee company to accept the UN Global Sustainability Reporting Standards, was twice named to the top 100 CR Magazine’s best corporate citizens, won two EPA awards for carbon offset programs, has been touted as one of the most committed leaders in the Fair Trade Movement, and has increased profitability over 500 % from 2011 to 2014 (Gunther, 2014). On the surface KGM appears to be a model firm for successful sustainable CSR. However, the future of CSR is complicated, particularly at KGM. In 2011, KGM sold 5.9 million Keurig coffee makers and 1.7 billion worth of single serve K-cup coffee packages (Gunther, 2014). Consumer advocacy groups quickly took to the internet and named Green Mountain as socially irresponsible generating tons of non-recyclable waste from its plastic coffee containers. These groups loudly and repeatedly questioned the firm’s commitment to “a better world” and went deeper to expose misleading claims in SEC reports and questionable business practices by its former CEO who was yachting on his company purchased 164 foot yacht.

The KGM case raises many questions for the future of CSR. First, had the firm not publicly committed and incorporated CSR as a core business practice, would they have been shamed or would it have passed under the radar? Is there value for firms in quietly embracing CSR? Using Vancouver Savings model of planet, people and profits, there is no doubt that value exists on the planet side, and possibly the profit side, but the people side is harder. Consumers and investors want to know what firms are doing, and want to be able to be aligned with socially and environmentally responsible brands.

Interestingly, the negative publicity has not had a significant adverse impact on sales, thus raising the second question. Do consumers value convenience over CSR? This question sharply suggests the paradox of consumption is hard at work. Consumers in developed countries need to commit to using fewer resources, yet these same consumers are typically not willing to inconvenience themselves to reduce their resource use. Innovations that assist consumers without impacting their quality of life allow consumers to feel good about their purchases and at least theoretically reduce their resource use. Again, consider KGM who responded to the allegations of waste by replacing their CEO and publicly committing to developing100 % recyclable K-cups and more energy efficient machines while expanding their partnerships to include Campbell Soup and Coca-Cola. KGM assuages consumers’ potential discomfort by continuing to report about the social good being done by the firm and their commitment to allocating 5 % of the company’s pre-tax profits to relevant social causes. Thus, consumers can now buy a new energy efficient machine, use the machine more often to brew coffee, tea, cold soup, and even cold drinks, and feel good that part of their purchase is being used to support hunger and environmental organizations. However, the reality is that the old machines are simply dumped and the consumers’ increase in consumption is likely to offset or surpass any energy savings of the new machine.

The KGM scenario suggests two other questions: does good in one sector offset infractions in another, and can owning a problem and ‘promising’ a solution placate both investors and customers? Can KGM’s $2 million dollars in development funds to coffee producing communities in poverty zones offset the waste of three billion K-cups? Can the promise of new packaging materials and more energy efficient machines keep investors and customers buying the product? Would the realization of a 100 % recyclable or biodegradable K-cup give KGM a renewed leadership position as a firm that is not just environmentally friendly, but environmentally forward?

The KGM example exposes a series of important questions for the future of CSR, not just in the coffee industry, but across many. Will firms tire of the CSR treadmill and the constant threat of advocacy groups to a point where CSR slides backward and only a few firms expend the time and resources to engage in innovative strategic programs, or will CSR communication grow in importance as firms look at cases like KGM and realize that consumers are relatively forgiving and willing to make trade-offs if savings in one area outweigh infractions in others?

6 Conclusion

The objective of this chapter was to examine the historical development of CSR in the United States, Canada, and Mexico to better understand how and why CSR and its related communication have evolved, and where it might be headed in the future. The chapter first presented a general context of CSR by reviewing the CSR lifecycle model and several foundational pieces for the development of CSR theory. Second, a comparative historic review of CSR communications in Canada, Mexico, and the United States illustrated how factors such as industrial growth, urbanization, consumerism, work place safety challenges, pollution, social inequality, and regulation have affected the development of CSR in the area. Third, the chapter analyzed contemporary CSR issues by focusing on the shift in CSR from a response based model to a more strategic proactive business model. Finally, some predictions were presented about the future of CSR, the role of firms, and how innovation, thought leadership, and the use of consumers as CSR business partners, via social media networks, might affect CSR communications.

No doubt CSR communication in North America has a long history of both shaping consumer responses and expectations and being shaped by consumer movements. From the earliest roots of industrialization, individuals have looked to firms to do more than make a profit and provide jobs; they have expected firms to be a part of the community. Though these expectations have shifted over the past century, there is no denying that firms, not just in North America, need to have strong CSR programs and corresponding communications if they want to be in positions of industry leadership and maintain a loyal customer base.

7 Exercise and Reflective Questions

  1. 1.

    Identify the role of firms and their agents expressed by Carnegie, Friedman, and Carroll. What is distinctive about these ideologies and where do they overlap? What is the inherent value in each of these arguments?

  2. 2.

    Many firms work with foundations, governments, and NGOs to address some of our most pressing problems. Choose a global issue and discuss how at least three firms have addressed that issue and how successful they have been in creating a long-term sustainable solution.

  3. 3.

    If a firm is faced with a CSR infraction such as an unsafe manufacturing facility, toxic dumping, or unfair labor practices, what would you recommend as a communication strategy to address that infraction? Do some research and choose a firm that has faced this issue and evaluate their response. What could they have done better? What worked well for them? Would your strategy have changed if the firm was small or large, or if the firm was in the United States or Mexico?

  4. 4.

    Countries with different levels of development of CSR require different CSR communication strategies. Imagine a company wanting to implement a CSR program across all three North American countries, what adaptations are necessary in terms of developing a North American CSR communication campaign?

  5. 5.

    Given the way young consumers communicate and consume media and entertainment, on which media would you suggest developing a multiplatform CSR communication campaign for a North American car manufacturer?

  6. 6.

    What do you see as the greatest challenges North American firms will face in terms of CSR strategy and communication?

  7. 7.

    With the increasing flow of immigrants across borders in the North American region, do you believe that a “one size fits all” CSR communication campaign will ever be possible? Discuss the pros and cons of this standardized approach to communication.