What do Procter & Gamble, Intel and Avon have in common? They are all multi-billion dollar corporations, they all trade at over $20 a share, they all conduct business globally - and all three are in the top 10 of Business Ethics Magazine's "100 Best Corporate Citizens" list.
Corporate citizens, you might ask? Chances are you have heard this or similar terms, such as corporate social responsibility or sustainable business.
These terms are becoming increasingly common in the business world, and practically every major corporation is now being confronted with these issues. But what exactly does corporate citizenship and social responsibility mean?
Corporate social responsibility, or CSR, refers to the conscious steps that businesses take to meet or exceed the interests of employees, stockholders, the environment and the local communities in which these businesses operate.
The idea behind CSR is founded on the belief that business and society can coexist, and that through sustainable practices, businesses can have tremendous power in effecting positive social change.
The very same issues that are currently appearing in major newspaper headlines, such as poverty, starvation, global warming and human rights violations, are also making their way to the desks of the most influential CEOs.
Corporations are now being directly affected by these issues and therefore can no longer take a passive stance and expect to succeed.
The world's smartest companies understand that they now have an opportunity to leap forward by being socially innovative and changing the way business operates.
It is in the interest of these companies to combat the most pressing challenges facing society.
CSR has its critics, primarily those who claim the sole responsibility of business is to make money. After all, Noble laureate economist Milton Friedman claimed "the business of business is business."
Most stock markets reflect this sentiment, judging companies solely based upon their financial returns and giving little if any consideration to social value.
However, to believe that businesses should only be concerned with their financial figures is to ignore the significant value that social activism can add to a business.
CSR does more than just improve a company's public relations; it makes perfect business sense. The notion that businesses are foregoing profits when they act socially responsibly is completely antiquated.
Smart CEOs are realizing that there is real business in acting responsibly, in ensuring sustainable operations and in providing adequate health-care to their employees.
CEOs are learning that their businesses can save thousands of dollars by using renewable energy, and that happy employees are more likely to increase customer satisfaction.
It is no coincidence that the stock of the companies listed on Fortune Magazine's "Best Places to Work" outperforms the stock of the Fortune 500 companies by a factor of three.
The companies that will succeed in this age of globalization and economic interconnectivity will be those that understand that businesses can no longer just compete on cost.
It is those businesses that learn to succeed by being socially responsible that will ultimately be at the forefront of innovation.
Since terms like corporate citizenship and social responsibility have gained so much popularity, many businesses have begun using them as mere marketing tools. Simply because a business donates some of its profits to a good cause does not make it a socially responsible company. Corporate social responsibility is not about giving away a company's money; that is philanthropy.
CSR involves going deeper and examining how a company makes the money that it makes: Does it adhere to good labor standards? What is its environmental impact? Is it active in its community?
Questions such as these lie at the core of corporate citizenship and will increasingly affect the way business is done in the 21st century.
The global reach of multinational corporations gives them unprecedented power in a world economy that is getting smaller by the day.
For many, a growth in corporate power seems like a chilling idea, and these fears are rightly justified given the numerous irresponsible acts that have been committed recently.
The good news, however, is that now, more than ever, business leaders are recognizing that it is possible to do well by doing good.
It is the business sector that has the greatest potential to implement positive social change, and it is up to this new generation of leadership to ensure that business and society not only coexist, but are also able to thrive together.
Thomas Singer is a Senior majoring in international relations with a minor in entrepreneurial leadership. He was president of Young Entrepreneurs at Tufts in 2003 and is currently a fellow of the StartingBloc Institute for Social Innovation.
