The evolution of impact

I like the outdoors. I think you know what I mean. It’s a simple phrase that represents a complex idea, the outdoors. The most straightforward definition is probably, “that which is not indoors.” But defining something by what it is not feels like a cop-out. A positive definition is more elusive: are there trees? Can you see the sky? Is the ground covered in grass, or dirt, or sand?

If we hadn’t settled on phrases like the outdoors, having a casual conversation would be a lot more difficult. And that’s exactly the position we find ourselves in when we talk about responsible business.

At Bullhorn, our values guide our decision-making, from how we budget to who we work with. But there isn’t an agreed-upon way to discuss socially responsible organizations. Some businesses call themselves mission-driven; some are sustainable, some use impact. Then there are B Corporations® (that’s us), benefit corporations (a different thing), and for benefit organizations (also different). How exactly did we get here, and why can’t we agree?

To understand our current ecosystem of socially-minded businesses, we should look towards corporate social responsibility, and before that, corporate philanthropy.

Philanthropy and Social Responsibility

In 1889, industrialist Andrew Carnegie published an article titled The Gospel of Wealth. In the article, he articulates that growing wealth inequality should be countered by the wealthy donating their riches to benevolent causes. As a foundational document for this philanthropy era, Carnegie’s statements influenced public opinion and his contemporaries. By the end of the nineteenth century, Carnegie and fellow industrialists like John D. Rockefeller were focusing on philanthropy nearly full time.

After the Great Depression, in 1935, Congress granted corporations the ability to make tax-deductible charitable contributions. Now, there was a business incentive for philanthropy.

Economics professor Howard Bowen is credited with ushering in the era of corporate social responsibility with his 1953 book Social Responsibilities of the Businessman. In it, he discussed “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action that are desirable in terms of the objectives and values of our society.”

Corporate social responsibility, as defined by Bowen, was at odds with the concept of shareholder primacy — that a company’s primary (or even sole) purpose is to maximize profit for shareholders.

Responsibility Goes Mainstream

As Bowen opened the door for serious scholarship around the framing of corporate social responsibility, demand was kindled by high-profile environmental news. Rachel Carson’s Silent Spring was an immediate bestseller in 1962, raising awareness of the dangers of industrial pesticides. In 1965, a report from the US Public Health Service led to the creation of the Occupational Safety and Health Administration. In 1969, the Cuyahoga River in Ohio erupted into flames from oil and chemical pollution, spurring support for the Clean Water Act.

The picture gets a little more complicated as we move into the 1970s. The decade kicked off with the inaugural Earth Day, an event that was not yet a target of corporate ad campaigns. The federal government began offering incentives for private companies to serve the public interest in areas such as housing and education. Think tanks like the Committee for Economic Development published research on the corporate social contract. And companies began to see a bottom-line benefit to responsibility messaging.

By 1985, Chevron was running ads celebrating its protection of endangered species. Five years later, a quarter of all household products were advertised as recyclable, compostable, biodegradable, or ozone-friendly — and Hewlett-Packard was on the board of the Earth Day Foundation.

(Green) Wash, Rinse, Repeat

Around this time, environmentalist Jay Westerveld coined the term greenwashing, spurred on by a hotel’s “reuse your towel, save the planet” pitch. Westerveld put words to an increasingly common feeling: that corporations were hijacking the terminology of environmentalism for ineffective or disingenuous campaigns.

Greenwashing may be one of the more important words in the history of responsible business because it represents an idea that has continued to spur change. If Chevron is green, a small company that earnestly cares about its impact may want to identify themselves differently. And if Nestle claims to be sustainable, the cycle continues. The phenomenon extends beyond environmentalism: Philip Morris (notable for marketing that targeted minority communities) touts inclusion and diversity as part of their social impact.

So, by the turn of this century, responsibility messaging was in a perpetual game of whack-a-mole. As Silicon Valley became a dominant player, a new breed of companies endeared themselves to the public with talk of connection and the greater good. Google was praised for its unofficial motto, “don’t be evil.” But a couple of decades later, Google would drop the motto and be seen by many as, well, pretty evil.

Today, the vocabulary of responsibility demands its own glossary. There isn’t a single word that we can all rally around. But there is plenty of work to do.

^{Design credit: Inaugural Earth Day poster, 1970 / www.nypl.org/blog/2017/04/20/informed-archives-environmental}

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