December 4, 2025
In 1970, economist Milton Friedman declared that the only duty of business was to maximize profits. For decades, companies clung to that creed, treating social responsibility as charity or PR gloss.
That world is gone. In today’s transparent, hyper-connected marketplace, corporate social responsibility (CSR) is no longer optional. It is the cost of doing business.
The Stakes
CSR has moved from boardroom afterthought to strategic necessity. A decade ago, sustainability reports were rare; now, most Fortune 500s produce them. More than 8,000 companies have signed the UN Global Compact, pledging to uphold human rights, labor standards, and environmental protections.
Why? Because ignoring responsibility is expensive.
Consumers punish neglect. Seventy-seven percent now factor corporate values into purchasing decisions. One viral scandal can wipe out years of brand building.
Investors demand accountability. Environmental, social, and governance (ESG) metrics shape where capital flows. Weak performance raises borrowing costs and drives investors elsewhere.
Regulators are tightening. From carbon disclosures to labor laws, governments are enforcing standards with teeth. Noncompliance brings lawsuits, fines, and lasting reputational damage.
CSR is not about image. It is about resilience.
The Talent Test
The strongest pressure may come from within. Workers, especially Millennials and Gen Z, expect employers to act responsibly. For them, meaningful work is not a perk, it is a prerequisite. Companies that fail to meet this demand will lose top talent to those that do. In a competitive labor market, that is not a soft issue; it is a survival one.
Profit and Purpose Align
The old debate between profit and purpose is false. Firms that embed responsibility into their operations are not sacrificing returns; they are securing them. Responsible companies build trust, cut risks, and unlock growth. Those who cling to Friedman’s outdated logic are betting against both the market and society.
The Bottom Line
The age of opacity is over. Companies can no longer hide harmful practices behind boardroom walls. In a world of instant accountability, social responsibility is not a luxury. It is a license to operate. The real question for business leaders is simple: can you afford the costs of ignoring responsibility? The answer is already clear—’no company can.’