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1. Issues in Social and Environmental Accounting
Vol. 2, No. 2 Dec 2008/Jan 2009
Pp. 260-265
Two Models of CSR and Sustainability
A comparison between the ‘Pyramid of Corporate Social Responsibility’ and the
‘Model of Sustainable Development’
A review of The Durable Corporation: Strategies for Sustainable Development: Güler
Aras & David Crowther; Gower; 2009
Jane Claydon
University of Sussex, UK
Although many different theories exist corporation. This was a necessary reori-
of the notion of Corporate Social Re- entation as it emphasised the importance
sponsibility (CSR) and the terms associ- of corporate action and implantation of a
ated with it (sustainability, Corporate social role, however the question still
Governance, sustainable development), remained of how to reconcile the eco-
very few have managed to develop a nomic orientation with such social role.
comprehensive model of CSR or sus- From this, a four part comprehensive
tainability but instead concentrate on definition of CSR was proposed, which
either one or a few stakeholders within emphasised the importance of businesses
specific contexts or examples. Aras and responding to all aspects of the social
Crowther (2009) present an interesting world: economic, legal, ethical and phil-
new ‘Model of Sustainable Develop- anthropic and it is from this that Carroll
ment’ that can be usefully contrasted constructed the four tiered pyramid
with Carroll’s (1991) Pyramid of Corpo- (Carroll 1991).
rate Social Responsibility’, now almost
twenty years old. According to Carroll (1991) all business
responsibilities are predicated upon the
With the creation of many government economic responsibility, the raison
bodies in the 1970s, such as the Environ- d’etre of the firm, which is to create
mental Protection Agency and the Con- profit for its shareholders from supply
sumer Product Safety Commission to and demand of society (Friedman 1970).
protect the environment, employees and This feature of the pyramid is positioned
consumers, it became apparent at the at the bottom as the foundation of the
time that the business world was under pyramid. All other responsibilities must
criticism for not being accountable occur after this fundamental principle
enough to their stakeholders and society has been satisfied . At the second tier lie
in general (Carroll 1991). The percep- the legal responsibilities, whereby the
tion of social responsibility shifted to corporation must adhere to the law and
social responsiveness by some writers all rules and regulations that it is gov-
who argued that the former was not con- erned by to ensure it maintains responsi-
centrating enough on the actions of the ble business practices. The third tier is

2. J. Claydon / Issues in Social and Environmental Accounting 2 (2008/2009) 260-265 261
Figure 1. The Pyramid of Corporate Social Responsibility (Carroll 1991, p42)
the ethical layer, where corporations are nomic goal of maximising profit. This
obliged to do what is right, just and fair suggests that all actions that derive out
for their stakeholders and avoid doing of CSR will inevitably be for economic
them any harm. The last tier, the philan- purposes, which have always been and
thropic level, ensures that the corpora- always will be the raison d’etre of the
tion is a good citizen to the community, firm.
contributing resources where needed.
The last two tiers of the pyramid have This model is one of the earliest exam-
also been highlighted within the social ples of how the structure of responsibili-
contract theory of CSR, whereby the ties should sit within a corporation, and
corporation is regarded as a citizen is still widely used. However, it has also
within the community, who should, faced much criticism. For example, the
therefore, contribute to society like any mere fact that the root imperative of a
other individual (Dahl 1972). This corporation is to maximise profit and
‘Pyramid of CSR’, then, rests on the no- act on behalf of the interests of its share-
tion that the raison d’etre of the firm is holders may prevent corporations from
economically defined, by the foundation acting socially responsibly. Campbell
of the pyramid. All other responsibilities (2007) argues that companies who are
(legal, ethical and philanthropic) come economically weak are less likely to en-
after or from this, suggesting that the gage in acts of CSR as they have fewer
company will only ever be socially re- resources to invest time, effort and
sponsible if this fits in with its eco- money into it (‘slack resource theory’),

3. 262 J. Claydon / Issues in Social and Environmental Accounting 2 (2008/2009) 260-265
thus these corporations are unlikely to as important variables, which ignores
meet the threshold for socially responsi- external factors outside the corporation
ble behaviour. He further states that itself. Yet this is typical of much litera-
companies are less likely to act in so- ture surrounding CSR. Aras and Crow-
cially responsible ways if it appears that ther, then, aim to provide a comprehen-
it will be difficult for a firm to turn a sive model which looks at all four as-
profit in the short term. Therefore, the pects of CSR (environment, society, fi-
traditional ‘Pyramid of CSR’ model is nancial performance and organisational
not sufficient as a comprehensive under- culture) in the short term as well as the
standing of the ways in which CSR and long term context, to provide a more
sustainability should be achieved. complex model than any others that ex-
ist.
The durability of a corporation is largely
dependant on its understanding and In ‘The Durable Corporation’, they pro-
demonstration of CSR (Aras and Crow- vide a comprehensive explanation and
ther, 2009). Within the broad concept of description of the term sustainability,
CSR are three issues on which corpora- referring to the traditional concepts of
tions focus most heavily: sustainability, what the terms has meant in the past and
corporate governance and the harmoni- providing a framework for understand-
zation of accounting standards. Aras and ing what the term should mean in the
Crowther focus on the first of these, as- present and in the future. They outline
serting that most analyses of sustainabil- the limitations of such existing asser-
ity concentrates solely on the environ- tions of the term sustainability, specifi-
mental and the social, which is inade- cally in relation to corporate behaviour,
quate as financial performance is im- and provide a new, more complex
perative to the success of sustainability model of CSR and sustainability. The
also. It is likely that such analyses do so term ‘sustainability’ traditionally asserts
because many authors see a conflict be- that society must not use resources more
tween financial performance of a corpo- quickly than it produces them, a defini-
ration and its social/environmental per- tion which was first publicly debated as
formance. As such, most work on corpo- part of the Brundtland Report. Although
rate sustainability does not recognise the we must start with this when attempting
need for understanding the importance to define sustainability, mainly because
of financial performance as an essential it is the first public definition of sustain-
part of sustainability, which again inhib- ability, it is still a controversial topic as
its a comprehensive debate. Margolis it can mean different things to different
and Walsh (2003) have reviewed thirty people in various contexts and so confu-
years of CSR literature and found the sion around the term is still prevalent
majority of it has ignored factors other (Aras and Crowther 2009). Further,
than financial performance which may there is a tendency for analysis of sus-
affect CSR. Further, although Waddock tainability to consider only two aspects:
and Graves (1997) found a positive cor- the environmental and the societal.
relation between financial performance However, Aras and Crowther assert this
and CSR, their research only focused on analysis is deficient and propose four
corporate financial performance, firm aspects, within a two dimensional aspect
size, risk tolerance and type of industry of short term versus long term that leads

4. J. Claydon / Issues in Social and Environmental Accounting 2 (2008/2009) 260-265 263
Figure 2
The Model of Sustainable Development, Aras and Crowther, 2009, page 41
to a more complete definition of sustain- aging the interest of the stakeholders
ability: societal influence, environmental versus the shareholder, which is the
impact, organisational culture and fi- most common assertion in organisation
nance. theory. Further, all stakeholder values
must be recognised and accommodated
Furthermore, to achieve sustainable de- within a body of trust, for if trust does
velopment it is necessary to achieve sus- not exist between the organisation and
tainability and this can be achieved by the stakeholder than these transactions
four actions: maintaining economic ac- of value sharing cannot take place (Aras
tivity as this is the raison d’etre of the and Crowther 2009).
company (Friedman 1970); conserving
the environment as this is essential for Aras and Crowther’s view of corporate
the maintenance of future generations; performance is that is should be one of
ensuring social justice which includes stewardship - of the resources of the so-
elimination of poverty and the ensuring ciety and of the environment within
of human rights; and developing spiri- which the corporation operates – which
tual and cultural values, where the cor- leads to sustainability (Aras and Crow-
porate and societal values align in the ther 2009). Sustainability focuses on
individual (Aras and Crowther 2009). ensuring that the resource utilisation of
Thus, sustainability and sustainable de- the present does not affect the future.
velopment is about more than just man- This creates concepts with which the

5. 264 J. Claydon / Issues in Social and Environmental Accounting 2 (2008/2009) 260-265
corporation must engage to become sus- to do business with a company if they
tainable such as renewable energy re- are conducting their business practices
sources, minimising pollution and using in an eco-friendly way. This assertion
new techniques of manufacture and dis- corroborates the principles of the
tribution and accepts the costs that may ‘Pyramid of CSR’ which also stresses
be involved in the present for ensuring the importance of the bottom line of fi-
such possibilities for sustainability in the nancial performance as a pre-requisite
future. This is beneficial not only to the for ethical behaviour thereafter. How-
environment, but also to the organisa- ever, although the ‘Pyramid of CSR’
tion, for it cannot operate tomorrow includes the financial aspect which is
without the resources it has today. The integral to a concrete model of CSR and
same applies within the financial per- sustainability, it does not provide an ex-
formance of the corporation and there is planation of how financial performance
no dichotomy between the environ- can actually lead to the corporation’s
mental and financial performance of the sustainability in terms of ensuring that
company as the environmental perform- money is invested in socially responsible
ance of the company in the present day behaviour and sustainable behaviour, i.e.
ensures the financial performance of the by investing in renewable energy re-
company tomorrow, and vice versa sources and other socially responsible
(Aras and Crowther 2009). activities as outlined by Aras and Crow-
ther. Instead, the ‘Pyramid’ merely as-
There are internal drivers for an organi- serts that the business must stay profit-
sation setting agendas to improve envi- able only because it is the raison d’etre
ronmental performance because of the of the corporation to do so and not be-
perceived benefits for such an action, yet cause it actually has a direct impact on
there have been many critics of these r ensuring sustainability. Further, the
(Aras and Crowther 2009). Two such ‘Pyramid’ asserts that the corporation
criticisms assert that either companies can always achieve profitability, despite
are often driven by the need to comply the other factors of CSR as seen in the
with regulation and legislation concern- other tiers, as the financial layer is the
ing the government, rather than having a foundation of the pyramid. However,
real concern for the environment or that Aras and Crowther’s model asserts that
the environmental practice of a company profitability is predicated upon the other
is a mere Public Relations stunt for ad- factors of CSR and so the financial suc-
vertising purposes. However, Aras and cess of the company and its actions of
Crowther state that it is inevitable that CSR exist in a continuum.
the business will concentrate on the bot-
tom line of the performance in order to Therefore, the ‘Model of Sustainable
ensure the raison d’etre of the firm and, Development’ offers a more comprehen-
thus, environmental performance is sive insight into CSR and sustainability.
achieved in relation to the bottom line It is a more practical tool for business
for the above reasons: to make sure that managers to use as a guide for achieving
the company is not prohibited by large socially responsible corporate behaviour
monetary fines from government bodies than has ever been seen before and
for not complying with regulation; or shows how each of the responsibilities
because consumers will be more likely associated with CSR are to be achieved

6. J. Claydon / Issues in Social and Environmental Accounting 2 (2008/2009) 260-265 265
for each stakeholder group, whether at a Aras, G. & Crowther, D. (2009) “The
local, national or global level, and ex- Durable Corporation: Strategies
plains whether these are short term or for Sustainable Develop-
long term aspirations. Although Car- ment” (Gower Publishing Ltd)
roll’s ‘Pyramid’ demonstrates many of Campbell, J.L. (2007) “Why would cor-
the important aspects of CSR (economic porations behave in socially re-
responsibility, legal responsibility, ethi- sponsible ways?” Academy of
cal responsibility and philanthropic re- Management Review, Vol. 32, No.
sponsibility) it does not show how these 3
responsibilities are to be sustained Carrol, D. (1991) “The Pyramid of Cor-
across time and for different stake- porate Social Responsibility: To-
holders, as Aras and Crowther’s model ward the Moral Management of
successfully does, ; nor does it assert Organisational Stakeholders”,
strongly enough the link between finan- Business Horizons, Vol. 34, No. 4
cial performance and socially responsi- Dahl, R. (1972) “A Prelude to Corporate
ble corporate behaviour. Reform”, Business and Society
Review, No. 1
I assert that ‘The Durable Corporation’ Friedman, M. ‘The social responsibility
is a comprehensive and exciting take on of business is to increase its prof-
CSR and sustainability. I would recom- its’ The New York Times, 1970, 13
mend it to anyone who is interested in September
CSR and sustainability, particularly Margolis, J. D., & Walsh, J. P. ‘Misery
business leaders and academics and for loves companies: Rethinking so-
people with varying understanding and cial initiatives by business’ Ad-
experience of CSR. It provides an in- ministrative Science Quarterly,
depth introduction to CSR but has 2003, Vol. 48
unique content with the introduction of Robinson, J. (2004) “Squaring the cir-
the ‘Model of Sustainable Development’ cle? Some thoughts on the idea of
and so is useful for novices who are sustainable development”, Eco-
learning about CSR and experts in the logical Economics, Vol. 48
field who can compare this model to Sneddon, C., Howarth, R.B., & Nor-
other models of CSR and sustainability. gaard, R.B. (2006) “Sustainable
Development in a post-Brundtland
world”, Ecological Economics,
References Vol. 57
Waddock, S. A., & Graves, S. B. (1997)
Internet Sources “The corporate social perform-
www.davideacrowther.com ance–financial performance link”,
www.thedurabilityinstitute.org Strategic Management Journal,
www.terry.uga.edu Vol. 18

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