Corporate social responsibility (CSR) is an approach to solve ethical issues. According to Bernd Carsten Stahl, “It is based on the recognition that companies benefit from society and thus needs to reciprocate.” CSR aims to find solutions for our current times, especially for environmental issues. For large corporations, CSR demonstrates their social responsivity beyond their profitability and has become a critical point when stakeholders and analysts evaluating the company.
However, CSR raises some debates. As Bernd stated: “Much of the criticism of CSR focuses on the problem of instrumental use of the idea of social responsibility.” Ethicists argue that companies utilize CSR as a corporate strategy, so it now becomes a tool for the corporation to generate profits and gain fame.
When you look through corporate’s website, it is not hard to find a segment called “Corporate Responsibility & Sustainability” which includes the company’s environmental sustainability performance, and its perspective about ethics. Every time I run to information sessions for companies recruiting events, over 80% of corporates will insist on their social responsibility such as non-profit volunteer events and environmentally friendly projects.
The financial industry even uses environmental and social issues as an investment idea. ESG investing is growing investment choices that considering environmental, social and governance issues and risks into traditional investment evaluations. According to J.P. Morgan, these factors not only have a positive social impact but also may affect a company’s financial performance. And it is becoming business as usual. Investment companies utilize ESG analysis into their approach to evaluate investment opportunities.
There is no doubt that the original propose of CSR is about social responsibility, but corporates now develop it as an opportunity to generate profit and people in the financial industry start to utilize this character as a mean of evaluating a company, which all deviates the original intention and violates ethic. For the next step, we need to think about how to make large corporations contribute to our sociality but not utilizing it to be more profitable.
I thought your approach to discussing social responsibility and corporations was intriguing. I like how you very quickly introduced the class text and made sure to waste no time talking about it. I do, however, think that your post would be improved if you talked consistently about the text throughout your article. It's good that you didn't just shove the text in at the end, but I think by including more specific quotes and references to the text you could improve your blog. Your post was thought provoking and got me to think seriously about corporations supposed claims of doing good.
ReplyDeleteI like the idea of ESG investing but I would push back on de-incentivizing profits in order to push social good. The two don't have to oppose each other. Like J.P Morgan said, not only do these social factors have a positive social impact but they also affect a company's financial performance. An entity only makes money if they give society something it wants. The amount of money they receive is a measure of how much they want that thing. Similar to cigarettes, we could not allow these companies that make harmful products to advertise or we could tax them in order to internalize the negative externalities they produce. For instance gasoline can have a gas tax in order to pay for offsetting the environmental impact the gas has. This allows for gas companies to make profits, for the user to get what they want, and for society to not be hurt by the burning of fossil fuels. Once the tax becomes too high to feasibly buy gas due to rising climate change costs, the new business of EVs would take over and the gas businesses would naturally die or shift into the new market in the most efficient way possible.
ReplyDeleteAlso a cool example to potentially use for ESG investing is Black Rock now considering environmental impact a core component in their investment thesis. They are the largest money manager on wall street with over $7 trillion under management and this signals a huge shift into sustainability by the power of wall street.