Corporate Social Responsibility and Environmental Ethics

Introduction: Globalism and the Rise of CSR

No one can argue that the international business community is becoming increasingly complex as a result of globalism. This complexity is driven by a growing understanding of sustainability, going "green," and bringing ethical and moral philosophy into the business community. British Telecom, for instance, noted in 2007 that it had reduced its carbon footprint by 60% since 1996, setting itself a target of 80% reductions by 2016 (Hawser, 2007). Francois Barrault, CEO of BT Global Services, said that by supporting sustainability his company hoped not only to reduce its carbon footprint but also to attract younger people who prefer to work for environmentally and socially responsible companies. He did not always think that way, however. Barrault noted that when he first met former U.S. Vice President and environmental activist Al Gore, who showed him pictures of melting ice caps, he thought Gore was mistaken. The issue Barrault faced was both intellectual and organizational: what role does his organization have in the environmental and social responsibility of actions that affect other countries and the wider world?

Corporate Social Responsibility: Dimensions and Debates

The essence of corporate social responsibility (CSR) is a self-regulated approach integrated into a strategic and tactical business model that ensures an organization's compliance with the spirit, ethics, and standards of the law. The goal of CSR in business is to encourage actions and functions that make governmental regulation unnecessary to force compliance. CSR achieves this by encouraging community growth, public disclosure, and the elimination of practices that harm or have the potential to harm society — whether legal or not. The basis of CSR is doing what is right in the public interest while still maintaining corporate growth and profitability. In a way, this echoes the Social Contract theories of Rousseau and Locke: if one does what is right for the individual and for society, one will profit as an organization (Kotler and Lee, 2005).

CSR interacts across multiple dimensions of the environment — physical, social, consumer, and employee — encompassing all stakeholders in the organization's milieu. It is certainly not country- or region-specific, although there is some tension between the developed and developing worlds over the issue. The developing world argues that it is unfair to hold them to the same standards when the developed world has had hundreds of years since industrialization to prepare, make errors, and atone (Koestoer, 2008). Nevertheless, the manner in which CSR is affected by Internet research, advertising, and fundamental privacy issues is significant. From an ethical point of view, one must ask how the Internet and subsequent technologies must be used in order to remain consistent with the basic principles of CSR (Jonker & De Witte, eds., 2010).

Pro-CSR arguments are, of course, quite compelling. The term began to gain popularity in the 1970s, when so many new multinational corporations were formed. Proponents argue that corporations earn far more in long-term profit by operating within a global CSR perspective, allowing stakeholders to see that moral and ethical principles are embedded in business operations. This idea is also tied to the development of business ethics, which became particularly visible in the post-1980 world of increased attention to sustainability and the greening of the planet (Pennings et al., 2008, pp. 47–50).

There are few serious arguments that CSR is wrong, or that moral and ethical behavior should not translate into business practice. However, critics often argue that CSR distracts from the economic role of the business organization, and that it is nothing more than a preemptive tactic to limit the role of governmental regulation as a watchdog over large multinationals. In other words, the public dialogue centers on CSR while the private strategic plan focuses on pushing fiscal limits as long as possible, delaying governmental regulation, or masking the true nature and intent of the organization (Visser et al., eds., 2008). Some also view the social responsibility of business purely as the creation of profits for stakeholders, which in turn trickles down into various aspects of the local, regional, and national community. The more people employed, for instance, the healthier the economic outlook for a given area (Friedman, 1970).

Different dimensions of CSR affect the robustness, application, and public image of the organization. These may be broken down into five major categories:

Physical Environment

CSR is neither monolithic nor one-dimensional. The physical makeup of a particular country, together with its demographic and geographical characteristics, gives rise to varying terms such as "value-driven CSR," "stakeholder-driven CSR," or "performance-driven CSR." It is this divergence between the developed and developing worlds that tends to cause the most friction around CSR — the developed world has already had three centuries of industrialization to arrive at its current position, yet expects the developing world to follow global standards that were shaped largely without their input. This tends to create cognitive tension between the first and third worlds (Horrigan, 2010).

Social Environment

Cultural and social environments share many characteristics with consumer-driven paradigms. The social environment is driven by sound fiscal management, the ability to respond positively in a crisis, and the nature of stakeholder priorities. Corporations are increasingly motivated to become socially responsible because their stakeholders expect them to understand and address the social needs of not only the local community but the global environment as well (Horrigan, 2010).

Consumer Paradigm

For CSR to be effective, it must be embraced by consumers. Over the last several decades, there has been a marked rise in the popularity of ethical consumerism, which is inextricably linked to CSR. As the global population grows, so do the pressures on the world's natural resources required to meet consumer demand. Because of globalization, industrialization is robust in many nations, and consumers are becoming increasingly aware that their individual decisions have an impact on the environment. While consistency across the globe is limited, more and more consumers are demanding that businesses "go green" (Werther and Chandler, 2010).

Supply Chain Management

CSR within the global supply chain can be quite complex. At its most robust, it ensures that appropriate CSR policies and responsibilities are upheld by every vendor and supplier throughout the entire supply chain. A less comprehensive approach might allow most vendors to participate in the process; however, as global economies merge, transparency is becoming the watchword, and CSR is expected in all countries at all times (Corporate Social Responsibility in the Global Supply Chain, 2010).

HR and Employee Relations

Many see CSR as an aid to both recruitment and retention, particularly in competitive markets where top graduate talent is highly sought after. It is now quite common for prospective employees to ask about a firm's CSR policy during an interview; having a comprehensive policy can significantly improve the perception of a company. Additionally, if employees can become involved in fundraising, community volunteering, or some form of global outreach, they are often far more likely to remain with their current employer (Career Services, 2010).

Introduction to Sustainability

One of the basic tenets of corporate responsibility is the understanding of organizations acting as resource managers for the entire planet. Understanding the Gaia concept — seeing the earth as a living organism, in which the forests are its lungs and the wind and waves its bloodstream — gives one pause when considering the effect that several thousand years of human activity have had on the Blue Planet. Sustainability, in ecological terms, is the capacity to endure; it is the way biological systems remain diverse yet continue evolving over time. The earth's long-lived and healthy forests and wetlands are examples of this principle. For humans, sustainability means managing human impact on the environment in a way that is long-term, less invasive, and ensures the survival of both the human population and the environmental, social, and cultural systems we have developed. Healthy ecosystems provide vital chemicals for our atmosphere, resources for our technological needs, and support for agriculture. For ecologists, it is this balance that is currently out of equilibrium: overfishing, overuse of land, destruction of forests, and environmental pollution are all causes for concern. Negative human impact on the environment can be reduced through proper CSR management, conservation, and reduced economic consumption. The process of sustainability intersects with economic activity through its social and ecological consequences. Sustainability economics centers on the integration of cultural, political, economic, and social ideas, and can take many forms depending on conditions — eco-villages, cities, reappraisals of economic sectors, and revised work practices — all with the aim of using new technologies to work with the environment rather than against it (Adams, 2006).

Technological advances over several millennia gave human societies increasing control over their environment. The concept of feudalism, for instance, segmented workers from managers and maintained a fairly stable balance in rural areas during the Middle Ages and Renaissance. However, the Industrial Revolution of the seventeenth to nineteenth centuries changed the conception of sustainability by tapping into fossil fuels, increasing urbanization and the segmentation of labor, and causing an unbalanced agricultural system in which food was not always available for burgeoning city populations. Coal was used to power ever-evolving engines and later to generate electricity. Society was protected from endemic disease through technological advances in sanitation. The combination of these conditions caused an unprecedented human population explosion and even greater urbanization, leading to massive industrial, technological, and scientific changes that continue to the present. From 1750 to 1850, for example, the global population doubled from a relatively sustainable 500 million to over 1 billion people (Goudie, 2005). Concerns about the environmental and social impacts of industry were expressed by some Enlightenment political economists and through the Romantic movement of the 1800s. Overpopulation was not a new theory; a famous essay by Thomas Malthus correctly predicted that eventually humans would populate to such an extent that food, living space, and living standards would decline to the point where much of the population would suffer. Malthus is still frequently cited today (Daly and Farley, 2004).

By the late nineteenth and early twentieth century, the Industrial Revolution had led to an exponential increase in the human conception and use of resources. The growth in the health and wealth of whole societies was seen as progress, although a number of economists began developing models that called sustainability into question. Ecology had gained more academic standing and was recognized as a viable science. Key ecological principles included: the interconnectedness of all living systems in a single living planetary system — the biosphere; the importance of natural cycles of water, nutrients, and other chemicals; and the passage of energy through the trophic levels of living systems (Worster, 1994).

The next several decades brought yet another period of escalating growth — what some call "a great acceleration... a surge in the human enterprise that has emphatically stamped humanity as a global geophysical force" (Robin, 2008). Alarms began ringing: The Limits to Growth, the Club of Rome, and the realization that environmental problems were now global in scale. One of the first major paradigm shifts occurred in 1973 and 1979 with the global energy crisis, driven by an overdependence on oil. A political and cultural schism developed: the richer, developed countries sought to regulate growth and environmental impact, while the developing world, driven by population pressures, needed to modernize rapidly, at whatever environmental cost (Turner, 2008).

What followed was another exponential growth pattern in human consumption, unchecked birth rates in much of the developing world, and scarcity of water and food in many regions. While there is an increasing push toward recycling, protecting the environment, and embracing green business practices, events like the Copenhagen Conference illustrate how contentious the issue of sustainability has become. For much of the world, ecological economics now seeks to close the gap between ecology and more traditional economics. This requires societies in all parts of the world to commit to recycling, reducing their carbon footprints, and investing in green energy and building processes (Kay, 2002).