Corporate Social Responsibility Through an Economic Lens
Robert N. Stavins
Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)
Forest L. Reinhardt
Harvard Business School
Harvard University - Business, Government and the International Economy Unit
October 1, 2008
HKS Working Paper No. RWP08-023
FEEM Working Paper No. 84.2008
Business leaders, government officials, and academics are focusing considerable attention on the concept of corporate social responsibility (CSR), particularly in the realm of environmental protection. Beyond complete compliance with environmental regulations, do firms have additional moral or social responsibilities to commit resources to environmental protection? How should we think about the notion of firms sacrificing profits in the social interest? May they do so within the scope of their fiduciary responsibilities to their shareholders? Can they do so on a sustainable basis, or will the forces of a competitive marketplace render such efforts and their impacts transient at best? Do firms, in fact, frequently or at least sometimes behave this way, reducing their earnings by voluntarily engaging in environmental stewardship? And finally, should firms carry out such profit-sacrificing activities (i.e., is this an efficient use of social resources)? We address these questions through the lens of economics, including insights from legal analysis and business scholarship.
Number of Pages in PDF File: 26
Keywords: corporate social responsibility, voluntary environmental performance, Business and Government Policy, Economics-Microeconomics, Environment and Natural Resources, Law and Legal Institutions, Regulation
JEL Classification: M14, L51, Q50
Date posted: April 23, 2008 ; Last revised: December 1, 2014
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