Corporate Social Responsibility and Environmental Sustainability

Company Law and Sustainability: Legal Barriers and Opportunities, Beate Sjåfjell and Benjamin J. Richardson (eds), Cambridge University Press, 2015

University of Oslo Faculty of Law Research Paper No. 2015-35

Posted: 23 Sep 2015

See all articles by David Millon

David Millon

Washington and Lee University - School of Law

Date Written: September 22, 2015

Abstract

This chapter explores the prospects for CSR as a partial solution to the environmental sustainability challenge. It begins with discussion of the 'ethical' model of CSR, which focuses on corporate management's duty to balance conflicting stakeholder interests even where doing so may come at the shareholders' expense. Because the prospects for ethical CSR depend very much on institutional context, the chapter surveys Continental Europe, the US, and the UK for perspectives on the efficacy of ethical CSR as a justification for environmental sustainability initiatives. Because of shareholder primacy's strong presence in the US and, to a lesser extent, in the UK, the outlook for ethics-based CSR in these countries is problematic. The chapter therefore presents a different theory of CSR, the 'strategic' model, according to which the company spends money on nonshareholder well-being in order to enhance corporate and shareholder profitability in the long run. This idea has the potential to overcome objections to ethical CSR based on shareholder primacy values. The chapter concludes with some critical reflections on the limits of strategic CSR. Shareholders may be unwilling to accept the short-term costs of CSR investments in return for benefits that will materialize if at all only in the long run. Further, because strategic CSR rests on cost-benefit analysis, companies will only invest in environmental sustainability if and to the extent they stand to benefit financially. There is a significant likelihood, therefore, that corporations will not go far enough to satisfy social needs. If CRS is to be part of the solution, the need for an ethics-based model persists.

Suggested Citation

Millon, David K., Corporate Social Responsibility and Environmental Sustainability (September 22, 2015). Company Law and Sustainability: Legal Barriers and Opportunities, Beate Sjåfjell and Benjamin J. Richardson (eds), Cambridge University Press, 2015, University of Oslo Faculty of Law Research Paper No. 2015-35, Available at SSRN: https://ssrn.com/abstract=2664037

David K. Millon (Contact Author)

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
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