CSR and Ecological Environment

Question:

Summarise and Analyse at least 6 scholarly sources on the topic of CSR and Ecological Environment.

Answer:

Introduction

The researcher’s research was started with the plain reading of the articles. It is important in this research to look at all the current aspects related to Corporate Social Responsibility (“CSR”) and the environment. It has been necessary for this research to build up upon the recorded and accumulated knowledge on the topic. It is necessary for a literature review to determine the contours of the literature so that the direction of the research can be determined. CSR over the past decade has become an essential topic of discussion for the scholars and researchers. This is research is based on such analysis and researches this has been the main basis behind selecting these six articles for literature review. 

Literature Review

This literature review is a symposium of six articles related to the CSR and the environment. This review is complimentary to the articles of (i) Reinhard, Stavins, and Vietor (2008), in the article Corporate Social Responsibility Through an Economic Lens in which an overview is provided with respect to the issues that exist with respect to CSR and the environment (Reinhardt, Stavins and Vietor, 2008), (ii) an empirical perspective is provided by the article of Portney (2008) The (Not So) New Corporate Social Responsibility: An Empirical Perspective (Portney, 2008). The most perplexing thing that there is about CSR that it has the different meaning for different people. This article concentrates on defining environmental CST as those actions that are environmentally friendly and are not provided under law. In this symposium, this definition is the same which has been used by Portney (2008). However, this is a definition that has not been accepted readily by people. The article by Stavins and Vietor’s (2008) argues in this symposium that CSR is sacrificing of profits for the social causes. However, both these articles recognize that despite there being growing and large literature on CSR the fact that companies are actually sacrificing their profits for the benefit of the society is not there. It has been argued similarly by Portney (2008) that if the discussions with respect to CSR are confined only to that cases in which the corporate knows that the profits are being sacrificed, it will then lead to a discussion which is very short.

 In this article focus is made on the strategic CSR in the ecology and moral or altruistic motivation that drives CSR we will be using the term altruistic CSR for the same (Ramachandran, 2010). 

The paper by Truscott, Bartlett, Trwoniak (2009), in a marketing journal of Australia “The reputation of Corporate Social Responsibility industry in Australia” which is based on the methodology of case study, this article was based on the interviews taken of important people in the Australian industry, vide which the term CSR was explained in this article (Truscott, Bartlett and Tywoniak, 2009). It was revealed by the industrialist that there was a growing importance of CSR. Their views with respect to CSR in the legal, ethical and economic roles in the society were discussed by them.  Further, the industrialists were also of the opinion that the model of CSR was a matter of reputation of the corporate.  The importance of CSR as a strategy for enhancing the companies’ reputation has been stated by Mc William & S. Seigal (2010) in Creating and Capturing Value: Strategic Corporate Social Responsibility, Resource-Based Theory, and Sustainable Competitive Advantage (McWilliams and Siegel, 2010). It was stated in this study that the firms which sell their goods under the CSR activities umbrella convincingly increases the loyalty of the customer towards them and further leading to an increase in the revenue. 

 It is also further indicated in the study the importance that advertising has in providing to the consumers information regarding the various social welfare activities to the consumers. The T.V. and medial also have a very important role to play when it comes to making the consumers aware regarding the activities of the firm which can lead to either damaging or increasing the company’s reputation. It is in this manner that the study with respect to the effect of CSR on the reputation of the firm was concluded.   

A case study methodology based paper Managing corporate social responsibility: lessons from the oil industry by Vaaland, Heide (2008), the main purpose of this paper was handing the critical events relating to CSR and utilization of these in the enforcement of activities of CSR (Vaaland and Heide, 2008). It was concluded by this study that management of CSR needs to be done by handling incidents that are unexpected, between the stakeholders, their expectations and the performance of the company there should be reduction in the long term gap and finally relationship should be maintained with the society by interplay between resources, activities and the actors.

An analysis was made by Gond, Crane (2008) in Corporate Social Performance Disoriented: Saving the Lost Paradigm?; on the corporate social performance concept being distorted. There was analysis of past researches in this paper and it indicated a fall that was emerging in the interest that the corporates were showing towards the research of scholars on social performance (Gond and Crane, 2008).

The Important Question and Aspects under the Article

There are following main questions that are addressed by the theoretical literature of CSR. The first being what is it that drives a company to engage in activities related to CSR? the second being what effect does CSR have on welfare? and when will there be in increased vigor that the scholars will show towards CSR, which seems to have diminished. 

There have been various explanations that have been given with respect to the present surge that has been in the CSR relating to the environment. It could be that the increasing pollution has become an indication of the inefficiencies in production on the broader perspective and that reduction of cost and pollution both go together which creates an opportunity that is win-win in the economy today. There perhaps is a new green consumer’s generation who are ready to pay a price that is higher for products that are clean, and it is to this shift that the firms are responding to. It could also be that the businesses are becoming savvier towards the political system’s working and are trying to avoid any conflict that is political, meaning thereby any kind of pressures of enforcement, threats that are regulatory, threats of boycott from the Non-Governmental Organizations (“NGOs”). It is these factors which have led to the various firms to engage in CSR activities. 

 The establishment of the CSR’s welfare effects is difficult as compared to establishing that it has economic explanations that are positive, and there are very few scholarly articles which discuss the same. However, there are some essential insights that have been provided by this literature into the effect that strategic CSR has on welfare effects, and there has been a start in addressing the altruistic CSR’s welfare effects. 

There are various theoretical models that have been used for CSR. There is a very important role that the pressure from an NGO plays being the cause of private or public political outcomes. There is also a need in this public political realm for makers of political decisions so that they can maintain a balance between the various groups. And the power that an NGO action has depends completely on the support that the NGO gets from the public in general.

 Though there has been a lot of progress which has been made with respect to understanding the CSR theoretically in the recent times, however, there is still a lot of scope for development. Till this date, it is strategic CSR which has been the center of attention, however, we have not yet reached a point where there is consonance in the strategic environmental CSR theory (Richardson, 2006). 

Politics of Public Regarding strategic CSR and Strategic CSR

There are two major areas under this which require work on them. The first being that the literature read in general makes an assumption that they have the full information completely ignoring the credibility of corporate environmental disclosure.  In what manner there is an effect of the environmental information disclosure on the demands made by public and NGOs for regulations of the environment? Is it possible for the company to anticipate the threats that are regulatory with actions that do have any environmental substance? If this is possible then what is the process that transmissions information’s nature that allows for outcomes like these, and what are its welfare effects?  

 The second are is that it is necessary for political activities of the corporate to be incorporated into a framework that is overarching about CSR. These activities should include (i) candidates, who are opposing the environmental externalities internalizing, should be funded; (ii) regulations which are mandatory or subsidies that are harmful environmentally should be lobbied against; and (iii) funding of what is termed as “junk science” that can sow in the public debates seeds of doubt. Though these actions seem unlikely to benefit socially there does not seem to be any paradigm that is accepted for not discussing them in the light of CSR (Segerson and Miceli, 1998) (Yu, 2005).

Private Politics regarding Strategic CSR and Strategic CSR

There are various issues that still remain unresolved. The first being that it is necessary to understand how companies and NGOs compete for the opinion of the public, why is it that NGOs seem to react more aggressively towards companies that are perceived to companies that are “greenwash” rather than towards those companies which have no interest in CSR? What is the response that the companies have towards advertisements that are public and competing by NGOs and companies? Are NGO campaigns weakened or expected by the corporate greenwash? (Aguinis and Glavas, 2012)  To be able to answer all these issues what is necessary is a much richer NGO theory which has not developed as much as the firm’s theory. Even if it is accepted that attempts are made by NGOs to ensure that the quality of environment is maximized, what is necessary to understand that there might come a time that their constraints with respect to raising funds and problems in the internal agency may lead them towards pursuing of campaigns which not only reduce welfare of the society but also may affect the quality of environment itself. This calls for the NGO’s industrial organization in which competition will be there between the NGOs for public support and financial resources (Skinner and Mersham, 2008). 

It is necessary to study the environmental CSR in the countries that are developing. When there are limited government regulations, it is the bigger NGOs at international level which plays essential roles in the biodiversity protection and services towards the environment. The NGOs like the Conservation International and World Wildlife Fund manage the tracts of substantial lands in the tropical regions. Under such conditions, it is quite apparent that the effects that CSR will have are different from that in the Europe and the United States, and private politics is likely to have much higher importance (Luu, 2011).  

CSR that is nonstrategic

With respect to altruistic CSR the theoretical work is still in the earlier stages. There are mainly two areas in it which need to work out, the first being charitable contributions market, to what extent can it be said that this market is competitive. Which aspect do non-traded goods are charities? What advantages does the firm have comparatively when it comes to giving socially?

An area which the firms have an advantage comparatively to the non-profits is the area of environmental CSR, however, there is research that is still required on this by various literature to completely ascertain this fact. Another area of concern is the altruistic CSR’s welfare effects. The literature which has been reviewed has a very positive orientation towards it (Frederick, 2016).

Conclusion

 This review attempts to convey the nature of CSR and the environment literature which is extremely dynamic. In the recent years, there is much that has been accomplished, and there still remains much that needs to be still done in this area.  The importance of CSR as market driver continues to grow. However environmental issues that are complicated, which require remedies that are expensive or in which change across firms that are multiple is required such as the case of global warming a critical influence on activities of CSR is likely to be by political pressure. Though as reviewed clearly in the articles the importance of NGOs is increasing over time specially in the countries that are developing, these have started to have quite an impact on various corporates and have often shaped the environmental CSR’s nature. A growing interest in entrepreneurship which is social the boundaries between altruistic corporations and non-profit organizations are becoming blurred with time. This increasing growth in the literature of environment and CSR will make it richer in the next one decade leading to policymakers, scholars, the community of business and NGOs being encouraged to review the policy and economic of the environment.

Reference

Aguinis, H. and Glavas, A. (2012). What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda. Journal of Management, 38(4), pp.932-968.

Dincer, C. and Dincer, B. (2007). Corporate Social Responsibility: Future Prospects in the Turkish Context. Social Responsibility Journal, 3(3), pp.44-49.

Frederick, W. (2016). Commentary: Corporate Social Responsibility: Deep Roots, Flourishing Growth, Promising Future. Frontiers in Psychology, 7.

Gond, J. and Crane, A. (2008). Corporate Social Performance Disoriented: Saving the Lost Paradigm?. Business & Society, 49(4), pp.677-703.

Korhonen, J. (2003). Should we measure corporate social responsibility?. Corp. Soc. Responsib. Environ. Mgmt, 10(1), pp.25-39.

Luu, T. (2011). Corporate Social Responsibility and Sustainable Tourism. Business and Economic Research, 1(1).

McWilliams, A. and Siegel, D. (2010). Creating and Capturing Value: Strategic Corporate Social Responsibility, Resource-Based Theory, and Sustainable Competitive Advantage. Journal of Management, 37(5), pp.1480-1495.

Portney, P. (2008). The (Not So) New Corporate Social Responsibility: An Empirical Perspective. Review of Environmental Economics and Policy, 2(2), pp.261-275.

Ramachandran, V. (2010). Strategic corporate social responsibility: a ‘dynamic capabilities’ perspective. Corp. Soc. Responsib. Environ. Mgmt, 18(5), pp.285-293.

Reinhardt, F., Stavins, R. and Vietor, R. (2008). Corporate Social Responsibility Through an Economic Lens. Review of Environmental Economics and Policy, 2(2), pp.219-239.

Richardson, B. (2006). Corporate Environmentalism and Public Policy. By THOMAS P. LYON AND JOHN W. MAXWELL [Cambridge, Cambridge University Press, 2004, xiii + 291 pp, ISBN 0521819474, Hardback,  45.00; ISBN 0521603765, Paperback,  19.99]. Journal of Environmental Law, 18(2), pp.333-337.

Segerson, K. and Miceli, T. (1998). Voluntary Environmental Agreements: Good or Bad News for Environmental Protection?. Journal of Environmental Economics and Management, 36(2), pp.109-130.

Skinner, C. and Mersham, G. (2008). Corporate social responsibility in South Africa: emerging trends. Society and Business Review, 3(3), pp.239-255.

Truscott, R., Bartlett, J. and Tywoniak, S. (2009). The reputation of the corporate social responsibility industry in Australia. Australasian Marketing Journal (AMJ), 17(2), pp.84-91.

Vaaland, T. and Heide, M. (2008). Managing corporate social responsibility: lessons from the oil industry. Corporate Communications: An International Journal, 13(2), pp.212-225.

Yu, Z. (2005). Environmental Protection: A Theory of Direct and Indirect Competition for Political Influence. Review of Economic Studies, 72(1), pp.269-286.