Corporate Social Responsibility
In the same way that the words "sustainable development" became prominent in environment policy debates a decade ago, the term "corporate social responsibility" (or CSR) is popping up more and more in corporate and academic circles. Proponents of CSR, including many within the corporate community itself, are insisting that businesses consistently exceed legal and regulatory mandates in protecting the environment, assuring worker safety, and giving back to the communities in which they operate. Many of those insisting on "beyond-compliance" behavior go farther to argue that such actions make good business sense—that is, that doing more than the law requires will pay a competitive return in the form of more loyal customers, more productive workers, and less demanding investors.
Skeptics of CSR, or outright opponents, see matters differently. They believe that while companies should without question obey all applicable laws and regulations, that's all they should do. These observers see no reason why companies should go above and beyond what the law requires in the areas of the environment and worker safety (unless such actions pay off in higher profits). And if firms engage in beyond-compliance behavior because it increases profits, these critics argue, this behavior is no more socially responsible than the other things that companies do to make money.
In the wake of recent corporate scandals and with ever-increasing interest in the social and environmental effects of doing business, there is little doubt that CSR will continue to be a topic in the forefront of public policy. Below RFF President and Senior Fellow Paul Portney shares his views on this compelling and controversial subject as part of the RFF Seminar Series and industry and academic leaders join in the debate at a RFF Council Meeting held in conjunction with the Leonard H. Stern School of Business at New York University.