Social Responsibility Ch6

PoM MID 2

What does CSR stand for?

Corporate Social Responsibility.

What is Corporate Social Responsibility (CSR)?

A concept where companies integrate social and environmental concerns into their business operations and interactions with stakeholders on a voluntary basis.

How does the European Commission (2011) define CSR?

As the responsibility of enterprises for their impacts on society.

According to the European Commission (2001), what does CSR involve?

Integrating social and environmental concerns in operations and stakeholder relationships voluntarily.

What did Dahlsrud (2008) study about CSR?

He analyzed 37 definitions of CSR between 1980 and 2003 to understand how it’s defined.

What are some other terms used for CSR?

CR (Corporate Responsibility), CSV (Creating Shared Value), CG (Corporate Governance), CC (Corporate Citizenship), SD (Sustainable Development), SR (Social Responsibility), SL (Sustainable Living).

Who created the four-part model of CSR?

Archie Carroll in 1979 (expanded in 1991 as the CSR Pyramid).

What are the four components of Carroll’s CSR model?

Economic, Legal, Ethical, and Philanthropic responsibilities.

What are Economic Responsibilities?

To be profitable and produce goods and services that society desires.

What are Legal Responsibilities?

To obey the law and play by the rules of society.

What are Ethical Responsibilities?

To do what is right, just, and fair, and avoid harm.

What are Philanthropic Responsibilities?

To be a good corporate citizen and contribute resources to the community to improve quality of life.

What does Carroll’s CSR Pyramid illustrate?

That economic responsibilities form the foundation, followed by legal, ethical, and philanthropic responsibilities at the top.

What does Baden criticize about Carroll’s model?

It implies economic responsibilities come first and justifies this by claiming that unprofitable businesses can’t survive.

According to Baden, what is problematic about prioritizing profit?

A business that can only be profitable by breaking the law or harming society shouldn’t exist.

Why does Baden question philanthropy as a responsibility?

Because philanthropy is voluntary and not obligatory—calling it a “responsibility” weakens the concept of CSR.

How did Baden reconstruct Carroll’s pyramid?

By removing philanthropy as a core responsibility and emphasizing legal compliance, ethics, and economic balance.

What does the stakeholder view of the firm propose?

Companies should serve the interests of all stakeholders, not just shareholders.

How does Edward Freeman (1984) define a stakeholder?

Any group or individual who can affect or is affected by the achievement of the organization’s objectives.

What is a key part of CSR under stakeholder theory?

Managing and balancing stakeholder interests through engagement and consultation.

What is the goal of stakeholder management?

To find “win-win” outcomes while balancing competing interests (e.g., cost vs. working conditions or profit vs. environmental protection).

Why do companies outsource production to countries with weak regulations?

To lower costs due to cheaper labor and lax health and safety standards.

Who can be held responsible for unethical supply chains?

Consumers, intermediaries (e.g., supermarkets), manufacturers, and local governments.

What is the ethical question raised about global supply chains?

How can society ensure accountability for inequality, poor labor conditions, and environmental harm?

What are some accountability and transparency measures companies use?

Non-financial reporting, social and environmental audits, external assessors, and comparability via frameworks like the Global Reporting Initiative (GRI).

What are examples of soft or civil regulation in CSR?

Codes of conduct, UN Global Compact, US model business principles, and NGO agreements.

What are market-based CSR mechanisms?

Pigovian taxes, carbon taxes, true cost economics, and full-cost accounting.

What are examples of philanthropic CSR responses?

Donations to charities and community programs.

What are alternative business governance models promoting social responsibility?

Credit unions, social enterprises, cooperatives, B-Corps, and stakeholder boards.

What are examples of ethical labels?

Fairtrade, FSC (Forest Stewardship Council), and the Ethical Trade Initiative.

What events highlighted the need for sustainability in business?

The 2007–08 global financial crisis, climate change, and the growing power of multinational corporations.

Why are many businesses not sustainable yet?

Because profits often depend on increasing consumption, short-term investor pressures, low consumer prices, and unpriced externalities.

What are “externalities”?

Unaccounted-for side effects of production, such as waste disposal or pollution costs.

What are the main drivers for sustainability in business?

Cost savings, customer demand, government regulation, supply chain pressure, employee motivation, innovation, and moral responsibility.

What is the UK’s climate change target?

To reduce emissions by 78% by 2035 compared to 1990 levels, and achieve net zero by 2050.

What must large UK businesses have to bid for government contracts over £5 million?

A credible net zero plan.

What does “Net Zero” mean?

Reducing greenhouse gas emissions to as close to zero as possible, with remaining emissions absorbed by natural or technological means.

What actions are required to reach global net zero?

Ending coal-fired power generation, phasing out petrol and diesel vehicles, and halting deforestation.

What is the UK government’s strategy for achieving net zero?

Ensure polluters pay via carbon pricing, support low-carbon technologies, power the UK with clean energy by 2035, ban new petrol/diesel cars by 2030, and require biodiversity net gain for new developments.

What are Scope 1 emissions?

Direct greenhouse gas emissions from company operations (e.g., vehicles, boilers).

What are Scope 2 emissions?

Indirect emissions from purchased electricity, heating, and cooling.

What are Scope 3 emissions?

Indirect emissions from the full value chain (suppliers and product use), often 85–95% of total emissions.

What is lifecycle analysis in sustainability?

Examining all stages of a product’s life to identify key environmental impacts.

What are examples of emissions by product lifecycle?

Orange juice (47% transport), Light bulbs (95% during use), Milk (76% on farms).

What are key steps to transform into a sustainable business model?

Conduct lifecycle analysis, map financial flows, hold brainstorming workshops, focus on customer outcomes, consider resource hierarchies, assess financial models, and create a sustainability flowchart.

What is a sustainable business model?

A model that focuses on long-term environmental efficiency and resource use.

What is the “access-based model”?

A system where customers lease or borrow products rather than owning them, encouraging durability and reuse.

What are examples of companies using access-based models?

Interface, Michelin, B&Q, and fashion rental platforms.

What are benefits of leasing-based models?

Companies profit from reliable, recyclable designs, and customers save on operating costs.

What is the sharing economy?

A system based on borrowing or renting assets instead of owning them.

What is the projected value of the online clothing rental market by 2023?

$2.5 billion.

What are examples of fashion-sharing platforms?

HireStreet, My Wardrobe HQ, and Mud Jeans.

What are examples of car-sharing platforms?

Drivy and Hiyacar.

How has the focus of CSR changed over time?

It used to focus on how CSR benefitted businesses financially

What is greenwash?

When companies falsely market products as environmentally friendly to exploit consumer goodwill.

What was the Colgate greenwash example?

Colgate Smile toothpaste was marketed as eco-friendly but had minimal ingredient differences and was overpriced, exploiting consumers’ green conscience.

How can consumers respond to greenwashing?

By writing to companies, demanding transparency, and avoiding deceptive “eco” products.

What is the key message of this lecture?

Businesses should aim to be part of the solution, not the problem, by embedding sustainability, ethics, and accountability in all operations.