DISCREDIT WHERE DISCREDIT IS DUE

In 1970, economist Milton Friedman’s essay, “The Social Responsibility of Business Is to Increase Its Profits” argued that business basically had no responsibility other than to maximize profits for shareholders. However, the demonstrated success of socially screened investing and the emergence of corporate social responsibility initiatives have discredited Friedman’s view.

Now, many Fortune 500 executives enthusiastically endorse the notion of corporate social responsibility (CSR) as part of a company’s obligation to all stakeholders, including customers, employees, investors, and advocates, as well as something that pays its way. All of these activities can be evaluated by performance indicators, including reduced operating costs, enhanced brand image, increased sales and productivity, employee retention, and reduced regulatory costs and oversight. Some of the strategies and practices include:

• A commitment to diversity in hiring employees and barring discrimination

• Treating employees as assets rather than costs

• Creating high performance workplaces that integrate the views of line employees into the decision-making processes

• Adoption of performance goals that go beyond compliance with environmental rules to promote measures to reduce ecological footprints, such as the United Nations Principles for Responsible Investment (UNPRI) and the CERES Principles

• Advanced resource productivity, focused on the use of natural resources in a more productive, efficient, and profitable fashion like maximizing recycled content and product and packaging recycling

• Responsibility for the conditions under which goods are produced down the entire supply chain and by contract employees domestically or abroad

• Transparent reporting on greenhouse gas emission, water use, and carbon footprint