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The Role of Individual Responsibility in the Transition to Environmental Sustainability

Steven Cohen

We New Yorkers live in a city that is on a gradual transition toward environmental sustainability, but we are a long way from the place we need to end up. A circular economy where there is no waste and where all material outputs become inputs is well beyond our technological and organizational capacity today. But that does not mean we shouldn’t think about how to get from here to there. Much of the work in building environmental sustainability requires the development of systems that enable us to live our lives as we wish while damaging the planet as little as possible. Large-scale institutions are needed to manage sewage treatment and drinking water, to develop renewable energy and build a modern energy grid. Government policy is needed to ensure the conservation of forests, oceans, and biodiversity. Pandemic avoidance requires global, national and local systems of public health. Climate change mitigation and adaptation also require collective action. What then can individuals do?

As individuals, we make choices about our own activities and inevitably, they involve choices about resource consumption. I see little value in criticizing people who fly on airplanes to travel to global climate conferences. (I assume you do remember airplanes and conferences, don’t you?) But I see great value in considering the importance of your attendance at the conference and asking if the trip is an indulgence or if you will have an important opportunity to learn and teach. This year has taught us how to attend events virtually. There is little question that live presence at an event enables a type of communication that can’t be achieved virtually. Many times, you will judge that the financial and environmental cost of the trip is far outweighed by the benefits. Those are the times you should travel. My argument here is that it is the thought process, the analysis of environmental costs and benefits, that is at the heart of an individual’s responsibility for environmental sustainability. Individuals are responsible for thinking about their impact on the environment and, when possible, minimize the damage they do to the planet.

Everyone needs to turn on the lights at night, start the shower in the morning, turn on the air conditioning and possibly drive somewhere on Mother’s Day. I would never argue that you should give up these forms of consumption. Instead, I believe we should all pay attention to the resources we use and the impact it has. We are responsible for that thought process and the related analysis of how we, as individuals, might accomplish the same ends with less environmentally damaging means.

Some say that the fixation on individual responsibility is a distraction from the more important task of compelling government and major institutions to implement systemic change. This perspective was forcefully argued in 2019 in The Guardian by Professor Anders Levermann of the Potsdam Institute for Climate Impact Research. According to Professor Levermann:

“Personal sacrifice alone cannot be the solution to tackling the climate crisis. There’s no other area in which the individual is held so responsible for what’s going wrong. And it’s true: people drive too much, eat too much meat, and fly too often. But reaching zero emissions requires very fundamental changes. Individual sacrifice alone will not bring us to zero. It can be achieved only by real structural change; by a new industrial revolution.   Looking for solutions to the climate crisis in individual responsibilities and actions risks obstructing this. It suggests that all we have to do is pull ourselves together over the next 30 years and save energy, walk, skip holidays abroad, and simply ‘do without.’ But these demands for individual action paralyse people, thereby preventing the large-scale change we so urgently need.”

Perhaps, but I do not see it that way. I consider individual responsibility and the thought process and value shift that stimulates individual action as the foundation of the social learning process required for effective collective action. In other words, individual change and collective system-level change are interconnected. The fact is that on a planet of nearly 8 billion people, it is too late for many of us to get back to the land and live as one with nature. There’s too many of us and not enough nature. There is an absolute limit to our ability as individuals to reduce our impact on the planet. Therefore, system-level change is absolutely needed. But system change requires individuals to understand the need for change along with a well-understood definition of the problem. The cognitive dissonance of identifying a problem but never acting on it is difficult to live with. If you see a poor child on the street begging for food, you can provide that child with food and money while continuing to support public policy that addresses the child poverty issue at the systems level. In fact, the emotional impact of that child’s face may well provide the drive that leads you to fight harder for the policy that would prevent that child from needing to beg. We learn by example, and vivid experiences and cases can lead to transformative systemic change.

While I consider individual and collective responsibility connected, without collective systems and infrastructure supporting environmental sustainability, there are distinct limits to what individual action can achieve. That is why I see no value in shaming individuals for consuming fossil fuels, eating meat, or buying a child a Mylar birthday balloon. I believe an attitude of moral superiority is particularly destructive in any effort to build the political support needed for systemic change.

As my mentor, the late Professor Lester Milbrath, often argued, the only way to save the planet is through social learning that would enable us to “learn our way to a sustainable society.” He made this argument in his pathbreaking work: Envisioning a Sustainable Society: Learning Our Way Out . In Milbrath’s view, the key was to understand environmental perceptions and values and to build on those values and perceptions to change both individual behavior and the institutions their politics generated. To Milbrath, the human effort to dominate nature had worked too well, and a new approach was needed. As he observed in Envisioning a Sustainable Society :

“Learning how to reason together about values is crucial to saving our species. As a society we have to learn better how to learn, I call it social learning; it is the dynamic for change that could lead us to a new kind of society that will not destroy itself from its own excess.”

My view is that one method to pursue social learning is learning by doing — in other words by encouraging the individual behaviors we might each take to reduce our environmental impact. Those behaviors remind us to think about the planet’s wellbeing along with our own. They reinforce and remind us and as they become habit, they impact our values and our shared understanding of how the world works.

There is, therefore, no tradeoff between individual and collective responsibility for protecting the environment unless we insist on creating one. Additionally, in a world of extreme levels of income inequality, wealthy people who have given up eating meat have the resources to consume alternative sources of nourishment. They do not occupy the moral high ground criticizing an impoverished parent proudly serving meat to their hungry child. In our complex world, we should mistrust simple answers and instead work hard to understand the varied cultures, values and perceptions that can contribute to the transition to an environmentally sustainable global economy. The path to environmental sustainability is long and winding and will require decades of listening and learning from each other.

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Steve, I appreciate your perspective on individual responsibility. I am developing a similar position and submitted an “OpEd” piece to Times about a month ago but alas it didn’t get published. I would like to share and develop the conversation with you so please reach out.

callie narum

What are the responsibilities of individuals, governments and the international community in helping people have access to water?

karen kramer

While this highly educated society continues the GDP rat race and decimating all other patterns that create balance in the world we live in, here’s a little story of obvious stupidity for fun and profit. In 1975 my wife and I after several years of college chose to listen to scientists’ warnings about continued expansionism economically. We simplified our lives and did without things like electricity, fancy new vehicles and useless bling. We did without as a plausible direction for a template of living lightly and securing a viable future for more than just humans. We endured countless slurs ( tree huggers, eco-terrorists, hippies,) and were subjected to verbal and realistic abuse . Now at 72 and 68 we are wondering where the hell were the rest of you? Read the book “Small is Beautiful ” to see the wrongheaded direction your politicians and some clergy and certainly all greedy vulture capitalist have led the general public. I have no patience for obvious stupidity .Yeah, we were WOKE long before most people and feel no compulsion to be apologetic as all of you are to blame if you help continue the narrative of GDP unlimited growth and the population explosion. nats remark

Edalyn Nebulous

“perhaps, but i do not see it that way” sorry but that kinda just means your guile is weak and you’re extremely credulous and succeptable to propeganda, dunno what to tell ya bud but this perspective is a total nothingburger. Of Course we must needs rely on some great measure of personal choice here, but if my choices are: Waste, Waste, Out of my Budget well i dont REALLY have a choice then Do I? which means that for the majority of americans there is no ethical choice list they can follow to fix the problem, only by compelling legislation can those choices be made available to them.

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118 Social Responsibility Essay Topic Ideas & Examples

Inside This Article

Social responsibility is a crucial aspect of our society that involves individuals and organizations taking actions that benefit society at large. It involves being conscious of the impact of one's actions on the environment, society, and the economy. Writing an essay on social responsibility can help raise awareness about important issues and inspire others to take action. To help you get started, here are 118 social responsibility essay topic ideas and examples:

  • The importance of corporate social responsibility in today's business world
  • How companies can promote social responsibility through sustainable practices
  • The impact of social responsibility on consumer behavior
  • The role of government in promoting social responsibility
  • The ethical implications of social responsibility
  • The benefits of social responsibility for businesses and society
  • The relationship between social responsibility and environmental sustainability
  • How social responsibility can help address social inequality
  • The role of social responsibility in promoting diversity and inclusion
  • The impact of social responsibility on employee morale and productivity
  • How social responsibility can help businesses build trust with consumers
  • The challenges of implementing social responsibility initiatives
  • The role of social responsibility in shaping public policy
  • The impact of social responsibility on brand reputation
  • The role of social responsibility in disaster relief efforts
  • The benefits of social responsibility for small businesses
  • The role of social responsibility in promoting ethical leadership
  • The impact of social responsibility on employee retention
  • The relationship between social responsibility and corporate governance
  • The role of social responsibility in promoting economic development
  • The challenges of measuring the impact of social responsibility initiatives
  • The role of social responsibility in addressing climate change
  • The impact of social responsibility on shareholder value
  • The benefits of social responsibility for nonprofit organizations
  • The relationship between social responsibility and social entrepreneurship
  • The role of social responsibility in promoting community development
  • The impact of social responsibility on organizational culture
  • The challenges of balancing social responsibility with profitability
  • The role of social responsibility in promoting ethical supply chain practices
  • The benefits of social responsibility for employees and their families
  • The relationship between social responsibility and government regulation
  • The impact of social responsibility on employee engagement
  • The role of social responsibility in promoting social justice
  • The challenges of integrating social responsibility into business operations
  • The benefits of social responsibility for investors and shareholders
  • The relationship between social responsibility and corporate social responsibility reporting
  • The impact of social responsibility on brand loyalty
  • The role of social responsibility in promoting employee wellness programs
  • The benefits of social responsibility for local communities
  • The relationship between social responsibility and social media
  • The impact of social responsibility on organizational performance
  • The role of social responsibility in promoting ethical marketing practices
  • The challenges of implementing social responsibility initiatives in developing countries
  • The relationship between social responsibility and business ethics
  • The impact of social responsibility on employee satisfaction
  • The role of social responsibility in promoting sustainable development
  • The benefits of social responsibility for customers and consumers
  • The relationship between social responsibility and corporate philanthropy
  • The impact of social responsibility on organizational reputation
  • The role of social responsibility in promoting environmental conservation

These social responsibility essay topic ideas and examples can help you brainstorm ideas for your essay and explore different aspects of social responsibility. Whether you are writing about the role of businesses in promoting social responsibility or the impact of social responsibility on society, there are plenty of interesting topics to choose from. Remember to conduct thorough research and provide examples to support your arguments. By writing about social responsibility, you can raise awareness about important issues and inspire others to take action for the betterment of society.

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Accountability

Social and environmental sustainability in undp.

UNDP is committed to ensuring that our programming and operations are socially and environmentally sustainable.

Sustainable Programme and project management

UNDP recognizes that social and environmental sustainability are fundamental to the achievement of sustainable development outcomes, and therefore must be fully integrated into our Programmes and Projects.  To ensure this we have the following key policies, procedures and accountability mechanisms in place to underpin our support to countries:

  • Social and Environmental Standards  for UNDP Programmes and Projects  
  • Project-level Social and Environmental Screening Procedure  
  • Accountability Mechanism with two key functions: 1.  A Stakeholder Response Mechanism that ensures individuals, peoples, and communities affected by UNDP projects have access to appropriate procedures for hearing and addressing project-related grievances. 2.  A Compliance Review process to respond to claims that UNDP is not in compliance with UNDP’s social and environmental policies.

Environmentally sustainable operations

As a global leader in the fight against climate change, UNDP is committed to being green, sustainable, and just. UNDP has been climate neutral in its global operations since 2015 and has made an ambitious commitment to reduce its carbon footprint by 50% by 2050 through the Greening UNDP Moonshot. Read more ...

Sustainable procurement

To help countries achieve the simultaneous eradication of poverty and significant reduction of inequalities and exclusion, while at the same time address the issues of climate change, UNDP makes a shift to more sustainable production and consumption practices. Sustainable procurement means making sure that the products and services UNDP buys are as sustainable as possible, with the lowest environmental impact and most positive social results. Procurement, therefore, plays a key role in contributing to sustainable development.

Please find more information on the UNDP Procurement Website .

Related resources

  • Framework for Advancing Environmental and Social Sustainability in the UN System
  • UN Greening the Blue

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Undp social and environmental standards.

The revised Social and Environmental Standards (SES) came into effect on 1 January 2021 . The SES underpin UNDP's commitment to mainstream social and environmental sustainability in our Programmes and Projects to support sustainable development.

The SES are an integral component of UNDP’s quality assurance and risk management approach to programming. This includes our  Social and Environmental Screening Procedure .

Key Elements of the UNDP's Social and Environmental Standards include: 

Part A: Programming Principles: 

  • Leave No One Behind 
  • Human Rights 
  • Gender Equality and Women's Empowerment 
  • Sustainability and Resilience 
  • Accountability 

Part B: Project-Level Standards:

  • Standard 1: Biodiversity Conservation and Sustainable Natural Resource Management
  • Standard 2: Climate Change and Disaster Risks 
  • Standard 3: Community Health, Safety and Security 
  • Standard 4: Cultural Heritage 
  • Standard 5: Displacement and Resettlement 
  • Standard 6: Indigenous Peoples
  • Standard 7: Labour and Working Conditions
  • Standard 8: Pollution Prevention and Resource Efficiency 

Part C: Social and Environmental Management System Requirements:

  • Quality Assurance and Risk Management 
  • Screening and Categorization 
  • Assessment and Management 
  • Stakeholder Engagement and Response Mechanism 
  • Access to Information 
  • Monitoring, Reporting and Compliance 

UNDP Social and Environmental Standards Cover Image

UNDP's Social and Environmental Screening Procedure (SESP)

Screening and categorization of projects is one of the key requirements of the Social and Environmental Standards (SES) . 

In this regard, the objectives of UNDP's Social and Environmental Screening Procedure (SESP) are to:

  • Integrate the SES Programming Principles in order to maximize social and environmental opportunities and benefits and strengthen social and environmental sustainability; 
  • Identify potential social and environmental risks and their significance; 
  • Determine the project's risk category (Low, Moderate, Substantial, High); and, 
  • Determine the level of social and environmental assessment and management required to address potential risks and impacts.

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The role of social responsibility in protecting the environment – a case of the petrochemical companies in Alexandria Governorate

Review of Economics and Political Science

ISSN : 2631-3561

Article publication date: 14 October 2019

Issue publication date: 11 December 2023

The purpose of this paper is as follows: First, understanding the nature of the relationship between corporate adoption of the concept of societal responsibility [availability of environmental awareness, clear vision of the impact of societal responsibility on financial performance, managers informing employees of the latest developments in societal responsibility programs, managers' response to their corporate social responsibility (CSR) proposals] in the form of an annual report that supports the success of the company's objectives, the company's management encourages employees to participate collectively in societal responsibility programs and to protect the environment from pollution in the petrochemical industry. Second, understand the nature of the relationship between the dimensions of corporate social responsibility concept (cultural, social, economic, ethical and legal) and protect the environment from pollution in the petrochemical industry. Third, the research also seeks to show the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in The Governorate of Alexandria – Egypt, and come out with results and recommendations that could help protect the environment from the forms of environmental pollution resulting from the production processes of this industry.

Design/methodology/approach

The researcher has relied on each of the following approaches: Case study methodology is a research strategy aimed at solving a problem or facing a particular situation. It is based on preliminary hypotheses through full analysis of all data collected and recorded. Which depends on the study of a limited number of cases or vocabulary in-depth comprehensive study through the study of all or a large number of variables overlapping and interrelated and influential on the problem under consideration. Thus, it provides a deep and rich understanding of what is going on around the research and the processes that are related to it, and not only the external or apparent description of the situation or phenomenon; it cares about the total description and looks at the particles, in relation to the whole. Quantitative approach: by giving a numerical description indicating the size or size of the phenomenon or the degree of association with the phenomenon. Other phenomena. Accordingly, the role of the petrochemical companies in Alexandria Governorate, and the social responsibility programs carried out within the governorate in terms of importance, growth and requirements, and the most important characteristics and constraints and components and methods of work and developments have been described. Thus, the researcher can analyze the relationship between CSR and environmental protection from pollution in Alexandria Governorate.

There is paucity in the studies that dealt with the relationship between CSR and environmental protection against pollution in public organizations. There is agreement among the sample on the importance and feasibility of adopting the concept of social responsibility and placing it at the top of the top management concerns, especially in the field of petrochemical companies. With the need to take concrete implementation measures to support social responsibility programs aimed at serving the community among all stakeholders. The effective implementation of the mechanisms for the implementation of meaningful social responsibility programs requires fundamental changes in management practices, existing organizational structures and the quality of personnel working in the relevant departments, in general, and the social responsibility group, in particular, which may be difficult for political and economic reasons.

Research limitations/implications

Time: The study period was set from 2015 to 2017. Place: The study focuses on the petrochemical companies operating in Alexandria. Humanity: The study focuses on the employees of the petrochemical companies operating in Alexandria Governorate.

Practical implications

The adoption of social responsibility positively affects the protection of the environment from pollution, and this effect shows that the adoption of the concept of corporate social responsibility is influenced by the following factors: increasing the participation of workers with healthy environmental contributions to the productive process; increasing the companies' economic and social activities toward protecting the environment from pollution; increasing the capacity of companies to pay greater costs to preserve the environment; increasing the awareness of green consumers with the products it offers Companies; development of continuous internal work environment companies; and clearly defined strategy followed in social responsibility programs.

Social implications

The social responsibility of the public organizations derives their strength through, first, the keenness of these organizations to analyze the variables of the ethical dimension of social responsibility and their availability, which will lead the organizations to provide their services with the highest quality and sincerity. That this analysis (ethics of individuals) as training members of the social responsibility team to solve problems using brainstorming and provide employees with official data related to improving work (ethics of leadership), such as the identification of business objectives through the participation of managers with subordinates, and the punishment of workers who exhibit immoral behaviors (ethics of productive processes) as a decision-making process to ethical standards regardless of the costs involved. When there is an immoral behavior and managers are responsible for implementing the changes needed to reach the targeted outcomes), second, promote partnerships with other relevant sectors for community service.

Originality/value

According to the results of the previous studies and the applied study results, the researcher would like to submit a mechanism to the directors and heads of the boards of directors of the Egyptian petrochemical companies under study.

  • Corporate social responsibility
  • Environment protection
  • Petrochemical industry

El-Mallah, R.K.E.-D. , Aref, A.A.e.H. and Sherif, S. (2023), "The role of social responsibility in protecting the environment – a case of the petrochemical companies in Alexandria Governorate", Review of Economics and Political Science , Vol. 8 No. 6, pp. 487-519. https://doi.org/10.1108/REPS-04-2019-0052

Emerald Publishing Limited

Copyright © 2019, Rasha Kamal El-Deen El-Mallah, Alia Abd el Hamid Aref and Sherifa Sherif.

Published in Review of Economics and Political Science . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

The evaluation of industrial companies is no longer measured by the extent to which the company achieves financial profits or a larger quantity of goods and services. A number of modern concepts have emerged in which organizations have become a legal entity that is treated as a citizen with direct social effects on the surrounding society, especially on the environmental field in which it operates.

The most important of these concepts is the concept of corporate social responsibility (CSR) towards the society in which it is located, the safety and health of its products, and contribution to a range of social activities from combating poverty and pollution control, and the pivotal role it plays in sustainable development processes in its continuous commitment to providing services and goods that achieve a better standard of living and contribute to the development of the environment to benefit them at the community level, and attention to societal responsibility towards the external environment and internal of those organizations.

Nowadays, the importance of applying the concept of societal responsibility in Egyptian public sector has become a new matter of interest for researchers and practicing administrators. How can societal responsibility be an integral part of a company's strategy to interact with society?; Which are supposed to undertake the tasks of making and implementing public policies in general and implementing of environmental policies in particular?; Where the planning of these companies did not include consideration of the environmental and community aspects and increase development, especially in the poor and marginalized areas and increase the green areas and reduce the rates of desertification and reduce the emission of carbon dioxide which is caused of the activities of factories, and increasing afforestation rates and reduce unemployment rates, awareness of fresh water purification and wastewater treatment, treatment of harmful waste and finding safe places for disposal; maintain non-renewable resources, reduce the rates of corruption and bribery and increase levels of transparency, accountability and accountability.

Just as there is a large group of organizations with a high commitment to the environment and the surrounding society, there are, on the other hand, organizations that are not committed and have no initiative in seeking to protect the environment from pollution as a result of the environmental effects of polluting the environment. The environment provides the food consumed by the community and provides it with the air and clean water it needs, and the raw materials that these organizations receive from the environment are brought back to them in the form of waste of various shapes and species, which leads to the rapid work to protect the human and the environment from pollution.

The petrochemical industry is one of the most important strategic industries in Egypt. However, these companies are a source of environmental pollution, which was monitored according to the reports of the Ministry of Environment in some industrial areas of Alexandria, Egypt.

The industrial companies in general and the petrochemical companies in particular are not charitable companies, but their first concern is to achieve a financial return commensurate with the size of their investment. Therefore, these industrial companies adopt their societal responsibilities in general and the environment in particular, which entails additional costs that may not result from other competitors, these companies in solving their environmental problems are working to add competitive advantage to others, as well as supporting the reputation of their products in the internal and external markets. It also helps to accomplish its tasks with different parties with its environmental commitment and obtaining various certificates in this field, the environmental public ecology of the government supports the trend to protect the environment from pollution.

Undoubtedly, urging organizations to adopt societal responsibility leads them to fulfill their commitments to the environment and to support their environmental management within their capabilities and responsibilities as this commitment is an integral part of social commitment.

2. Literature review

The petrochemical industry is based upon the production of chemicals from petroleum and also deals with chemicals manufactured from the byproducts of petroleum refinery. At the preliminary stages of chemical plant development and design, the choice of chemical process route is the key design decision. In the past, economics were the most important criterion in choosing the chemical process route. Modified studies imply that the two of the important planning objectives for a petrochemical industry, environmental risk and the industrial safety involved in the development. So the environmental issues especially CSR and environmental protection from pollution has now become important considerations due to the potential harmful impacts produced by petrochemical industry.

1.1 Theoretical background of corporate social responsibility

Frynas and Yamahaki (2016 , pp. 265-270), summarized the theories used to account for the CSR phenomenon. In a nutshell, the stakeholder theory ( Freeman, 1984 ) was most frequently used in CSR studies, followed by institutional theory ( Scott, 2001 ) and legitimacy theory ( Suchman, 1995 , p. 578). Moreover, the authors classified the theories with respect to CSR practices into the external- and internal-driver groups. The stakeholder theory, institutional theory, legitimacy theory and resource independence theory ( Pfeffer and Salancik, 1978 ) belong to the external-driver group, while the internal-driver group includes the Edith Penrose’s resource-based view ( Lockett and Thompson, 2004 , p. 199; Rugman and Verbeke, 2002 , p. 777) and ( Jensen and Meckling, 1976 , p. 325) agency theory.

According to the resource-based view, firms exploit internal resources (e.g. specialized skills) to create competitive advantages. Under the agency theory, management engages in CSR to communicate to stakeholders about firms’ transparency ( Frynas and Yamahaki, 2016 , p. 260). However, there are replications between different external and internal-driver theories; therefore, the collective use of theories, rather than individually, would offer a more comprehensive view of the CSR phenomenon ( Frynas and Yamahaki, 2016 , p. 281; Reverte, 2009 , p. 358).

As this research aims to determine the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in The Governorate of Alexandria – Egypt.

Companies should work to balance their participation in CSR programs, as very limited participation can have an impact on the company's reputation, and the very broad participation of the company may incur financial losses. It must focus on “social responsibility programs” Ideal for businesses. Regardless of the size of the company is small, medium or large, it must describe its strategy of social responsibility with clearly defined objectives, key performance indicators are measurable and disclosure of frameworks in place.

1.2 Corporate social responsibility in Egypt

Although research studies have become more attentive to examining CSR in developing countries, studies from African countries are still limited ( Kolk and Lenfant, 2010 , p. 247). With the exception of South Africa, Nigeria and Lebanon ( Jamali et al. , 2017 , p. 18).

According to the World Bank projections, Egypt’s economic growth was expected to improve significantly reaching 4 per cent in 2017. This indicates that the Egyptian economy experienced a rapid recovery and maintained its stability in spite of unfavorable political and social conditions. In this respect, the Arab Spring had major consequences for firm operations but did not result in a breakdown of the economy ( Letmathe and El-Bassiouny, 2019 , p. 6).

Marquis and Raynard (2015 , pp. 297-299) highlighted corporate institutional strategies that are mainly applied in weak and challenging institutional environments. The authors classified them into three main strategies, namely, relational, infrastructure-building and socio-cultural bridging. Organizations undertaking relational strategies manage their relationships with both internal and external stakeholder groups and the government to increase the stability and certainty of their resources and to improve their competitive place in the market. Infrastructure building strategies, on the other hand, focus on building absent or limited regulatory and physical infrastructure to facilitate business activities. Organizations adopting sociocultural- bridging strategies focus on improving their socio-cultural and demographic environment, including poverty and political and social unrest, to enhance economic development and trade. All of these strategies aim at effectively managing challenging institutional environments to enhance the firms’ performance and to ensure their long-term survival.

The findings of Letmathe and El-Bassiouny (2019 , p. 12) that some companies added a “CSR” section to their 2012 annual reports. However, there is no substantial change in the disclosure of CSR-related content in the 2012 annual reports compared to Years ago. The political context in which these findings are assessed needs to be taken into account. The national and the institutional environments in which the firm operates affect the promotion of the CSR practice. Egyptian companies suffered financial deficiencies (at least during the revolution year) that would normally redirect their efforts to “survival” economic factors, such as productivity and profitability, rather than to “luxurious” CSR initiatives. However, in spite of these restrictions, sample companies continued their involvement in CSR practices.

There is no doubt that the Egyptian companies contribute annually to a large amount of donations in various charitable aspects. It has contributed to the construction of mosques, the establishment of schools and hospitals, and the support of orphanages, the handicapped and many aspects of righteousness.

However, these donations are spontaneous and ill-considered, which neglects national priorities and focuses on specific areas. As most companies are located within Cairo and Alexandria, this makes them serve certain specific groups without the other. These donations also go to individuals, which makes them go to spend my life and do not go to establish large institutions and facilities, or long-term projects.

Therefore, a central mechanism must be developed that sets out a plan to redistribute corporate contributions according to national and social priorities to achieve real sustainable development.

1.3 The literature review of the relationship between societal responsibility and environmental protection

To develop sustainable business through the implementation of corporate social responsibility, the following are essential: informing and sensitizing all stakeholders, opening channels of communication and transparency between companies and stakeholders, cooperation, strengthening the legal and institutional framework, and voluntary commitment to look at the environment in the long run by companies ( Stojanović et al. , 2016 , p. 11).

Protecting the environment is essential for companies to take care of environmental issues through the management of societal responsibility programs that promote environmental protection, as well as the need for investors and investors to invest in green, and to formulate their investment strategies to take into consideration the environmental aspects ( Andrei et al. , 2014 , p. 5).

The leaders of companies are responsible for the impact of their companies on society and the natural environment beyond the legal commitment and responsibility of individuals and more experienced leaders can gain new perspectives on how to grow in their approach to sustainability and how to develop innovative business models, A pioneer in the principle of senior management and entrepreneurs ( Bhagwat, 2011 , p. 8).

The Polish public sector institutions are taking their first steps in developing internal environmental responsibility because there are no internal mechanisms for environmental responsibility and that there is a significant difference between the environmental responsibility of the organizations in Poland and their counterparts abroad ( Hawrysz and Foltys, 2015 , p. 5).

The laws of environmental protection in India in 1986, in addition to a variety of the environmental policy laws of 2006 are not complied with by companies, which led to the condemnation of industries that damaged the environment and resulted in environmental imbalances. The CSR agenda is only formal as they announce societal responsibility programs to prove that they Officials Socially and human society as a whole to save face, but the fact is that they do this to hide the real activities that they do and do not care about the issues and environmental damage that result ( Tiwari, 2010 , p. 4).

Companies should adopt the concept of social responsibility for their impact on the environment, consumers, employees, communities, stakeholders and all members of society. Accordingly, these companies are working to promote the public interest by encouraging the growth and development of society, and eliminating practices harmful to society.

It must also set limits and controls for growth and progress to be the basis for the well-being, prosperity and happiness of the community to live in a clean, pollution-free environment, and not to waste their time in exploiting natural resources and neglecting the right of future generations to benefit as much as they enjoyed.

1.4 The literature review on societal responsibility

The results of some studies show a positive association between financial performance and CSR ( Platonova et al. , 2018 , p. 461), corporate social responsibility (CSR) practices and models are mainly Western-driven ( Jammulamadaka, 2018 , p. 12).

And the enabling environment is a product of a strong institutional environment that is commonly found in developed markets. On the other hand, lack of competition among firms, inefficient enforcement of regulations and marginal roles of NGOs and employee unions are likely to cause institutional voids that create challenging CSR environments ( Amaeshi et al. , 2016 , p. 137).

The findings of Amaeshi et al. (2016 , p. 149) suggest that in weak institutional environments, companies adopt “CSR adaptive mechanisms” that act as an “institutional buffer,” which immunes companies from their surrounding non-enabling institutional environment and enable them to successfully implement CSR practices.

The impact of the dimensions (responsibility for handling customer complaints, responsibility for providing security to customers when using the service, responsibility for providing adequate and adequate information about the service) on customer satisfaction is greater than the impact of dimensions (responsibility for maintaining customer health, Showing products in suitable places for customers), which illustrates the need to prioritize corporate social responsibility concerns ( Abu-Halaqan, 2014 , p. 133).

an impact on the ethical responsibility of the organization to empower its employees;

the commitment of organizations to assume ethical responsibility for the environment in which they operate; and

there are some fears of departmental directors of delegation of powers and responsibilities.

Ethical codes and moral training do not affect the performance of local government employees, and that the most important element of behavior promotion is ethical leadership, the most important factor in encouraging employees to be ethical. The study noted that the lack of ethical leadership will lead to fraud waste, corruption, ill-treatment and the collapse of the organization ( Elmore, 2011 , p. 163).

There is an inverse relationship between financial performance and CSR over the years of study, which may be due to the recent application of CSR practices by Egyptian companies. Consequently, the positive impact of these practices has not yet been reflected in financial performance in a stable general climate for most periods studying ( Mustafa, 2013 , p. 120).

The study of Al-Tira (2012) concluded that societal responsibility should be integrated into the message, vision and philosophy of Libyan companies and their culture, as well as the need for Libyan industrial companies to fully disclose information related to the social activities carried out during the year and the social costs resulting from them.

One of the pillars of the companies' start up is the complete conviction of shareholders, owners, board of directors and executive management of the importance and importance of social contribution and community service based on a sense of social responsibility and the principle of social solidarity, and any start of companies that are simple and simple are donations and donations to committees and charities accredited and participate in events and events social issues.

Therefore, there is an institutional shift in the establishment of specialized departments in the management and supervision of areas of social responsibility in an institutional and professional manner, which is administratively linked to the executive heads of companies and the allocation of independent financial budgets.

1.5 The literature review on environmental protection

In India TNCs are more effective in paying taxes than local companies, and that foreign affiliates with knowledge of CSR implementation are paying taxes at a higher rate than those of foreign companies less familiar with the concept. This set of findings suggests that TNCs operating in India believe that paying taxes in developing countries has to do with the implementation of CSR ( Muller and Kolk, 2012 , p. 22).

The activity of the economic institutions in Algeria has negative effects on the environment. A large group of these institutions do not pay much attention to integrating the environmental dimension into their activities.

The economic institutions in Algeria are trying to show their interest in the environment by participating in scientific conferences related to the preservation of the environment and protection from pollution. Environmental awareness has been established in these institutions by attempting to contribute to reducing the environmental pollution.

Environmental taxes and fees are an instrument by which the state intervenes to guide the environmental behavior of economic institutions, but they remain very weak, due to their low rates, poor productivity, and inefficient methods of collection.

Pressures of parties with an active interest in the environmental field, these institutions to absorb this pressure through some environmental initiatives, which are few in view of the environmental damage caused by the economic institution.

There are significant effects of different components of environmental management at the level of current output.

The most important ingredient for the compost industry is the environmental component.

The full implementation of ISO 14001 certification in the fertilizer industry in Bangladesh contributes to sustainable development.

Environmental law in Egypt is based on the importance of linking sustainable development and the environment with all its elements and contents. The Environmental Law has been concerned with the studies of environmental impact assessment, which is the new line of defense for environmental protection in the future. No project or facility will be allowed to start its activities without the EIA studies for this project. The law was also called for the establishment of an environmental protection fund to support the project, studies of environmental protection, the establishment of environmental monitoring networks covering the Egyptian territory and recording all pollution and declare emergency at risk.

3. Conceptual framework

Before analyzing the relationship between corporate social responsibility and protect the environment from pollution, we first should define them separately.

3.1 Corporate social responsibility

3.1.1 define corporate social responsibilty according to professional organizations..

According to the increasing importance of societal responsibility as concept, many professional organizations many professional organizations have tried to provide a specific definition of CSR. These definitions are:

Definition of the Organization of International Standards (ISO): Societal responsibility can be defined as “the responsibility of the organization for the effects of its decisions and activities on society and the environment, represented by transparency and ethical behavior consistent with sustainable development and the welfare of society, as well as taking the expectations of shareholders”. As (ISO 26000): Societal responsibility is defined as “translating the decisions and activities of the organization towards society and the environment by adopting transparent and ethical behavior that contributes to sustainable development (including health and welfare in society) takes into account the expectations of stakeholders, And conforms to international standards, so that this concept is incorporated into the organization as a whole, and is practiced and applied at different administrative levels”. (The Boston College Center for Corporate Citizenship – BCCCC) defines Corporate social responsibility as “the business strategy that defines the value model on which the company is based in carrying out its tasks and choices by executives, managers, and employees for engagement in the community”.

3.1.2 Definition of societal responsibility according to academic studies.

Academic studies sought to define CSR as follows:

In terms of modern management, the origin of the societal responsibility concept goes back to the 1950s ( Carroll, 1999 , p. 70). As ( Carroll, 1999 , p. 70): CSR is “The business commitments of policy-making, decision-making and the pursuit of a set of desired behaviors in the light of the goals and values of society” ( Othman, 1999 , p. 9) defines the responsibility of the establishment for the negative environmental effects resulting from its activity in response to social pressure forces, which necessitate carrying out certain mandatory activities to satisfy the social requirements imposed by the prevailing laws, policies and social norms”.

the need for the Organization to examine its decisions and actions so as to take into account the interests of the relevant parties – the parties of workers, customers, the community and the environment – as well as the pursuit of profits.
Corporate social responsibility, as undertaken by a corporation or directed by a state, includes activities that internalize costs for externalities resulting directly or indirectly from corporate actions, or processes and actions to consider and address the impact of corporate actions on affected stakeholders, which are undertaken at least in part because of a recognized moral or ethical duty to society and stakeholders beyond the corporation’s owner/shareholders.

3.1.3 Setting the corporate social responsibility definition for this study.

The current study concludes that CSR is defined as a culture of commitment to the responsibility of companies towards society, so that the interests of all parties to the activity become part of their strategic plans, while providing support from senior management towards sustainable development, including Ensuring the development, prosperity and well-being of society as a whole, protecting and reducing pollution from the environment, developing programs for the training and development of corporate personnel, improving the quality of products and services provided and complying with the laws, regulations and policies of the state.

3.2 Environment protection

In recent decades, many environmental problems have increased as the result of human activities and unplanned management of the technological development those interference eco-systems.

Environmental protection is a social movement. The protection of environment has assumed even more importance in recent times with increased industrialization resulting not only in overdraw of natural resources but also pollution of air, water, flora and fauna. While development is essential to every economy, it is also essential that no irreparable damage be caused to the eco-system ( The Institute of Company Secretaries of India (ICSI), 2005 , p. 301).

[…] the change in the natural characteristics of the elements controlling the environment in which effect human beings live -air, water and soil- change that is detrimental to the improper use of these elements by adding substances that are alien to them. The contamination may be biologically, chemically, Waste and harmful waste or lack of hygiene ( Al-Maazawy, 2004 , p. 8).
Any change in the characteristics of the environment that directly or indirectly affects human health and influences the exercise of its natural life, or damage to natural factors, organisms or biological diversity.

And it also defined as “quantitative change” And qualitative in the environmental components leads to imbalance in nature” Christopher J. ( Barrow, 2000 , p. 25). Or “an undesirable change in the characteristics of the chemical, physical and biological component of environment” ( Wagner, 1994 , p. 20). And it can be “any quantitative or qualitative change in the components of the living or non-living environment that ecosystems cannot absorb without losing their equilibrium” (Dabis, 1997, p. 15).

[…] any change in environmental properties that leads directly or indirectly to undermining man's health, negatively impacting his ability to lead a normal life, or harming natural habitats, living organisms or biological diversity
[…] protecting and promoting the components of the environment and preventing or reducing their degradation or pollution, these components encompass air, seas, internal waters, including the river Nile, lakes and subterranean water, land, natural protectorates, and other natural resources.

Environmental protection can be defined as the prevention of unwanted changes to ecosystems and their constituent parts. This includes the protection of ecosystems and their constituent parts from changes associated with human activities; and the prevention of unwanted natural changes to ecosystems and their constituent parts. Environmental remediation is distinct from environmental protection as its primary objective is to restore an ecosystem or natural environment to a previous state; that is, like exploitation, it is associated with deliberately induced change, as opposed to the prevention of change ( Hamilton and Bastianoni, 2019 , p. 320). And it is policies and procedures aimed at conserving the natural resources, preserving the current state of natural environment and, where possible, reversing its degradation ( Zhang et al. , 2019 , p. 1027).

It is necessary to gain a good understanding of the socio-economic aspects of environmental protection to ensure that measures taken to protect the environment do not place undue burdens on enterprise and society ( Environmental Protection Agency, 2013 , p. 11).

3.3 Setting the environmental protection definition for this study

However, the vision of the current study is that environmental pollution can be defined as all that affects total elements of the living environment of plants, animals, humans and non-living organisms like air, soil and water, whether affects directly or indirectly. This means that any change in the natural qualities of the elements that control the environment in which man lives. Therefore, the concept of Environmental protection can define as preserve and improve the environment components, prevent their degradation or pollution and reduce pollution. These components include air, sea and inland waters including the Nile River, lakes, groundwater and land, natural reserves and other natural resources.

And it determinate the competent administrative agency concerned that protection of the Water Environment; Protection of Land Environment from Hazardous Materials and Waste; protection of Air Environment From Pollution by Harmful Substances and Pollution from Sewage and Garbage.

4. Hypotheses

To ensure a statistically significant relationship between CSR and environmental protection from pollution in Egypt, the following hypotheses were formulated to test the assumed relationship between the search variables:

CSR affects the protection of the environment from pollution.

Adopting the concept of societal responsibility positively affects the protection of the environment from pollution.

The strength of the dimensions of societal responsibility positively affects the protection of the environment from pollution.

5. Methodology

5.1 questionnaire.

The questionnaires were administered to employees of petrochemical companies operating in Alexandria Governorate were managed in seven companies ((EPC) Egyptian Petrochemical Company, (SIDPEC) Sidi Kerir Petrochemicals Company, (ETHYDCO) The Egyptian Ethylene And Derivatives Company, Egyptian Linear Alkyl Benzene (ELAB) (2019) Company, Egyptian Styrenics (EStyrenics) (2019) Company, Alexandria National Refining and Petrochemicals Company (ANRPC) (2019) , Alexandria Specialty Petroleum Products (ASPPC) (2019) Company during the period from October 2017 to December 2018. All locations were repeated on different days of the week to be able to cover all employees. The respondents were contacted on location through a direct and personal interview with the researcher. Before the implementation of the questionnaire, the researcher tested it through a previous sample, to verify whether the questions were clearly understood and analyze the overall degree of answers variability. Before starting the interview, the interviewer presented herself, described the purpose of the study and asked if the respondent knew about the role of their company's corporate responsibility in protecting the environment from pollution. If that was the case, that questionnaire continued until end. A sample of workers produced 134 usable questionnaires.

The degree of adoption of the concept of societal responsibility (CSR) at your company comes through: (included seven phrases).

The strength of CSR programs in your company depends on: (included five phrases).

The company protects the environment from pollution when: (included seven phrases).

Furthermore, in this section the respondents expressed the extent of their agreement using a five-point Likert scale (1 – strongly disagree; 2 – disagree; 3 – neither agree nor disagree; 4 – agree; 5 – strongly agree). Full details can be found in Appendix .

5.2 Description of the sample

The study population consisted of 1,340 managers. A cluster random sample of 134 managers was selected. Depending on the type of problem under study, the main objective of the research is to test a specific imposition of the correlation between two variables: CSR (independent variable) and environmental protection (dependent variable) (Reverse) or reverse (reverse). A review of the previous literature and its findings has led to the formulation of the research hypothesis (CSR affects the protection of the environment from pollution).

On this basis, a questionnaire was used to collect data from the sample items to test the validity or incorrect relationship between the variables in question. The significance of the relationship between the change in societal responsibility and environmental protection was determined during the period (s) in which the research was conducted. Based on this analysis, it is possible to determine whether the hypothesis being tested is acceptable, The Bilateral Test.

The simple linear regression model: ( Y = β■ + β 1 x 1  + ϵ) was used to test the hypothesis.

5.3 Analytical descriptive approach

Qualitative: by describing the phenomenon and clarifying its characteristics; and

Quantitative: by giving a numerical description indicating the size or size of the phenomenon or the degree of association with the phenomenon or other phenomena.

Accordingly, the role of the petrochemical companies in Alexandria Governorate, and the social responsibility programs carried out within the governorate in terms of importance, growth and requirements, and the most important characteristics and constraints and components and methods of work and developments have been described. Thus, the researcher can analyze the relationship between CSR and environmental protection from pollution in Alexandria Governorate.

Time: The study period was set from October 2015 until September 2018.

Place: The study focuses on the petrochemical companies operating in Alexandria Governorate.

Human resource: The study focuses on the employees of the petrochemical companies operating in Alexandria Governorate.

The relationship between variables ( Figure 1 ).

(EPC) Egyptian Petrochemical Company;

(SIDPEC) Sidi Kerir Petrochemicals Company;

(ETHYDCO) The Egyptian Ethylene and Derivatives Company;

(ELAB) Egyptian Linear Alkyl Benzene Company;

(EStyrenics) Egyptian Styrenics Company;

(ANRPC) Alexandria National Refining & Petrochemicals Company; and

(ASPPC) Alexandria Specialty Petroleum Products Company.

Legal framework of the applied study:

According to petrochemical companies legal Department, “Legally”, The Egyptian Petrochemical Company (a public business company) is a member of the Egyptian Petroleum Sector and affiliated to the Egyptian petrochemical holding company (ECHEM), it has been established at 20/9/1981, and started production at September 1987, and the Egyptian Petrochemical Company is the first petrochemical company to produce PVC originating in the Arab Republic of Egypt.

The following companies are listed in the commercial registration (8) for the year 1997 and its amendments, which were canceled and replaced by Law (72) of 2017:

The shareholders of Sidi Kerir Petrochemicals Company are [Egyptian petrochemicals holding company (ECHEM) (20 per cent), Egyptian Petrochemicals Co. (7 per cent), Ahli Capital Holding (7 per cent), National Investment Bank (7 per cent), Government Sector Employees Trust Fund (19 per cent), Private Sector Employees Trust Fund (12 per cent), Misr Insurance Co. (3 per cent), Naser Social Bank (2 per cent) and General Public Offering (23 per cent)].

The shareholders of The Egyptian Ethylene and Derivatives Company are [Egyptian petrochemicals holding company (ECHEM) (20 per cent), SIDPEC (20 per cent), GASCO (11 per cent), Al Ahly Capital Holding (21 per cent) National Investment Bank (14 per cent), Banque Misr (10 per cent), Naser Social Bank (4 per cent)].

The shareholders of Egyptian Linear Alkyl Benzene Company [National Investment Bank (34.15 per cent), Royal Co (0.22 per cent), Ministry of Finance (13.11 per cent), EGPC (10.50 per cent), Egas (21 per cent), Egyptian petrochemicals holding company (ECHEM) (21.01 per cent)].

The shareholders of Egyptian Styrenics Company ( National Investment Bank, Egyptian petrochemicals holding company (ECHEM), Ministry of finance, Petrojet, Enppi).

The shareholders of Alexandria National Refining and Petrochemicals Company [Bank of Alexandria (7.75 per cent), National Bank of Egypt (18.25 per cent), Alexandria Petroleum Company (72.99 per cent), Misr Insurance Company (0.54 per cent), Misr Life Insurance (0.47 per cent)].

The shareholders of Alexandria Specialty Petroleum Products Company [Misr Petroleum Company (12.60 per cent), Alexandria Petroleum Company (20 per cent), CO_OP Company (12.60 per cent), National Bank of Egypt (10.40 per cent), Bank Misr (10.40 per cent), Naser Social Bank (4.20 per cent), Commercial International Investment Company (5.20 per cent), Al Watany Bank of Egypt (5.20 per cent), Misr Insurance Company (5.58 per cent), Misr Life Insurance Company (4.82 per cent), Social Insurance Fund For The Government Sector (4.50 per cent), Social Insurance Fund For Public And Private Sector (4.50 per cent)].

In Egypt, petrochemical companies do not have a separate CSR department so there is no hierarchical structure entailed. They are not familiar with the term of CSR or aware of the global CSR initiatives, even though there is annual Company Report that is published on their website portal (Company Report).

The practical frame mechanisms applied by companies to enhance the idea of societal responsibility and environment protection :

5.4 Societal responsibility

The petrochemical companies are committed to promoting a safe, stable, supportive and productive work environment through the foundations of work and ethical, cooperative and sustainable behavior. These include the vision of petrochemical companies to promote human rights and social values through the integration of societal responsibility within their activities and that codes of conduct have a positive impact on society, rules of international law and standards of conduct. This is to increase the production capacity of high-quality and value added petrochemical products.

Pavement and lighting of the main road leading from and to the companies and surrounding areas, and the paving and development of railway glider.

Contribution and permanent contribution in the field of health and medical treatment and purchase of medical devices, and contribute mainly to convoys of medical treatment and all medical supplies in public hospitals and universities.

Contribution and permanent contribution to charitable societies in areas surrounding petrochemical companies, and provide their needs to upgrade the infrastructure of these areas, and the participation of residents of the region in various events, and donate to government schools.

Rationalize the electricity consumption of some residential areas surrounding the companies, to save energy as part of a lower bill […] Better life. (websites of the seven petrochemical companies).

5.5 Environmental protection

Petrochemical companies are oil companies engaged in the production, processing, operation, treatment, sale, purchase, import and export of final and intermediate petrochemicals, production and sale of electrical power, maintenance, water treatment and industrial drainage and doing everything related to this purpose or helping to complete it. And is committed to ensuring that all its activities are carried out in such a way that the health and safety of all its employees and others are of absolute priority in a moral and professional sense, in the belief that it is of great importance. To maintain ecological balance at the end, it is committed to:

5.5.1 Occupational safety and health activities.

continuous growth while preserving the climate conducive to attraction and retention of qualified persons in the areas of work of the company;

support and continuous development of staff skills to ensure that the leading role in the production and supply of petrochemical materials is maintained;

employees are the driving force must be involved and maintain their safety;

identification of work hazards and the development of adequate means of control to ensure the safety of workers and environmental protection and efficiency of production processes;

training and awareness of all employees in the world's largest oil and petrochemical companies and specialized scientific and research bodies;

excellence with the interests of the surrounding society in mind and its member’s safe without any damage;

preserving the environment is a national duty and a primary objective that the senior management seeks to achieve;

adopting HSE principles as core values;

compliance with all local laws and regulations and international standards;

adherence to ethical and legal behavior;

use the best environmental techniques and practices available to reduce emissions and waste, and to meet the expectations and demands of customers and satisfy them;

application of occupational safety and health management systems OHSAS 18001 and environmental management ISO 14001;

to comply with the ISO 50001 Energy Management System for the purpose of optimizing energy use and preserving natural resources; and

documenting, distributing and monitoring all system management documents and documents to the concerned departments and communicating information related to this subject to all the employees of the company, while providing environmental data and information to the official stakeholders. (websites of the seven petrochemical companies)

5.1.2 Energy management systems.

5.1.2.1 energy..

The Alexandria petrochemical companies have chosen to apply one of the energy handling methods to ensure the improvement of sustainable energy efficiency and continuous improvement of performance, the “energy management system”, to obtain the technical support needed to prepare and implement the requirements of the energy management system in these companies and to obtain the ISO 50001 certificate. November 2011 to be certified to comply with the international standard of energy management system 50001: 2011 to be one of the first Egyptian companies to obtain this certificate and the first among the oil and gas companies and petrochemicals in Egypt, which obtains that certificate, The support of senior management, the formation of the energy team from all disciplines, increased communication with employees and the dissemination of achievements and success stories to motivate employees to participate in the energy efficiency of the company are key factors for SEDEPC's success in implementing the energy management system (Websites of the seven petrochemical companies).

5.1.2.2 Rehabilitation program for petrochemical companies to implement the energy management system.

After participating in the training program organized by the UNIDO in the framework of the project to improve industrial energy efficiency in Egypt and the success of SEDEPC in the implementation of the energy management system resulting in the ISO 50001 certificate, and it expand the exchange of knowledge and expertise acquired in the field of energy management and transfer to other companies.

UNIDO has agreed with the Egyptian Petrochemical Holding Company (ECHEM) to cooperate in the initiation of the project for the rehabilitation of companies within the petrochemical sector to implement the energy management system by supporting the national experts of SEDEPC to transfer their knowledge and expertise to the petrochemical sector in Egypt. Training and technical support were provided by SEEDBEC to 30 trainees representing six of the following petrochemical companies: EStyrenics, ELAB and ECHEM. The results of this training and technical support included 22 trainees with the “National Expert in Energy Management System from UNIDO” (Websites of Sidi Kerir Petrochemicals Company and Egyptian Petrochemical Holding Company).

5.1.2.3 Quality.

Petrochemical companies apply the concept of quality to all operations. EPC has obtained the OHSAS 18001-2007 certificate, ISO 14001-2015 certificate and the ISO 9001-2015 quality system certification certificate (Egyptian Petrochemical Company website).

While SIDPEC has been certified to comply with the requirements of ISO 9001-2015, the ISO 50001-2011 certification certificate, the 6 Sigma Black Belt certificate, the ISO 26000 compliance letter to demonstrate compliance with the requirements of ISO 26000 In the field of sustainability and societal responsibility, by receiving the National Award for Excellence from the National Institute of Quality of the Ministry of Commerce and Industry within the National Program of Excellence Awards for 2013 (Sidi Kerir Petrochemicals Company website).

ETHYDCO, in the first half of year 2018, obtained the following International Certificates: ISO 9001:2015 Certificate (Quality Management System), ISO 14001:2015 Certificate (Environmental Management System), OHSAS 18001:2007 Certificate (Occupational Safety and Health Management System), and ISO 50001:2011 Certificate (Energy Management System).

Moreover, total quality management systems general department in ETHYDCO is making great efforts to qualify the company to obtain: ISO 17025:2017 (General requirements for the efficiency of testing and calibration laboratories), and ISO 26000:2010 (Societal Responsibility). (The Egyptian Ethylene and Derivatives Company website).

ELAB entered an agreement with Energy and Environmental Studies Center, affiliate to Tebeen Institute for Metal Studies as an accredited third party to perform environmental measurements twice per year inside work environment according to Egyptian Environmental Affairs Agency, Law No. 4 ( (1994) and law no.9/2009. The periodical measurement procedures are performed by the company through environmental monitoring vehicle owned by the Petroleum Committee in Alexandria Region (Egyptian Linear Alkyl Benzene Company website).

Societal responsibility investment combines ESTYRENICS’s financial goals with our obligation and dedication to factors that ensure the well-being of society such as environmental friendly practices, economic growth and justice in society.

Corporate societal responsibility is no longer defined by how much money ESTYRENICS contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives (Egyptian Styrenics Company website).

ANRPC has been accredited by Compliance Certificate for the occupational health, safety and environmental protection with honors degree, the renewal of the OHSAS18001: 2007 certification and ISO14001: 2004 certification through SGS International Company. ANRPC is committed to ongoing training systems to the safety, occupational health and environmental protection team to obtain international certifications such as: NEBOH certificate, certificates of various OSHA, Foam Training School Certificate, Fire Marshal certificate, NASP-OHSAS certificate 18001: 2007, ISO14001: 2004 (Alexandria National Refining and Petrochemicals Company website).

Environmental advantages of ANRPC and ASPPC products: cold applications, environmentally clean and solvent free products, safely handled and applied no harmful disposals during or after applications, energy conservation (Alexandria Specialty Petroleum Products Company website).

6. Results and discussion

6.1 study population.

The study population consists of managers in petrochemical companies operating in Alexandria Governorate. Emphasis was placed on the Governorate of Alexandria because it is the second largest city in Egypt, and it includes seven of petrochemical companies, it is the governorate in which the researcher lives, and no other governorates were selected due to the high costs.

The Governorate of Alexandria has a number of industrial zones, which number to about nine industrial zones and thus is considered an important industrial city in the Egyptian economy. These areas are (New Borg El Arab, Nahda Industrial Zone, Mansheya Al Jadida Industrial, Nasiriyah Industrial Zone, The Agamy Small Industries Complex, the industrial ship factory area in August).

The petrochemical industry is one of the main pillars of Egypt's future economy, which is based on value added as a principle in the exploitation of natural resources. The oil sector is considered one of the sectors that has a clear vision and a specific work program for the implementation of new projects, development of existing projects, and continuous attention to the maintenance process to achieve the increase in production and the provision of direct jobs and raw materials to establish many industries that rely on petrochemical products as inputs For the productive process, and the most important projects and companies operating in the city of Alexandria:

The production of (polyvinyl chloride) (PVC) by the Egyptian Petroleum Company (EPC) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in 1981 with a production capacity of 80,000 tons/year using ethylene as raw material.

The production of (polyethylene) by Sidi Kerir Petrochemicals Company (SIDPEC) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in November 1997, a company listed on the Egyptian Stock Exchange since March 2005.

The production of (Road Emulsion, Compounded Waxes, Petroleum Jelly, Cutback and Industrial Emulsions) by Alexandria Specialty Petroleum Products Company (ASPPC) is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since its establishment in February 1998.

The production of (Reformate 560,000 ton/year its RONC 100, Hydrogen 33,000 t/year, Sweet LPG 12000 t/year) by (ANRPC) Alexandria National Refining and Petrochemicals Company is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since was established in 1999, and in September 2013, the Zero Liquid Discharge (ZLD) unit and the company's Naphtha Hydrogen Processing Unit were launched.

The production of ((LAB) Linear Alkyl Benzene, (HAB) Heavy Alkyl Benzene) by Egyptian Linear Alkyl Benzene Company (ELAB) is headquartered in Wadi El-Kamar Road, Merghem, in Agami district in Alexandria city since its establishment in November 2003.

(EStyrenics) Egyptian Styrenics Company was established in September 2005 and is headquartered in El Dekheila Port in Agami district, Alexandria city. It produces (polystyrene, styrene monomer) with a production capacity of 200 thousand tons/year from March 2009.

The production of (Linear Low and High Density Polyethylene, Polybutadiene) by the Egyptian Ethylene and Derivatives Company (ETHYDCO) is headquartered in the industrial renaissance Elnahda zone in Ameria district in Alexandria city since its establishment in January 2011.

Therefore the petrochemical industry is one of the most important strategic industries in Egypt. However, these companies are a source of environmental pollution, which has been monitored according to the reports of the Ministry of Environment in some industrial areas in Alexandria. The researcher seeks to show the role of societal responsibility and its application in the petrochemical companies to protect the environment from pollution in Alexandria.

6.2 Study sample

The study population consisted of 1,340 managers. A cluster random sample of 134 managers was selected. The sample size was determined using the equation ( Agresti and Finlay, 2002 , p. 148). This equation is as follows: n =   N   Z ∝ / 2 2   π   ( 1 - π ) β 2   N - 1 +   Z ∝ / 2 2   π   ( 1 - π )

N = size of the population;

n = sample size;

Z = Probability value for the confidence interval of Z table “normal distribution”where Z at 95 per cent confidence level = 1.96;

β = permissible error rate = 0.05 which is the maximum allowed statistically; and

π = the percentage of the sample of the society which is the maximum allowed statistically = 50 per cent ( Table I ).

6.3 The variables of the study

Table II shows the variables of the study in accordance with the recent studies and literature of the CSR criteria. They are the determinants of societal responsibility, the power of societal responsibility, the degree of awareness and commitment to societal responsibility as independent variables, and the societal responsibility and the protection of the environment from pollution as variables affiliate.

Despite the possibility of other elements to identify the criteria of societal responsibility adopted by industrial companies in general and petrochemical companies in Alexandria in particular, but the researcher was limited to the elements specified in the list of the survey as it includes the standards used in the previous studies that were reviewed in advance by the researcher and what prompted them to quote and guide them.

6.4 Sources of data acquisition

The applied study on data collection was based on primary sources through a survey list, which is the main measuring instrument and was designed to cover all the variables of the study.

6.5 Methods of data collection

The researcher relied on the use of the survey list in collecting the data needed to conduct the field study, in addition to conducting some personal interviews for the managers to verify the validity of the information contained in the questionnaires after collection and to obtain any other information that would be useful for the field of study. The researcher measured the variables of the study, which included (18) phrases for each of the variables that are performed in companies that adopt the concept of societal responsibility to protect the environment from pollution using the (Likert scale), which is one of the most widely used measurements Reviews for easy to understand and balance grades where individuals subject refers to test the extent of their approval of each of the statements that make up the proposed trend scale.

The responses were translated as follows:

adopting societal responsibility and expressed in (7) phrases;

the strength of societal responsibility and expressed in (5) phrases; and

protection of the environment from pollution and expressed in (6) phrases.

After the researcher formulated the paragraphs of the list in its initial form, the truth was verified through content validity.

The validity of the content was verified by arbitrating this form before it was distributed by the faculty members from the administrative and statistical departments to benefit from their knowledge and knowledge curve, which earned them an outstanding reputation in their specialties, which made the form more accurate and objective in the measurement. Arbitrators all the observations mentioned have been taken into consideration.

The reliability of the parameters used by the Cronbach alpha method has been verified. The Cronbach alpha method is based on the consistency of the individual performance from one paragraph to another, indicating the strength of the correlation between the scales of the scale and, in general, of the correct one as the degree of consistency and consistency increases.

The researcher also used the method of direct contact through personal interviews with the officials of the sectors and the main departments of the companies under study, and was handed over (120) form by hand to the surveyed groups, has been clarified and understood and explained the nature and objectives of the survey and was followed up again until it was completed Table III shows the number of distributed lists, the number of recovered and correct lists and the response rate.

It is clear from the previous table that the number of survey able inspection lists (100) at a response rate is 83 per cent of the total survey lists that have been distributed and this ratio is fairly high.

6.6 Methods of statistical analysis and hypothesis testing

To achieve the objectives of the study, the primary data collected through the survey tool using the computer was analyzed through the program of statistical packages for social sciences (SPSS), No. 23, to test the type and strength of the relationship between the variables and to verify the difference between the independent variables The researcher used the appropriate statistical methods to analyze the results of the survey. The analysis was done on three levels.

Verification of honesty; and

Cronbach’s alpha coefficient to confirm the degree of stability of the scale used to measure the variables of the study.

Using descriptive methods: The results of the study were calculated to determine the extent to which the sample variables supported the availability of the variables of the study and the standard deviation to identify the extent of variance in the responses of the sample items (the respondents), the percentages and the difference coefficients.

Using simple liner regression method: This method helps determine the relative importance of the independent variable in its effect on the dependent variable.

First, to test the validity and accuracy of the measurements used in measuring the variables of the study based on the Cronbach’s alpha coefficient, this method calculates the mean correlation coefficients for all variables. The results of the study showed that all measurements were reasonably reasonable for stability, ( Sekaran, 2003 , P. 245). The results of the study showed that all measurements were fairly reasonable. Table IV presents the results of these tests.

All alpha coefficients for stability are greater than 0.60 indicating the high internal consistency of the scale and thus the stability of the scale.

The highest stability coefficient for the dimensions of the list is (0.91) related to the variable of environmental protection from pollution, while noting that the minimum value of stability was (0.82) of the variable dimensions of societal responsibility. Generally, the transactions show the stability of the results that can result from the survey list applied, previous analysis standards are true and consistent and this means the validity of standards and their validity to collect data.

6.7 Descriptive analysis

For data, the researcher used the arithmetical averages, standard deviations and variance coefficients as shown in Table V .

The above table shows that the variable of societal responsibility was the most influential in companies operating in the petrochemical sector with an average score of (3.90) and a standard deviation of (0.228) and a difference coefficient of (5.85 per cent) which shows the low dispersion in the responses of the sample of the study sample, (0.306) with a difference coefficient of (10.37 per cent). Finally, the variable environmental protection from pollution is calculated with a mean (3.34) and a standard deviation (0.825) with a difference coefficient of (24.70 per cent).

6.8 Test assignments

The researcher examined the main hypotheses of the study and focused on testing the acceptance or rejection of the study hypotheses through the use of simple regression model.

The researcher examined the main hypothesis of “CSR affects the protection of the environment from pollution”. And focus on testing the acceptance or rejection of the study hypotheses through the use of simple regression model and derived from the main hypothesis sub-assumptions:

The first sub-hypothesis: “The adoption of societal responsibility positively affects the protection of the environment from pollution”.

The first sub-hypothesis validity test: Table VI shows the results of the simple regression analysis test for the effect of societal responsibility on protecting the environment from pollution.

At the beginning, we evaluated and impact of adopting the concept of corporate societal responsibility to protect the environment from pollution. The aim of this procedure was to know whether environmental issues and environmental protection from pollution in petrochemical companies are related to the extent of adoption of the concept of societal responsibility.

For the statistical analysis, we set the hypothesis, “The adoption of societal responsibility positively affects the protection of the environment from pollution”. The analysis was carried out via discrimination of statistical hypothesis: There is no positive effect to adopt societal responsibility to protect the environment, or there is a positive impact to the adoption of societal responsibility to protect the environment.

The impact of the adoption of societal responsibility to protect the environment from pollution.

The results of the statistical analysis showed that there is a significant effect of societal responsibility on protecting the environment from pollution. The correlation coefficient reached 0.92 at a significant level of 1 per cent. This means that there is a significant positive correlation between the variable of societal responsibility and variable Protect the environment from pollution.

The coefficient of R 2 determination is (0.85), meaning that 0.85 of the changes in the environmental protection variable from pollution are due to the variable of societal responsibility and 15 per cent due to other factors. Therefore, this model is characterized by quality. The independent variable selected explains about 85 per cent of the changes Occur in the dependent variable (environmental protection from pollution).

In finding that the value of the effect of the coefficient of societal responsibility ( β ) is (0.763). This means that the increase in one degree in (x 2 ) leads to an increase in the environmental protection variable from pollution by (0.763).

The value of F is calculated at 545.36. The significance of this effect is the calculated value of F (545.36), which is significant at sig = 0.000.

Positive reference coefficient of independent variable regression Adopted societal responsibility (x 2 ) with the dependent variable environmental protection from pollution (y).

This means acceptance of this hypothesis, and the ability of this variable to contribute to the interpretation of the change in the protection of the environment from pollution, and therefore we reject the zero hypothesis and accept the alternative hypothesis.

clear vision on the impact of societal responsibility on financial performance;

the environmental awareness of senior leadership and employees;

managers should inform employees about the latest developments in societal responsibility programs;

the company's role towards societal responsibility supports the members of the community in the success of the objectives of the company;

transparency in the presentation of data by disclosing the company's societal responsibility programs as an annual report;

the company's management encourages employees to participate collectively in societal responsibility programs; and

managers respond to employees about their CSR proposals.

This will lead the petrochemical companies to respond to the requirements of its social environment, the rights of the community, and the interests of their stakeholders in making decisions. Petrochemical companies must take actions on the effects of the decisions on all stakeholders of society. Making balance between their interests and the interests of the beneficiaries, which is ultimately protects the environment from pollution. This finding is consistent with the study of Hawrysz and Foltys (2015) , Andrei et al. (2014) , Al-Tira (2012) , Bhagwat (2011) and Tiwari (2010) .

The second sub-assumption: “The dimensions of societal responsibility positively affect the protection of the environment from pollution”.

The Second sub-hypothesis validity test: Table VII shows the results of the simple regression analysis test of the impact of societal responsibility dimensions on environmental protection from pollution.

The researcher evaluated and impact of the dimensions of societal responsibility to protect the environment from pollution. The aim of this procedure was to know whether environmental protection from pollution in petrochemical companies are linked to the impact of societal responsibility dimensions, and the extent to which these dimensions influence them.

For the statistical analysis, we set the hypothesis, “The dimensions of societal responsibility positively affect the protection of the environment from pollution”. The analysis was carried out via discrimination of statistical hypothesis: There is no positive effect to the dimensions of societal responsibility to protect the environment, or: There is a positive impact to the dimensions of societal responsibility to protect the environment.

The results of the second sub-hypothesis test are shown from the figures in Table VII to the regression model estimates of the relationship between the variable of societal responsibility dimensions as an independent variable and the variable protection of the environment from pollution as a dependent variable.

The impact of the dimensions of societal responsibility on the protection of the environment from pollution.

The coefficient of R 2 determination is 0.72, meaning that 0.72 of the changes in the environmental protection variable from pollution are due to the variable of societal responsibility dimensions and 26 per cent are due to other factors. Therefore, this model is characterized by quality. The selected independent variable explains about 72 per cent which occur in the dependent variable (environmental protection from pollution).

In finding that the value of the degree of influence of the social liability dimension ( β ) is (0.638). This means that the increase in one degree in the dimensions of societal responsibility leads to an increase in the protection of the environment from pollution by 0.638.

The value of F is calculated at 267.99. The significance of this effect is the calculated value of F (267.99), which is significant at (sig = 0.000).

Positive reference coefficient of independent variable regression societal responsibility dimensions with dependent variable Environmental protection from pollution.

the strength of the economic dimension;

the strength of the cultural dimension;

the strength of the legal dimension;

the strength of moral dimension; and

the strength of the social dimension.

Our results confirm that strategic CSR is contingent to financial performance, befitting its role as the basic economic unit in a market economy; the first and foremost societal responsibility must be economic in nature. As a basic economic unit in society, the economic dimension of a corporation's social behavior extends to the production of goods and services demanded by society and available to them at reasonable and acceptable profit. The primacy of this dimension of CSR is based upon the fact that all other societal responsibilities borne or expected of a business are predicated on this fundamental obligation. This finding is consistent with the study of McWilliams and Siegel (2011) .

The second ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the cultural dimension, societal responsibility is an organizational culture that must be disseminated among the employees of the company. It is to respect human rights, support cultural development, spread commitment to the laws and regulations of the society, promote national culture and cultural communication locally, regionally and globally and support cultural and civilizational activities ( Halkos and Skouloudis, 2016 ).

The third ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the legal dimension, because businesses must operate within the legal framework in achieving their business objectives ( Mohammed and Rashid, 2018 ).

The fourth ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the moral dimension, there are some elements of business behavior and activities cannot necessarily be codified into the regulatory frame, are unwritten and is an implicit social contract that businesses have with society and often acts as the source and base for extensions into the explicit social contracts embodied and codified in the formal legal framework, society has expectations of business to exhibit social behavior over and above the mandatory requirements imposed on them ( Trevino and Nelson, 1999 ).

The fifth ranking of the impact of the strength of the dimensions of corporate societal responsibility on protect the environment from pollution in the petrochemical companies is the social dimension, this dimension refers to relationship between all types of organizations and society in general ( Currás‐Pérez et al. , 2017 ).

This finding is consistent with the study of Stojanović et al. (2016) , Zanat (2016) , Mohamed Arfa (2015), Abu-Halaqan (2014) , Muller and Kolk (2012) , Elmore (2011) , Sajib et al. (2011) .

General results

There is paucity in the studies that dealt with the relationship between CSR and environmental protection against pollution in public organizations.

There is agreement among the sample on the importance and feasibility of adopting the concept of societal responsibility and placing it at the top of the top management concerns, especially in the field of petrochemical companies. With the need to take concrete implementation measures to support societal responsibility programs aimed at serving the community among all stakeholders.

The effective implementation of the mechanisms for the implementation of meaningful societal responsibility programs requires fundamental changes in management practices, existing organizational structures and the quality of personnel working in the relevant departments in general and the societal responsibility group in particular, which may be difficult for political and economic reasons.

Results of the applied study

increasing the participation of workers with healthy environmental contributions to the productive process;

increasing the capacity of companies to cope with disasters and environmental crises;

increased commitment of companies to implementing environmental public policies;

increasing the companies' economic and social activities towards protecting the environment from pollution;

increasing the capacity of companies to pay greater costs to preserve the environment;

increasing the awareness of green consumers with the products provided by companies;

development of continuous internal work environment companies; and

clearly defined strategy followed in societal responsibility programs.

The keenness of these organizations to analyze the variables of the ethical dimension of societal responsibility and their availability, which will lead the organizations to provide their services with the highest quality and sincerity. And that this analysis [(ethics of individuals) as training members of the societal responsibility team to solve problems using brainstorming and provide employees with official data related to improving work, (Ethics of leadership), such as the identification of business objectives through the participation of managers with subordinates, and the punishment of workers who exhibit immoral behaviors (ethics of productive processes) as a decision-making process to ethical standards regardless of the costs involved. When there is an immoral behavior and managers are responsible for implementing the changes needed to reach the targeted outcomes];

Promote partnerships with other relevant sectors for community service;

Align the mission and objectives of the organization with the goals and values of the community in which it operates;

Ensure compliance with legislation and laws that urge organizations to increase transparency and disclosure while providing incentives for the distinction of working organizations In the area of societal responsibility and environmental protection; and

To develop an integrated strategy for the culture of the organization on the societal responsibility programs to be provided by the organization by applying and practicing the work ethic to protect the environment from pollution on the other to motivate the workers to practice the best behavior towards work and to participate in training programs to disseminate the principles of work ethic and culture of societal responsibility among them, Giving them better opportunities to develop their skills and experience and enhance their motivation to work.

Petrochemical companies, especially public and private sector companies, produce goods and products in an environmentally friendly manner, taking into consideration waste recycling and wastewater treatment, continuous monitoring of any type of radiation or emission of harmful gases such as carbon dioxide. Such treatment should not be limited to guidance from before the EEAA or by the sovereign agencies of the state or under the pressure of laws, but must be paying attention to the development of the educational axis and support the educational aspect constantly.

Although all CSR programs within Egypt are philanthropic and humanitarian, there is still a difference between the nature of these programs offered by the public sector companies and the government sector for the private sector companies, especially in the field of environmental protection against pollution. Therefore, these efforts should be consolidated through the work of partnerships directed by the private sector towards the social imbalance that is required to be reformed.

Recommendations of the study

increase the participation of workers with healthy environmental contributions in the production process and increase the ability of companies to cope with disasters and environmental crises;

increase the commitment of companies to implement environmental public policies and guide their economic and social activities towards protecting the environment from pollution;

increase the capacity of companies to bear greater costs to preserve the environment and increase the awareness of the green consumer with the products provided by companies;

develop the internal work environment of companies with a clear definition of the strategy followed in societal responsibility programs;

the organizations' keenness to analyze the variables of the ethical dimension of societal responsibility and training the members of the team on societal responsibility to solve problems using brainstorming;

encourage other relevant companies to serve the community; and

develop an integrated strategy for the culture of the organization on the programs of societal responsibility to protect the environment from pollution and interest in involving staff in training programs to disseminate the principles of ethics.

Conclusion and future studies

The issue of societal responsibility and ethical aspects is of great importance at the present time due to the increasing influence of organizations and the increasing criticism directed at them in aspects related to the legitimacy of its work and mechanisms such as cases of corruption and unethical decisions affecting society and the environment. With the increasing role of business organizations in civil society and lobbying groups because of the spread of knowledge and the speed of communication, government organizations are obliged to enhance their social performance, especially petrochemical companies, to many community groups. All these issues have forced the management of governmental and private organizations to broaden the perspective through which they see their social role and their humanitarian performance toward different segments of society.

Finally, regarding future research lines, it would be very interesting to examine the proposed model by collecting data from a significantly large source and examining the hypothesized relationships, and it would also be very useful to analyze alternative channels of influence of legal form and environmental policy on the protection of the environment in oil and gas companies.

Distribution of study population and study sample for 2017

Companies Study population Study sample
1 Egyptian Petrochemical Company 450 45
2 Sidi Kerir Petrochemicals Company 150 15
3 The Egyptian Ethylene And Derivatives Company 150 15
4 (ELAB) Egyptian Linear Alkyl Benzene Company 150 15
5 Egyptian Styrenics Company 150 15
6 Alexandria National Refining and Petrochemicals Company 150 15
7 Alexandria Specialty Petroleum Products Company 140 14

Study variables

Independent variables Conceptual indicators
Adopt societal responsibility (x1) Availability of environmental awareness
Clear vision on the impact of societal responsibility on financial performance
Managers inform employees about developments in societal responsibility programs
Managers respond to employees about their CSR proposals
Disclose societal responsibility as an annual report
The company's role towards societal responsibility supports the members of the community in the success of the objectives of the company
The company's management encourages employees to participate collectively in societal responsibility programs
Dimensions of the power of societal responsibility (x2) The strength of the social dimension
The strength of the economic dimension
The strength of moral dimension
The strength of the legal dimension
The strength of the cultural dimension
dependent variables Conceptual indicators
Protecting the Environment from Pollution (y) Prepare reports on pollution control and industrial waste
Develop plans for environmental improvement of industrial processes
A record of hazardous waste
The existence of standards for the prevention of major industrial accidents
Prepare reports on environmental auditing and programs for environmentally educating and training workers
Awareness of local and international environmental requirements and standards for the protection of the environment

Distributed and retrieved lists and response rate

Statement No. of distributed lists No. of recovered and sound lists Response rate(%)
Petrochemical companies 120 100 83

The degree of stability of the measurements used to measure the variables studied

Dimensions Phrase numbers in the survey list No. of phrases Stability (α)(%) Honesty(%)
1 Adopt societal responsibility (x ) (1–7) 7 71 84
2 Dimensions of societal responsibility (x ) (8–12) 5 68 82
3 Environmental Protection from Pollution (y ) (13–18) 6 82

Order of the importance of study variables

Variables SMA Standard deviation Coefficient of variation(%) Ranking
1 Adopt societal responsibility (x ) 3.9 0.288 5.85 The first
2 Dimensions of societal responsibility (x ) 4.3 0.446 10.37 The second
3 Environmental protection from pollution (y) 3.34 0.825 24.70 The third

Simple regression analysis results of the effect of societal responsibility on protecting the environment from pollution

Statement F test Sig
Variables Regression coefficient
Protecting the environment from pollution (y) 0.92 0.85 545.36 0.000 Constant 1.004
0.000 Adopt societal responsibility (x ) 0.763
Note:
Statement F test Sig
Variables Regression coefficient
Protecting the environment from pollution (y) 0.85 0.72 267.99 0.000 Constant 1.004
0.000 Dimensions of societal responsibility (x ) 0.763
N Phrases

Agree or disagree scores
I absolutely disagree Disagree Neutral I agree I fully agree
The degree of adoption of the concept of societal responsibility (CSR) at the company comes through:
1 Availability of environmental awareness
2 Clear vision on the impact of societal responsibility on financial performance
3 Managers inform employees about developments in societal responsibility programs
4 Managers respond to employees about their CSR proposals
5 Disclose societal responsibility as an annual report
6 The company's role towards societal responsibility supports the members of the community in the success of the objectives of the company
7 The company's management encourages employees to participate collectively in societal responsibility programs
The strength of CSR programs depends on:
1 The strength of the social dimension. When the company performs its business and services with high quality and energy efficiency through the use of modern technology in product design, providing raw materials, reducing pollution and waste and maintaining environmental balance
2 The strength of the economic dimension. When the company preserves natural resources and rationalizes their consumption by setting a clear environmental policy and linking the analysis of environmental and social role and the proper environmental contribution to production processes
3 The strength of moral dimension. When the company maintains the rights of the community through a clear vision of the concept of societal responsibility and the dissemination of environmental culture among its employees of the company and protection of the environment from the effects of industrial waste and committed to honesty in all business dealings in ways that are clear and non-twisted
4 The strength of the legal dimension. When the company's commitment to local laws in the course of its activities through the dissemination of a culture of adherence to the laws and regulations in the society, support and respect for human rights declared globally and the establishment of legal entities (units, departments) whose task is to work according to the system of institutions sponsoring the concept of societal responsibility
5 The strength of the cultural dimension. When the company develops environmental and social awareness among customers and suppliers by organizing awareness campaigns on the importance of the environment and implementing programs to protect and preserve the environment
The company protects the environment from pollution when:
1 Prepare reports on pollution control and industrial waste
2 Develop plans for environmental improvement of industrial processes
3 A record of hazardous waste
4 The existence of standards for the prevention of major industrial accidents
5 Prepare reports on environmental auditing and programs for environmentally educating and training workers
6 Awareness of local and international environmental requirements and standards for the protection of the environment

The survey method

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the role of social and environmental responsibility essay

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Raleigh Kung has been a social-media specialist and copywriter since 2010. He has worked with various companies on their online marketing campaigns and keeps a blog about social-media platforms. Now, he mainly writes about online media and education for various websites. Kung holds a master's degree in management and entrepreneurship from the University of San Francisco.

Corporate social responsibility research: the importance of context

International Journal of Corporate Social Responsibility volume  1 , Article number:  2 ( 2016 ) Cite this article

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There has, in recent times, been an increasing interest in understanding corporate social (and environmental) responsibility (CSR) and, in particular, CSR reporting in developing countries. However, many of these studies fail to investigate fully the contextual factors that influence CSR and reporting in those countries, preferring to rely on theories and hypotheses developed from studies undertaken in the West, particularly the US, UK and Australasia.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. Notwithstanding this, a large number of these countries have an entirely different socio-political environment, with different political regimes, legal systems and cultural influences. These factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

In State Capitalist countries, such as China, an important influence on companies is the political ideology that underpins the nation’s government. The nature and impact of ideology and hegemony in China has been under-studied and, therefore, investigating how the ideology, and competing forces that may mitigate its influence, manifest themselves in Chinese reporting are essential. In the Middle East, countries such as Saudi Arabia have no free press, are ruled by a royal family, have a market dominated by the oil industry, and potential religious influences. Such socio-cultural differences mean societies develop different understandings of concepts such as sustainability and social responsibility. Finally, countries such as Sri Lanka have some similarities to other developing countries, but their economy is set against a background of a recent civil war – operating in a post-conflict economy is a factor rarely considered in social and environmental disclosure, yet has important influence on policy in these areas.

This paper discusses three contextual issues that warrant more and improved consideration in CSR research, with particular emphasis on CSR reporting research.

More and more corporations worldwide are involved in corporate social responsibility activities, and as a result are providing more social and environmental information to the public. Following from this, CSR disclosure, or reporting, has become one of the major fields of investigation by accounting scholars (Deegan 2009 ; Mathews 1997 ; Tilt 2001 ). Research that considers both CSR activity and CSR reporting has traditionally focused on companies in more developed economies, predominantly the US, UK, Australia and New Zealand (Burritt and Schaltegger 2010 ; Frost et al. 2005 ; Gray 2006 ; Gurvitsh and Sidorova 2012 ; Othman and Ameer 2009 ; Patten 2002 ; Sahay 2004 ), but recently there has been increasing interest in understanding the phenomenon in developing countries particularly as they experience growth and move towards a more capitalist orientation (Sumiani et al. 2007 ). Of the research that does exist, a number of papers suggest that ‘country’ is a determinant for CSR involvement and for the level of disclosure, but do not go much further.

Many of the studies of developing countries however, choose a framework for their investigation based on those shown to be meaningful for explaining disclosure in developed, capitalist economies. That is, they fail to investigate fully the contextual factors that influence firms and their reporting in those countries that have a different social, political, legal and/or cultural context.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. However, this is rarely acknowledged or questioned in these papers. Yet, it is reasonable to suggest that these factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

The majority of the world’s population lives in developing countries and each country experiences its own unique social, political and environmental issues (United Nations 2013 ). These countries are in the process of industrialisation and are often characterised by unstable governments, higher levels of unemployment, limited technological capacity, unequal distribution of income, unreliable water supplies and underutilised factors of production. As a result of rapid industrial development, policies are pursued that aim to attract greater foreign investment, and the investors are often keen to start benefitting from fiscal incentives and cheap labour. While these strategies make economic sense, they have adverse social and environmental effects, including the use of child labour, low or unpaid wages, unequal career opportunities, occupational health and safety concerns, and increased pollution.

In a review of the literature on determinants of CSR reporting (Morhardt 2010 ), reports that research on the impact of different variables in different regions is inconclusive due to the lack of enough studies. Factors that may influence CSR disclosure practices fall broadly into internal and external (Fifka 2013 ; Morhardt 2010 ), but are commonly classified further as (Adams 2002 : p224):

Corporate characteristics, such as size, industry group, financial/economic performance and share trading volume, price and risk;

General contextual factors, such as country of origin, time, specific events, media pressure, stakeholders and social, political, cultural and economic context; and

Internal contextual factors, including different aspects of corporate governance.

While CSR reporting has been studied by a large number of scholars, only a few fall into the second of the categories above, and consider context in detail. This is particularly relevant when considering developing countries. A few papers have specifically reviewed studies on developing countries. For example, (Belal and Momin 2009 ) categorise the work on developing countries into three groups: studies of the volume or extent of reporting; studies of the perceptions of CSR reporting by managers; and studies of the perception of CSR reporting by stakeholders. In all the studies reviewed there is little discussion of the context, other than a description of the country, and no real thought about the theoretical assumptions being made.

This paper presents a discussion of the different contextual issues or factors that show some evidence or potential to influence CSR and reporting in developing countries. It focusses on three specific issues and provides a research agenda for future consideration of the influence of context in CSR reporting research. The paper is structured as follows. The next section introduces some broad contextual factors that warrant consideration in the literature on CSR reporting. Next, three specific contextual issues are examined: the role of political ideology and hegemony; the influence of cultural understandings; and the impact of historical economic context. Finally, by way of conclusion, some recommended areas for further research are suggested.

Contextual considerations

Adams ( 2002 ) talks about the social, political, cultural and economic context, so some consideration of what this might mean is needed as each of these concepts themselves cover a variety of aspects, and indeed overlap. While papers may talk about the ‘social context’ in which the companies being examined operate, this is not well defined and little consideration is given to what this means. Some things that could be more explicitly considered include, inter alia : the role of the press; the status of women; the legal/justice system; the level of corruption; the level of government control, cultural understandings; and so on. This paper chooses to highlight three of these areas, and these are discussed briefly below in broad terms, followed by a discussion of some specific aspects of each identified as providing fertile grounds for future research.

Political system

Assumptions are often made about capitalist systems, whether explicit or implicit, as the vast majority of work on CSR reporting has been done in the Western context. However, there is little research looking at CSR reporting in socialist or communist countries. Some work has been undertaken on China (Dong et al. 2014 ; Gao 2011 ; Situ and Tilt 2012 ), but this work often applies the same conceptual frameworks as Western studies. What about the influence of ideology, and hegemony?

Sociocultural environment

Human beings have “distinctive cultural (learned) characteristics, histories and responses to their environment” and the term ‘sociocultural’ is commonly used in anthropological research to describe these and the “interactions and processes” that this involves (Garbarino 1983 : p1). Some general studies of culture and CSR using Hofstede exist (Silvia and Belen 2013 ), but an in-depth analysis of different understandings and conceptions of terms such as CSR as a result of sociocultural influences is lacking. The work that does examine specific factors often suggests that the Western concept of CSR does not fit these contexts (Wang and Juslin 2009 ).

The majority of work that considers sociocultural factors has looked mainly at religious aspects of CSR, most commonly by reviewing reporting by Islamic organisation, such as Islamic banks (Maali et al. 2006 ; Siwar and Hossain 2009 ; Sudarma et al. 2010 ). The teachings of many religions focus on social responsibility, the relationship with the natural environment, treatment of others, fairness, justice, etc., so there is a natural expectation that religion-based organisations may be more likely to engage in CSR and CSR reporting. A more nuanced consideration of how this manifests itself in different societies would improve understanding of the drivers and motivations of these activities. Similarly, other sociocultural factors, such as national identity, values, social organisation and language, could be incorporated.

Stage of development

The emerging literature on CSR reporting outside the Western world examines countries that are ‘developing’ (Belal and Momin 2009 ; Momin and Parker 2013 ), but little depth is included about where they are in their development journey and how the potential conflict between economic and social goals impacts CSR or CSR reporting. Rostow’s ( 1962 ) Stages of Economic Growth model suggests there are five stages (traditional society, preconditions for take-off, take-off, drive to maturity, and age of high or mass consumption), yet most literature on CSR classifies countries only into developed or developing. The ‘developing’ classification potentially includes countries that are in Rostow’s first, second or third stage which may have an impact on their response to CSR issues. In addition to economic variables however, the United Nations also produces a Human Development Index (HDI) which considers life expectancy, education and income to measure how social, as well as economic, development (UNDP 2015 ). Both these concepts are important for consideration of CSR.

Importantly, consideration of just one or two aspects of these three broader contextual issues may result in misinterpretation of the results. Often these things interact, for example, social issues often cross over with cultural and religious impacts, or even with political influence where the regime is more hegemonic. It is thus important to consider, or at least acknowledge, the holistic nature of the context of the phenomenon being examined.

It is beyond the scope of this paper to discuss all of the issues raised here although this would be an important part of a larger research program. Therefore, three particular contextual issues, and three specific contexts, are the focus of this paper: the role of political ideology and hegemony (China); the influence of cultural understandings (Middle East); and the impact of historical economic context (Sri Lanka).

Politics, ideology and state control

Ideology is a set of common beliefs that are shared by a group of people, and is “the fundamental social beliefs that organize and control the social representations of groups and their members” (Van Dijk 2009 : p78). Countries such as China provide a fertile research setting to examine the influence of ideology, and hegemonic approaches of influencing CSR, which have been missing from most CSR research in the region.

The Chinese political model has some unique characteristics. Among these is the dominance of ‘the party state’, which exercises control in different forms over most aspects of the economy that is unmatched when compared to other state capitalist economies. Political leaders use a variety of tools (Bremmer 2010 ) and it is the combination of three particular tools that sets apart the Chinese system: the exercise of control as a dominant shareholder, the ability to appoint key positions in major firms, and the means to influence decision-making via ideology. First, the party exerts shareholder power over state-owned enterprises (SOEs). Chinese SOEs play an instrumental role in society (Du and Wang 2013 ) and make up around 80 % of the stock market (Economist T 2012 ). As protecting the environment is a major part of the guiding ideology and the nation’s policy, SOEs are likely to be keen to provide CER. Second, the party exercises power over the appointment of the senior leadership in SOEs (Landry 2008 ). This has resulted in control as they are “cadres first and company men second. They care more about pleasing their party bosses than about the global market” (Economist T 2012 : p6). Third, party control is exercised through ideology. The party has cells in most larger firms, whether private or state-owned, which influence business decisions made at board meetings. Given that China considers the Marxist-Leninist-Maoist ideology as crucial this distinguishes it most significantly from other varieties of state capitalism that have a more liberal-democratic flavour.

There is some evidence that the first form of party control has been declining in recent times with the number of SOEs under the SASAC’s control halving over the last decade (Mattlin 2009 ). Similarly, since 1999, the share of SOEs in the economy has declined from 37 % to less than 5 %. This results in greater use of regulation and ideological hegemony to achieve its aims, yet most CSR research still uses state-ownership as a proxy for all types of state control.

Even after economic reform, ideology in China was still pervasive (Lieber 2013 ). Lieber ( 2013 ) argues that ideology is widely used to signal loyalty and the government is good at using ideology to “control and direct key vocabularies… (and) vague ideological language can create a climate of uncertainty thus increasing the range of a control regime” (Lieber 2013 : p346). However, the prevailing ideological themes in China are dynamic. In particular, most recently, new ideological themes have developed to respond to the changes in society. When economic reform began, “building up a socialist market economy with specific Chinese characteristics” was the guiding ideology (Zhang 2012 : p25). As such, economic growth was the country’s priority, but in 2005, “building up a harmonious society became the prevailing ideology” (and CSR is a key element of this resolution).

Ideology is used by the Chinese government to exert control over businesses. Traditionally, the government has “been considered a source of moral authority, official legitimacy and political stability…and …political language has been vested with an intrinsic instrumental value: its control represents the most suitable and effective way first to codify, and then widely convey, the orthodox state ideology” (Marinellin 2012 : p26). The language “developed and used by party officials … consists of ‘correct’ formulation, aims to teach the ‘enlarged masses’ how to speak and, how to think” (Marinellin 2012 : p26). The idea of the importance of a ‘Harmonious Society’ is the “re-contextualized discourse in response to the emergent issues in the changing social stratification order” (Zhang 2012 : p33). As a result, Chinese companies have been noticeably adopting the language of social concern and environmental protection.

It may therefore be suggested that CSR reporting in China is directly a response to the government’s ideological hegemony. However, the story is not as straightforward as it may first appear, for two reasons. First, despite a great deal of commitment to social and environmental regulation in China, implementation of these regulations has been limited. Second, as China enters a phase of continued economic development, Western influences may begin to have a moderating effect on the strength of the ideology.

The Chinese economy has grown rapidly in terms of gross domestic product (GDP) (World Bank 2016 ). The economic reforms that took place over the past decades were motivated substantially by the Chinese central government, and recent scholars have noted the positive role that ideology played in driving those reforms, notwithstanding that economists historically view ideology as “distorting… knowledge, judgment and decision making” (Lieber 2013 : p344).

With economic reform however, has come substantial environmental degradation which in turn has led to poor health outcomes for much of society generally. This led to a high level of commitment to environmental regulation in particular from as early as the 1990, followed by the release of even more rigorous regulations on environmental protection in the 2000s. However, despite the high commitment made by the Chinese central government, implementation of these policies is quite poor (Bina 2010 ). In terms of environmental regulation, for example, the implementation problems stem from a number of areas, including: the position of environmental protection agencies in the political framework; conflict between central and local governments; and supervision issues. The system of supervision of local environmental departments is a key problem (Bina 2010 ). When an environmental department is set up in the central government, corresponding environmental departments are set up in local governments. Ideally, these local departments should be agencies of the central department, deliver the central environmental department’s strategies, and supervise local environmental protection implementation. In reality, the local environmental departments are subservient to the local rather than central governments. All their financial support and staff appointments come from local governments. Therefore, rather than supervising local environmental protection implementation, the local environmental departments become “rubber stamps” for local governments (Zheng 2010 ). Therefore, it is unlikely that there will be efficient enforcement of environmental laws, regulations and policies at the local level (Bina 2010 ; Zheng 2010 ).

Finally, as China heads towards a market economy, government intervention becomes a policy choice, and markets function as a tool of national interest (Zhao 2011 ). However, as Chinese firms become more involved with foreign trading partners and markets, their reporting activity is also influenced by foreign and global organisations, leading to potential tension between demonstrating commitment to state ideological goals and meeting the requirements of global stakeholders.

Given the complexity of the context, research into CSR reporting in China needs to take into account the specific aspects of Chinese politics and culture in order to provide a nuanced understanding, and ultimately an improvement, of CSR reporting activities. However, a review done of the literature on CSR in by Chinese showed that it is very descriptive with little depth and much of the CSR literature is conceptual, descriptive, or argumentative in nature (Guan and Noronha 2013 ). The authors noted proper research methodologies are not systematically applied in some studies, and supporting theories are lacking. In the non-Chinese studies on China, there is also a predominance of papers on determinants and volume of reporting (Situ and Tilt 2012 ), with very few considering broader contextual factors, other than a few that look at specific cultural attributes (e.g., Rowe & Guthrie 2009 ).

Sociocultural understandings

Notwithstanding a move towards a market orientation of many developing countries, such as in China as outlined above, conceptions of CSR by management of companies in these countries may be quite different to those in the West (Wang and Juslin 2009 ). These differing conceptions may be a result of differing values and attitudes, language, religion or identity. Even specific elements of CSR are conceived of differently, for example in China, the main understanding of sustainability is in terms of environmental protection (Situ et al. 2013 , 2015 ). These socioculturally derived understandings are inevitably reflected in their reporting.

In another example, in the Middle East, the predominant perception of CSR is that it simply means philanthropic donations. In this region, the issue of social responsibility is relatively new, and as such the number of studies of CSR and CSR reporting in the Gulf region is growing (Al-Khatar and Naser 2003 ; AlNaimi et al. 2012 ; Emtairah et al. 2009 ; Mandurah et al. 2012 ; Marios and Tor 2007 ; Minnee et al. 2013 ; Nalband and Al-Amri 2013 ; Naser et al. 2006 ; Naser and Hassan 2013 ; Qasim et al. 2011 ; Sangeetha and Pria 2012 ). Many of these studies do not consider the cultural context to a very great extent as the research is emerging and focusses on perceptions. For example, Mandurah et al. ( 2012 ) and Emtairah et al. ( 2009 ) explored managerial perceptions of the concept of CSR in Saudi Arabia and found that managers are aware of the concept, but there is little connection between the managerial level perceptions and firms’ workforce. The authors describe CSR as being in its infancy phase, which limits the understanding of the concept to the view that CSR simply means being philanthropic. This indicates a different, and perhaps less developed, understanding of the concept in the region compared with the West, but the reasons for this, and the consequences for CSR reporting, are under-explored. Some authors suggest the narrow use of the term is because of the religious obligations towards society, (Visser 2008 ). There is only minimal evidence of any CSR practices other than philanthropy-based or any strategic approaches to CSR for long-term benefits (Visser 2008 ), but the trend is increasing and the forms that philanthropy takes is expanding.

It has also been argued that politics plays a significant role in increasing the awareness of CSR in the Arab world. Avina ( 2013 ) suggests that the perception of CSR in the Middle East changed after the Arab spring event, for both local and international firms. The term CSR more than a decade ago had little meaning to the public (Visser 2008 ) but since the Arab spring, the sense of social responsibility among civil society and the corporate sector has increased Avina 2013 ). Firms realised that they play a role in social responsibility, not just governments, and recognised that CSR should go beyond just donations to charitable causes (Avina 2013 ). Ronnegard ( 2013 ), however, predicts that CSR in the Middle East will not mimic the Western concept because of the strong influence of culture and religion in the region. Moreover, the influence of stakeholders in the Middle East is considered to be limited due to there being a lack of free press, few lobby groups and the different cultural attributes of employees and consumers. Some studies in Gulf countries have however, suggested that stakeholders, such as government and charitable organisations, may have an impact on firms’ behaviour (Emtairah et al. 2009 ; Naser et al. 2006 ). Others suggest that CSR may have developed as a concept due to the increase of foreign direct investment into Arab countries, the trend of shifting family and government owned firms into the public domain, and the globalisation of the region’s large national firms.

From the limited studies that have been undertaken, there is evidence of CSR reporting by Gulf country companies, with human resources and community involvement being the dominant themes in may reports Abu-Baker and Naser 2000 ). Thus, understanding of motivations for CSR reporting is not yet well developed and few existing studies consider the different level of stakeholder pressure in the region. This suggests that more research is needed on the formation of notions of CSR within specific contexts. This region is of particular interest because, according to the Human Development Report (HDI 2013 ), countries in the region are classified as high, or very high, in human development. That is, they are not only trying to develop and improve their economy, but are also trying to improve the quality of life of their citizens (Ramady 2010 ). The overall outlook of these countries indicates that they are performing well, however, Fadaak ( 2010 ) notes that identifying poverty lines is a challenge because of a lack of a clear definition of poverty in the region. There are no official reports considering poverty or other social problems and no GCC (Gulf Cooperation Council) countries were found in the list of the World Bank Database in relation to the poverty rate.

Similarly, in other developing countries the importance of local economic, cultural, and religious factors that shape the business environment, and understandings of charity and philanthropy, need to be taken into account. Empirical work in this area is lacking (Lund-Thomsen et al. 2016 ). In Sri Lanka, for example, “the most common arguments used to ‘sell’ the business case for CSR and CP [Corporate Philanthropy], for example an improved brand image, increased market or customer share, employee retention, mitigated regulatory risks, and reduced tax burden, are considered mostly irrelevant” (Global Insights 2013 : p1). Business leaders engage in CSR for a range of business, humanitarian, social, religious, and political reasons. Key amongst them is a belief that ‘giving back’ to society discharges religious obligations to the poor, and an awareness that being seen to contribute to national development goals is important (Global Insights 2013 ). Hence, the conception of CSR in this region is culturally determined, but also shaped by the economic environment.

As well as government control, culture and political factors, the stage of economic development a country is in is also an important contextual factor that may impact CSR reporting. In China, as discussed above, the drive for economic reform led directly to environmental impacts which needed to be addressed. A number of other developing countries have been examined for their reporting on CSR issues, particularly from the Asian region (Andrew et al. 1989 ; Elijido-Ten et al. 2010 ), India (Mishra and Suar 2010 ; Raman 2006 ; Sahay 2004 ), and Bangladesh (Belal and Owen 2007 ; Belal and Roberts 2010 ; Khan 2010 ; Muttakin et al. 2015 ).

While these countries are classified as developing (IMF 2015 ), Bangladesh and India score only medium for human development. Another country in the region, Sri Lanka, has a high rating on the HDI, and has been exhibiting extensive growth since the end of a 30-year war (WPR 2015 ). Thus, exhibiting both economic and social growth aspects makes it an interesting case for studying CSR.

Sri Lanka has a population of over 20 million and foreign companies have increased their investments with one billion US dollars in direct foreign investments in 2013 alone ( BOI ). Classified as a middle income developing country, the challenge for Sri Lanka is to achieve high economic growth without causing irreversible damage to the environment and while continuing to eliminating social issues such as poverty, malnutrition and poor workplace ethics (Goger 2013 ). In addition, Sri Lanka also has a long history of corporate philanthropy, largely led by individuals whose values and actions stem from religious and cultural views (Beddewela and Herzig 2013 ) but has recently seen an increase in private firms offering development-related initiatives. Public infrastructure projects have been the main element of post-war economic planning, but there still remains rural poverty in the country. Thus, the primary motivation for CSR and philanthropy in Sri Lanka is poverty reduction, particularly for children and youth, social welfare organisations like orphanages and elderly homes, hospitals and health services, and veterans’ charities (Global Insights 2013 ). Thus, the economic, cultural, and political context means that these poverty rates have fallen (data indicates that the rate went from approximately 20 % in 2000 to under 9 % in 2013) and that inflation has slowed (Wijesinha 2014 ), so opportunities for private businesses to contribute to infrastructure abound. However, these private, development-orientated, CSR initiatives have often failed to deliver their aims and there is considered to be a danger that they may in fact perpetuate the causes of poverty and ethnic and religious conflict given their ties to particular ethnic groups (Global Insights 2013 ).

Notwithstanding this environment, the topic of CSR reporting in Sri Lanka has received relatively little research attention compared to other parts of the world (see Belal and Momin 2009 , for a review). In terms of motivations for CSR, there is some evidence that firms in which senior management have a positive outlook towards social and environmental practices tend to disclose more on these aspects, as compared to other firms (Fernando and Pandey 2012 ). However, reporting on CSR initiatives is not mandatory thus it is likely that any voluntary reporting by Sri Lankan firms will vary significantly. One study of reporting was conducted by Senaratne and Liyanagedara ( 2012 ) who examined the level of compliance with Global Reporting Initiative (GRI) guidelines in the disclosures of publicly listed companies, selected from seven business sectors. The authors conclude that the level of compliance with the GRI is low and that disclosures vary significantly amongst the companies, potentially reflecting varying commitment to CSR. Similarly, a longitudinal study across five years (2005–2010) was carried out by Wijesinghe ( 2012 ) to identify trends in CSR reporting in Sri Lanka and the study identified an increasingly positive trend, predicting similar levels of disclosures provided by companies in developed countries. The few studies that have been conducted examining the predominance of reporting in Sri Lanka, mostly examining multinational companies, conclude that CSR reporting is gaining momentum in Sri Lanka but is still emerging as the concept of CSR itself emerges (Beddewela and Herzig 2012 ; Hunter and Van Wassenhove 2011 ).

Conclusion and a future research agenda

As more and more research on CSR in developing countries emerges in the academic literature, it is important to ensure that appropriate consideration is given to the context in which the research takes place. Examination of CSR and CSR reporting practices without contextualisation could perpetuate flawed understandings that are based on evidence from research in the developed world. Different political, social, cultural and economic environments impact on the both the development of, and reporting of, CSR activities and consequently impact on the value of these activities to benefit society and the natural environment.

A suggested agenda for future research, that considers context in more depth, includes:

Consideration of ideological and hegemonic regimes and their attitude towards CSR. This research would consider potential positive and negative impacts of the political and governance system. In China, for example, the potential for Communist Party ideology to increase environmental protection and improve social conditions is vast, and is starting to be seen to have a strong impact on firm behaviour. Examination of this over time will provide an important contribution to understanding the role of government beyond the more common analysis of environmental protection regulation.

Greater examination of sociocultural variables in different countries, beyond analysis of religious influence, and beyond the use of Hofstede. Understandings of concepts such as CSR in countries in Asia, the Middle East and the Asian sub-continent, are known to differ from those in the West, so understanding their potential to lead to better (worse) CSR outcomes is important. The variety of variables that could be included is vast, but some clearly important issues include: language, secularism, freedom of the press, access to information, homogeneity of values and attitudes, and the existence of a national figurehead or identity.

Longitudinal examination of the process of economic development. Countries where the economy is developing rapidly, such as China and the Middle East; and countries where the historical economic context differs dramatically, such as in Sri Lanka where the need for development is borne out of conflict, provide rich backgrounds to consider how CSR is developing alongside economic developments.

A comprehensive framework for examining these, and other, potential factors that influence CSR and CSR reporting in developing countries does not exist, but Table  1 attempts to provide a preliminary outline of some factors that could comprise such a framework, and be used to guide future research. As mentioned earlier, it is important to note, however, that these variables are not discreet and are likely to interact with each other. This is noted in the table as a reminder that the classifications are somewhat artificial and that acknowledgement of a more holistic consideration is important.

These are clearly only a selection of opportunities for CSR research on developing nations and emerging economies. Calls for more work on these factors have continued since Adams’ ( 2002 ) original call, but there is still vast scope to improve our understanding of CSR practice throughout the world (Fifka 2013 ), where much of the social and environmental damage is taking place.

Importantly, research of this kind must be transdisciplinary as perspectives from areas such as political science, philosophy and economics are essential. Only with in-depth, contextualised understandings can improvements to the nature of CSR activity be implemented.

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Acknowledgements

It is important to acknowledge that this paper provides an overview of a larger research program currently being undertaken by a team of doctoral students at Flinders University and the University of South Australia. Credit must be given to Ms Hui Situ (Flinders University) who is researching environmental reporting in China, Mr Abdullah Silawi (Flinders University) who is researching social responsibility reporting in the Gulf region, and Ms Dinithi Dissanayake (University of SA), who is researching environmental disclosure in Sri Lanka.

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Tilt, C.A. Corporate social responsibility research: the importance of context. Int J Corporate Soc Responsibility 1 , 2 (2016). https://doi.org/10.1186/s40991-016-0003-7

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The Truth About CSR

the role of social and environmental responsibility essay

Despite the widely accepted ideal of “shared value,” research led by Harvard Business School’s Kasturi Rangan suggests that this is not the norm—and that’s OK. Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:

Pruning and aligning programs within theaters. Companies must examine their existing programs in each theater, reducing or eliminating those that do not address an important social or environmental problem in keeping with the firm’s business purpose and values.

Developing metrics to gauge performance. Just as the goals of programs vary from theater to theater, so do the definitions of success.

Coordinating programs across theaters. This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole.

Developing an interdisciplinary CSR strategy. The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top-down or bottom-up, but ongoing communication is key.

These practices have helped companies including PNC Bank, IKEA, and Ambuja Cements bring discipline and coherence to their CSR portfolios.

Most of these programs aren’t strategic—and that’s OK.

Idea in Brief

The problem.

Many companies’ CSR initiatives are disparate and uncoordinated, run by a variety of managers without the active engagement of the CEO. Such firms cannot maximize their positive impact on the social and environmental systems in which they operate.

The Solution

Firms must develop coherent CSR strategies, with activities typically divided among three theaters of practice. Theater one focuses on philanthropy, theater two on improving operational effectiveness, and theater three on transforming the business model to create shared value.

Companies must prune existing programs in each theater to align them with the firm’s purpose and values; develop ways of measuring initiatives’ success; coordinate programs across theaters; and create an interdisciplinary management team to drive CSR strategy.

Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend. But there is increasing pressure to dress up CSR as a business discipline and demand that every initiative deliver business results. That is asking too much of CSR and distracts from what must be its main goal: to align a company’s social and environmental activities with its business purpose and values. If in doing so CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good. But for many CSR programs, those outcomes should be a spillover, not their reason for being. This article explains why firms must refocus their CSR activities on this fundamental goal and provides a systematic process for bringing coherence and discipline to CSR strategies.

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Does ESG really matter—and why?

Since the acronym “ESG”  (environmental, social, and governance) was coined in 2005, and until recently, its fortunes were steadily growing. To take one example, there has been a fivefold growth in internet searches for ESG since 2019, even as searches for “CSR” (corporate social responsibility)—an earlier area of focus more reflective of corporate engagement than changes to a core business model—have declined. Across industries, geographies, and company sizes, organizations have been allocating more resources toward improving ESG. More than 90 percent of S&P 500 companies now publish ESG reports  in some form, as do approximately 70 percent of Russell 1000 companies. 1 Sustainability reporting in focus , G&A Institute, 2021. In a number of jurisdictions, reporting ESG elements is either mandatory or under active consideration. In the United States, the Securities and Exchange Commission (SEC) is considering new rules that would require more detailed disclosure of climate-related risks and greenhouse-gas (GHG) emissions. 2 Release Nos. 33-11042, 34-94478, File No. S7-10-22, US Securities and Exchange Commission (SEC), March 21, 2022. The proposed rule would not come into effect until fiscal year 2023 and could face legal challenges; “We are not the Securities and Environment Commission—At least not yet,” statement of Commissioner Hester M. Peirce, SEC, March 21, 2022; Dan Papscun, “SEC’s climate proposal tees up test of ‘material’ info standard,” Bloomberg Law, March 23, 2022. Additional SEC regulations on other facets of ESG have also been proposed or are pending. 3 See “SEC response to climate and ESG risks and opportunities,” SEC, modified April 11, 2022; “SEC proposes to enhance disclosures by certain investment advisers and investment companies about ESG investment practices,” SEC press release, May 25, 2022.

The rising profile of ESG has also been plainly evident in investments, even while the rate of new investments has recently been falling. Inflows into sustainable funds, for example, rose from $5 billion in 2018 to more than $50 billion in 2020—and then to nearly $70 billion in 2021; these funds gained $87 billion of net new money in the first quarter of 2022, followed by $33 billion in the second quarter. 4 “Global Sustainable Fund Flows: Q2 2022 in Review,” Morningstar Manager Research, July 28, 2022; Cathy Curtis, “Op-ed: While green investments are underperforming, investors need to remain patient,” CNBC, March 28, 2022. Midway through 2022, global sustainable assets are about $2.5 trillion. This represents a 13.3 percent fall from the end of Q1 2022 but is less than the 14.6 percent decline over the same period for the broader market. 5 “Global Sustainable Fund Flows: Q2 2022 in Review,” Morningstar Manager Research, July 28, 2022; Cathy Curtis, “Op-ed: While green investments are underperforming, investors need to remain patient,” CNBC, March 28, 2022.

A major part of ESG growth has been driven by the environmental component of ESG and responses to climate change. But other components of ESG, in particular the social dimension, have also been gaining prominence. One analysis found that social-related shareholder proposals rose 37 percent in the 2021 proxy season compared with the previous year. 6 Richard Vanderford, “Shareholder voices poised to grow louder with SEC’s help,” Wall Street Journal , February 11, 2022.

In the wake of the war in Ukraine and the ensuing human tragedy, as well as the cumulative geopolitical, economic, and societal effects, critics have argued that the importance of ESG has peaked. 7 Simon Jessop and Patturaja Murugaboopathy, “Demand for sustainable funds wanes as Ukraine war puts focus on oil and gas,” Reuters, March 17, 2022; Peggy Hollinger, “Ukraine war prompts investor rethink of ESG and the defence sector,” Financial Times , March 9, 2022. Attention, they contend, will shift increasingly to the more foundational elements of a Maslow-type hierarchy of public- and private-sector needs, 8 Bérengère Sim, “Ukraine war ‘bankrupts’ ESG case, says BlackRock’s former sustainable investing boss,” Financial News , March 14, 2022. and in the future, today’s preoccupation with ESG may be remembered as merely a fad and go the way of similar acronyms that have been used in the past. 9 Charles Gasparino, “Russian invasion sheds light on hypocrisy of Gary Gensler, woke investment,” New York Post , March 5, 2022; James Mackintosh, “Why the sustainable investment craze is flawed,” Wall Street Journal , January 23, 2022; David L. Bahnsen, “Praying that ESG goes MIA,” National Review , March 17, 2022. Others have argued that ESG represents an odd and unstable combination of elements and that attention should be only focused on environmental sustainability. 10 See, for example, “ESG should be boiled down to one simple measure: emissions,” Economist , July 21, 2022. In parallel, challenges to the integrity of ESG investing have been multiplying. While some of these arguments have also been directed to policy makers, analysts, and investment funds, the analysis presented in this article (and in the accompanying piece “ How to make ESG real ”) is focused at the level of the individual company. In other words: Does ESG really matter to companies ? What is the business-grounded, strategic rationale?

A critical lens on ESG

Criticisms of ESG are not new. As ESG has gone mainstream and gained support and traction, it has consistently encountered doubt and criticism as well. The main objections fall into four main categories.

1. ESG is not desirable, because it is a distraction

Perhaps the most prominent objection to ESG has been that it gets in the way of what critics see as the substance of what businesses are supposed to do: “make as much money as possible while conforming to the basic rules of the society,” as Milton Friedman phrased it more than a half-century ago.” 11 Milton Friedman, “The social responsibility of business to increase its profits,” New York Times Magazine , September 13, 1970. Viewed in this perspective, ESG can be presented as something of a sideshow—a public-relations move, or even a means to cash in on the higher motives of customers, investors, or employees. ESG is something “good for the brand” but not foundational to company strategy. It is additive and occasional. ESG ratings and score provider MSCI, for example, found that nearly 60 percent of “say on climate” votes 12 Say-on-climate votes are generally nonbinding resolutions submitted to shareholders (similar to “say-on-pay” resolutions), which seek shareholder backing for emissions reductions initiatives. See, for example, John Galloway, “Vanguard insights on evaluating say on climate proposals,” Harvard Law School Forum of Corporate Governance, June 14, 2021. in 2021 were only one-time events; fewer than one in four of these votes were scheduled to have annual follow-ups. 13 “Say on climate: Investor distraction or climate action?,” blog post by Florian Sommer and Harlan Tufford, MSCI, February 15, 2022. Other critics have cast ESG efforts as “greenwashing,” “purpose washing,” 14 Laurie Hays, et al., “Why ESG can no longer be a PR exercise,” Harvard Law School Forum on Corporate Governance, January 20, 2021. or “woke washing.” 15 See Owen Jones, “Woke-washing: How brands are cashing in on the culture wars,” Guardian , May 23, 2019; Vivek Ramaswamy, Woke Inc.: Inside Corporate America’s Social Justice Scam , New York, NY: Hachette Book Group, 2021. One Edelman survey, for example, reported that nearly three out of four institutional investors do not trust companies to achieve their stated sustainability, ESG, or diversity, equity, and inclusion (DEI) commitments. 16 Special report: Institutional investors , Edelman Trust Barometer, 2021.

2. ESG is not feasible because it is intrinsically too difficult

A second critique of ESG is that, beyond meeting the technical requirements of each of the E, S, and G components, striking the balance required to implement ESG in a way that resonates among multiple stakeholders is simply too hard. When solving for a financial return, the objective is clear: to maximize value for the corporation and its shareholders. But what if the remit is broader and the feasible solutions vastly more complex? Solving for multiple stakeholders can be fraught with trade-offs and may even be impossible. To whom should a manager pay the incremental ESG dollar? To the customer, by way of lower prices? To the employees, through increased benefits or higher wages? To suppliers? Toward environmental issues, perhaps by means of an internal carbon tax? An optimal choice is not always clear. And even if such a choice existed, it is not certain that a company would have a clear mandate from its shareholders to make it.

3. ESG is not measurable, at least to any practicable degree

A third objection is that ESG, particularly as reflected in ESG scores, cannot be accurately measured. While individual E, S, and G dimensions can be assessed if the required, auditable data are captured, some critics argue that aggregate ESG scores have little meaning. The deficiency is further compounded by differences of weighting and methodology across ESG ratings and scores providers. For example, while credit scores of S&P and Moody’s correlated at 99 percent, ESG scores across six of the most prominent ESG ratings and scores providers correlate on average by only 54 percent and range from 38 percent to 71 percent. 17 Florian Berg, Julian Kölbel, and Roberto Rigobon, “Aggregate confusion: The divergence of ESG ratings,” Review of Finance , forthcoming, updated April 26, 2022. Moreover, organizations such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) can measure the same phenomena differently; for example, GRI considers employee training, in part, by amounts invested in training, while SASB measures by training hours. It is to be expected, therefore, that different ratings and scores providers—which incorporate their own analyses and weightings—would provide diverging scores. Moreover, major investors often use their own proprietary methodologies that draw from a variety of inputs (including ESG scores), which these investors have honed over the years.

4. Even when ESG can be measured, there is no meaningful relationship with financial performance

The fourth objection to ESG is that positive correlations with outperformance, when they exist, could be explained by other factors and, in any event, are not causative. It would indeed challenge reason if ESG ratings across ratings and scores providers, measuring different industries, using distinct methodologies, weighting metrics differently, and examining a range of companies that operate in various geographies, all produced a near-identical score that almost perfectly matched company performance. Correlations with performance could be explained by multiple factors (for example, industry headwinds or tailwinds) and are subject to change. 18 See, for example, James Mackintosh, “Credit Suisse shows flaws of trying to quantify ESG risks,” Wall Street Journal , January 17, 2022. Several studies have questioned any causal link between ESG performance and financial performance. 19 See, for example, Chart of the Week , “Does ESG outperform? It’s a challenging question to answer,” blog post by Raymond Fu, Penn Mutual, September 23, 2021; Gregor Dorfleitner and Gerhard Halbritter, “The wages of social responsibility—where are they? A critical review of ESG investing,” Review of Financial Economics , Volume 26, Issue 1, September 2015. While, according to a recent metastudy, the majority of ESG-focused investment funds do outperform the broader market, 20 Ulrich Atz, Casey Clark, and Tensie Whelan, ESG and financial performance: Uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015 – 2020 , NYU Stern Center for Sustainable Business, 2021. some ESG funds do not, and even those companies and funds that have outperformed could well have an alternative explanation for their outperformance. (For example, technology and asset-light companies are often among broader market leaders in ESG ratings; because they have a relatively low carbon footprint, they tend to merit higher ESG scores.) The director of one recent study 21 Giovanni Bruno, Mikheil Esakia, and Felix Goltz, “‘Honey, I shrunk the ESG alpha’: Risk-adjusting ESG portfolio returns,” Journal of Investing , April 2022. proclaimed starkly: “There is no ESG alpha.” 22 Steve Johnson, “ESG outperformance narrative ‘is flawed,’ new research shows,” Financial Times , May 3, 2021.

In addition to these four objections, recent events and roiled markets have led some to call into question the applicability of ESG ratings at this point. 23 See James Mackintosh, “War in Ukraine reveals flaws in sustainable investing,” Wall Street Journal , March 27, 2022. It is true that the recognized, pressing need to strengthen energy security in the wake of the invasion of Ukraine may lead to more fossil-fuel extraction and usage in the immediate term, and the global collaboration required for a more orderly net-zero transition  may be jeopardized by the war and its aftermath. It is also likely that patience for what may be called “performative ESG,” as opposed to what may be called true ESG, will likely wear thin. True ESG is consistent with a judicious, well-considered strategy that advances a company’s purpose and business model (exhibit).

Yet, many companies today are making major decisions, such as discontinuing operations in Russia, protecting employees in at-risk countries, organizing relief to an unprecedented degree, and doing so in response to societal concerns. They also continue to commit to science-based targets and to define and execute plans for realizing these commitments. That indicates that ESG considerations are becoming more —not less—important in companies’ decision making.

Sustainable performance is not possible without social license

The fundamental issue that underlies each of the four ESG critiques is a failure to take adequate account of social license—that is, the perception by stakeholders that a business or industry is acting in a way that is fair, appropriate, and deserving of trust. 24 “‘Corporate diplomacy’: Why firms need to build ties with external stakeholders,” Knowledge at Wharton , May 5, 2014; and Witold J. Henisz, Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders , first edition, London, UK: Routledge, 2014; see also Robert G. Boutilier, “Frequently asked questions about the social license to operate,” Impact Assessment and Project Appraisal , Volume 32, Issue 4, 2014. It has become dogma to state that businesses exist to create value in the long term. If a business does something to destroy value (for example, misallocating resources on “virtue signaling,” or trying to measure with precision what can only be imperfectly estimated, at least to date, through external scores), we would expect that criticisms of ESG could resonate, particularly when one is applying a long-term, value-creating lens.

But what some critics overlook is that a precondition for sustaining long-term value is to manage, and address, massive, paradigm-shifting externalities . Companies can conduct their operations in a seemingly rational way, aspire to deliver returns quarter to quarter, and determine their strategy over a span of five or more years. But if they assume that the base case does not include externalities or the erosion of social license by failing to take externalities into account, their forecasts—and indeed, their core strategies—may not be achievable at all. Amid a thicket of metrics, estimates, targets, and benchmarks, managers can miss the very point of why they are measuring in the first place: to ensure that their business endures, with societal support, in a sustainable, environmentally viable way.

ESG ratings: Does change matter?

Among the most sharply debated questions about environmental, social, and governance (ESG) is the extent to which ESG, as measured by ratings, can offer meaningful insights about future financial or TSR performance—particularly when ratings and scores providers use different, and sometimes mutually inconsistent, methodologies. A number of studies find a positive relationship between ESG ratings and financial performance. 1 Florian Berg, Julian Kölbel, and Roberto Rigobon, “Aggregate confusion: The divergence of ESG ratings,” Review of Finance, forthcoming, updated April 2022; Ulrich Atz, Casey Clark, and Tensie Whelan, ESG and financial performance: Uncovering the relationship by aggregating evidence from 1,000 plus studies published between 2015–2020 , NYU Stern Center for Sustainable Business, 2021. Other research suggests that while scoring well in ESG does not destroy financial value, the relationship between ESG ratings at any given time, and value creation at the identical time, can be tenuous or nonexistent. 2 See Chart of the Week , “Does ESG outperform? It’s a challenging question to answer,” blog post by Raymond Fu, Penn Mutual, September 23, 2021; Giovanni Bruno, Mikheil Esakia, and Felix Goltz, “‘Honey, I shrunk the ESG alpha’: Risk-adjusting ESG portfolio returns,” Journal of Investing , April 2022. Because of the short time frame over which the topic has been studied, and the resulting lack of robust analyses, conclusions from the analyses should be tempered. 3 When the ESG characteristic of a company changes, based on MSCI ESG data, it may be a useful financial indicator for generating alpha. Guido Giese et al., “Foundations of ESG investing: How ESG affects equity valuation, risk, and performance,” Journal of Portfolio Management , July 2019, Volume 45, Number 5.

In exploring the connection between ESG ratings and financial performance, another approach is to look at the effect of a change in ESG ratings. This approach mitigates issues deriving from differences among various ESG rating methodologies (assuming the methodologies are relatively consistent over time). It stands to reason that demonstrating real improvement—if reflected in the scores—could, in turn, drive TSR outperformance for multiple reasons, including those we explore in this article. Our initial research indicates, however, that it is too soon to tell. We found that on average companies that show an improvement in ESG ratings over multiyear time periods may exhibit higher shareholder returns compared with industry peers in the period after the improvement in ESG scores. We found, too, that the effect of this result has increased in recent years (exhibit). This initial finding is in line with some of the recent academic research and was also generally consistent across data from multiple ratings and scores providers.

Still, the findings are not yet conclusive. For example, only 54 percent of the companies we categorize as “improvers” and less than one-half of those categorized as “slight improvers” demonstrated a positive excess TSR. The research also does not prove causation. It is important to bear in mind that ESG scores are still evolving, observations in the aggregate may be less applicable to companies considered individually, and exogenous factors such as headwinds and tailwinds in industries and individual companies cannot be fully controlled for.

Most important, this research does not explain the mechanism of TSR outperformance and whether the outperformance is sustainable. We know from decades of research that companies with a higher expected return on capital and growth are ultimately TSR outperformers and that there is clear, statistically significant correlation. Are ESG ratings a sign of greater expected resilience of margins in the transition, an indication of higher growth through green portfolios—or do they suggest something else? Will these increased expectations relative to peers ultimately materialize, or will they revert to the mean? ESG ratings are very new compared with financial ratings, and therefore, it will take time for them to evolve. We will continue to research these questions as data sets increase and refinements to ESG scores continue to be refined.

Regardless of current ratings scores, many companies are already advancing in ESG to improve their long-term financial performance. High performers consider and seek to learn from ESG ratings, but they do not get unduly distracted or make superficial changes merely to score higher. Companies should focus on ESG improvements that matter most to their business models, even if the improvements do not directly translate to higher ratings.

Since conclusions about the relationship between ESG ratings and financial performance are not yet certain, they might not be compelling enough, on their own, to persuade executives to invest significant resources in ESG. But there is a tangible cost to waiting. In fact, companies should adopt a bias toward focusing on ESG today ; if companies, particularly those with significant externalities (such as high-emitting industries), hold out for perfect data and a “flawless” rating process, they may not have a business in 20 to 30 years.

Accordingly, the responses to ESG critics coalesce on three critical points: the acute reality of externalities, the early success of some organizations, and the improvement of ESG measurements over time. And the case for ESG cannot be dismissed by connections between ESG scores and financial performance and changes in ESG scores over time. (For a discussion about ESG ratings and their relationship to financial performance, see sidebar, “ESG ratings: Does change matter?”)

1. Externalities are increasing

Company actions can have meaningful consequences for people who are not immediately involved with the company. Externalities such as a company’s GHG emissions, effects on labor markets, and consequences for supplier health and safety are becoming an urgent challenge in our interconnected world. Regulators clearly take notice. 25 See, for example, Sinziana Dorobantu, Witold J. Henisz and Lite J. Nartey, “Spinning gold: The financial returns to stakeholder engagement,” Strategic Management Journal , December 2014, Volume 35, Issue 12. Even if some governments and their agencies demand changes more quickly and more forcefully than others, multinational businesses, in particular, cannot afford to take a wait-and-see approach. To the contrary, their stakeholders expect them to take part now in how the regulatory landscape, and broader societal domain, will likely evolve. More than 5,000 businesses , for example, have made net-zero commitments as part of the United Nations’ “Race to Zero” campaign. Workers are also increasingly prioritizing factors such as belonging and inclusion  as they choose whether to remain with their company or join a competing employer. 26 ” ‘Great Attrition’ or ‘Great Attraction’? The choice is yours ,” McKinsey Quarterly , September 8, 2021. Many companies, in turn, are moving aggressively to reallocate resources and operate differently; nearly all are feeling intense pressure to change. Even before the Ukraine war induced dramatic company action, the pandemic had prompted companies to reconsider and change core business operations. Many have embarked on a similar path with respect to climate change. This pressure, visceral and tangible, is an expression of social license—and it has been made more pressing as rising externalities have become more urgent.

2. Some companies have performed remarkably, showing that ESG success is indeed possible

Social license is not static, and companies do not earn the continued trust of consumers, employees, suppliers, regulators, and other stakeholders based merely upon prior actions. Indeed, earning social capital is analogous to earning debt or equity capital—those who extend it look to past results for insights about present performance and are most concerned with intermediate and longer-term prospects. Yet unlike traditional sources of capital, where there are often creative financing alternatives, there are ultimately no alternatives for companies that do not meet the societal bar and no prospect of business as usual, or business by workaround, under conditions of catastrophic climate change.

Because ESG efforts are a journey, bumps along the way are to be expected. No company is perfect. Key trends can be overlooked, errors can be made, rogue behaviors can manifest themselves, and actions can have unintended consequences. But since social license is corporate “oxygen”—thus impossible to survive without it—companies cannot just wait and hope that things will all work out. Instead, they need to get ahead of future issues and events by building purpose into their business models and demonstrating that they benefit multiple stakeholders and the broader public. Every firm has an implicit purpose—a unique raison d’être that answers the question, “What would the world lose if this company disappeared?” Companies that embed purpose in their business model not only mitigate risk; they can also create value from their values. For example, Patagonia, a US outdoor-equipment and clothing retailer, has always been purpose driven—and announced boldly that it is “in business to save our home planet.” Natura &Co, a Brazil-based cosmetics and personal-care company in business to “promote the harmonious relationship of the individual with oneself, with others and with nature,” directs its ESG efforts to initiatives such as protecting the Amazon, defending human rights, and embracing circularity. Multiple other companies, across geographies and industries, are using ESG to achieve societal impact and ancillary financial benefits, as well.

3. Measurements can be improved over time

While ESG measurements are still a work in progress, it is important to note that there have been advancements. ESG measurements will be further improved over time. They are already changing; there is a trend toward consolidation of ESG reporting and disclosure frameworks (though further consolidation is not inevitable). Private ratings and scores providers such as MSCI, Refinitiv, S&P Global, and Sustainalytics, for their part, are competing to provide insightful, standardized measures of ESG performance.

There is also a trend toward more active regulation with increasingly granular requirements. Despite the differences in assessing ESG, the push longitudinally has been for more accurate and robust disclosure, not fewer data points or less specificity. It is worth bearing in mind, too, that financial accounting arose from stakeholder pull, not from spontaneous regulatory push, and did not materialize, fully formed, along the principles and formats that we see today. Rather, reporting has been the product of a long evolution—and a sometimes sharp, debate. It continues to evolve—and, in the case of generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS) reporting, continues to have differences. Those differences, reflecting how important these matters are to stakeholders, do not negate the case for rigorous reporting—if anything, they strengthen it.

While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle. Names will come and go (ESG itself arose after CSR, corporate engagement, and similar terms), and these undertakings are by nature difficult and can mature only after many iterations. But we believe that the importance of the underlying ideas has not peaked; indeed, the imperative for companies to earn their social license appears to be rising. Companies must approach externalities as a core strategic challenge, not only to help future-proof their organizations but to deliver meaningful impact over the long term.

Lucy Pérez is a senior partner in McKinsey’s Boston office; Vivian Hunt is a senior partner in the London office; Hamid Samandari is a senior partner in the New York office; Robin Nuttall  is a partner in the London office; and Krysta Biniek is a senior expert in the Denver office.

The authors wish to thank Donatela Bellone, Elena Gerasimova, Ashley Gorman, Celine Guo, Pablo Illanes, Conor Kehoe, Tim Koller, Lazar Krstic, Burak Ovali, Werner Rehm, and Sophia Savas for their contributions to this article.

This article was edited by David Schwartz, an executive editor in the Tel Aviv office.

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The effect of corporate social responsibility on environmental performance in china’s manufacturing industry: the mediating role of environmental strategy and green innovation.

the role of social and environmental responsibility essay

1. Introduction

2. Literature Review

3. research methodology, 4. research findings, 5. discussions, 5.1. policy implications, 5.2. theoretical implications, 6. conclusions, limitations, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest.

Click here to enlarge figure

ItemsStatementsSources
CSR for the Community
CSRC1Our organization gives adequate financial contributions to charities.Shahzad et al. [ ]
CSRC2Our organization supports non-governmental organizations working in problematic areas.
CSRC3Our organization contributes to the campaigns and projects that promote the well-being of society.
CSR for the Environment
CSRE1Our organization participates in activities which aim to protect and improve the quality of the natural environment.Shahzad et al. [ ]
CSRE2Our organization invests in creating a better life for future generations.
CSRE3Our organization implements special programs to minimize its negative impact on the natural environment.
CSRE4Our organization targets sustainable growth, which considers future generations.
Green Innovation
GNI1The company chooses the materials of the product that produce the least pollution.Song et al. [ ]
GNI2The company chooses the product’s materials that consume the least energy and resources.
GNI3The company uses the smallest number of materials to create the product.
GNI4The company circumspectly deliberates whether the product is easy to recycle, reuse, and decompose.
GNI5The manufacturing process effectively reduces the emissions of hazardous substances or waste.
GNI6The manufacturing process recycles waste and emissions to allow them to be treated and reused.
GNI7The manufacturing process reduces the consumption of water, electricity, coal, or oil.
Environmental Strategy
ENS1Our firm reduced energy consumption.Aftab et al. (2023) [ ]
ENS2Our firm reduced waste and emissions from operations.
ENS3Our firm reduced the impact on animal species and natural habitats.
ENS4Our firm reduced the environmental impacts of its products/services.
ENS5Our firm reduced environmental impact by establishing partnerships.
Environmental Performance
ENP1Our firm sold waste products for revenue.Aftab et al. (2023) [ ]
ENP2Our firm reduced the costs of inputs for the same level of output.
ENP3Our firm reduced costs for waste management for the same level of output.
ENP4Our firm worked with government officials to protect the company’s interests.
ENP5Our firm created spin-off technologies that could be profitably applied to other business areas.
ENP6Our firm differentiated the process/product based on the marketing efforts of the process/product’s ENP.
ConstructsItemsLoadingsAlphaCRAVE
CSR for the CommunityCSRC10.8690.8500.9090.768
CSRC20.877
CSRC30.884
CSR for the EnvironmentCSRE10.7810.7980.8680.622
CSRE20.790
CSRE30.798
CSRE40.785
Environmental Performance ENP10.8410.8970.9280.765
ENP30.912
ENP50.884
ENP60.859
Environmental StrategyENS10.9000.9230.9420.764
ENS20.926
ENS30.894
ENS40.805
ENS50.841
Green Innovation GNI10.9050.8780.9080.626
GNI20.854
GNI40.711
GNI50.660
GNI60.744
GNI70.845
CSRCCSREENPENSGNI
CSRC0.877
CSRE0.5720.789
ENP0.5040.6370.874
ENS0.5250.5060.7490.874
GNI0.4670.6450.6030.4930.791
CSRCCSREENPENSGNI
CSRC10.8690.5380.4670.4990.400
CSRC20.8770.5160.4070.4230.385
CSRC30.8840.4490.4470.4550.442
CSRE10.4190.7810.5610.4530.529
CSRE20.4160.7900.5330.4100.433
CSRE30.5150.7980.4390.3700.539
CSRE40.4570.7850.4670.3570.531
ENP10.4600.4720.8410.6020.497
ENP30.4210.5700.9120.6990.546
ENP50.4080.6030.8840.6720.536
ENP60.4800.5740.8590.6430.528
ENS10.4370.4010.5850.9000.413
ENS20.4690.4390.6600.9260.442
ENS30.5000.5230.7230.8940.472
ENS40.4960.4770.7310.8050.435
ENS50.3610.3290.5200.8410.369
GNI10.4240.5810.5840.4810.905
GNI20.4190.5220.5000.4170.854
GNI40.3000.3940.3390.3090.711
GNI50.3330.4490.3730.2920.660
GNI60.3710.5880.5090.3880.744
GNI70.3510.4880.5020.4150.845
CSRCCSREENPENSGNI
CSRC
CSRE0.696
ENP0.5780.747
ENS0.5820.5750.808
GNI0.5370.7620.6680.535
RelationshipsBetaStandard DeviationT Statisticsp Values
CSRC -> ENP−0.0060.0440.1410.888
CSRC -> ENS0.3500.0526.7400.000
CSRC -> GNI0.1470.0502.9100.004
CSRE -> ENP0.2540.0455.7030.000
CSRE -> ENS0.3060.0515.9670.000
CSRE -> GNI0.5610.04711.9840.000
ENS -> ENP0.5360.03714.3650.000
GNI -> ENP0.1780.0503.5350.000
RelationshipsBetaStandard DeviationT Statisticsp Values
CSRC -> ENS -> ENP0.1880.0306.2580.000
CSRC -> GNI -> ENP0.0260.0112.3100.021
CSRE -> GNI -> ENP0.1000.0303.3260.001
CSRE -> ENS -> ENP0.1640.0295.6110.000
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Khoshnaw, Z.; Ali, K.A.A.; Mousa, K.M. The Effect of Corporate Social Responsibility on Environmental Performance in China’s Manufacturing Industry: The Mediating Role of Environmental Strategy and Green Innovation. Sustainability 2024 , 16 , 7133. https://doi.org/10.3390/su16167133

Khoshnaw Z, Ali KAA, Mousa KM. The Effect of Corporate Social Responsibility on Environmental Performance in China’s Manufacturing Industry: The Mediating Role of Environmental Strategy and Green Innovation. Sustainability . 2024; 16(16):7133. https://doi.org/10.3390/su16167133

Khoshnaw, Zana, Khairi Ali Auso Ali, and Kawar Mohammed Mousa. 2024. "The Effect of Corporate Social Responsibility on Environmental Performance in China’s Manufacturing Industry: The Mediating Role of Environmental Strategy and Green Innovation" Sustainability 16, no. 16: 7133. https://doi.org/10.3390/su16167133

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Social Responsibility and the World of Nature: an interdisciplinary environmental studies course for inspiring whole system thinking and environmental citizenship

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Environmental educators face many challenges in university settings, including improving students’ capacity for systems thinking, the effective use of educational technology, and supporting a sense of agency for participation in social change. This article presents a model for teaching “Social Responsibility and the World of Nature,” an undergraduate-level civic engagement course designed to address these challenges in a context of interdisciplinary environmental studies. The model draws upon strategies from the authentic learning sciences to support co-created, collaborative learning, formative evaluation, and a personally relevant, “affective awareness” of environmental issues. These strategies are combined with case studies on environmental ethics, ecological sciences, and social entrepreneurship to inform a social-ecological design project through which students can express a personal definition of environmental citizenship. A key in application is implementing a reflective teaching practice that questions the role of absolute knowledge in the classroom. The analysis draws upon a case study approach, informed by four semesters implementing and refining the model, to illustrate its use in practice while examining student outcomes to elicit insights on effectiveness. The results support trends in the learning sciences that can transform the teaching and learning of environmental studies in higher education, particularly, the role of personally relevant learning experiences in developing a sense of agency for social and environmental change. This study contributes to these trends, while offering forward-looking insights for environmental educators and researchers in a variety of learning settings.

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Frankel-Goldwater, L. Social Responsibility and the World of Nature: an interdisciplinary environmental studies course for inspiring whole system thinking and environmental citizenship. J Environ Stud Sci 12 , 114–132 (2022). https://doi.org/10.1007/s13412-021-00720-2

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Customers Matter

Increases employee motivation.

What Is the Difference Between ESG and Social Responsibility?

The bottom line.

Why Social Responsibility Matters to Businesses

the role of social and environmental responsibility essay

Companies are increasingly ramping up their focus on social responsibility , whether they are championing women’s rights, protecting the environment, or attempting to obliterate poverty, on local, national, or global levels. From an optics perspective, socially responsible companies project more attractive images to both consumers and shareholders alike, which serves to positively affect their bottom lines.

Key Takeaways

Embracing socially responsible policies goes a long way toward attracting and retaining customers, which is essential to a company’s long-term success. Furthermore, many individuals who know that part of a company's profits will be channeled toward social causes near and dear to them will gladly pay a premium for goods.

Companies can likewise witness increased foot traffic if they're committed to supporting the local community. For example, banks that dispense loans to low-income households are apt to see an uptick in business as a direct result.

Social responsibility is an effective tool to increase employee engagement. These companies tend to attract employees who are eager to make a difference in the world—in addition to simply collecting a paycheck. With large companies, there is strength in numbers, and collective employee efforts can achieve substantial results, which increases workplace morale and boosts productivity.

According to Harvard Business School, nearly 70% of employees say they would not work for a company without a strong purpose. Ninety percent of employees who work at companies with a strong sense of purpose say they’re more inspired, motivated, and loyal, and 92% of employees who work at a socially responsible company say they would be more likely to recommend their employer to those in their network who are looking for a job.

Research shows that employee engagement translates directly to a company's overall performance and bottom line: engaged employees have a 17% increase in productivity, are 21% more profitable, and can have 41% lower absenteeism .

To sum it all up, even a small investment in corporate social responsibility initiatives can increase employee engagement and have an impact on how profitable the company can be.

Community Support and Customer Loyalty

Social responsibility works as a platform for companies and consumers alike to make a positive impact on local and global communities. Businesses that implement a social responsibility initiative that’s in line with their values have the opportunity to increase customer retention and loyalty.

Research shows that 87% of American consumers are more likely to buy a product from a company that advocates for an issue they care about, and 76% would refuse to purchase a product if they found out a company supported an issue contrary to their beliefs.

Community-oriented companies often enjoy a leg up on their competition as well, thanks to superior brand imaging. For example, Tesla Inc. ( TSLA ) CEO Elon Musk has successfully attracted environmentally-minded consumers with his line of cutting-edge electric cars and green automotive products.

104,975,528

Lives impacted globally by the socially responsible initiatives and community support enacted by TOMS, the popular shoe brand, in the 15 years since its inception.

Examples of Corporate Social Responsibility

Coca-cola company (ko).

In 2010, Coca-Cola started the 5by20 initiative to empower women across the globe. The company stated:

Through 5by20 programs around the world, we equip women entrepreneurs to overcome social and economic barriers by providing business skills training, access to financial services, and assets, and connections with peers and mentors. The women participating in 5by20 work in roles across our value chain include retailers, suppliers, producers, artisans, and more.

Visa Inc. (V)

Through its financial inclusion program, Visa has developed innovative ways of bringing digital cash to places in the world where the financial infrastructure doesn't exist or for people who don't have access to the financial system, like residents of many developing countries. The company stated:

Today, about half the adult world lives in the informal economy, dealing exclusively in cash. To be one of these estimated 2 billion people is to face financial barriers that make life risky, expensive, and inefficient. Financial inclusion helps put people on a path out of poverty, creates productive, empowered citizens, fosters business opportunities, and fuels economic growth.

Both terms refer to the social responsibilities of businesses. Though corporate social responsibility (CSR) holds businesses accountable for their social commitments in a qualitative manner, environmental, social, and governance (ESG) helps measure or quantify such social efforts. Socially conscious investors use ESG criteria to screen potential investments .

How Can a Company Be More Socially Responsible?

Even the smallest initiative can have an impact on a community. Donating money or resources to charities can make a huge difference, although small companies and startups may not have the ability to do so. Companies can start by organizing small fundraising events, encouraging volunteering, establishing a social mission and clear goals, implementing education programs for employees, or joining efforts with businesses with a similar mentality.

What Are the Benefits of Corporate Social Responsibility?

Embracing CSR increases customer retention and loyalty, increases employee engagement, improves brand imaging, attracts investment opportunities and top talent, and makes a difference in bottom-line financials. The non-profit Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) exist to help investors analyze company bottom-line data.

Socially responsible companies cultivate positive brand recognition, increase customer loyalty, and attract top-tier employees. These elements are among the keys to achieving increased profitability and long-term financial success.

Harvard Business School. " 15 Eye-Opening Corporate Social Responsibility Statistics ."

Gallup. " State of the Global Workplace ."

Cone. " AMERICANS WILLING TO BUY OR BOYCOTT COMPANIES BASED ON CORPORATE VALUES, ACCORDING TO NEW RESEARCH BY CONE COMMUNICATIONS ."

Tesla. " Elon Musk ."

TOMS. " Toms Impact Report 2021 ."

The Coca-Cola Company. " 5by20: What We're Doing ."

Coca-Cola. " How Coca-Cola Empowers Women Entrepreneurs ."

Visa. " Financial Inclusion ."

Forbes. " Three Reasons Why CSR And ESG Matter To Businesses ."

the role of social and environmental responsibility essay

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The Role of Social Responsibility and Ethics in Employees’ Wellbeing

Claudiu george bocean.

1 Department of Management, Marketing and Business Administration, Faculty of Economics and Business Administration, University of Craiova, 13 AI Cuza Street, 200585 Craiova, Romania

Michael Marian Nicolescu

2 Doctoral School, University of Craiova, 13 AI Cuza Street, 200585 Craiova, Romania; moc.liamg@nairamleahcimucselocin (M.M.N.); moc.liamg@mbtnairamucazac (M.C.); moc.liamg@9691uirtimudanomis (S.D.)

Marian Cazacu

Simona dumitriu, associated data.

Not applicable.

Social responsibility (SR) is a concept or practice by which organizations take into account the interest of society by taking responsibility for the impact of their activities on all stakeholders. The SR of organizations implies ethical behavior concerning all stakeholders and a company’s commitment to the sustainable economic development of society. Organizational ethics is a set of written and unwritten codes of principles and values that govern decisions and actions within an organization. Ethics has a rather internal perspective, while social responsibility has a rather external perspective. This study examines the impact of social responsibility and organizational ethics on employees’ wellbeing. To perform the empirical analysis, we conducted a survey among 423 employees from Romanian organizations. Using the structural equation modeling, we analyzed the relationships between social responsibility, organizational ethics, and employees’ wellbeing, emphasizing the positive impact of ethical and responsible behavior of the organization on the employees’ wellbeing. The organization’s employees play a dual role: firstly, they are all internal stakeholders, and secondly, they are constituents of an external stakeholder essential for the organization—the community. The results show a significant positive influence of social responsibility and organizational ethics on employees’ wellbeing as a result of a responsible and ethical behavior in relation to the organizational stakeholders.

1. Introduction

The modern organization is an entity with a substantial social impact due to its ability to mobilize productive resources and create new wealth. However, the organization’s legitimacy depends not only on success in creating wealth but also on its ability to meet the expectations of the various stakeholders that contribute to its existence and success.

Social responsibility (SR) concerns implementing ethical behavior and attitude in the organization, providing a perspective on core values and organizational culture to promote responsible behavior towards staff. Organizational ethics (OE) influence practices in the field of social responsibility. It is in the interest of every organization to develop and incorporate elements of both OE and SR into its agenda, as the challenges of an increasingly globalized economy with stringent sustainability requirements will require an integrated approach of OE and SR to support the sustainable development of organizations [ 1 , 2 ].

To be sustainable, organizations need to identify innovative ways to balance the social and environmental needs of internal and external stakeholders (employees, unions, community) with the economic (financial) needs of internal and external stakeholders (shareholders, employees, suppliers, customers, tax administrations) [ 3 , 4 , 5 ]. External SR extends to the community and society, including environmental concerns, while internal SR addresses the organization’s human resources [ 6 ]. In addition, internal SR focuses on strategies and practices to improve employee health and wellbeing (WB) [ 7 ], human rights [ 8 ], training and development [ 9 , 10 ], ensuring equal opportunities in business [ 11 ], and work–life balance [ 12 ].

Although most studies show a significant relationship between SR and OE practices, these relationships are neither universal nor consistent [ 13 ]. Therefore, investigating the different dimensions of SR practices concerning the dimensions of OE is necessary to integrate the two concepts and evaluate the combined effects on the employees’ WB and the community in which the organization operates.

Although the impact of SR and OE on economic, social, and environmental performance has long been analyzed, not many studies examine the effects of SR and OE on employees’ WB. Despite the awareness that employees are a key internal stakeholder whose motivation depends on the organizational success, being at the same time a constituent part of a critical external stakeholder (the community in which the organization operates), there are a few studies in the area.

The research gap that the paper aims to cover comes from the lack of work to study the combined effect of OE and SR on employees’ WB. Since organizational employees are an essential category of internal stakeholders, the organization must pay special attention to SR and OE; these significantly affect employees’ WB. This study’s objectives involve analyzing the direct relationships among employees’ perceptions of SR, OE, and WB, and the mediation effects between the variables considered. By studying these objectives, this study aims to understand better cause-and-effect relationships on how SR and OE can influence employee WB. The paper structure has six sections. The introduction and literature review approach the research topic from a theoretical point of view. Section 3 and Section 4 describe the research design and results. The last two sections provide discussions and conclusions of the research.

2. Literature Review

2.1. social responsibility.

SR is the moral responsibility of an organization toward the community in which it operates in particular and towards society in general [ 4 , 14 ]. SR is a concept that has received multiple definitions, and there are various classifications of its dimensions: the economic, legal, ethical, and philanthropic dimensions [ 15 ] and the economic, social, environmental, stakeholder, and volunteer dimensions [ 16 ]. Davis and Blomstrom argue that the substance of SR stems from the ethical “obligation” of the organization to assess the effects of its decisions and actions on the entire social system [ 17 ]. At the same time, [ 18 ] identifies the gap between the concept of SR and practice. Other authors [ 15 , 19 , 20 ] looked at SR in terms of organizational efforts to meet the needs of different categories of stakeholders. For example, McWilliams and Siegel [ 21 ] saw in SR an increase in the social interests of business organizations or a commitment to increase the reputation and improve the image by diminishing the community’s negative perception of the organization [ 22 ]. Matten and Moon considered SR to be a component of the organization’s strategic policy that illustrates its interest in social issues, not just the primary goal of profit maximization [ 13 ]. Aguinis considers that SR represents those actions and policies that meet stakeholders’ expectations to maximize results in three areas: economic, social, and environmental [ 6 ].

An issue increasingly addressed by an employer is employee involvement in SR actions [ 23 ]. Such employer behavior brings social benefits and plays an essential role in ensuring employees’ WB, directly affecting the satisfaction, commitment, and loyalty of current employees and leading to greater motivation, increased productivity, and a greater propensity to innovate [ 24 , 25 ]. In addition, when employees identify the organization’s commitment to socially responsible behavior, they tend to have more responsible attitudes that correlate with better performance due to improved relationships between employees and other stakeholders [ 26 ].

2.2. Relationships between Organizational Ethics and Social Responsibility

According to [ 27 ], philanthropic responsibilities stem from the philosophical, ethical tradition of concern for what is good for society and justify organizations to help improve the quality of life of different stakeholders and the community. Reich points out that SR is nothing more than intelligent management covered by the language of morality and ethics. Only organizations which aim to adhere to all universally accepted ethical standards can expect a positive attitude and support from society [ 26 , 28 ]. Moreover, solving the problems that affect the community and society leads to competitive advantages for the organization. Nord and Fuller saw corporate SR as a matter of higher-level strategy. They linked it to the conceptualization of organizational change, raising awareness of an alternative model that would complement the strategic vision and add an ethical dimension [ 23 , 24 , 29 ].

At the same time, managers have developed practices related to OE and SR within their organizations. There are many reasons why organizations implement these practices: reducing costs, mitigating risks, gaining legitimacy, gaining a competitive advantage, and creating new value [ 30 ]. In addition, researchers and managers have recommended aligning these practices within organizations [ 23 , 24 , 26 , 31 , 32 , 33 , 34 ]. Still, there is little empirical research exploring the impact of alignment or why it has not become a common practice within organizations. Based on these considerations, we formulated the following research hypothesis:

Employees’ perception of OE directly positively affects employees’ perception of SR.

2.3. Employees’ WB

The community includes individuals in constant interaction in a particular space where they live and work [ 35 ]. In addition to the spatial dimension, a community may be determined by the common interest of its members [ 36 ]. Given that interactions between individuals within the community include several dimensions (psychological, cultural, spiritual, social, economic, and natural) [ 37 ], meeting all the needs of individuals related to these dimensions confers a WB status. Consequently, WB also includes the social, economic, environmental, cultural, and political dimensions [ 38 ].

The concepts of health and WB are often used together and sometimes even interchangeably. However, health refers to an individual’s physiological or psychological indicators [ 39 ], while WB is a more comprehensive concept that aim to describe the individual’s general condition in a social context [ 40 , 41 ]. Therefore, WB consists appropriately of non-contextual measures of life (e.g., life satisfaction, happiness), general considerations (e.g., job satisfaction), and more specific dimensions (e.g., salary satisfaction, good workplace).

WB includes the individual’s general satisfaction regarding privacy, social relationships, work environment, and reduced stress [ 42 , 43 , 44 ]. Therefore, employers’ concern for ensuring a better job for their employees and a WB status was considered a component of SR, which is part of ethical behavior.

The concept of WB has therefore been approached in the paradigm of the multidimensionality of human, social, and economic capital [ 45 ]; physical, psychological, social, and economic WB [ 46 ]; and social, environmental, economic, health, political, physical, and residential dimensions [ 47 ]. The economic dimension is manifested by providing sufficient income, job stability, and existing opportunities in the labor market [ 47 , 48 ]. The social dimension includes income and profession that offer a certain social status [ 37 , 49 ] and concepts such as security, community spirit, cohesion, trust, reciprocity, involvement, and informal interaction [ 5 , 37 , 47 ].

Employers want to improve employee wellbeing because lowering WB can lead to unhappiness, decreased productivity, and increased stress and anxiety, eventually leading to a high turnover [ 44 , 50 , 51 , 52 ]. Therefore, as a dimension of relationships and social status, employees’ WB can be considered an objective of SR concerning its human resources and work environment [ 53 ].

The WB concept integrates employees’ status at and outside the workplace: job satisfaction or dissatisfaction, reward, working relationships, working conditions, friendly work environment, promotion opportunities, care for the environment, and interest in the general health community. WB is a complex and multifaceted construct [ 54 ], balancing between objective indicators (life standards) and subjective measures (psychological, social, and spiritual aspects) [ 55 ].

Other authors have added to the social dimension the interaction between individuals in the family, at home, and in neighborhoods [ 56 ] or education [ 38 ]. The environmental dimension includes the perception of individuals about the place where they live, with a solid psychological load for individuals. McCrea et al. [ 47 ] suggested that environmental satisfaction, green areas, transport, air quality, energy quality, and sustainability are crucial indicators of WB [ 37 , 45 , 47 , 57 , 58 , 59 ].

2.4. Relationships between Employees’ WB, SR, and OE

SR is a social obligation of the organizations to decide and act responsibly following the objectives and values of society [ 60 ]. Currently, SR is perceived as a continuous commitment of organizations to behave ethically and contribute to the economic development of the community and society in which the organization operates by improving the quality of human WB, through involvement in the local community and society. SR is the basis of sustainability, competitiveness, and innovation and is a strategic advantage of any organization [ 61 , 62 , 63 , 64 ]

Due to the potential impact of organizations on WB employees and the community in which they operate, ethical behavior and SR programs are of great importance for overall WB [ 65 ]. In this context, Chowdhury et al. proposed an SR and OE reporting on stakeholder health and WB [ 66 ], based on the Global Reporting Initiative (GRI) sustainability reporting standards. Cheng et al. [ 67 ] suggest that if SR activities do not live up to employees’ expectations, they generate mistrust of organizations, leading to reduced commitment [ 34 , 67 , 68 ] and WB and increasing turnover rates [ 67 ]. Various authors [ 67 , 68 , 69 , 70 , 71 ] have studied the impact of employees’ perceptions regarding CSR and organizational ethics on outcome measures: employee satisfaction, turnover rates, and overall organization sustainability. Consequently, examining and monitoring employees’ perceptions regarding SR and OE is beneficial for the organization’s human resources management and strategic management to meet the expectations of all stakeholders, especially employees [ 67 , 68 , 69 , 72 ].

Based on the relationships between OE, SR, and WB described in the literature, we formulated the following research hypothesis:

Employees’ perception of SR and OE directly positively affects employees’ perception of WB.

Internal stakeholder-oriented SR programs target WB employees by obtaining employee satisfaction based on meeting the expectations of their organizations [ 73 ]. Employees have an ethical expectation towards their organizations in terms of job stability, recognition and appreciation, fairness of rewards, opportunities for professional and personal development, freedom of association in trade unions, work–life balance, involvement in decisions, autonomy, participation in organizational decisions, and involvement of the organization in the community [ 74 ]. In addition, organizations will invest in ethical health and safety management practices that impact the company’s performance [ 75 ].

Occupational health and safety (OHS) promote human resource management, safety, occupational safety, physical and mental health, and in general, an essential part of the WB of human resources [ 76 , 77 , 78 , 79 ]. WB incorporates the employee’s physical, emotional, and mental wellbeing, exerting a significant positive impact on achieving objectives [ 74 , 77 , 80 , 81 ]. However, several authors [ 82 , 83 ] have highlighted the need to see the health and wellbeing of employees beyond the work environment by taking into account other ethical factors related to other areas of human resources: the process of training and development [ 9 , 10 ], ensuring equal opportunities in business [ 11 ], work–life balance [ 12 ], job stability, and existing options in the labor market [ 47 , 48 ].

Researching employees’ perceptions and attitudes towards SR, OE, and WB is important [ 34 , 84 , 85 ] because it can lead to seeking opportunities for better implementation of responsible and ethical social practices and initiatives. In addition, companies are increasingly recognizing the strategic importance of OE and SR in ensuring employees’ WB and the sustainability of their business [ 69 , 84 , 86 ], as well as employee satisfaction in implementing SR programs and ethical conduct.

Based on these considerations, we formulated the following research hypothesis:

Employees’ perception of OE has significant indirect positive effects on their perception of WB, mediating their perceptions of SR.

Figure 1 shows the conceptual model of the research on the relations between SR, OE, and WB.

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Conceptual model. Source: designed by authors.

3. Methodology

3.1. research design.

To study the impact of SR and OE on employees’ WB, we conducted quantitative research in a survey among employees of Romanian companies.

The data collected in a database were subjected to descriptive and inferential statistical analyses. To determine the intensity and meaning of the relationships between the research variables, we used structural equation modeling and artificial neural network analysis. Finally, the obtained results confirmed the hypotheses’ validity based on the literature. Figure 2 illustrates the research process.

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Research process. Source: own construction.

3.2. Selected Sample

To perform the empirical analysis, we conducted a survey based on a questionnaire filled by 423 employees from Romanian organizations, small and medium enterprises, and large corporations between March 2022 and May 2022. The sampling method chosen was random stratified sampling. The target population of the research is the employees in Romanian private companies, comprising 4,500,000 individuals. The sample of 423 individuals was selected with a level of confidence of 95%, with a margin of error of 4.762%. Table 1 describes the descriptive statistics for the selected sample.

Descriptive statistics.

MinMaxMeanStd. DeviationSkewnessKurtosis
Economic sector142.810.981−0.239−1.048
Size131.800.7480.345−1.146
Gender121.300.4590.875−1.241
Age152.701.0990.606−0.250
Education153.301.101−0.615−0.237
Experience in work152.301.3450.669−0.762
Experience in organization152.911.1360.187−0.752
Position121.200.3991.5170.301
Income category152.911.512−0.012−1.443

Source: designed by authors using SPSS v.20 (SPSS Inc., Chicago, IL, USA).

Employees were selected in the sample using the economic sector criterion: 9.9% in agriculture, 29.8% in industry, and 60.3% in services (including technology and communications). The sample structure according to the size of the companies from which the employees come is as follows: 40% of the employees come from small and medium companies, 40.2% come from large companies, and 19.8% come from multinational companies. Within the sample, 68.15% are male and 31.85% are female. Regarding the age, 9.95% are under 30 years old, 69.93% are between 31 and 55 years old, and 20.12% are over 55. In addition, 19.8% of respondents have received secondary education, and 80.2% have studied a higher degree. Over 60.3% of respondents have more than ten years of work experience, and over 60.2% have more than ten years of experience in the organization. Most respondents are subordinates, with only 19.81% being managers. Depending on the income category, over 43.32% of respondents have a net income above the average net salary in the economy.

3.3. Research Tools and Methods

The design of this study involved conducting a survey based on a questionnaire applied to employees of Romanian organizations. The questionnaire contains the socio-economic-demographic variables that characterize SR, OE, and WB. We evaluated the impact of SR and OE on WB empirically by using statistical methods for modeling structural equations (SEMs) in the partial least squares (PLS) variant using a procedure described by [ 87 , 88 ], similarly used by [ 89 , 90 ]. The initial literature review established measures for each construct and the reliability and validity of variables using various statistical tests (Cronbach’s Alpha, Composite Reliability, and Average Variance Extracted). We built items for SR and OE based on previous research. SR includes five dimensions describing the levels of responsibility: responsibilities to shareholders (increasing the organizational value); responsibilities to employees, unions, customers, and suppliers (societal welfare, organizational SR philosophy); responsibilities to central and local public authorities and the community (organizational citizenship); and responsibilities to society (societal contribution). The items concerning SR, which define the levels of responsibility, were defined based on [ 15 , 91 , 92 , 93 ]. OE includes five dimensions describing the ethical principles in the organization: transparency, fair competition, respect for the customer, employees’ wellness, and sustainability, as stated in other research [ 8 , 15 , 33 , 89 ]. The WB scale was established based on the TINYpulse questionnaire [ 94 ], using the eight dimensions for WB: general WB, emotional WB, environmental wellness, intellectual WB, occupational WB, physical health, and social WB. To measure the variables SR, OE, and WB, we used a five-level Likert scale (5—total agreement, 4—partial agreement, 3—agreement, 2—partial disagreement, 1—total disagreement).

The exogenous variables (the items of the questionnaire) which characterize SR, OE, and WB are presented in Table 2 .

Exogenous variables.

Latent VariablesExogenous Variables
CodeDescription
WBGWBGeneral WB
EWBEmotional WB
EWEnvironmental wellness
IWBIntellectual WB
OWBOccupational WB
PHPhysical health
SWBSocial WB
SWSpiritual wellness
OEOE1Transparency
OE2Fair competition
OE3Respect for the customer
OE4The organization treats employees well
OE5Sustainability
SRRS1Organizational citizenship
RS2Societal contribution
RS3Societal welfare
RS4Organizational SR philosophy
RS5Increasing the organizational value

Source: designed by authors based on [ 75 , 76 , 77 , 78 ].

The self-administered questionnaire results can be affected by common method bias (CMB) [ 95 ]. We tested all variables using Harman’s single-factor test using principal component analysis. The extracted variance was below 50% (45.329%), attesting to no significant common method bias effects [ 95 ].

We used structural equation modeling (SEM) in the partial least square variant (SmartPLS 3.0 software: SmartPLS GmbH, Oststeinbek, Germany) to validate the three hypotheses. The model has three unobservable latent variables: SR, OE, and WB. Each of the three latent variables depends on a series of observable exogenous variables defined by the items in the questionnaire. Figure 3 shows the exogenous variables for each latent variable.

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Preliminary model. Source: designed by authors using SmartPLS 3.0 (SmartPLS GmbH, Oststeinbek, Germany).

Following the methodology described by [ 88 ], we eliminated from the model those items that have an outer loading below 0.7, considering the lower influence of these items on the latent determinant variables. Figure 4 presents the resulting model.

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Object name is ijerph-19-08838-g004.jpg

Model applied. Source: designed by authors using SmartPLS 3.0 (SmartPLS GmbH, Oststeinbek, Germany).

The validity and reliability of the model were tested following the procedure described in [ 87 , 88 ]. All three indicators, namely Cronbach’s Alpha, Composite Reliability, and Average Variance Extracted), recorded good values ( Table 3 ). In the model, SRMR recorded a value of 0.048, and NFI recorded a value of 0.934.

Validity and reliability.

Cronbach’s AlphaComposite ReliabilityAVE
Organizational ethics0.8890.9190.696
Social responsibility0.8750.9070.664
Wellbeing0.8790.9100.670

Source: designed by authors using SmartPLS 3.0 (SmartPLS GmbH, Oststeinbek, Germany).

Finally, running a bootstrapping process, we determined the path coefficients and specific indirect effects in our model for assessing the role of SR and OE in ensuring employees’ WB ( Table 4 ).

Path coefficients and specific indirect effects.

Original SampleStandard DeviationT Statistics Values
Organizational ethics Social responsibility (H1)0.8120.01171.7460.000
Organizational ethics Wellbeing (H2)0.4960.03315.0310.000
Social responsibility Wellbeing (H2)0.4500.03313.4620.000
Organizational ethics Social responsibility Wellbeing (H3)0.3650.02315.6370.000

Analyzing the path coefficients and specific indirect effects in Table 4 , we affirm that all three hypotheses are valid. The organizations’ ethical practices positively affect SR programs in employees’ perception. The two sustainability constructs (OE and SR) positively impact employees’ WB. In addition to the direct effect on WB, the organization’s ethical behavior has substantial indirect effects on WB, with an SR program based on ethical principles and values as a mediating variable.

5. Discussions

The relationship between SR, OE, and WB has not frequently been subject to an evaluation process in the literature on SR and OE. However, there is a recognition that this relationship can contribute to establishing sustainable jobs to ensure WB at the individual level and welfare at the societal level. In recent years, several researchers have conducted empirical studies to determine the impact of SR programs on work results from the perspective of stakeholders (including employees) [ 34 , 96 , 97 , 98 , 99 ]. Employees are key stakeholders who, once satisfied, can positively influence the implementation of SR programs [ 97 ]. Therefore, employees’ perceptions of SR shape the community’s view of organizations [ 96 ]. In addition, employees with a good level of WB can improve and stimulate SR programs and ethical behavior that promotes all stakeholders’ wellbeing, including employees [ 34 ].

Employers improve employee WB because low WB can produce unhappiness, lower productivity, and increased stress and anxiety, eventually leading to a high turnover rate [ 44 , 50 , 51 , 52 , 67 ]. Therefore, employees’ WB is an objective of SR programs concerning its human resources and work environment [ 53 ], ensuring employee commitment [ 68 ]. Researching the relationships between the variables of the researched model, SR and OE can contribute to increasing economic, social, and environmental performance and the health and wellbeing of employees, as we have demonstrated by confirming the validity of the H2 hypothesis.

The conceptual model in this study, which reveals the relationship between corporate SR and OE, also aims to help integrate and facilitate the implementation of SR activities and tools to ensure ethical conduct in organizations. Various authors have pointed out the need for a unified theory regarding SR and OE because there is much confusion and redundancy between the dimensions of the two concepts [ 27 , 30 , 33 , 89 ]. In our research, we tested the relationship established between SR and OE by confirming the validity of the H1 hypothesis. Combining these two areas can provide sustainability to organizations and ensure employees’ WB and that of the community they operate in [ 20 ].

Many studies have attempted to understand the impact of SR and ethical practices on employees’ satisfaction, a constituent of employees’ WB [ 34 , 84 , 85 , 100 , 101 , 102 , 103 , 104 , 105 , 106 , 107 ]. Researching employees’ perceptions and attitudes towards SR, OE, and WB is important [ 34 , 84 , 85 ] because it can lead to seeking opportunities for better implementation of responsible and ethical social practices and initiatives. In addition, employees’ satisfaction provides an insight into the emotional state of work experience and environment [ 108 ], directly contributing to organizational performance [ 73 ]. Although employees’ satisfaction is an essential component of employee WB, it is not just about satisfaction. There are several areas of SR that address job satisfaction aspects: job stability; employee status; fair pay; social benefits; occupational safety and health; work–life balance and employment opportunities; training and personal development; cordial labor relations; and a work environment characterized by communication, transparency and social dialogue, equal treatment, and equal opportunities [ 34 , 75 , 84 , 109 ]. Satisfaction is directly related to work, while WB also covers general aspects of general physical and mental health, relationships in the social environment, social status, care for the environment in which they live, and the individual’s connection to the community and society in general.

Programs in the SR area stimulate the improvement of health, the environment, and involvement in educational activities, acting as an essential mechanism for mediating between the organization’s ethical practices and improving employees’ and communities’ WB [ 110 ], as demonstrated by the confirmation of the validity of Hypothesis H3. Companies are increasingly recognizing the strategic importance of OE and SR in ensuring employees’ WB and the sustainability of their business [ 69 , 84 , 86 ], as well as employee satisfaction in implementing SR programs and ethical conduct. Organizations that promote health and safety management practices and ensure an adequate work environment [ 88 ] benefit from increased employee engagement, as the organization demonstrates an interest in employees’ WB. Rela et al. showed that other factors, such as community capacity and motivation, government policy, and other stakeholders’ contributions, influenced WB [ 5 ].

The results of our research are in line with the results of previous research showing that ethical issues can have a significant impact on physical health and spiritual wellbeing.

6. Conclusions

The research results indicate that the variables SR and OE have significant and positive influences on WB dimensions, consistent with previous studies showing a significant relationship between these constructs [ 4 , 111 , 112 , 113 , 114 , 115 , 116 , 117 ]. SR contributes to the satisfaction of employees’ interests related to WB dimensions (health, education, economy) and OE by inducing ethical behavior and attitudes that contribute to increasing WB. Research results confirm that SR programs and ethical behavior contribute to the employees’ wellbeing.

6.1. Practical Implications

Although OE activities and SR programs target both stakeholders, the present research focused on critical internal stakeholders (employees), given their dual nature. Employees are also constituents of an essential category of external stakeholders—the community. The research results confirmed the importance of SR and OE for improving employee wellbeing, SR being a mediating factor between OE and WB. These results support an essential mechanism by which OE activities and SR programs can increase WB, especially when the organization does not have sufficient resources to motivate employees and ensure job satisfaction. Employee satisfaction with job stability issues, guaranteeing a friendly work environment, caring for the environment in which they live, and organizational involvement in community social causes can all contribute to the overall WB of employees.

6.2. Theoretical Implications

Three issues can be highlighted as theoretical implications of this research. First, most studies have focused on external stakeholders [ 118 , 119 , 120 , 121 ], with few focusing on the positive effect of OE activities and SR programs on internal stakeholders. Second, while many types of research have addressed various facets of wellbeing (psychological, health, occupational wellbeing, etc.) [ 118 , 122 , 123 , 124 ], this study aimed at a holistic approach to the concept of WB. Although SR depends on the macroeconomic and organizational context, the main expectations for organizations are reducing poverty in the community and society in general, caring for the environment, improving public health, increasing employee WB, and an increasingly efficient educational process.

6.3. Limitations and Recommendations for Future Research

The analysis revealed a direct positive effect of SR and OE on employees’ WB. However, organizational ethics have a significant indirect positive impact on WB through SR programs that induce ethical conduct and the attitude of employees. These results should take into account various limitations of the research. First, the research only targets a category of stakeholders (employees) with a dual nature (internal and external) by their presence in the organization’s community. Secondly, the research was carried out only among the employees of some Romanian organizations, making it impossible to consider cultural differences between employees from different countries. Finally, the transversal approach to research provides more information through the results obtained, but does not offer a perspective on the evolutions of perceptions over time as a longitudinal approach.

Future research may address some of these limitations. In addition, future research may focus on studying the effects of moderating factors, such as communication, reputation, and organizational culture. Furthermore, there is a need for a deep investigation of the OE practices’ integration and alignment with SR programs to support a more synergistic impact on WB.

Funding Statement

This research received no external funding.

Author Contributions

Conceptualization, C.G.B., M.M.N., M.C., and S.D.; methodology, C.G.B.; software, C.G.B.; validation, C.G.B., M.M.N., M.C., and S.D.; formal analysis, C.G.B.; investigation, C.G.B., M.M.N., M.C., and S.D.; writing—original draft preparation, C.G.B., M.M.N., M.C., and S.D.; writing—review and editing, C.G.B., M.M.N., M.C., and S.D.; project administration, C.G.B. All authors have read and agreed to the published version of the manuscript.

Institutional Review Board Statement

Informed consent statement, data availability statement, conflicts of interest.

The authors declare no conflict of interest.

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Home > Books > Corporate Social Responsibility - A Global Perspective

CSR and Environmental Responsibility Eco-friendly Practices

Submitted: 04 January 2024 Reviewed: 09 February 2024 Published: 18 September 2024

DOI: 10.5772/intechopen.1005333

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Corporate Social Responsibility - A Global Perspective

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This chapter discusses the importance of corporate social responsibility (CSR) on the sustainability of the environment with the application of eco-friendly practices. The incorporation of CSR in the company activities enables the company to apply ethical practices that achieve economic, social, and environmental sustainability. CSR with eco-friendly activities improves the economy and sustains the environment. The discussion, therefore, is based on how CSR eco-friendly practices contribute positively to the environment and the community in achieving the three sustainable pillars: economic, social, and environmental factors. The methodology used was a semi-systematic review, which used a narrative review approach for topics designed from CSR and environmental responsibility eco-friendly practices main topic from literature written by different groups of researchers within the diverse discipline of CSR. Through some global companies discussed in the chapter, it is known that companies implementing sustainable CSR formulate the policy according to the nature of their ethical and environmental impact and have different strategies for achieving their goals according to their respective environmental impacts. The discussion also found that many organizations globally are implementing CSR to achieve economic, environmental, and social aspects. However, there is a lack of a holistic approach in the implementation of CSR activities and CSR strategic planning.

Author Information

Joseph chilombe *.

Symon Chiziwa

*Address all correspondence to: [email protected]

1. Introduction

Corporate social responsibility (CSR) requires companies to do business in an ethical manner and to be responsible to employees, customers, and stakeholders when doing business and contribute to society and social issues [ 1 ]. When companies conduct their activities, their activities release particles and gases into the air, water, and soil, many of which have a negative impact on the environment. Companies need to consider the community and environment in which they operate [ 1 ]. It is when the concept of CSR is needed to provide support to the community and ethical behavior in business for the company’s activities to be done in an ethical manner by using eco-friendly practices. Although the purpose of establishing a company is to generate profit, the company has an obligation to protect the environment and consider social factors. The conceptual underpinning of CSR emanates from a profound concern for human welfare and places explicit emphasis on the social dimensions of business activities, which intricately interconnect with the overall quality of life in society.

Corporate responsibility, within the CSR framework, encapsulates the ethical and societal obligations of companies, delineating their responsibilities toward society in terms of how they address social and ethical concerns, incorporating social and environmental considerations into their business operations, and managing their interactions with stakeholders [ 2 ]. The manifestation of CSR practices by companies signifies not only a commitment to the moral and ethical conduct of their operations but also an acknowledgment of responsibilities toward customers, suppliers, employees, shareholders, and society at large, transcending the sole pursuit of profit. Despite the myriad benefits that accrue to companies implementing CSR practices [ 3 ], managers engaged in such endeavors encounter challenges during decision-making processes, including the identification of pertinent social issues, selection of initiatives aligned with those issues, development and implementation of comprehensive plans for projects, and the evaluation of outcomes [ 4 ].

The decision-making process assumes paramount significance in the CSR landscape, serving as the pivotal stage wherein initiatives are adopted, therefore, managers are advised to conduct a strategic plan for CSR activities during the planning stage to align the resources/competencies and the opportunities identified within the external environment to ultimately lead to higher levels of performance [ 5 ]. Strategic planning needs to consider community service, corporate philanthropy, corporate social marketing, and environmental issues [ 1 ]. It is imperative to recognize that CSR is a voluntary undertaking, wherein companies integrate social and environmental considerations into core business strategies and operations while adhering to ethical and legal obligations in their interactions with stakeholders [ 6 ].

1.1 Chapter overview

This chapter, therefore, highlights the corporate social responsibility theoretical background and the methodology that led to the development of the chapter. The chapter further explains CSR’s positive perspectives and progress and the benefits of CSR philanthropic responsibilities. The chapter also explains the importance of the involvement of employees in the implementation of CSR practices and the relationship between CSR, green shared vision and green human resource management and green innovation and green marketing. Eco-friendly practices by some companies through CSR have been explained by citing five international companies narrating about their similarities and differences in the implementation of their eco-friendly practices. The chapter further explains the strategic implementation and strategic planning of CSR. Finally, the chapter discusses the implications of the study’s findings by the chapter through literature review.

1.2 Corporate social responsibility theoretical background

Corporate social responsibility, which is also referred to as corporate citizenship or conscious capitalism, has become one of the major contributors to environmental conservation [ 7 ]. There is a positive relationship between corporate social responsibility and corporate governance. Well-administered corporate governance improves corporate environmental performance; in addition, it is also responsible for activities that emerge with negative impacts on the environment [ 8 ]. Research proves that corporate environmental performance enhances performance organization’s good performance [ 9 ]. Nowadays, organizations are taking a leading role in recognizing the significance of environmental sustainability [ 10 ]. In this regard, organizations globally are embracing green efforts to educate employees, customers, and stakeholders about the increasing environmental degradation and climate change [ 11 ]. The paradigm shift of organizations to a green approach has gained much attention and has changed organizations from human resource management to human capital management that focuses on selecting, recruiting, and training employees to accomplish green goals [ 12 ] equipping employees with environmental responsibility. The green human resource management (GHRM) motive enables employees to understand the outcome of green activities [ 11 ]. According to Snyder [ 13 ], the implementation of corporate social responsibility by organizations increases economic, environmental, and social impacts because CSR considers corporate accountability, stakeholders, legitimacy, corporate sustainability, political issues, and justice.

1.3 Methodology

This chapter writing is focused on CSR and environmental responsibility eco-friendly practices with a narrative review approach for topics designed from CSR and environmental responsibility eco-friendly practices [ 14 ]. The partial aim is to highlight the significance of ethical and eco-friendly practices in the implementation of productive CSR in order to promote environmental protection innovation and the company’s economic value. For the purpose of this chapter, CSR literature from various authors has been used to unveil the importance of the application of ethical and eco-friendly practices in the implementation of CSR by companies. The methodology was used to find out the relevance of the implementation of CSR to the environment and eco-friendly practices.

2. Corporate social responsibility implementation model, perspective, and philanthropic responsibilities

This section discusses positive perspectives and progress of CSR, benefits of CSR philanthropic responsibilities, involvement of employees in CSR implementation, CSR green shared vision and green human resource management, green innovation, and green marketing.

2.1 Corporate social responsibility: positive perspectives and progress

The roots of corporate social responsibility (CSR) can be traced back to the 1930s when deliberations commenced regarding the social obligations of the business sector toward the community [ 15 ]. However, it was not until 1952 that Bowen introduced the formal concept of CSR to the global business sector [ 16 ]. The 1980s marked a pivotal shift, with CSR evolving into a more business-centric concept, as noted by Hoffmann et al. [ 17 ]. Initially, companies implemented CSR primarily to maximize profits, often neglecting the social and environmental dimensions of their operations [ 18 ]. However, a paradigm shift in the business mindset transformed the implementation of CSR, emphasizing the dual objective of economic benefits for businesses and the imperative to consider the improved conditions of customers, stakeholders, and the environment throughout business operations [ 19 ].

Dmytriyev [ 19 ] urges companies to forge relationships with a wide array of stakeholders and should look beyond strategic self-interest and short-term profits, as their behaviors can have an effect on local communities and the natural environment [ 19 ]. Camilleri [ 20 ] expounds that stakeholders may have different needs and expectations, as illustrated in Figure 1 . Positive expectations bring economic improvement to the company.

the role of social and environmental responsibility essay

Stakeholder demands and expectations. Adapted from: (Camilleri [ 20 ], p. 6).

In contemporary business operations, CSR has emerged as a strategic tool providing companies with competitive advantages and yielding positive economic outcomes. Consequently, CSR has garnered attention from industry practitioners, policymakers, and researchers in the field of management [ 21 ]. The World Business Council for Sustainable Development (WBCSD), serving as a catalyst for change toward sustainable development, asserts that CSR contributes to economic development while simultaneously enhancing the quality of life for employees, their families, and the broader community and society [ 22 ].

Gutterman [ 23 ] advocates corporate companies to incorporate CSR into their policies, emphasizing the prioritization of the protection of people, communities, and the natural environment. This advocacy stems from the understanding that CSR practices uphold ethical values and demonstrate respect for people, communities, and the environment, all while companies continue to generate profits. Gutterman’s encouragement aligns with a sustainable paradigm that underscores the importance of addressing current needs without compromising the well-being of future generations [ 24 ]. Similarly, Nagaty [ 25 ] encourages companies to focus on the triple-bottom-line—comprising economic development, environmental conservation, and social improvements—while Boccia and Sarnacchiaro [ 26 ] affirm that companies can create value for all stakeholders through CSR initiatives.

The triple-bottom-line represents a shift from an old to a new paradigm, where traditional CSR approaches aimed at achieving singular dimensions [ 27 ]. In contrast, the contemporary implementation encompasses all dimensions to achieve sustainability. Each dimension within this new paradigm reflects implicit corporate ambitions, as elucidated in Table 1 . The table explains that each of the dimensions in the old and new paradigms reflects implicit corporate ambition. This explains that the approach to the implementation of CSR is different from the old paradigm, the new paradigm is for sustainability.

DimensionOld ParadigmNew Paradigm
MarketsComplianceCompetition
ValuesHard (economic figures)Soft (additional values)
CommunicationClosed (internal)Open (wider stakeholder analysis)
PartnershipsSubventionSymbiosis (win-win)
Life cycle technologyFocused on productsFocused on functions
TimeWideLonger
Corporate governanceExclusiveInclusive

Seven areas of transition.

Adapted from: (Mark-Herbert et al. [ 27 ], p. 2).

The shift of seven areas: markets, values, communication, partnerships, life cycle technology, time, and corporate governance is evident through changes in the concept of CSR, in the business and political world Sustainable Development Agenda adopted at the UN Conference on Environment and Development in Rio de Janeiro in 1992 and the Sustainable Development Agenda adopted at the World Summit in Johannesburg in 2002 [ 28 ]. Now sustainable development is recognized as a cornerstone of corporate social responsibility [ 29 ]. Navickas et al. [ 28 ] argue that CSR focus is more on corporate business models and the concept of sustainable development on key changes in the global environment.

2.2 Benefits of CSR philanthropic responsibilities

Corporate social responsibility (CSR) assumes a transformative role in affecting positive societal change through philanthropic initiatives, utilizing resources derived from company profits. The integration of CSR with philanthropy positions CSR as a crucial facet within the business sector’s public perception. CSR engenders a symbiotic relationship, establishing interdependence between the company and the community. Acting as a bridge, CSR fosters connectivity between the business entity and the non-profit sector, exemplified by the community. Embracing a philanthropic approach not only motivates the community but also serves as a testament to the company’s social influence, positive public image, and commitment to societal well-being [ 30 ]. In this light, companies must cultivate trust, project a positive reputation, and nurture robust relationships with employees, communities, targeted customers, and other stakeholders [ 31 ]. Implementing CSR with a focus on philanthropic responsibilities becomes a means for companies to acquire social influence.

Carroll [ 32 ] spurs companies to engage in community service and philanthropic activities that improve the quality of life in the areas they operate. Liu et al. [ 33 ] argue that companies need to implement environmental philanthropy in CSR practices because philanthropic activities are reinforced by business dividends articulated in the form of environmental corporate social responsibilities. However, philanthropy is the most optional and discretionary aspect of corporate social responsibility and has not always been related to bringing losses to companies or firms. Besides, Fedotova et al. [ 34 ] assert that companies engage in environmental philanthropic initiatives to gain a positive image, corporate trust, and enhance reputation, which yields a competitive advantage to the company. Eshra and Beshir [ 35 ] confirm that philanthropic actions are mutually beneficial for businesses and the communities in which the companies operate. However, Abbas and Dogan [ 36 ] and Allui and Pinto [ 37 ] support that companies that prioritize CSR with philanthropic activities gain a positive impact on their sustainable performance. On the contrary, Nagaty [ 25 ] eludes that some companies’ philanthropic responsibilities come as the last priority, which is not good. Mataruka et al. explain that philanthropic CSR cannot work, it needs to be incorporated with other CSR elements. The company needs to align with social, economic, and environmental investments when markets and demand expand, creating stakeholder value [ 38 ]. The study conducted by Mataruka et al. [ 39 ] addresses the mediating role of the philanthropic dimension of CSR in the relationship between other corporate practices and sustainable practices in Zimbabwe’s service-based firm sector, the result suggested that philanthropy is the mediator in the connection between the CSR dimensions of economic, ethical, and environmental responsibilities and the study emphasizes that relying solely on philanthropy is not adequate to maintain sustainability.

2.3 Involvement of employees in CSR implementation

Employees, as internal stakeholders, play a pivotal role in enhancing organizational productivity through active engagement in CSR activities [ 40 ]. Serving as key implementers, employees contribute significantly to sustainable practices by reducing waste, sharing information, and participating in the design of new products. Companies, such as Shangri-La hotels and resorts in the National Capital Region of India, exemplify the commitment to CSR by initiating campaigns under the umbrella brand of “Sustainability,” addressing key CSR areas, including environment, health and safety, employees, and the supply chain [ 41 ].

2.3.1 CSR, green shared vision and green human resource management

Nowadays, companies are encouraged to initiate green initiatives to produce eco-friendly products and services, which are less harmful to the environment because customers are motivated to buy high prices for eco-friendly products and services. For this reason, it is of great importance that companies need motivated employees to achieve their green objectives [ 42 ]. This can be achieved if companies adopt green policies in their green shared vision that will initiate the implementation of socially responsible activities to gain society’s and stakeholders’ attention. Yang et al. [ 42 ] posit that green shared vision and green human resource management (GHRM) practices are strategies that prompt all members to adopt green behavior in their own capacities. According to Sharabati [ 43 ], literature found that the positive relation of CSR to employees in maintaining the engagement, enthusiasm attitude as well as behavior concerning in workplace the environment, and green shared vision is an approach that encourages each member to undertake environmentally friendly practices in their individual capacity in the workplace. GHRM ensures that companies effectually adopt more ecologically sound practices since it raises employees’ environmental consciousness because employees develop green customer citizenship behavior [ 44 ]. Arguably, results indicate that employees who share a green vision embrace sustainable behaviors [ 45 ]. Yang et al. [ 44 ] argue that both CSR and GSV have a significant impact on voluntary green work behavior (VGWB) in an organization. For example, green customer citizenship behavior for hotel employees includes recycling, choosing environmentally friendly products, and supporting environmentally responsible hotels [ 46 ] that have benefits like the reduction of operating costs by conserving resources, the attraction of environmentally conscious customers willing to pay a premium for sustainable practices and enhancement of company’s responsible businesses [ 47 ].

2.4 Corporate social responsibility triple-bottom-line-approach, green innovation, and green market

This section discusses the CSR triple-bottom-line-approach contribution to environmental responsibility eco-friendly practices, green innovation and green market for CSR eco-friendly practices, eco-friendly practices by companies through CSR, strategic implementation for CSR, and environmental responsibility eco-friendly practices.

2.5 CSR triple-bottom-line-approach contribution to environmental responsibility eco-friendly practices

Corporate social responsibility (CSR) adopts a triple-bottom-line (TBL) approach, integrating economic, environmental, and social values to manage sustainable corporate conduct. Initially conceptualized by John Elkington in 1994, the TBL approach seeks to balance these three imperatives, aligning with the economic, social, and environmental responsibilities denoted as profit, people, and planet [ 48 ]. The TBL approach transcends traditional corporate models, emphasizing the importance of managing corporate conduct holistically [ 49 ]. By achieving a balance between economic, environmental, and social imperatives, the TBL approach ensures a comprehensive fulfillment of CSR responsibilities [ 50 ]. This multifaceted approach is essential for fostering sustainability, with economic prosperity, social equity, and environmental responsibility intertwined to achieve corporate objectives [ 49 ].

2.5.1 Green innovation and green market for CSR eco-friendly practices

Various internal factors, such as green innovation (GI) and green market (GM), have been noted to impact the implementation of corporate social responsibility (CSR) and sustainability, as evidenced by previous researchers [ 51 ].

2.5.1.1 Green innovation

Green innovation is a means of creating new processes and using technologies that implement new and unique ideas to minimize negative environmental impacts, such as carbon footprint and pollution [ 52 ]. GI consists of green technological practices, such as green product, process, managerial, and marketing innovation and the execution of green human resource management practices, which include green training and development, administrative support and culture, recruitment and selection, compensation, and benefits [ 53 ]. GI is directly linked to CSR and sustainability due to its aspect of environmental protection [ 54 , 55 ]. Go-green is an initiative practiced by organizations to do away with eco-friendly problems. GI is practiced in green products, green marketing, green processes, and green management. GI processes are meant for an eco-friendly environment, decreasing consumption of energy and lean production processes, controlling pollution emission and waste recycling, improving the performance of the organization, and providing a pollution-free environment to society at large scale [ 56 ].

A study conducted by Ilvitskaya and Prihodko [ 57 ] explains that GI includes technology, managerial, and organizational innovations that help to sustain the surrounding environment. In addition, the study conducted by Fernando et al. [ 58 ] showed that GI, regulation, supplier intervention, and technology have a strong influence on sustainable performance mediated by service innovation capabilities.

It is therefore important for companies to use green innovation practices. However, it may be difficult to implement GI practices because of difficulties in developing green technologies due to other barriers [ 59 ]. In addition, the implementation of GI requires researchers to assess the impact of various policy frameworks on environmental sustainability initiatives that needs time and resources [ 60 ]. Importantly, there is a need for a comprehensive SWOT study to understand consumer behaviors and attitudes toward green products and services because consumer choices play is paramount in shaping market demand for sustainable alternatives [ 61 ].

The implementation of CSR sustainable practices often leverages green innovation strategies. Green innovation involves the production of environmentally friendly products using sustainable materials and adhering to ecological product design principles. The application of green innovation attracts a green market, as the emphasis on environmentally responsible products aligns with consumer demands and expectations [ 54 , 62 ]. Green marketing, characterized by environmentally friendly operations and services, extends beyond production methods to include consumption, disposal practices, and ethical business decisions [ 63 ]. Companies adopting green marketing not only reduce negative environmental consequences but also enhance customer health and welfare, contributing to the development of a positive corporate reputation [ 64 ].

2.5.1.2 Green marketing

According to Deshmukh and Tare [ 65 ], green marketing (GM) refers to the encouragement and an effort to pursue the selling of environmentally friendly goods and services. Therefore, GM is a strategy used by companies to create and promote goods and services that are environmentally friendly and sustainable and do not have any adverse effects on the environment [ 65 ]. The positive effects of GM on the environment are products such as low carbon footprint, energy efficiency, and recyclable nature of products.

There is a significant relationship between CSR and GM in today’s business environment [ 65 ]. Nowadays, customers are very sensitive to the goods and services that they use since they know that the bad products are harmful to them personally or their environment. As such, companies make sure that their products take proactive measures to address social and environmental issues [ 66 ]. Nowadays, customers have grown more environmentally conscious, favoring eco-friendly products, and perceiving socially responsible buying behavior as more appropriate. This is because green marketing and eco-friendly activities are becoming more popular as a strategic endeavor in companies’ production process. Therefore, companies face the challenge of being more environmentally friendly [ 64 ] to meet customer’s and consumer’s needs. In addition to satisfying customer needs, green marketing considers the environment and promotes corporate social responsibility [ 67 ]. The company’s competitive advantage can be complemented by green marketing and CSR through the company’s reputation and brand image [ 65 ]. Research has revealed that adoption of sustainable practices results in cost savings, reduction in resource usage, and long-term business resilience [ 68 ].

2.6 Green marketing and CSR practices: Challenges and criticisms

In response to the global appeal to companies on the implementation of sustainability and social responsibility, many companies use green marketing and CSR strategies in order to satisfy stakeholders and consumers who are environmentally sensitive [ 65 ]. However, the companies meet challenges in the implementation of green marketing such as greenwashing, experiencing problems in balancing sustainability and profitability goals, and issues with regulation and industry standards [ 65 ]. Greenwashing is deceiving customers into thinking that a company’s goods or services are more environmentally or socially responsible or friendly than they actually are [ 69 ]. This is the reason why the government must have monitoring bodies to assess pro-environmental behavior in the context of close business or one industry [ 69 ]. Another challenge is the strive to balance between a company’s profitability and sustainability objectives when companies implement CSR practices [ 65 ].

3. Eco-friendly practices by companies through CSR

Companies are ethically obligated to adopt fair and environmentally responsible practices in their CSR activities. This involves a consideration of major environmental CSR components, such as waste and emission elimination, maximization of energy efficiency, and the reduction of practices detrimental to natural resources [ 70 ]. Eco-friendly practices encompass proper packaging materials, clean energy usage, and the incorporation of sustainable materials in construction.

Companies, while seeking to maximize profits, often contribute to environmental degradation through resource exploitation and pollution. Excavation of rocks, release of industrial effluents, and the use of fossil fuels emit pollutants that adversely affect the environment. CSR practices are instrumental in mitigating the adverse impacts of non-environmentally friendly practices, with companies increasingly integrating environmental considerations into all facets of their operations [ 70 ]. CSR factors, such as the formulation of corporate environmental policies, environmental audits, employee involvement, procurement of sustainable materials, and the use of environmentally friendly processes, are pivotal in addressing the environmental impact of company activities [ 71 ].

To ensure the success of eco-friendly practices in the supply chain, companies adhere to CSR green requirements. This involves selecting green suppliers who provide sustainable materials that meet environmental protection standards. Implementing CSR supply chain practices that prioritize environmental and eco-friendly considerations not only reduces environmental harm but also satisfies the green preferences of customers, enhancing profit-making opportunities [ 71 ].

The adoption of CSR practices, specifically those emphasizing eco-friendly approaches, is crucial in safeguarding the environment, reducing production costs, and minimizing waste [ 72 ]. Companies that prioritize CSR activities not only build a positive reputation but also contribute to global efforts in environmental conservation and sustainable development [ 73 ].

Udomphoch and Pormsila [ 74 ] conducted a study of corporate social responsibility in Thailand on packaging and communicated CSR to evaluate consumer buying decisions using the packaging from coconut fibrin. The company used local material (coconut fibrin) for green packaging, which creates jobs in the community by making paper and packaging from coconut fibrin. The production process is environmentally friendly. Corn starch paper has performed under alkaline conditions coupling a mixture of natural additives consisting of carboxymethyl cellulose and corn starch. The company’s effort of using local waste material (coconut fibrin) for green packaging is beneficial to the environment and job creation in the community by making paper and packaging from coconut fibrin pleased the community and consumers were delighted to buy the packaging.

3.1 Examples of international companies that use green market practices

Supekova and Szwajca [ 75 ] conducted a study in Slovak Republic, they highlighted the significance of green marketing in the modern business and economy and its importance in the future as well. The study involved three companies: Panasonic, DELL, and Samsung.

3.1.1 Panasonic

Panasonic is one of the largest electronic company in Slovakia. It invested in the production automation process, mainly in the manufacturing of loudspeakers. The company concentrates on the increase of the Energy Star brand level as well as components used in divisions. Panasonic through its manufacturing process proves that eco-friendly electronics can be manufactured massively with a minimal loss on process performances with more than 300 Energy Star products. The company improved its manufacturing process in waste recycling through green innovation and in 2013 the company’s factory waste recycling achieved a rate of 99.3%. The company uses lean production because it uses recycled plastic waste in its product manufacturing process. In order to control energy use, the company established its own power and water-saving function. Furthermore, the company ensures that home products are power and water-consumption friendly, using intelligent technologies to save consumption and be more ecologically effective. Although the company uses principles of green marketing are widely implemented in the production process and investment to change the appliances to be eco-friendly and power-efficient.

DELL company sells personal computers (PCs), servers, printers, and other electronic equipment. In terms of green marketing, the company focuses mostly on delivery, packaging, and shipping. The company has a policy called “3Cs”–cube–content–curb. The policy focuses on the package box itself, the product that is being packaged and the way how the product and box itself could be recycled. The company manages to decrease the waste production among the company itself and for the customers through the policy. Based on the policy achieves in the reduction of box sizes, transportation of more products at one time, and reduction in waste. Importantly, the production process is environmentally and eco-friendly because it uses natural materials in their packages, such as bamboo cushions or straw initiative. On the contrary, Slovak consumers may not be clear on green innovation and green market, since the company’s activities are mostly focused on foreign consumers and green marketing activities.

3.1.3 Samsung

Samsung is a manufacturer of electronic equipment such as LCD and LED panels mobile phones, digital cinema screens, and laptops. The company is a global leader in carbon management. Slovakia-based LED panel factory in Voderady (SDSK) introduced technologies that reduce gases from LCD screens. The objective was to significantly reduce CO 2 production during the manufacturing process, as well as using the products. The effort made it possible to reduce Greenhouse Gas (GHG) emissions per sale by 20% from the 2017 levels and expanded eco-friendly products in their portfolio. The products are packed into recyclable and eco-friendly packages that can be reused or recycled. For example, ecological refrigerators are being packed into polypropylene packages that can be used more than 40 times instead of paper and polystyrene. However, KPMG survey [ 76 ] argues that CSR principles and actions applied in the manufacturing processes in the world’s 250 largest companies are not unified and hard to compare.

Unilever: Unilever is a company that uses agricultural raw materials such as palm oil, soy, and tea, from sustainable sources. The company’s stand on its “Sustainable Agriculture Code” (ethical sourcing and sustainable processing) of businesses encourages farmers to adopt eco-friendly practices [ 65 ].

Nestlé: Nestlé is the world’s leading nutrition, health, and wellness company. Nestlé emphasizes on the ethical sourcing of important goods such as cocoa and coffee. Using “Nestlé Cocoa Plan” and the “Nescafé Plan” the company encourages sustainable cultivation and conservation of natural resources such as farmers adopting regenerative practices and more than 15% of Nestlé key ingredients are grown in more regenerative ways [ 77 ]. In 2023, reduction of emissions was reduced by 33.19% due to the increase of renewable energy established in manufacturing facilities that were combined with energy efficiency measures [ 78 ].

Green marketing, characterized by environmentally friendly operations and services, extends beyond production methods to include consumption, disposal practices, and ethical business decisions [ 63 ]. Companies adopting green marketing not only reduce negative environmental consequences but also enhance customer health and welfare, contributing to the development of a positive corporate reputation [ 64 ]. In the supply chain, companies embrace CSR green requirements to implement eco-friendly practices, choosing sustainable suppliers and materials to reduce environmental harm and increase profitability [ 71 ].

3.2 Comparison and contrast of companies on eco-friendly practices

Companies that implement CSR have the same goal when using eco-friendly practices in their operations and production of their products. In this regard, companies are there to meet social activities in their operations. Marijana et al. [ 79 ] state that social activities, as a rule are useful and are there to achieve certain social goals. The similarity of companies in their ambition of using eco-friendly practices is that each company develops a policy according to their nature of ethical and environmental impact in order to achieve their sustainable objective. The contrast is observed when the companies want to achieve their objectives. The companies target areas that affect their environment, customers, consumers, or society. For example, Panasonic concentrates on the increase of Energy Star brand level in order to control energy use, DELL focuses mostly on sustainability practices on delivery, packaging, and shipping, Samsung concentrates on the reduction of gases from LCD screens, Unilever is a company that focuses at ethical sourcing and sustainable processing while Nestlé, which is a world’s leading nutrition, health and wellness company, encourages sustainable cultivation and conservation of natural resources.

3.3 Strategic implementation of CSR and environmental responsibility eco-friendly practices

The implementation of corporate social responsibility (CSR) is a multifaceted process governed by several critical factors, such as accountability, transparency, ethical behavior, stakeholder consideration, legality, human rights, and adherence to international standards, rooted in the stakeholder theory [ 80 ]. Scholars like Chiappetta et al. [ 81 ] underscore the importance of integrating CSR practices into the planning phase of company projects or operations. Emphasizing the significance of strategic implementation, [ 13 ] asserts that a well-designed and strategic approach is essential for achieving positive CSR outcomes. Consequently, the implementation of CSR demands a strategically-steered approach, ensuring systematic, efficient, effective, and practical management of CSR initiatives [ 82 ].

However, considerations of strategy choice in CSR implementation are contingent upon the size and structure of the company and its targeted objectives, as argued by Fet et al. [ 82 ]. For effective implementation, Maccarrone and Contri [ 83 ] advocate for the integration of CSR into the strategic management processes of an organization. The integrated management system (IMS), as presented by Anholonet et al. [ 80 ], serves as a framework for integrating individual management systems that address stakeholder needs and requirements [ 13 ]. The adoption of an IMS aligns company objectives uniquely, facilitating effective management [ 84 ].

Proposing a systematic approach to CSR strategy implementation, Fet and Knudson [ 82 ] introduced a four-step model that can be adapted for companies of varying sizes. The model encompasses (1) CSR planning, (2) CSR analysis, (3) CSR plan of action, and (4) CSR implementation. This four-step model offers a systemic guide for companies to formulate initial CSR strategy plans, analyze pertinent values and aspects to be incorporated, decide on the operationalization of aspects, and execute the implementation process. Fet and Knudson [ 82 ] contend that this model provides a structured framework that enables companies to monitor and enhance CSR activities systematically, ensuring adaptability to diverse organizational contexts ( Figure 2 ).

the role of social and environmental responsibility essay

Systematic approach to implement CSR strategies in a company. Source: (Fet and Knudson [ 82 ], p. 126).

3.4 Strategic planning in corporate social responsibility

The effectiveness of corporate social responsibility (CSR) initiatives hinges on sustainable planning and management that incorporates social and environmental dimensions to mitigate the carbon footprint, as asserted by Chiappetta et al. [ 81 ]. Acknowledging the pivotal role of well-planned strategies, Fet and Knudson [ 82 ] underscore that a meticulously crafted CSR strategy significantly enhances the successful implementation of CSR activities. In line with this perspective, Heikkurinen [ 85 ] introduced the concept of strategic corporate social responsibility (SCSR), signifying a deliberate integration of CSR within an overarching strategic framework [ 85 ].

Companies of varying sizes and across diverse industries are increasingly championing CSR in their operations. Notably, research indicates a growing recognition among companies regarding the imperative of integrating CSR into their business models to ensure productivity, competitiveness, and relevance in the swiftly evolving global business landscape [ 86 ]. Despite this widespread adoption of CSR, substantial variations persist in the planning and implementation of CSR activities across companies and the global spectrum.

By emphasizing a holistic approach, the planning of CSR activities must be seamlessly integrated into a company’s strategic planning and core operations. This integration is crucial to ensuring that the company aligns with the interests of stakeholders and maximizes economic and social value through sustainable means [ 87 ]. The planning and analysis stages, as highlighted by Latapí et al. [ 14 ], play a pivotal role in projecting how a company implements its CSR strategy, emphasizing the need for foresight and meticulous examination in the formulation and execution of CSR plans. Although many organizations and companies are implementing CSR, they do not approach CSR holistically and they lack strategic planning before the implementation.

3.5 Implications of the study’s findings

The chapter provides valuable insights for policymakers, companies, businessmen, and stakeholders interested in promoting the implementation of successful and meaningful CSR that is environmentally responsible by using eco-friendly practices in their activities. It encourages the companies to improve CSR regulation to guarantee companies adhere to ethical standards that efficiently address environmental issues by not just focusing on the economic benefits of their companies. It also encourages the companies to use eco-friendly practices in order to invest in sustainable technology in the implementation of CSR in order to promote environmental protection and innovation, at the same time making economic benefits. The chapter also provides examples of some global reputable companies that implement ethical and eco-friendly practices that other companies can borrow a leaf. Bashir et al. [ 88 ] assert that companies need to utilize green/eco-friendly initiatives because it is as an effective CSR tool to gain a competitive advantage because they reflect a favorable picture of the company and demonstrate the company’s ability toward society.

4. Conclusion

This chapter discussed the importance of CSR on the sustainability of the environment with the application of eco-friendly practices. Corporate social responsibility is a widely adopted and implemented concept in companies around the world. For this reason, companies need to implement CSR in an ethical manner through the use of eco-friendly practices. Companies produce waste during the production of products and offering services. Therefore, using ethical and eco-friendly practices with CSR minimizes environmental degradation. Eco-friendly practices bring a competitive advantage to companies. The use of ethical and eco-friendly practices results in a low carbon footprint, energy efficiency, and recyclable nature of products. For CSR to be effective, employees must be well trained in order to be acquainted with green shared vision, which will assist them in the implementation of ethical and eco-friendly voluntarily. CSR strategic planning and implementation of CSR activities will result in effective CSR that brings sustainability to the environment and community.

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Corporate sustainability and responsibility: creating value for business, society and the environment

Asian Journal of Sustainability and Social Responsibility volume  2 ,  pages 59–74 ( 2017 ) Cite this article

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Today’s corporations are increasingly implementing responsible behaviours as they pursue profit-making activities. A thorosugh literature review suggests that there is a link between corporate social responsibility (CSR) or corporate social performance (CSP) and financial performance. In addition, there are relevant theoretical underpinnings and empirical studies that have often used other concepts, including corporate citizenship, stakeholder management and business ethics. In this light, this contribution reports on how CSR is continuously evolving to reflect contemporary societal realities. At the same time, it critically analyses some of the latest value-based CSR constructs. This review paper puts forward a conceptual framework for corporate sustainability and responsibility. It suggests that responsible business practices create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility.

This research builds on the previous theoretical underpinnings of the corporate social responsibility (CSR) agenda, including corporate social performance (Waddock and Graves 1997 , Griffin and Mahon 1997 , Wang and Choi 2013 ), stakeholder management (Freeman 1984 , Berman et al. 1999 , Carroll and Buchholtz 2014 ), corporate citizenship (Carroll 1998 , Maignan et al. 1999 , Fombrun et al. 2000 , Matten and Crane 2005 ), strategic CSR (Burke and Logsdon 1996 , Lantos 2001 , McWilliams et al. 2006 , Falck and Heblich 2007 ) and creating shared value (Camilleri 2017 , Porter and Kramer 2011 , 2014 , European Union 2011 , Elkington 2012 , Crane et al. 2014 ). Moreover, it reviews the corporate sustainability and responsibility perspectives (Van Marrewijk and Werre 2003 , Salzmann et al. 2005 , Montiel 2008 , Visser 2011 , Benn et al. 2014 ). Corporate sustainability and responsibility is increasingly being recognised as a concept that offers ways of thinking and behaving. This approach toward sustainable business has potential to deliver significant benefits to business, society and the environment.

The subject of corporate social responsibility (CSR) has continuously been challenged by those who want corporations to move beyond transparency, ethical behaviour and stakeholder engagement. Today, responsible behaviours are increasingly being embedded into new sustainable business models that are designed to meet environmental, societal and governance deficits. Although there are numerous theories and empirical analyses on CSR constructs (Carroll 1979 , Margolis and Walsh 2001 , McWilliams and Siegel 2001 , Fombrun 2005 , Wang and Choi 2013 , Strand et al. 2015 ), there is still scant theoretical research that links corporate sustainability with corporate social responsibility and environmental management. Therefore, this contribution aims at filling this academic gap by examining the conceptual developments of the “corporate sustainability and responsibility” notion. This review paper reiterates that that there is a business case for CSR as organizations can pursue profit-making activities (i.e. corporate sustainability). Businesses are encouraged to strategically re-align their products, services, and operations with responsible behaviors (Husted and Allen 2009 ). Strategic CSR outcomes may include responsible management of internal practices and forging relationships with external stakeholders. It is in the organizations’ interest to forge closer ties with the regulatory authorities and with their neighbouring communities. Responsible behaviours add value to the firm, society and the environment (Camilleri 2017 ). Therefore, businesses ought to utilize their skills, resources, and management capability that lead to social progress (see Beschorner 2014 , Porter and Kramer 2011 : 77). This is consistent with the expectation that much of CSR is developed in order to improve the firm’s image and reputation, possibly allowing it to differentiate its products in the market (Fombrun 2005 ).

The underlying objective of this research is to advance the corporate sustainability and responsibility concept. Hence, this contribution provides a critical analysis of the literature that has inevitably led to the conceptual development of this value-based construct. This research elaborates on the business case for CSR and the related stakeholder theory. It provides a logical link between them. Following relevant theoretical underpinnings, this review article also puts forward a conceptual model representing a graphical illustration of ‘corporate sustainability and responsibility’.

Literature review

The discussion on social responsibility grew in popularity and took shape during the 60s. Many authors have indicated that the CSR notion was a fertile ground for theory development and empirical analysis (McWilliams et al. 2006 ). However, the businesses’ way of thinking has changed dramatically since Levitt in 1958 (and Friedman in 1962) held that the companies’ only responsibility was to maximise their owners’ and shareholders’ wealth, rather than looking after societal (and environmental protection) issues. At the time, these corporations had considerable bargaining power, and their power called for responsibility (Davis 1960 ). Arguably, these businesses had responsibilities towards society beyond their economic and legal duties. In the 60s and 70s, the most important social movements included civil rights, women’s rights, consumers’ rights as well as environmental movements. The period was characterised as an issue era, where companies began noticing specific societal problems arising from social, environmental and community issues. There was a focus on philanthropy and a noticeable manifestation in charitable donations. The gifts in-kind have expanded to the groups representing the health and social services, culture, arts, and the community at large. In a book entitled, ‘Corporate Social Responsibilities’, Walton ( 1967 ) addressed many facets of CSR in society. He came up with several models for social responsibility as he underlined that CSR involved a degree of voluntarism, as opposed to coercion. Moreover, back then, the corporations were incurring discretionary costs for their CSR engagement (Walton 1967 ). Without doubt, the clarification of CSR’s meaning is a significant strand within the research agenda. Table  1 reports a list of concepts that have emerged from the CSR paradigm:

The CSR notion has developed as a rather vague concept of moral good or normative behaviour (Carroll 1991 ). This construct was described as a relativistic measure of ‘the economic, legal, ethical and discretionary expectations that society had of organizations at a given point of time’ (Carroll 1979 ). CSR tackled ‘social problem(s)’ to engender positive ‘economic benefit(s)’ to ensure ‘well paid jobs, and ... wealth’ (Drucker 1984 ). This was consistent with academia’s call toward corporate social performance (CSP). The CSP theory had evolved from previous theoretical approaches. CSP reconciled the importance of both corporate social responsibility and corporate social responsiveness (Carroll 1979 ). It also placed an emphasis on achieving better performance out of the socially-responsible initiatives. Many researchers have used the corporate social performance (CSP) construct to establish a definitive causal relationship between the firms that were doing good (CSP) and those doing well (Corporate Financial Performance, i.e. CFP) (Waddock and Graves 1997 , Orlitzky et al. 2003 , Margolis and Walsh 2001 ).

There were several unresolved theoretical debates about whether there was a clear link between CSP and financial performance. Despite certain controversies regarding the validity of some empirical findings, most studies have reported a positive relationship between the two (Waddock and Graves 1997 , Preston and O'bannon 1997 ). The working assumption of CSP research was that corporate social and financial performance were universally related. Yet, it may prove hard for businesses and academia to demonstrate how CSR could lead to tangible improvements in the firms’ bottom lines.

It may appear that there was no explicit statement that describes how socially responsible practices could possibly translate into specific results that affect the profit and loss account (Murillo and Lozano 2006 ). At times, the empirical research did not yield the desired results as the findings were mixed (McWilliams and Siegel 2001 ). Alternatively, they yielded inconsistent evidence (Vogel 2005 ). Some authors have argued that the CSP-CFP link was pointless, as they were unable to find a positive relationship between the responsible business and the firms’ performance. Alternatively, another pertinent research question was to determine whether corporate profitability could be a sufficient motive for the avoidance of irresponsible behaviours (Vogel 2005 ).

The business case for corporate social responsibility

CSR can be much more than a cost, a constraint, or a charitable deed. It is ‘a source of opportunity, innovation and competitive advantage’ (Porter and Kramer 2006 ). However, its successful implementation could be influenced by a variety of factors including the firm’s size, diversification, research and development and market conditions (McWilliams and Siegel 2001 ). Very often academic research tried to follow and capture trends in the broader societal debate on the businesses’ social responsibilities. For instance, CSR’s domains often include, commercial responsibility, ethical responsibility and social responsibility (Singh and Del Bosque 2008 ). One of the businesses’ commercial responsibilities is their continuous development of high quality products or services. Companies are also expected to be fair and truthful in their marketing communications, whist they promote their offerings to customers (Singh and Del Bosque 2008 ). Secondly, the ethical responsibility is concerned with the corporations fulfilling their obligations towards their shareholders, suppliers, distributors and other agents with whom they make their dealings. Their ethical responsibility includes safeguarding the human rights and the norms that are (not necessarily) defined in the law when carrying out business activities. The ethical principles in business relationships could have more priority over achieving superior economic performance for some responsible corporations (Singh and Del Bosque 2008 ). Hence, the other social responsibility domain focuses on philanthropic behaviours. In this case, businesses could allocate part of their budget to the natural environment, or toward social issues that favour the most vulnerable in society. This form of social responsibility supports the development of financing stewardship principles including corporate donations to charitable institutions, religious, sports, cultural and heritage activities. This latter perspective is concerned with improving societal well-being.

Other scholars examined innovation and the level of differentiation in the industry as moderators in the relationship between corporate social performance and financial performance (Hull and Rothenberg 2008 ). A study reported that corporate social performance strongly affected financial performance in low-innovation firms and in industries with little differentiation (Hull and Rothenberg 2008 ). Ideally, social performance ought to be consistent over time and across stakeholder domains (Waddock and Graves 1997 , Johnson and Greening 1999 ). For example, job seekers are attracted by CSP and organizational ethics that mirror their own values (Turban and Greening 1997 , Jones et al. 2014 ). Hence, there is an opportunity that socially-responsible businesses could differentiate themselves from other companies. They may leverage their firm’s image relative to other organizations. Lozano ( 2015 ) held that external drivers for CSR include reputation, customer demands and their expectations, as well as regulation and legislation. His findings suggest that one of the CSP outcomes is to communicate the corporations’ commitment to socially-responsible and sustainability values that stakeholders share.

CSR can help to build reputational benefits, it enhances the firms’ image among external stakeholders and could lead to a favourable climate of trust and cooperation within the company (Camilleri 2014 ). The expenditures on CSR activities are typically intended as long- term investments that are likely to yield financial returns. Corporations “give back” to their constituencies because they believe it to be in their best financial interests to do so. Many authors held that CSR is a driver for innovation and economic growth. They believed that it will help the company to achieve a competitive advantage (Burke and Logsdon 1996 , Lantos 2001 , Sen et al. 2006 ) by deriving positive benefits for both societal stakeholders and for the responsible firms. Therefore, companies should devote their attention to CSR strategies which add value to the business and disregard others’ activities which do not add value to the business (Camilleri 2017 ). In this context, the corporate philanthropy should be deeply rooted in the firm’s competences and linked to its business environment (Porter and Kramer 2002 ). Thus, strategic CSR behaviours may lead to the creation of value for both business and society (Burke and Logsdon 1996 , Lantos 2001 , McWilliams et al. 2006 , Porter and Kramer 2011 ). Strategic CSR could increase the financial performance of businesses, it minimises their costs through better operational efficiencies, boosts the employee morale, creates job satisfaction and reduces the staff turnover, along with other benefits (Camilleri 2017 ).

CSR can bring a competitive advantage if there are appropriate relationships with multiple stakeholders. Therefore, it is in the interest of business to engage in ongoing communications and dialogue with employees, customers, marketplace and societal groups (Morsing and Schultz 2006 , Union 2016 , Bhattacharya et al. 2009 ). Businesses may also need to recognise the potential of building fruitful networks with key marketplace stakeholders, including suppliers, regulatory authorities and the community at large. These stakeholder relationships are needed to bring external knowledge sources, which may in turn enhance organizational skills and performance. Acquiring new knowledge must be accompanied by mechanisms for dissemination. Arguably, there is scope in sharing best practices, even with rival firms. It is necessary for the responsible businesses to realise that they need to work in tandem with other organizations to move the CSR agenda forward.

In the past, the stakeholder theory has demonstrated how businesses could develop long-term mutual relationships, with a wide array of stakeholders. The businesses’ closer interactions with stakeholders could be based on relational and process-oriented views (Godfrey 2005 ). Thus, many firms are already forging strategic alliances in their value chain to run their businesses profitably. Many multinational corporations including Nestlé, Google, IBM, Intel, Johnson & Johnson, Unilever, and Wal-Mart have embraced the ‘shared value’ approach (Porter and Kramer 2011 , Union 2011 , Camilleri 2017 ). In many cases, they are building partnership and collaborative agreements with external stakeholders (including suppliers) hailing from different markets. The most successful businesses are increasingly promoting the right conditions of employment within their supply chains. They are instrumental in improving the lives of their suppliers (Porter and Kramer 2011 ). They do this as they would like to enhance the quality and attributes of their products, which are ultimately delivered to customers and consumers. They have economic responsibilities toward their owners and shareholders (Godfrey et al. 2009 , Desai and Dharmapala 2009 ). Many businesses do not always pay their fair share of taxes to government. Alternatively, they may be accused of not providing the right conditions of employment, or they may even pay lousy wages to their employees (Trejo 1997 ).

Some commentators on the subject of CSR often suggested that the factors that should contribute towards creating value in business and society are often qualitative in nature, and that there are variables that may prove very difficult to measure and quantify, such as, employee morale, corporate image, reputation, public relations, goodwill, and popular opinion (Maignan et al. 1999 , Fombrun et al. 2000 ). Therefore, any discretionary expenditure on altruistic or strategic CSR activities may be regarded as long-term investments that are likely to yield financial returns (McWilliams et al. 2006 , Falck and Heblich 2007 ). Hence, corporate philanthropy, stewardship and cause-related marketing could be re-aligned with the businesses’ profit motives (Camilleri 2017 ). This perspective resonates very well with the agency theory (Eisenhardt 1989 ). In the past, scholars argued that the companies’ only responsibility was to maximise their owners’ and shareholders’ wealth (Levitt 1958 , Friedman 1970 ). Hence, companies were often encouraged to undertake CSR strategies which add value to their business and to disregard other activities which were fruitless. Moreover, at times, the fulfilment of philanthropic responsibilities could simultaneously benefit the bottom line (Lantos 2002 ). Although, it could be difficult to quantify the returns of responsible behaviours, relevant research has shown that those companies that practiced social and environmental responsibility did well by doing good, in the long run (Falck and Heblich 2007 , Porter and Kramer 2011 ). However, other research has shown that it was also possible to overspend on CSR activities (Camilleri 2017 , McWilliams and Siegel 2001 , Lantos 2001 ).

The corporate social responsibility, environmental and ethical behaviours could be triggered by genuine altruism and self-preservation (Hemingway and Maclagan 2004 , Van Marrewijk 2003 ). Some of the contributions on this topic suggest that corporate philanthropy should be deeply rooted in the firms’ competences and linked to their business environment (Porter and Kramer 2002 , Godfrey 2005 ). Many authors often referred to CSR’s core domains (economic, legal and ethical responsibilities) that were compatible and consistent with the relentless call for the business case of CSR (Carroll and Shabana 2010 , Vogel 2005 ). The ethical responsibilities demand that businesses ought to abide by moral rules that define appropriate behaviours within a particular society. Another category of corporate responsibility is related to discretionary, voluntary or philanthropic issues. Corporate philanthropy is a direct contribution by a corporation to a charity or cause, most often in the form of cash grants, donations and/or in-kind services (Kotler and Lee 2008 ). This category of social responsibility is totally dictated at the “discretion” of the organization as there are no laws or codified expectations that guide the corporations’ activities (Rasche et al. 2013 ).

Discretionary responsibilities include those business activities that are not mandated by law, and they are not expected from businesses in an ethical sense (Carroll 1979 ). Practically, some examples where organizations meet their discretionary responsibilities include, when they provide day-care centres for working mothers, by committing themselves to philanthropic donations, or by creating pleasant work place aesthetics (Carroll 1979 ). Evidently, the CSR approach had established a new way of doing business that has led to the creation of value (Porter and Kramer 2011 , Union 2011 , Wheeler et al. 2003 ) with a respectful and proactive attitude towards stakeholders (Freeman 1984 , Lantos 2001 ). The stakeholder theory provides opportunities to align business practices with societal expectations and sustainable environmental needs. The stakeholder relationships support the principle of inclusivity, as the business practitioners ought to strike a balance between the conflicting demands of different stakeholders. Inevitably, businesses need to reconcile disparate stakeholders’ wants and needs (e.g. employees, customers, investors, government, suppliers et cetera).

The CSR’s responsibilities include the obligations toward customers. The businesses maintain economic growth, and meet the consumption requirements in the market. This economic component of CSR represents the fundamental responsibility of businesses. Many firms produce goods and services and sell them at fair prices to customers (including other businesses). This will in turn allow them to make a legitimate profit and to pursue growth and competitiveness. The legal responsibilities of businesses imply that these entities must fulfil their economic mission within the extant framework of rules and regulatory parameters. This legal component recognises the firms’ obligations to obey the relevant laws in the countries where they are trading. Of course, it could prove hard to define and interpret the ethical responsibilities of businesses. This component is often referred to as a “grey area”, as it involves activities that are not necessarily mandated by law but may still entail certain organizational behaviours that are expected by society (Carroll 1979 ).

The economic, legal and ethical responsibilities of corporations are compatible with the business case for CSR (Carroll and Shabana 2010 ), as firms create value to society in the long term with a respectful and proactive attitude towards different stakeholders, including their human resources (Carroll 1991 ). Many commentators argued that the CSR agenda had potential to bring a new wave of social benefits as well as gains for the businesses themselves (Fombrun et al. 2000 , Porter and Kramer 2011 ) rather than merely acting on well-intentioned impulses or by reacting to outside pressures (Van Marrewijk 2003 ). Lozano ( 2015 ) indicated that leadership and the business case are the most important internal drivers for responsible companies. Thus, proper incentives may encourage managers ‘to do well by doing good’ (Falck and Heblich 2007 ). If it is a company’s goal to survive and prosper, it can do nothing better than to take a long-term view and understand that if it treats society well, society will return the favour. Companies could direct their discretionary investments to areas (and cost centres) that are relevant to them (Jamali 2007 , Gupta and Sharma 2009 ). The reconciliation of shareholder and other stakeholders addresses the perpetual relationship between business and society, at large.

The legitimate businesses’ response to the demands of stakeholders allow them to meet and even exceed legal, ethical, and public societal expectations (Carroll 1979 ). Therefore, CSR offers prospects for greater credibility and value added as it involves linking altruistic interventions with long-term strategic goals (Jamali 2007 ). Therefore, corporate philanthropic activities, including stewardship programmes could also create social value to the business practitioners themselves (Camilleri 2017 , Baron 2001 , Carroll and Shabana 2010 ). Certain CSR variables including voluntarism, centrality and visibility could possibly relate to value creation (Husted and Allen 2009 ). One would expect that greater voluntarism would lead to greater creation of value, particularly when CSR initiatives arise as the result of industry, tax, or regulatory constraints (Burke and Logsdon 1996 , Husted and Allen 2009 ). In a similar vein, the environmental regulation can also stimulate the innovation and competitiveness among firms (Orlitzky et al. 2011 ). The incorporation of multiple elements of competitive advantage increases the likelihood that a CSR initiative will succeed and create value for the firm (Burke and Logsdon 1996 ). There could be an optimal level of spending on CSR and environmental responsibility, as businesses are expected to continuously balance conflicting stakeholder interests for long term sustainability (Orlitzky et al. 2011 , Camilleri 2017 ).

Environmental sustainability and corporate sustainability

The term “sustainable development” has been defined in many ways, but the most frequently quoted definition is from “Our Common Future”, also known as the Brundtland Report, that was published way back in 1987. A central contribution of this report was the intermittent link between human development and actions toward environmental responsibility for the benefit of future generations (Camilleri 2014 ). Thirty years ago, the sustainable development agenda necessitated empirical research data. Debatably, today academia is calling for more policy and concrete action. Many governments as well as businesses are changing their stance on sustainability as they are becoming more proactive rather than reactive on social and environmental issues. Porter and Kramer ( 2011 : 74) recommended that national governments could set performance standards to big businesses. They suggested that they should not interfere with the methods to achieve them, “those are left to companies” (2011:74). In this day and age, we are increasingly witnessing a growing consensus on principles and regulatory guidelines. The initial flurry of codes and guidelines seem to have settled around a few core standards, such as the Global Reporting Initiative’s Sustainability Reporting Guidelines, the UN Global Compact and the Sustainable Development Goals, the World Resources Institute’s Greenhouse Gas Protocol and the UN Principles for Responsible Investment. This change toward sustainable and responsible business is a long-term process, but the momentum is important to reach the necessary tipping points in public opinion, policy response and business action. As a matter of fact, most of the largest corporations are continuously re-articulating their codes of conduct, certifiable standards, corporate programmes, industry initiatives, green politicians, triple-bottom-line reports and documentaries about sustainability (Brundtland 1987 ). Nevertheless, many of the global challenges are still present today — be they climate change, water depletion, biodiversity loss, bribery and corruption or income inequality, among others.

The term “sustainability” can mean different things to a variety of constituencies. While there may be no objection to the sentiments expressed by multiple stakeholders on the respective definitions for sustainable business, most of them are far from holistic. The sustainability systems may be too complex and varied, and their applications could be quite diverse. Some authors have attempted to relate sustainability with the corporations’ responsible behaviours: Interestingly, the corporate sustainability construct was also related to a nested system consisting of economic, societal, and ecological systems. These pillars are interconnected to each other where the economy is part of society, which is also a fundamental part of the larger ecological system. Corporate sustainability relies on six criteria: eco-efficiency, socio-efficiency, eco-effectiveness, socio-effectiveness, sufficiency and ecological equity (Dyllick and Hockerts 2002 ). These corporate sustainability imperatives can be structured into value systems that could result in a better financial performance (Salzmann et al. 2005 , Van Marrewijk 2003 ). A few researchers have developed (self)-assessment tools, that could be used to audit, analyse and interpret corporate sustainability (Van Marrewijk 2003 , Clarkson 1995 ). However, corporate sustainability may be contingent on different parameters (e.g. technology, regime and visibility) that could vary across industries, plants and countries (Salzmann et al. 2005 ). Corporate sustainability could reduce the downside operational risk as it comprises relevant measures that are intended to increase eco-efficiency, and health and safety performance among other issues (Porter and Kramer 2002 , Porter and Kramer 2011 , Camilleri 2014 ). This means that the economic value of sustainable business strategies could be materialised in the long-term (Weber 2008 , Guenster et al. 2011 ).

Notwithstanding, there are the long term effects of corporate sustainability on intangible assets (e.g. brand value, employee loyalty) could be difficult to quantify (Salzmann et al. 2005 , Dyllick and Hockerts 2002 ). Although some commentators have voiced their opposition to the normative calls in favour of the “sustainability rhetoric” (Salzmann et al. 2005 , Vogel 2007 ), it may appear that we are witnessing a relentless progression from active antagonism, through indifference, to a strong commitment to actively furthering sustainability values, not only within the organization, but across many industries and in our society as a whole. These recent developments imply that the organizations’ commitment to responsible behaviours may represent a transformation of the corporation into a truly sustainable business that is adding value to the business itself, whilst also adding value to society and the environment. Perhaps, there is scope for more collaboration between CSR and corporate sustainability fields. This synergy could help to increase the impact of social and environmental performance research within the field of strategic management. Ultimately, the corporate sustainability’s strategic goals are economic development, institutional effectiveness, stakeholder orientation and sustainable ecosystems (Dyllick and Hockerts 2002 , Shrivastava 1995 ).

Creating value for all: Seeking win-win outcomes with stakeholders

Firms create simultaneous, pluralistic definitions of value whilst targeting their stakeholders. In a similar vein, the resource based view (RBV) theory suggests that the resources of the firm affect its activities and growth, profits and the level of sustained competitive advantage (Barney, 1991 ). Significant areas of study which are synonymous with the corporate sustainability and responsibility approach include, ‘the Virtuous Circles’ (Pava and Krausz 1996 , Preston and O'bannon 1997 , Waddock and Graves 1997 ), ‘The Sustainable Local Enterprise Networks’ (Wheeler et al. 2005 , ‘The Triple Bottom Line Approach’ (Elkington 1998 ), ‘The Supply and Demand Theory of the Firm’ (McWilliams and Siegel 2001 ), ‘The Value Based Networks’ (Wheeler et al. 2003 ), ‘The Base of Pyramid Approaches’ (Anderson and Markides 2007 , Landrum 2007 ), ‘the Win-Win Perspective for CSR practices’ (Falck and Heblich 2007 ), ‘Creating Shared Value’ (Porter and Kramer 2011 , Union 2011 ), ‘Value in Business’ (Lindgreen et al. 2012 ), ‘The Stakeholder Approach to Maximizing Business and Social Value’ (Bhattacharya et al. 2012 ) and ‘Value Creation through Social Strategy’ (Husted et al. 2015 ), among others.

Very often, these value-based theories suggest that businesses should continuously monitor and evaluate their performance in terms of their economic results. It may appear that many of these propositions focus on identifying and expanding the connections between societal and economic progress. Whilst the traditional school of thought for CSR’s had primarily focused on responsibility, Porter and Kramer ( 2011 ) argued that their creating shared value (CSV) approach is inherently different than CSR. Yet, other academics did not view CSV as unrelated to strategic CSR practices (de los Reyes et al. 2016 , Beschorner 2014 ). Porter and Kramer ( 2011 ) contended that their proposed strategy has set out new business opportunities as it creates new markets, improves profitability and strengthens the corporations’ competitive positioning. The reason for this is that the businesses processes in the value chain operate in an environmental setting within their wider community context (Porter 2001 ). It may appear that Porter and Kramer ( 2011 ) had focused on the value chain activities that could bring opportunities for competitive advantage. The authors contended that there is shared value when the organizations’ social value propositions are integrated into their corporate strategies. Therefore, companies could benefit from insights, skills, and resources that cut across profit/non-profit and private/public boundaries. On the other hand, companies will be less successful if they attempt to tackle societal problems on their own.

Porter and Kramer ( 2011 ) maintained that companies could create shared value opportunities by reconceiving products and markets. Hence, new products and services that meet social needs or serve overlooked markets will require new value chain choices in areas such as production, marketing, and distribution. These revised configurations will create demand for equipment and technology that could save energy, conserve resources, and support employees. They argued that their shared value approach redefines productivity in the value chain by enabling local cluster development. They reiterated that their suggested avenues for creating shared value are mutually reinforcing as corporations, their marketplace stakeholders and the governments ought to work together to develop clusters that enable more local procurement and less dispersed supply chains. For example, Nestlé can be considered as a pioneer of the shared value initiative. The multinational organization has accessed new products, reconfigured and secured the value chain by tapping into new or better resources (through partners and cluster development) whilst improving their capabilities (in terms of skills, knowledge and productivity) of its suppliers. Nestlé sources its materials from thousands of farms in developing countries, where it provides training to farmers for sustainable production. This way, the company protects its procurement, raises its standards and maintains a high quality of the raw materials it uses. At the same time, these suppliers run profitable farms, as they offer their children a fairer future through better education. Moreover, both Nestlé and its suppliers are committed to protecting their natural environmental resources for their long-term sustainability. Nestlé’s business principles have incorporated ten United Nations Global Compact Principles on human rights, labour, the environment and corruption. The company maintains that it complies with international regulatory laws and acceptable codes of conduct, as it improves its company’s operations. Firms don’t just need to prepare financial reports. In a lot of countries, they’re legally required to report social and environmental information. And they have to build up accounting systems to do so (Rasche et al. 2013 ). Very often the companies’ responsible management may involve designing business processes and activities in a way that they meet certain social and environmental minimum standards.

Relevant academic literature is indicating that today’s businesses are strategically re-orienting themselves toward corporate sustainability and corporate responsibility whilst focusing on their stakeholders’ needs. Strand et al. ( 2015 ) suggested that CSV necessitates heightened forms of collaboration and stakeholder management as they remarked about the apparent links between creating shared value and stakeholder theory. Strand et al. ( 2015 ) posited that Porter and Kramer’s ( 2011 ) shared value proposition is a response to the competitive, conflict-based view of strategic management that Michael Porter himself helped to create (Strand 2014 ). However, some critics have argued that ‘shared value’ is based on a shallow conception of the corporation’s role in society (de los Reyes et al. 2016 , Crane et al. 2014 , Beschorner 2014 ) For instance, Crane et al. ( 2014 ) held that CSV looks naïve by ignoring the tensions that could exist between social and economic goals. They suggested that this proposition simplifies the role of corporations in society and ignores the challenges arising from business compliance. Their argument was that there are alternative ways to re-invent capitalism (Corazza et al. 2017 ). This strategic approach cannot cure all of society’s ills as not all businesses are good for society, nor would the pursuit of shared value eliminate all injustice (Porter & Kramer, 2014 ). Beschorner ( 2014 ) also noted that the creation of business value and social value may not always go hand in hand. He regarded Porter and Kramer’s ( 2011 ) shared value approach as a reformulation of a classical strategic stakeholder approach that tends to prioritise the relevance of stakeholders according to their influence on the business’ activities. Although shared value seems to address “win-win” business and society issues, it leaves managers ill-equipped to legitimately manage issues where they face the prospect of “win-lose” or “lose-win” social engagements (de los Reyes et al. 2016 ).

The way forward: -corporate sustainability and responsibility

In the past, CSR may have been more associated with corporate philanthropy, stewardship principles, contributions-in-kind toward social and environmental causes, environmental protection, employees’ engagement in community works, volunteerism and pro-bono service among other responsible initiatives. Very often, such altruistic CSR activities may have not resulted in financial performance to the business per se. On the contrary, certain discretionary expenses in corporate philanthropy could have usurped the businesses’ slack resources (including financial assets, labour and time) without adding much value (in terms of corporate reputation and goodwill) to the businesses. Nevertheless, this research reported that the contemporary discourses on corporate social responsibility are opening new opportunities for the businesses themselves. The academic discourse about CSR is moving away from ‘nice-to do’ to ‘doing-well-by-doing-good’ mantra. Evidently, the value-based approaches that were discussed in this paper could be considered as guiding principles that will lead tomorrow’s businesses to long term sustainability (in social and economic terms). Debatably, the profit motive (the business case or corporate sustainability concepts) could be linked with the corporate responsibility agenda. This way, the multinational corporations could be better prepared to address their societal and environmental deficits across the globe, whilst adding value to their business.

This review paper has built on the previous theoretical underpinnings of the corporate social responsibility agenda including Stakeholder Management, Corporate Citizenship and Creating Shared Value as it presents the latest Corporate Sustainability and Responsibility perspective. This value-based model reconciles strategic CSR and environmental management with a stakeholder approach to bring long term corporate sustainability, in terms of economic performance for the business, as well as corporate responsibility’s social outcomes. Recently, some international conferences including Humboldt University’s gatherings in 2014 and 2016 have also raised awareness on this proposition. The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes including nvironmental management, human resource management, operations management and marketing (i.e. Corporate Sustainability). At the same time, it raises awareness on the businesses’ responsible behaviours (i.e. Corporate Responsibility) toward stakeholders including the government, suppliers, customers and the community, among others. The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated in Table  2 .

Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Lozano 2015 ). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri 2017 ).

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment. The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010, or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013, could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri 2017 ). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This theoretical paper has contributed to academic knowledge as it explained the foundations for corporate sustainability and responsibility. Although this concept is still evolving, the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

Limitations and future research avenues

No research is without limitations. This conceptual paper could not have featured all of the contributions that are related to CSR’s value driven notions. However, the scope of this paper has been reached. The corporate sustainability and responsibility proposition could appeal to business practitioners themselves, as sustainable and responsible behaviours may bring significant improvements to their firms’ bottom lines. Of course, there are diverse contexts across different industry sectors (and jurisdictions) that will surely influence the successful implementation of corporate sustainability and responsibility practices and their reporting mechanisms. Notwithstanding, it may prove difficult to quantify the tangible and intangible benefits of corporate sustainability and responsibility. Future theoretical and empirical research may address these challenging issues, in further detail. Indeed, there is also potential for more conceptual development in this promising area of strategic management.

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Camilleri, M.A. Corporate sustainability and responsibility: creating value for business, society and the environment. AJSSR 2 , 59–74 (2017). https://doi.org/10.1186/s41180-017-0016-5

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the role of social and environmental responsibility essay

Business Ethics and Social Responsibility Essay

Searching for business ethics and social responsibility essay? This reflection paper discusses the importance of corporate ethics and social responsibility.

Introduction

The importance of business ethics.

Ethics and social responsibility play an important role in business management. Organizations, both public and private, feel the need to incorporate corporate responsibility in their organizational culture. Ethics deals with knowing what is wrong and what is right. Business ethics encompasses analyzing ethical decisions, beliefs, and actions inline with business activities. Organizations are expected to show ethical values and operate socially responsible.

The major issue is that business ethics integrates different sets of ethics. This is the reason as to why organizations should employ good individuals as workers. Social responsibility deals with business conduct in respect to the broader social values. It questions the duties of business to the entire society (Sims, 2003). In this light, this paper discusses the importance of ethics and social responsibility and various practices and theories employed in different organizations.

Businesses operate in such a way that their owners can realize some benefits. Business owners are also known as shareholders. Though, other stakeholders are part of critical components of decision making because businesses have to act in a liable and ethical manner and reflect on the potential effects of any choices made. Stakeholders such as dealers, customers, staff, owners, and communities are the integral part of business operations.

Customers, who are also citizens, require quality products which are affordable. Likewise, other stakeholders expect fair business engagements from organizations. Citizens need to know that right things are being done for the right reasons. This is because organizations target citizens in their plans for making profits and it is imperative that citizens observe the conduct of businesses in order to make the right choices (McNamara, 2010).

Knowing ethical and social norms help citizens to keep organizations in tandem with the society’s expectations. Businesses should work in a way that is lawful, beneficial, ethical, and inline with social commands (Johnson, n.d). Ethics in business enable organizations to maximize profits, utilize business resources, and create support in the market. Ethical values should command what is suitable to pay employees as well as to charge consumers.

An organization is therefore required to have a culture that enhances strong values. This will also attract good employees in the company. For example, companies strive to be included in the list of the top 100 firms in the United States issued frequently in Fortune magazine. The most common criteria used are analyzing profit sharing, bonuses, and stock markets. The list also incorporates policies and rewards that refer to work and enhance social responsibility (Griffin, 2008).

In the health sector, patients are supposed to trust physicians because hospitals are normally governed with good ethical conducts. This trust ensures that good medical care is offered to patients. Studies have found that trust is mostly related to patient satisfaction and therefore vital in selecting and applying treatment that is essential to patients (Thom & Campbell, 1997). Moreover, such trusts are essentials because in many cases patients require long-term or ongoing management in chronic cases.

Reflection about Business Ethics and Social Responsibility

Social responsibility is an element of ethical conduct. It is improving the community in general. Areas of social responsibility include business giving, ecological and environmental quality, consumerism, government relation, and labor relations. Social responsibility improves the public image of an organization and enhances the local economy.

Trust and excellent reputation are among the most important assets in any business that can only be realized through social responsibility. Social responsibility also attracts and retains employees who are committed to their task, hence improved performance. By doing so, companies can reduce the cost of recruitment.

Moreover, social responsibility increases the customer base and attracts investors. Being a social responsible organization enable a business to gain competitive advantage. Developing products that are friendly to the environment adds value and increases sales in business. Investors prefer social responsible businesses because it is an indication of proper management and a good reputation (The Economist, 2009).

However, if a company produces products that are detrimental to the environment, there is high chance that the company’s image can be destroyed.

The effect of pollution on air, water, and land calls for the need to observe ecological and environmental quality. Companies should clean up the existing pollution, start processes to reduce pollution, control noise, recycle materials, and perform aesthetic improvements. Consequently, social responsibility determines how children behave and thus there is need to educate children about social responsibility in order to put a sustainable investment in the future. Children are the potential business stakeholders in future.

Practicing social responsibility such as training children and improving health and education broadens their view and persuade them to help others. Teenagers can be asked to take part in volunteer programs in nursing homes, heath centers, and schools. This helps to heighten the idea that we are accountable for the state and quality of our societies (Griffins, 2008).

Practices of Corporate Social Responsibility

Ethics and social accountability in the context of business have changed over the last decades. This is due to various ethics scandals that have captured the interest of people. It is vital to talk about some of these scandals. The Salmon Brothers, a sponsor of security, defied Treasury policy in 1990s by purchasing more than thirty five percent of a Treasury copy of securities at auction. This business scandal forced three top executives to resign, including other effects.

The crime contributed in the effort of setting the U.S. Sentencing Commission in 1991 which was responsible for ensuring that companies are accountable for any unlawful behavior (Brenner, 1992). In the mid 1990, many ethical scandals were inline with sexual harassment and racial prejudice.

Coca-cola, Mitsubishi, and Texaco are some of the companies that received such accusations. At the start of the new century, scandals were persistent in the news. In 2001, Firestone and Ford expressed regret to their customers for a continued tire failures. Business ethics crimes are still common in the present days and therefore there is a possibility of changing ethical and social responsibility practices and theories in the future.

From the inference of public interest in social responsibility during the last forty years, two implications can be made. Attention in social responsibility has increased throughout the past three decades. Consequently, attention in ethics and social responsibility appears to have been driven by business scandals. In essence, the society has constantly changed their view on the issue with different tastes; some take it seriously and others take it lightly.

Because of the increasing ethical missteps, companies have been undergoing an intensive analysis from the public with regards to their performance. Due to many allegations, such as unfavorable care for the customer and environmental degradation, social responsibility has changed dramatically and thus companies are required to offer back to the community. It is believed that individual corporations are like citizens so they should contribute to the society (Henn, 2009).

The current organizations in many aspects are part of the society made up of many persons with different views and expectations. This implies that there is new demand for all stakeholders to reorganize their relationships.

For example, according to the President of McDonald’s, Don Thompson, the enduring success of the company relies on customers’ trust and loyalty – in the value and safety of food, in the business processes, and in the firm’s commitment to solving issues presented by the customers (personal communication, June 13, 2010). Those businesses expected to last for long will be concerned with making certain that the evolving requirements are met.

These companies will need to observe legal, ethical, and social requirements while being able to operate in tandem with changing economic conditions. In the past, social responsibility was seen as a practice that can decrease profits and thus contradicting the reason for the firm’s existence (Griffin, 2008).

Likewise, most organizations applied the utilitarian principle in solving ethical problems. The utilitarian principle argues that an action should be taken if it brings greater value to the whole organization. Modern organizations take into consideration the rights of every individual. This is known as the moral rights principle of solving ethical problems. It is imperative that modern firms observe and preserve the rights of employees, customers, and the whole society.

In future, ethics and social responsibility will have a new meaning in the context of business operations. From the current happenings, it is possible that businesses will be required to be adoptive and interactive. Future organizations will need to observe the changing laws that govern business operations.

As pressure increases from the outside environment, companies will be able to anticipate environmental changes and blend their own goals with those of the society. This is an interactive approach that reduces the difference between society’s viewpoint and business routine.

Social responsibility is part of business ethics that require managers to be open in their business engagements. Observing ethics and social responsibility improves the company’s image and result to profit maximization.

The whole world would benefit from social responsibility because companies are required to take part in the following aspects: improve environmental quality, provide truthful advertisement, start industries in marginal areas, provide equal employment rights, develop quality products, and enable freedom of participation in company’s affairs.

As explained in this paper, ethics and social responsibility requires constant changes in organizational conduct and performance. Since internal and external requirements change, it is imperative that firms likely to survive in future observe the changing needs from the society and regulations imposed by the government. In essence, since businesses create some problems they should help solve them.

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McNamara, C. (2010). Complete Guide to Ethics Management: An Ethics Toolkit for Managers . Free Management Library. Web.

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