Ethics is an important component of the overall approach to corporate responsibility, sometimes called corporate social responsibility (CSR). CSR is a business model that began emerging in the late 1960s and early 1970s. Under the CSR model, corporate responsibility and ethics are considered intertwined.
The philosophy of CSR stresses compliance with the law and high ethical standards toward consumers and the public. It also envisions positive actions in the areas of the environment and the public interest. It promotes the active elimination of harmful corporate practices even when they are outside the realm of government regulation.
Other areas in which corporate responsibility and ethics overlap under the CSR model is the inclusion of the public interest and environmental concerns in corporate planning and decision making. Corporate responsibility includes creating voluntary ethical and environmental standards and developing projects for community growth. Companies that follow the CSR model adhere to the “triple bottom line” slogan of “People, Planet, Profit.”
Some commentators believe that corporate responsibility and ethics intersect with consumer ethics, as more people become aware of their individual impact on the environment and the world. As more consumers begin to make their choices based on social and environmental concerns, corporations strengthen their commitment to these issues. As a company practices social corporate responsibility, the result can become part of its corporate identity. Some observers point out that operating under a CSR model increases corporate profits in the long run.
Some critics of the CSR model suggest that corporate social and environmental concerns are only superficial, and that the government should take the lead in addressing these concerns through regulation. They note that taxpayers already pay the government to ensure that businesses conduct themselves in a manner safe and beneficial to the public. Supporters of CSR respond that consumers and stakeholders bring a natural and healthy pressure to bear on corporations to act responsibly.
Stakeholders consist of more than just shareholders and investors. They include social and financial institutions, government regulators, and foreign governments. Professional institutions, labor organizations, and academic institutions also influence and have a stake in socially responsible corporate behavior.
Many corporations do appear to be invested in promoting corporate responsibility and ethics as they are understood in the CSR model. A great number of companies around the world file annual corporate sustainability reports with the international Global Report Initiative. Sustainability reports inform the public and stakeholders regarding a corporation’s efforts in enhancing environmental and social values and promoting the public interest. The reports usually contain information on how these efforts have maintained or enhanced profits.