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In this chapter argues that the ethics of Environmental, Social, and Governance (ESG) must be understood as inseparable from the modes of responsibilization that have preceded it, which refers to developments in business ethics, Corporate Social Responsibility (CSR) and corporate sustainability. Focusing primarily on ESG as a heading for corporate responsibility policies and practices within the context of EU regulation, the chapter considers ESG as a supplement to prior conceptions rather than a stand–alone concept. After outlining the foundational, societal and environmental accomplishments of the three preceding constructs, the chapter argues that the defining, supplementary feature of ESG is that it is informational and that it has emerged as a concept that binds together the information needs of investors and other stakeholders, corporate disclosures, and government regulation. Thus, the ethics of ESG must be understood in terms of its ability to put greater and more obligatory demands on corporate responsibility through standardized reporting, standardized methods, and standardized data and performance measures.
Community sport foundations (CSFs), like other non-profit organizations, are increasingly employing social media such as Twitter to communicate their mission and activities to their diverse stakeholder groups. However, the way these CSFs utilize social media for communicating such practices remains unclear. Through a mixed-method approach of content analysis of tweets from 22 CSFs established by English professional football clubs and interviews with key individuals within these CSFs (n = 7), this study examines the extent to which CSFs’ core activities are being communicated through Twitter and identifies the strategies employed for doing so. Reflecting the target audiences CSFs are seeking to reach through Twitter and the challenges associated with communication about projects involving marginalized groups, tweets largely concern programs related to sports participation and education. The most frequently employed communication strategy is to inform, rather than interact or engage with stakeholders. However, CSFs with higher organizational capacity attempt to go beyond mere informing towards engaging with stakeholder groups that relate to their social agenda, highlighting the importance of trained and dedicated social media personnel in optimizing CSFs’ use of Twitter for communication.
This paper emphasizes the importance of participative governance in the study of social enterprise. Furthermore, it argues that social enterprise must be analyzed through a multi-dimensional perspective. The EMES approach is based on three dimensions emphasizing the social, economic, and political dimension, while many Anglo-American definitions tend to use a one-dimensional spectrum framework. The latter often see social enterprise as a simple phenomenon that can be arranged along a continuum, ranging from economic to social, where more of one means less of the other. However, this fails to acknowledge the multi-disciplinary nature of social enterprise. Scholars inspired by the EMES approach should devote greater attention to exploring the interactive and interrelated nature of the three dimensions of social enterprise, especially the governance dimension.
Effective programmes introduced by NGOs in developing countries have the potential to benefit a large number of people if they are scaled up, but instances of successful scaling-up are relatively rare. This paper uses a case study of an Indian educational NGO that has scaled up rapidly and effectively in order to explore the reasons for choice of scaling-up strategy, the particular barriers to scaling-up in the education sector, and how these barriers can be overcome. It finds that, while a high-functioning NGO can successfully overcome many of the internal organisational challenges posed by scaling-up, external barriers such as the difficulty of building relationships with key stakeholders like government officials and school teachers pose significant challenges. While these difficulties could in principle be mitigated by moving from an expansion-based to collaboration-based model of scaling-up, low accountability and governance of the NGO sector make it difficult to detect the quality of potential partners. The case also shows that India’s recent law mandating CSR has increased funding availability for scaling-up, but its requirement for corporate donors to preferentially support local projects has also created some challenges by constraining NGO ability to harness economies of scale during scaling.
Saudi Arabia is undergoing a transformational shift, leveraging regulatory reforms to position its non-profit and impact sector as a driving force for national and regional development. This chapter explores how Vision 2030’s ambitious agenda has unlocked new opportunities for philanthropy, impact investing, and catalytic capital, enabling a once-traditional charitable landscape to evolve into a $2.7 billion economic powerhouse.
With the number of non-profit organizations surging from 4,000 to over 62,000 in just seven years, Saudi Arabia is pioneering a new model of impact-driven growth. The chapter delves into groundbreaking regulatory reforms, digital philanthropy, innovative financing models, and multi-sector partnerships. It highlights how Saudi Arabia’s rise as a regional leader in the impact space can set the stage for a more dynamic and globally connected non-profit ecosystem.
This paper presents a theoretical framework to explain how firms strategically choose between truthful disclosure, greenwash (overstating environmental performance) or greenhush (deliberately under-communicating positive environmental actions). The analysis reveals that greenhush arises as an equilibrium when signalling costs exceed benefits from investor support, particularly when firms can secure sales without environmental claims. Greenwash emerges when penalties for false claims are insufficient relative to market premiums. Notably, increasing investor support for environmental initiatives reduces greenhush but may unintentionally promote greenwash rather than truthful disclosure without complementary regulatory mechanisms. The results suggest several policy strategies to promote truthful labeling: strengthening certification credibility by increasing the cost differential between legitimate and fraudulent certification, calibrating penalties to ensure separating equilibria and developing coordinated approaches that simultaneously target investor preferences andverification mechanisms.
This study examines how the managerial interpretation of incentive arrangement affects corporate engagement in social areas, as reflected in corporate social performance, from two interrelated perspectives: the political influence view and the normative agency view. Building the theoretical framework on state-owned enterprise (SOE) executives' dual-career tracks perspective, we contend that economic factors (performance decline and relative pay gap) and political factors (socialist imprints and political career horizon) could divergently reshape the interpretation of incentive arrangement on corporate social performance. Using ‘Pay Ceiling Order’ as a quasi-natural experiment context, a secondary analysis, and a controlled experiment reveal that compensation restriction on top executives causes a decrease in corporate social performance. This relationship is weakened when there are stronger socialist imprints inherited by a focal firm and when the executives have a longer political prospect. In contrast, the relationship is strengthened when firms face severe performance declines and when the executives' compensation is relatively lower than peers. The findings show that compensation is an indispensable incentive joining with political and economic factors, enabling SOEs to engage in social areas. We discuss the implications of understanding top executive incentives with incentive arrangements and how the government purpose influences top executive responses to compensation incentive in ways that matter for long-term social value.
The attention-based view contends that executives possess limited attentional capabilities that must be carefully allocated across different strategic issues. Although many scholars contend that narrow strategic attention breadth leads to better performance, others argue that broad strategic attention breadth may be more beneficial due to better opportunity scanning. We posit that the relationship between strategic attention breadth and performance will be inverted U-shaped, where strategic attention breadth is positively related to firm performance up to an optimal point, after which firms will see declining benefits due to executive cognitive overload. Furthermore, we propose that executives’ assessment of strategic opportunities will be influenced by the firm’s corporate social responsibility perspective, as the firm’s environmental and ethical commitment may mitigate executive blind spots and enhance opportunity selection. We support our hypotheses with multiple measures of firm performance and a content analysis of annual reports corresponding to a 5-year longitudinal sample of 2,245 S&P 500 firms.
This study explores how corporate social responsibility and risk management intersect in the fashion industry, aiming to promote sustainability. It emphasizes the importance of integrating responsible practices into business strategies to mitigate risks and enhance long-term profitability. By focusing on a multinational fashion supply chain, the study examines real-world examples to highlight the challenges and opportunities in balancing brand image with ethical supply chain management. The findings provide insights into how companies can safeguard their reputation, manage complex supply chains, and contribute positively to sustainability goals in the fashion sector.
Technical summary
This paper investigates the relationship between corporate social responsibility (CSR) and risk management within the fashion industry. It conducts an in-depth case study of a prominent multinational fashion supply chain, analyzing 11 suppliers through interviews, observations, and internal documents. The study underscores that integrating CSR principles into risk management strategies helps mitigate supply chain risks and capitalize on business opportunities. It addresses gaps in existing literature by presenting empirical evidence of CSR-driven transformations in the sector, rather than merely documenting unsustainable practices. The study contributes by offering practical insights for fashion businesses aiming to achieve long-term success through sustainable practices. Key implications include the necessity for strategic integration of CSR into operational frameworks to protect corporate image, manage risks effectively, and foster sustainable growth in the competitive fashion marketplace.
Social media summary
From risk management to sustainable success: how corporate social responsibility shapes the future of fashion.
This study addresses endogenous factors related to the strategic planning of corporate social responsibility (CSR). Our findings help explain the paradox: If better CSR always leads to better firm performance, why do so many companies either choose not to engage in CSR or act irresponsibly? Managers may make decisions regarding CSR based on the environment. Some companies may be better served through a proactive CSR strategy; however, others may be unable to achieve better performance through this strategy for a variety of endogenous causes. Our sample included 594 U.S. publicly traded companies with 2,019 firm-year observations. We empirically simulated scenarios where companies selected inappropriate CSR strategies and found that the companies were unable to achieve better firm performance if they did not select appropriate CSR strategies based on their internal and external environment. Practical and theoretical implications are discussed.
The ever-increasing disclosure requirements we impose on public companies are, at best, not read, and at worst, are likely reducing the quality of investor decision-making. More environmental and social (ESG) disclosure has been touted as a popular solution to climate change and social issues. However, the evidence suggests this is highly unlikely, as it is very difficult for shareholders to understand the impact of corporate actions and the viable alternatives. Making matters worse, the very information shareholders require is information that assists a firm’s competitors and therefore is information that, if disclosed, has the effect of reducing the incentives for ESG innovation. Shareholders possess few legal tools capable of constructively engaging with corporate behavior. The empirical evidence about these theoretical points is evaluated, along with an examination of the real-world evidence about the outcomes of shareholder ESG interventions.
Corporate governance reforms are increasingly promoted as a method of materially improving social and environmental (ESG) outcomes. This chapter clears up the conceptual confusion about what counts as an action taken primarily for ESG purposes, then considers the incentives, resources, and market constraints that compel corporate actors to avoid unnecessary expenses or lower-value investments. The empirical evidence suggesting corporations are unlikely to voluntarily pursue ESG includes: (1) the revealed preferences of managers, particularly those that emphasize their ESG commitments; (2) the impact of ESG-friendly governance practices on corporate outcomes; and (3) the actual outcomes generated by giving ESG-friendly constituencies (such as socially responsible investors or employees) more power in corporate governance arrangements.
The debate over whether corporate social responsibility should comprise soft law responsibility or legally binding obligations is inadequate to address the legal relationship between corporations and society. The corporate social responsibility movement addresses only an economic agency problem and overlooks a fundamental gap between economic agency and legal agency, or attribution. The former is the problem of potential divergence of interests between a principal and an agent, and the latter concerns the laws regulating the relationship between a person and his or her representative. Corporate social responsibility is meant to respond to the first of these— – the economic agency problem – —as scholars have analyzed at length. However, the legal structures needed to address attribution and legal accountability are still far from established. The chapter proposes an attribution framework that can appropriately address the legal agency problem, in other words, to address corporate social accountability. It suggests that creating a new form of fictitious legal entity could help address this problem by resolving collective action issues.
This article uses Statoil (Equinor since 2018) as a prism to explore some key features and concerns of Western oil companies’ evolving human rights awareness from the mid-1990s to the early 2000s. This period saw the first human rights lawsuits brought against oil companies and a gradual change in their human rights awareness. The article uses insights from the business history literature and new archival material from the oil industry to explain why business ethicists and legal scholars are wrong to argue that the relationship between business and social responsibility, on the one hand, and business and human rights, on the other, are inherently problematic and profoundly disparate due to their divergent historical origins. In so doing, the article offers a historical take on the so-called debate between business human rights (BHR) and corporate social responsibility (CSR), and it repudiates the argument that a so-called minimal understanding of human rights has hindered business from undertaking proactive human rights initiatives. Mapping onto both the business history literature and the BHR–CSR debate, the article aims for a richer understanding of the experiences and ideas that incentivized oil companies to “get serious” about human rights.
This piece recounts the efforts by NGO Sign of Hope (SoH) to rectify human rights violations in South Sudan, which manifested themselves as drinking water pollution by the oil industry. Committed to exposing and remediating this water contamination, SoH was able to prompt the automobile company Daimler’s CSR to engage in extended dialogue with the oil industry stakeholders in Unity State. Despite a tactful use of various methods ranging from cooperation to confrontation, SoH’s campaign did not lead the oil producers to reverse the harm inflicted on the people of Unity State. When SoH tried to hold these companies accountable, SoH had the impression that it was hitting an elastic wall. This piece identifies lessons which may help to counter corporate human rights violations and compensate for the weakness of CSR in fragile states and in the face of corporate irresponsibility.
Beneficence is the act of doing good, while benevolence is being willing to do good. Walmart is cited as a case where, despite its founder’s belief that businesses do sufficient good simply by fueling wealth through commerce and employment, the company is nevertheless highly involved in community projects. Corporate philanthropy may be used strategically to increase future profits, while many corporations see themselves as morally responsible for stakeholders – employees, communities, consumers, and the wider environment – without requiring a clear return on investment. Corporate intervention is discussed historically in terms of apartheid, where some companies applied pressure for social change whereas others felt firms should abide by local norms despite violating human rights. Corporate intervention in the political affairs of Central America are discussed, as well as businesses that supply biased educational materials. The final case describes the sponsorship of an artistic production that becomes politically embroiled and asks what an appropriate level of corporate involvement in the community should be.
This book studied under which conditions the EU and its Member States influence the accountability of transnational corporations that are based in developing and emerging states for their involvement in human rights violations. Five conclusions are drawn. First, there are identifiable corporate concerns about the competitive threat of such corporations. They form a barrier to strengthening the accountability of EU-based corporations. Second, regulation has been adopted only when the ‘perceived interests’ in the EU and its Member States outweigh these concerns. Such interests are vastly different at the EU level and Member State level. Third, regulators have tried to minimise the impact on the competitiveness of their corporations by ‘extending’ their human rights regulations internationally. Fourth, bilateral agreements contain obligations relating to human rights and can serve to contribute to the creation of a ‘thick’ transnational stakeholder consensus. Local litigation is an important element in this process. Finally, there are valuable options to bring cases against corporations from developing and emerging states in EU Member States courts.
Building on recent developments in optimal distinctiveness (OD) research, we identify two dimensions of corporate social responsibility (CSR) practices – CSR scope conformity and CSR emphasis differentiation – and examine the antecedents of both. We theorize that private ownership and enhanced media coverage may increase scope conformity and emphasis differentiation, while such effects may be contingent on industrial context. In socially contested industries, the impact of private ownership on scope conformity will be mitigated, and the impact of media coverage on scope conformity will be amplified. Meanwhile, in highly competitive industries, the impact of private ownership and media coverage on emphasis differentiation will be mitigated. We test our predictions using a database of 942 Chinese publicly listed firms between 2008 and 2016. Our findings imply that the choice of optimal CSR strategy has to be made in accordance with the embedding context. The multidimensionality view of OD enables firms to better orchestrate firms’ strategic positioning along different dimensions of complex practices, which leads to better customization of societal expectations and the industrial competitive landscape.
Labour market participation by refugees in their new host country is crucial both to the integration process and in terms of reducing public spending on income replacement benefits for refugees. In this article, we explore workplace factors associated with employment of refugees. For this purpose, we use a survey of Danish employers, in light of the fact that with some notable exceptions, the employer role has been somewhat neglected in existing research on labour market integration of refugees. We find that many different workplace factors are associated with employment of refugees. In addition to objective workplace characteristics, existing social responsibility practice, contacts by public employment services and the attitudes and preconceptions of employers towards refugees are of importance.
Human rights and business have long been perceived as two separate domains, with human rights considered to be a shield and protection against the abuse of governmental power. It has only been more recently that private actors such as corporations have come onto the radar of human rights scholars, while those concerned with corporations and corporate responsibility have hardly adopted a human rights perspective. Hence, bringing business and human rights together has not been intuitive for either human rights scholars or corporate responsibility researchers. Accordingly, learning “business and human rights” (BHR) actually means unlearning both business and human rights, at least to some degree. A certain taken-for-grantedness of “business as usual” often provides fertile ground for corporate human rights violations and the inadequacies of the current international legal system that provides the shield for their impunity.