Best-Laid Plans: Corporate Social Responsibility Often Goes Awry

Abstract

This quote from Milton Friedman encompasses the increasingly ambivalent attitude that many Americans feel toward our government’s growing body of regulatory measures. Do they really work? Does regulation cause more problems than it solves? In a time when concepts like global warming and resource conservation are at the forefront of national debate, some private actors and businesses are taking their own initiative. These companies have decided that pausing for the government to address such problems would subject consumers to a waiting game they cannot afford to play anymore. These forward-thinking corporate leaders have taken it upon themselves to bypass the bog of administrative law and to voluntarily commit to practices grounded in concepts like sustainability and transparency. This growing field, known as corporate social responsibility (CSR), is a company’s commitment to undertake voluntary actions, obligations, or ethics to help the businesses to become more “socially responsible.” These behaviors benefit corporate shareholders by fostering positive consumer perceptions, as well as ancillary stakeholders (such as the communities where the companies are based) through philanthropy, environmental *1042 stewardship, or improved working conditions. While there are a number of sweeping laws governing business conduct toward the environment--restrictive statutes like the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act -- America’s hands-off approach to the free market makes consumer-based environmentalism difficult at best. Thus, it falls to the directors of major market participants to decide whether or not to embrace an environmentally responsible approach to running their business. While at one time corporations may have viewed CSR as a burden, more recently executives see it as a cost-saving model of sustainability. Companies such as Whole Foods, Toyota, and even Walmart are now unflinchingly basing their business plan on a model of competitive, eco-friendly investment. Though this trend in responsible behavior paints a nice picture of corporate America caring for its consumers, often the results of such efforts might not be exactly what those consumers had envisioned when choosing one brand over another. The implementation of socially and environmentally responsible initiatives can be incredibly time consuming, and while companies like Walmart might be cutting costs with efficient light bulbs and toilets, such practices require a great deal of monitoring, especially when these products involve vast supply chains. Reports on the methods used in implementing CSR policies indicate that the way companies initiate, organize, and monitor the process is just as important as the results they hope to achieve. This Comment explores the maturing field of corporate social responsibility, highlights economic drivers, and levels Milton Friedman’s criticism of lofty policy objectives at corporate attempts to juggle both CSR and the fiduciary duty owed to their shareholders.