Archives for corporate social responsibility



Are Socially Responsible Businesses Bad for Society?

Writing for Foreign Policy, Daniel Altman argues against socially responsible business initiatives such as the recently launched “B Team.”  For-profit companies, explains Altman, often think long-term:

As Jonathan Berman and I have written in the past, for-profit companies that take a long time horizon in their decision-making are likely to make more social and environmental investments. Things like training workers, bolstering communities, and protecting ecosystems can take a long time to pay off for private companies. When they do, the return — including a stronger labor pool, a wealthier consumer base, fewer working days lost to strikes and protests, and greater employee loyalty — can be comparable to other for-profit investments.

In fact, strictly for-profit companies can be among the best social investors because they apply the same discipline to these investments that they would to other parts of their core business. Energy and mining companies, for example, have some of the longest time horizons in the private sector, and they tend to be big social investors as well. Some European companies have actually stopped issuing quarterly reports to shift the attention of analysts to the long-term. And because they are still targeting a single bottom line, profit, there’s no loss of clarity about their mission or erosion of transparency for shareholders.

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Is Good Corporate Citizenship Also Good for the Bottom Line?

Our latest Freakonomics Radio on Marketplace podcast is called “Is Good Corporate Citizenship Also Good for the Bottom Line?” (You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

The short answer: yes. That’s the finding of Robert G. Eccles, Ioannis Ioannou and George Serafeim from their recent paper “The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance” :

“We show that there is significant variation in future accounting and stock market performance across the two groups of firms. We track corporate performance for 18 years and find that sustainable firms outperform traditional firms in terms of both stock market and accounting performance.”

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