This past Tuesday, Eric Bettleheim, environmental and financial markets expert, and distinguished Rochester alum, gave a guest lecture in one of my classes. His topic, which I found particularly stimulating, was the reality of corporate social responsibility, or CSR. CSR is defined as “the duty a corporation has to create wealth by using means that avoid harm to, protect, or enhance societal assets” and has three components: market forces, mandated social programs, and voluntary social programs.
Bettelheim discussed how although seemingly commendable, there is currently a discrepancy between companies’ portrayed actions, which tend not to be cohesive, and reality. He had previously worked for a large oil company that sought to adopt certain aspect of corporate responsibility when the Waxman-Markey bill was passed by the House of Representatives in 2009. The bill later died in Senate, and when this happened, the company ceased all efforts to take actions that aligned with the public good. These kinds of experiences provided significant support for his point that CSR and environmental governance sometimes just utilize words to avoid instead of absorb externalities.
His key point seemed to be that ultimately, the threat of climate change and resource depletion needs a large-scale movement similar to the one that formed in opposition to the Vietnam War. Global cooperation is necessary to enact meaningful change. He stressed that the typical time scale may be too long. The fossil fuel industry is huge, and will fight off any significant change for years and years.
Our modern-day definition of CSR has evolved recently from the previous system, which used to be simply a company’s philanthropic efforts. Perhaps as guidelines develop and businesses become more transparent, it will become a powerful tool for change. Business and society need each other, thus choices must benefit both sides.
Written by Leslie Wolf, Class of 2015