Corporate social responsibility and Green washing and its sins

1. Corporate Social
Responsibility
Presented by:
• Amr Sherif Arafa
• Amr Samy Elsheikh
• Rawda Khaled
• Nader Mohamed
• Karim Mohamed

2. CSR Definition 1 Common Definition / Argument / Domains
Arguments of CSR 2
Arguments Against
Arguments Favor
Green Washing 3
Definitions / Types / Diagrams /
7 sins.
Conclusion 4
Conclusion to the CSR
INDEX
2

3. The term CSR refers to Sustainable Development issues applied to business. The ISO 26000 standard defines
CSR as:
an organization's responsibility for the impacts of its decisions and activities on society and the environment,
through transparent and ethical behavior that:
- contributes to Sustainable Development, including health and the welfare of society;
- takes into account the expectations of stakeholders;
- is in compliance with applicable law and consistent with international norms of behavior;
- and is integrated throughout the organization and implemented in its relations.
DEFINITION OF CSR.

4. DEFINITION OF CSR.
What is CSR
• Any definition of CSR ultimately must include definitions of what “social” and “responsibility” mean and that these
definitions must be clear and operational so that any attempt to scientifically understand the role and impact of CSR
practices is possible. Without a clear understanding of the societies to which a corporation is meant to be responsible
and what more or less responsibility entails, the efficacy of any discussion of CSR is limited by a fundamental
incommensurability.
• From a practical perspective, no such comprehensive definition of CSR will ever be possible as all interested parties
will never be at the negotiating table and hence will not be able to contribute their definitions of “social” and
“responsibility” to the debate.
• When put in the context of CSR it should also be clear that it is ultimately the decision of the corporation as to what
it is willing to agree to (whether voluntarily or under duress). Hence, a cynical retort to the corporate response that
“we cannot solve all the world’s problems, so we will concentrate on where we can make a difference” might be to
say that what is really being said is that “we choose to work on those problems that have the most benefit to us.”

5. DOMAINS OF CSR.
• Includes topics such as corporate social responsibility, corporate philanthropy,
stakeholder management, and corporate social performance
Social Environment
• Includes topics such as corporate codes of ethics, corporate crime, individual
ethical behavior, the influence of the organization on ethical conduct, ethical
implications of technology, the assessment of personal values & corporate culture
Ethical Environment
• Includes topics such as political action committees, and the legal and regulatory
areas
Public Policy Environment
• Includes topics such as environmental management and various ecological issues
Ecological Environment
• Includes topics such as the impact of corporate use of technology, workplace
diversity, corporate governance, and public affairs management
Stakeholder environment

6. The case against the concept of CSR
• Friedman held that management has one responsibility to maximize the profits of its owners or
shareholders
• Friedman argued that social issues are not the concern of business people and that these problems should be
resolved by the uncontrolled workings of the free market system
• This view holds that, if the free market cannot solve the social problems, it falls not upon business, but
upon government and legislation to do the job
• Second objection to CSR has been that business is not equipped to handle social activities
• This position holds that managers are oriented towards finance and operations and do not have the
necessary expertise (social skills), to make socially oriented decisions
• Third objection to CSR is that it dilutes businesses’ primary purpose
• Fourth argument is that business already has enough power, and so why should we place in its hands the
opportunity to wield additional power, such as social power
• Fifth argument is that, by following CSR, business will make itself less competitive globally

7. The case with the concept of CSR
• It is in business’s long-term self interest – enlightened self-interest – to be socially responsible, if
business is to have a healthy climate in which to function in the future, it must take actions now that will
ensure its long-term viability
• Another argument is that it will ‘facilitate government regulation’. This is a very practical reason, and it
is based on the idea that future government intervention can be foreseen
• Pro-acting is better than reacting. This basically means that pro-acting (anticipating, planning and
initiating) is more practical and less costly than simply reacting to social problems once they have
surfaced
• Public strongly supports it. As they believe that, in addition to seeking for profits, business should be
responsible to their workers, communities and other stakeholders, even if making things better for them
requires companies to sacrifice some profits

8. Zadek has argued that companies pursue CSR strategies to
(1) defend their reputations (pain alleviation),
(2) justify benefits over costs (the ‘traditional’ business case),
(3) integrate with their broader strategies (the ‘strategic’ business case),
(4) learn, innovate and manage risk (New Economy Business case) (Zadek 2000). Kurucz
The rationale for the business case for CSR may be categorized under four arguments:
ARGUMENTS FAVORS CSR
01
Reducing cost
and risk
02
Strengthening
legitimacy and
reputation.
03
Building
competitive
advantage.
04
Creating win–
win situations
through
synergistic value
creation.

9. The “Good” of CSR? Corporations _ Behaving Well
• Part of the logic of CSR is that corporations can (and some would say should) be instruments of social policy.
• First, individuals vote with their feet and pocketbooks. Based on this logic, corporations with more acceptable
practices within a society would have more satisfied customers, more satisfied employees, and more satisfied
owners and hence would last longer and thrive in more adverse circumstances
• Second, corporations possess more knowledge than individuals and governments and hence are more likely to
be able to use that information to tailor products and services to the appropriate constituencies.
• Third, corporations have a better understanding of trade-offs, technologies, and trends operating within a
society and can act on them in a way that is more rational and realistic than governments can.
• Finally, being free of the transparency required of governments and many civil society organizations,
corporations can more easily engage in social “experimentation”

10. The “Bad” of CSR? Doing Well by Exploiting _ Being Good
• A potentially naive assumption underlying CSR is that firms are guided by society and do not deliberately manipulate that
society for their own benefit. It is the natural vice of corporations that they gravitate toward solving problems from which
economic rents can be claimed. There are five natural vices of relevance here
• First, corporations exist to generate economic returns, not to solve societal problems. They live to optimize for themselves
(i.e., their near stakeholders: shareholders, managers, employees, suppliers, governments, etc.), not the general public.
• Second, corporations skew societal standards to their own needs. We can see this in two ways. The first is the use of
regulatory capture and direct and indirect political influence and various religion-affiliated Western NGOs, while controlling
the global market for textiles through production quota allocations from developing countries
• Third, corporations are not representative of the society at large. For lack of a better analogy, corporations are urban upper
middle class. They do not represent the poor and disadvantaged of a society, nor do they represent the geographic spread of a
society.
• Fourth, most corporations are naturally socially conservative and hence will not experiment unless they can see a clear profit
from the endeavor.
• Fifth, CSR allows governments to abdicate some of their social responsibilities, thus making
• the delivery of those social services provided by companies less accountable and transparent and more subject to the whims
of unelected decision makers

11. The “Ugly” of CSR? Where’s the Performance?
• The empirical literature on the relationship between CSR and performance is mixed and fraught with empirical question
marks around not just how performance is measured but what it means to “do good”
• There is no indication that doing well by
• doing good has a clear and obvious relationship to
• the generation of firm value
• The difficulty is that we must be willing to accept the good and bad character of the corporation. We want corporations to
experiment, but not too much or on the wrong things. We want them to offer products and services and create new processes,
but not those that might be to the detriment of us (whoever us is) and certainly not at a high price

12. Green Washing

13. 1) we found that
substantive actions neither
harmed nor benefited financial
performance, but symbolic
actions were related to
decreased financial
performance.
2) found that green-washing
harms firms financially, and
green-highlighting neither
harms nor improves financial
performance.
Without questi

14. WHAT IS GREENWASHING?
• Greenwashing is the act of misleading consumers
regarding the environmental practices of a company
(firm-level greenwashing) or the environmental
benefits of a product or service (product-level
greenwashing)
• One definition offered by Ramus and Montiel (2005)
is that green-washing is ‘‘disinformation
disseminated by an organization so as to present an
environmentally responsible public image,’’

15. A Typology of Firms based on Environmental Performance and Communication
Green
washing
Firms
Vocal
Green
Firms
Silent
Brown
Firms
Silent
Green
Firms
Bad Environmental
Performance
Positive Communication
No Communication
Good Environmental
Performance
Green washing Firms
• Brown firms that positively communicate about their environmental
performance are the firms of interest in this discussion, namely,
“green washing firms”
Vocal Green Firms
• Firms with good environmental performance that positively
communicate about their environmental performance can be
described as “vocal green firms”
Silent Brown Firms
• Companies that are not communicating about their environmental
performance as “silent brown firms”
Silent Green Firms
• Those companies that do not communicate about their environmental
performance can be described as “silent green firms”

16. Drivers of Green washing
Nonmarket
External Drivers:
Regulatory/
Monitoring
Context
Uncertain
Regulatory
Environment
Activist, NGO,
Media
Monitoring
Market External Drivers
Consumer Demand
Investor Demand
Competitive Pressure
Organizational Drivers
Firm Characteristics
Incentive Structure and Culture
Effectiveness of Intra-Firm Communication
Organizational Inertia
Individual Psychological Drivers
Optimistic Bias
Narrow Decision Framing
Hyperbolic Intertemporal Discounting
Green
Washing

26. MANAGERIAL AND POLICY
RECOMMENDATIONS
• Greenwashing regulation currently applies only to
miscommunication about product or service
environmental performance; there is no regulation
for miscommunicating about firm environmental
performance.
• In practice, however, difficulty in measuring and
assessing the degree of firm-level greenwashing
makes this a hard regulatory challenge.

27. Thanks!
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