Questions and Answers
The incident had a spillover effect on peer companies like ______ whose share prices have dropped.
Shall
Solving the tragedy of the commons is challenging as there is no world ______.
government
Social pressure, Fridays for future, and the bankers- ______ are examples of self-governance in corporate sustainability.
oath
ISO 26000 is an example of a standardized ______ that industries can adopt to improve sustainability practices.
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One of the challenges with certifications is determining whether they are effective or merely ______.
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Reputation is a significant asset, indicating its importance for a company's ______ value.
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The rising social pressure on companies is partly due to mass ______ demanding responsible practices.
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Sustainability issues are increasingly important to ______ and those holding equity of an organization.
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Companies that are perceived as 'good' regarding sustainability may face criticism through ______ media.
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BP's reputation was severely impacted by the ______ Horizon explosion, affecting its legitimacy and stock prices.
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Study Notes
Corporate Social Responsibility (CSR)
- Economic Responsibility: Compliance with capitalist principles.
- Legal Responsibility: Adhering to laws set by global stakeholders.
- Ethical Responsibility: Meeting the ethical expectations of stakeholders.
- Philanthropic Responsibility: Engaging in activities desired by stakeholders.
Importance of Going Beyond Obligations
- Reputation: A valuable asset impacting brand value.
- Legitimacy: Essential for operational success; lack of legitimacy discourages investments from shareholders and suppliers.
Pressures on Firms
- Increased social demand for accountability in supply chains.
- Activist and public mobilization are driving forces for sustainability.
- Investment funds are divesting from fossil fuels, influencing broader corporate behaviors.
- High demand for transparency and sustainability reporting, especially for companies closer to consumers.
- Companies showing commitment to sustainability face scrutiny and potential backlash on social media.
- Strategic withholding of sustainability certifications to prevent reputational harm.
Spillover Effects
- Case of BP: Reputation damaged after the Bluewater Horizon disaster, with long-term impacts on stock prices.
- Negative actions of one firm can affect peers, as seen with BP and Shell.
Self-Governance in Corporate Sustainability
- Social Movements: Initiatives like Fridays for Future influence corporate practices.
- Regulatory Frameworks: Banks established the bankers' oath and Equator Principles for greater accountability.
- Certification Standards: ISO standards (e.g., ISO 26000) promote trust but can also raise questions about potential greenwashing.
Institutional Examples for Sustainability
- Certifications: Establish standards that encourage sustainable practices.
- Resource Scarcity: Highlights necessity for innovation, such as BMW's battery refurbishment initiative.
- Government Regulations: Bans on fossil fuel vehicles push firms toward sustainable alternatives.
- Market Dynamics: Consumer preferences shifting towards car-sharing services impact automobile ownership models.
Case Analysis: WestLB
- WestLB faced systemic scrutiny and accountability for broader environmental impacts.
- Stakeholder reactions influenced the bank's response to sustainability issues.
Stakeholders' Perspectives
- Diverse Interests: Customers, NGOs, and shareholders hold varying expectations from firms.
- Political Dimensions: Stakeholders, including state entities, can shape corporate sustainability discussions.
- NGO influence grows when combined with public pressure, shifting corporate strategies from defensive to collaborative approaches.
Company Responses
- Nike's Transformation: Efforts to eliminate sweatshop practices demonstrate responsiveness to stakeholder concerns.
Key Takeaway
- Balancing stakeholder interests is crucial for maintaining reputation and driving business strategy in a sustainability-focused world.
Corporate Social Responsibility (CSR)
- Economic Responsibility: Compliance with capitalist principles.
- Legal Responsibility: Adhering to laws set by global stakeholders.
- Ethical Responsibility: Meeting the ethical expectations of stakeholders.
- Philanthropic Responsibility: Engaging in activities desired by stakeholders.
Importance of Going Beyond Obligations
- Reputation: A valuable asset impacting brand value.
- Legitimacy: Essential for operational success; lack of legitimacy discourages investments from shareholders and suppliers.
Pressures on Firms
- Increased social demand for accountability in supply chains.
- Activist and public mobilization are driving forces for sustainability.
- Investment funds are divesting from fossil fuels, influencing broader corporate behaviors.
- High demand for transparency and sustainability reporting, especially for companies closer to consumers.
- Companies showing commitment to sustainability face scrutiny and potential backlash on social media.
- Strategic withholding of sustainability certifications to prevent reputational harm.
Spillover Effects
- Case of BP: Reputation damaged after the Bluewater Horizon disaster, with long-term impacts on stock prices.
- Negative actions of one firm can affect peers, as seen with BP and Shell.
Self-Governance in Corporate Sustainability
- Social Movements: Initiatives like Fridays for Future influence corporate practices.
- Regulatory Frameworks: Banks established the bankers' oath and Equator Principles for greater accountability.
- Certification Standards: ISO standards (e.g., ISO 26000) promote trust but can also raise questions about potential greenwashing.
Institutional Examples for Sustainability
- Certifications: Establish standards that encourage sustainable practices.
- Resource Scarcity: Highlights necessity for innovation, such as BMW's battery refurbishment initiative.
- Government Regulations: Bans on fossil fuel vehicles push firms toward sustainable alternatives.
- Market Dynamics: Consumer preferences shifting towards car-sharing services impact automobile ownership models.
Case Analysis: WestLB
- WestLB faced systemic scrutiny and accountability for broader environmental impacts.
- Stakeholder reactions influenced the bank's response to sustainability issues.
Stakeholders' Perspectives
- Diverse Interests: Customers, NGOs, and shareholders hold varying expectations from firms.
- Political Dimensions: Stakeholders, including state entities, can shape corporate sustainability discussions.
- NGO influence grows when combined with public pressure, shifting corporate strategies from defensive to collaborative approaches.
Company Responses
- Nike's Transformation: Efforts to eliminate sweatshop practices demonstrate responsiveness to stakeholder concerns.
Key Takeaway
- Balancing stakeholder interests is crucial for maintaining reputation and driving business strategy in a sustainability-focused world.
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Description
This quiz explores the key aspects of Corporate Social Responsibility (CSR), including economic, legal, ethical, and philanthropic responsibilities. It highlights the significance of going beyond obligations for enhancing reputation and legitimacy in the business landscape. Understand the pressures firms face in terms of accountability and sustainability initiatives.
