MCQ session 3 CSR

Key Concepts in Corporate Sustainability

• Responsible Management involves balancing economic, social, and environmental duties
• Corporate Sustainability ensures long-term ecological balance, societal welfare, and stakeholder value
• Ethical Decision-Making integrates responsibility, ethics, and sustainability into business strategy
• Externalities are unintended side effects of corporate activities that affect third parties, such as pollution or biodiversity loss

Why Companies Engage in CSR

• Companies engage in CSR due to stakeholder pressure from customers, investors, and governments
• Legal and regulatory compliance requires companies to engage in CSR
• A competitive advantage and enhanced reputation are gained through CSR
• Ethical commitment to sustainability and social well-being motivates CSR

Earth as a System of Systems

• The Earth is comprised of five major spheres: atmosphere, biosphere, hydrosphere, geosphere/lithosphere, and cryosphere
• The atmosphere consists of air and climate systems
• The biosphere includes all living organisms
• The hydrosphere contains water bodies, oceans, and rivers
• The geosphere/lithosphere is made up of land, soil, and minerals
• The cryosphere includes ice caps and glaciers
• Interdependencies exist where actions in one sphere impact others; for example, deforestation leads to climate change and biodiversity loss

The Greenhouse Effect & Carbon Cycle

• Greenhouse Gases (GHGs) like CO2, CH4, and N2O trap heat in the atmosphere
• Carbon Sinks: Forests, oceans, soil absorb CO2
• Carbon Sources: Fossil fuel combustion, deforestation release CO2
• The Keeling Curve is a graph that shows rising atmospheric CO2 levels

Six Ecological Concepts for Sustainability

• Networks demonstrate that everything is connected, such as food webs and supply chains
• Nested Systems show that smaller systems exist within larger ones
• Cycles are natural recycling processes like the water cycle and carbon cycle
• Flows represent continuous energy transfer, such as solar energy driving ecosystems
• Development involves adaptation and evolution over time
• Dynamic Balance is when self-regulating feedback loops maintain stability

The Great Acceleration & Corporate Impact

• Since the mid-20th century, there has been rapid economic and industrial growth
• Planetary boundaries are exceeded, including climate, biodiversity loss, and resource depletion
• Industries contribute to deforestation, pollution, and global warming

Globalization & Deregulation

• Multinational Corporations (MNCs) operate across multiple countries
• Limited Liability means corporations are legally separate from their owners, reducing accountability
• Governance Gaps occur because businesses operate globally, but regulations remain national
• Regulatory Vacuums exist when weak labor and environmental laws in some countries are exploited by corporations

Business Responsibility & Ethical Issues

• Nike (1996) involved child labor in supply chains
• Rana Plaza Disaster (2013) describes a factory collapse due to unsafe working conditions
• Bhopal Disaster (1984) was a chemical plant leak with severe environmental and health consequences
• Biodiversity Loss results from resource extraction, industrial farming, and pollution harming ecosystems

Sustainability Regulations & Standards

• Soft Law (Voluntary) includes guidelines businesses follow, such as the UN Global Compact and ISO 26000
• Hard Law (Mandatory) consists of government regulations like the EU Corporate Sustainability Reporting Directive
• ILO Core Labour Standards are fundamental labor rights, including no child labor, freedom of association, and anti-discrimination
• Sustainability Reporting involves companies disclosing their environmental and social impacts, such as through the Carbon Disclosure Project (CDRD)

Critiques of Sustainability Standards

• Standard Multiplicity occurs when too many overlapping certifications confuse businesses and consumers
• Greenwashing is when companies adopt sustainability policies symbolically without taking real action
• Lack of Inclusiveness is the result of some standards excluding key stakeholders in decision-making

Business Responses to Regulation

• Ignoring Regulations can lead to fines and reputational damage
• Complying with Laws involves meeting minimum legal requirements
• Going Beyond Compliance means proactively exceeding regulations for long-term sustainability

Key Takeaways & Exam Tips

• CSR balances economic, social, and environmental responsibilities
• Businesses must understand ecological limits and feedback loops to avoid long-term damage
• Regulation in sustainability is crucial, but enforcement gaps exist
• Corporate actions can drive positive or negative externalities, impacting global sustainability
• Sustainability standards can help, but companies must genuinely integrate them into their strategy
• Exam questions might include defining and giving examples of externalities, explaining how business strategies can align with nature’s cycles, discussing how governance gaps impact corporate accountability, and analyzing a real-world corporate sustainability case study