What are the advantages and disadvantages of corporate social responsibility?

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gsenviro | College Teacher | (Level 1) Educator Emeritus

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Corporate social responsibility or CSR is the idea or philosophy that corporations should behave responsibly toward the environment and society. This means that none of the actions of corporations should adversely affect the community or the environment and that they try to benefit the community and environment. CSR has its pros and cons. Such activities reflect a commitment of the business to the community where it operates and give it a better reputation in the eyes of the community. It also presents a better image to the stockholders and analysts. However, such activities have their cost. Environmentally friendly operations require capital and changes in work practices. Such investment has no direct benefit or return to the stockholders. Investors invest money to earn profits and not to see part of that investment being spent on non-productive activities. Also such costs may be an issue for small and medium businesses. This often results in businesses failing to fulfill their community and environmental commitments. 

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