Corporate Social Responsibility Through an Economic Lens

Forest L. Reinhardt, Robert N. Stavins, Richard H. K. Vietor

NBER Working Paper No. 13989
Issued in May 2008
NBER Program(s):Environment and Energy Economics, Industrial Organization, Law and Economics, Public Economics

Business leaders, government officials, and academics are focusing considerable attention on the concept of "corporate social responsibility" (CSR), particularly in the realm of environmental protection. Beyond complete compliance with environmental regulations, do firms have additional moral or social responsibilities to commit resources to environmental protection? How should we think about the notion of firms sacrificing profits in the social interest? May they do so within the scope of their fiduciary responsibilities to their shareholders? Can they do so on a sustainable basis, or will the forces of a competitive marketplace render such efforts and their impacts transient at best? Do firms, in fact, frequently or at least sometimes behave this way, reducing their earnings by voluntarily engaging in environmental stewardship? And finally, should firms carry out such profit-sacrificing activities (i.e., is this an efficient use of social resources)? We address these questions through the lens of economics, including insights from legal analysis and business scholarship.

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Document Object Identifier (DOI): 10.3386/w13989

Published: Forest L. Reinhardt & Robert N. Stavins & Richard H. K. Vietor, 2008. "Corporate Social Responsibility Through an Economic Lens," Review of Environmental Economics and Policy, Oxford University Press for Association of Environmental and Resource Economists, vol. 2(2), pages 219-239, Summer. citation courtesy of

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