Content and Limits of Corporate Social Responsibility

Corporate Social Responsibility (CSR) represents a company’s voluntary commitment to address the ethical, social and environmental factors associated with its operations. Despite its potential for furthering social needs CSR activities may come under severe pressure in an era of increased global competition and during business cycle downturns.

The role of governments in facilitating and supporting CSR still remains unclear.

Do we need joint action of firms and governments to agree on common CSR standards to prevent a race to the bottom where firms that engage in CSR are at a cost disadvantage vis-à-vis their competitors? Should governments help to sustain CSR-activities during business cycles downturns, and if so, how should they do that? Should a company only be responsible for its own activities or should it also take responsibility for eventual actions by their suppliers and customers and, if so, how to make a company’s commitment to CSR enforceable against potential misbehaviour by suppliers and customers? How to prevent politicians to neglect their original responsibilities and treat CSR as a substitute for good government policy?