The Microeconomics of Wellbeing and Sustainability

Chapter 11

Corporate social responsibility

Abstract

To persuade companies that are traditionally focused on maximizing profit to increase their focus on the social and environmental externalities of their actions, it is necessary to show that greater social responsibility does not put them out of business. In this chapter we will explain that giving greater attention to stakeholders with different interests from shareholders entails certain costs and five potential benefits that can offset them. An alliance between socially oriented consumers who “vote with their wallet” and pioneering social enterprises can provide a decisive push toward greater social responsibility by the industrial system. When such an alliance creates positive market ...