Who Really Pays For CSR Initiatives?

February 15, 2008

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Corporate CSR activities raise the cost of doing business and lower corporate productivity without a net benefit to free enterprise or the human condition, according to an Investor Business Daily article (via CNNMoney).

According to the author, corporate executives that arbitrarily fund CSR activities reduces returns to shareholders – and are in effect spending someone else’s money. Executives should instead spend their own money on CSR activities.

“But billions of corporate dollars are now being diverted from investors and redistributed elsewhere, often according to the whims of social activists who are accountable to no one but themselves, and who pursue goals based not on a desire for greater corporate efficiency or profit but on their own vision of what is sustainable, equitable and good for the rest of us.,” the article states.

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Reader Comments

As IBD well knows, if enough shareholders disagree with CSR initiatives they can always push to put it up to shareholder vote.

I also think IBD probably realizes that a “slash the CSR” vote would probably go nowhere. Certainly shows they don’t know much about current labor markets and what young professionals are looking for.

RhapsodyInGlue | February 15th, 2008

…and not a single example of an executive “arbitrarily ” spending funds on CSR activities in this article, pure hyperbole. Execs are under pressure and that pressure comes from the market, legislators and consumers; if they fail to act their companies (and investors) will pay the ultimate price of imposed legislation, lost market share to competitors that get it and irate consumers – is that what this uninformed commentator wants?

Brendan Dunphy | February 18th, 2008