‘15 days of Economics’

Day 10: Why do firms have to behave well?

Every firm has a responsibility to try and diminish social and environmental issues that the world faces. This is called Corporate Social Responsibility (CSR). These issues need to be addressed while ensuring that food, health care and education is sufficient and effective. This essentially involves the process of technological development benefitting the greatest number of people possible.

To solve these issues the participation of international organisations, governments, associations, companies and even citizens is required. The overall goal is to ensure Economic Progress, Social Justice and Envrionmental Preservation.

An individual company can do this addressing there workforce, clientele and production. All the stakeholders need to be involved to ensure that the Corporate Social Responsibility can be efficient. The combination of the company’s profits (Economic Growth) needs to match its environmental sustainability. CSR is recognised as a performance driver and it encourages innovation.

Trans-National Companies including Nestle have a huge CSR as they operate in 189 countries, selling million of products daily. To decrease waste, 15% of their factories produce no waste. To reduce social health issues, they decrease the amount of sugar in their products. To reduce their carbon footprint they have decreased their greenhouse gas emissions.