Do Corporations Invest Enough in Environmental Responsibility?

Journal of Business Ethics 105 (1):115-129 (2012)

Abstract
Proponents of corporate environmental responsibility argue that corporations shortchange shareholders by investing too little in environmental responsibility. They claim that corporations can improve their financial performance by increasing their investment in environmental responsibility. Opponents of corporate social responsibility argue that corporations shortchange shareholders by investing too much in environmental responsibility. They claim that corporations can improve their financial performance by reducing their investment in environmental responsibility. Yet, others claim that corporations serve their shareholders well by investing just enough in social responsibility, not too little and not too much. If so, corporations increase their investment in environmental responsibility when an increase improves financial performance and reduce their investment in environmental responsibility when a decrease improves financial performance. Our evidence is consistent with this last claim. We find that the behavior of corporations is consistent with the claim that they act in the interest of shareholders, increasing or decreasing their investment in environmental responsibility as necessary to improve their financial performance.
Keywords Corporate environmental responsibility  Corporate financial performance  Causality  Corporate social responsibility
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DOI 10.1007/s10551-011-0954-2
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References found in this work BETA

Why Firms Should Not Always Maximize Profits.Ivar Kolstad - 2007 - Journal of Business Ethics 76 (2):137-145.
Why Corporations Should Not Abandon Social Responsibility.Moses L. Pava - 2008 - Journal of Business Ethics 83 (4):805-812.

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Corporate Environmental Responsibility and Firm Risk.Li Cai, Jinhua Cui & Hoje Jo - 2016 - Journal of Business Ethics 139 (3):563-594.

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