Importance Of CSR: Ethics And Environmental Responsibility

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2.2. Importance of CSR Although previous studies have examined the concept CSR extensively, it is an important element in today’s business and society (Branco & Rodriques, 2006; Rahim, 2011). The original focus of CSR is social responsibility, even though, the component environmental responsibility is more and more added to the overall concept CSR. Environmental responsibility has gained importance, as a result of the changing climate, the increasing population and the scarcity of resources. Dramatic cases, such as BP oil spill and Chernobyl, and external pressure from the media and interest groups have showed the urgency for environmental responsibility and confirmed how important it is to incorporate this element in CSR (Flammer, 2013). Rahim (2011) argued that there are various reasons for companies to invest in CSR and the author discussed key motives for companies to adopt CSR practices. First, the personal value and ethics of a company can be a motivator to invest in CSR. As a result of CSR investments, the company’s reputation and brand equity will improve. Second, market or regulatory requirements are a motivator to invest in CSR. Standards and regulations concerning environmental performance and safety might require that companies invest in CSR. Third, a higher reputation and improved stakeholder relationships are a motive for companies to adopt CSR practices. As stated by Srivastava et al. (1998), CSR practices can be seen as market-based assets which in the

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