Arguments for CSR: Ethical Argument

Although many discussions around CSR assume an ethical component, the precise relationship between ethics and CSR is often left unspecified. The main question is: “Can a socially responsible company be unethical?” In essence, responsibility is one of the core five elements of ethics:

• honest
• respect
• fairness
• compassion
• responsibility

Ethics requires all five. Therefore, a corporation can have a strong sense of responsibility without necessarily being honest.

CSR is an argument based on two forms of ethical reasoning—consequentialist (utilitarian) and categorical (Kantian). Consequentialist reasoning justifies action in terms of the outcomes generated (the greatest good for the greatest number of people), while categorical reasoning justifies action in terms of the principles by which that action is carried out (the application of core ethical principles, regardless of the outcomes they generate).

At a more practical level, these two ethical perspectives become realized in social norms which have been accepted by the organization, the industry, the profession, or society as necessary for the proper functioning of business. They are codified with the organization in the form of a code of conduct or code of ethics, which then acts as a point of reference or guide in determining “whether a company is acting ethically according to the conventional standards.”

The violation of a society’s ethical principles regarding issues of social justice, human rights, and environmental stewardship is deemed to be ethically wrong and socially irresponsible.This premise is the foundation of the “social contract,” which is based on societal expectations that bind firms because compliance is directly related to a social license to operate. Remaining within these implicit ethical boundaries is directly related to the firm’s societal legitimacy and long-term viability.