As we enter 2020, corporations are facing increasing public scrutiny and being held accountable for their products and actions as a business. This has given rise to the concept of corporate social responsibility (CSR), which is featured in this issue’s Roundtable, where packaging companies discuss how they are responding to expectations from their stakeholders.
CSR describes a company’s efforts to improve society in some way. This theory encourages companies to enact policies that promote an ethical balance between the dual mandates of striving for profitability and benefiting society as a whole. These efforts can range from donating money to non-profits to implementing environmentally friendly policies in the workplace.
For companies involved in the manufacture and use of packaging, the most obvious social issue is packaging’s effect on the environment. Creating packaging that can be sustainable is, perhaps, one of the largest issues facing the industry today. Consequently, it is no wonder packaging companies are making significant efforts to improve the sustainability of their products.
However, CSR extends well beyond sustainability. Companies are expected to take actions that respond to all of their stakeholders, including employees, customers and communities — not just their shareholders. Companies can act responsibly in many ways, such as promoting volunteering, making changes that benefit the environment, and engaging in charitable giving.
This is a relatively new concept. In 2019, the Business Roundtable, an association of corporate CEOs, announced the adoption of a new statement on the purpose of a corporation, signed by 181 well-known, high-powered CEOs. This document abandoned “shareholder primacy” as a guiding principle and outlines in its place a “modern standard for corporate responsibility” that made a commitment to all stakeholders. This includes:
- Delivering value to customers.
- Investing in employees.
- Dealing fairly and ethically with suppliers.
- Supporting the communities in which we work
- Generating long-term value for shareholders.
CSR does have its critics. Not everyone claimed that businesses should have a social conscience. Economist Milton Friedman believed only individuals can have a sense of social responsibility, and businesses, by their very nature, cannot. Some experts claim the only reason business exist is to make a profit above all else.
However, businesses can benefit financially from adopting CSR. Studies have shown that consumers are willing to pay more for a good or service if the company’s values align with their own. In addition, social responsibility is more effective when a company takes it on voluntarily, instead of being required by regulation.
John Kalkowski Editor-in-Chief
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