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Beyond Corporate social responsibility (CSR) and shareholder theory: Contesting the relevant context of sustainability

 (Previously presented in a preliminary form at the 2018 EAEPE conference) 

 

Marc Jacquinet

December 2024

 

Corporate social responsibility (CSR) has not just become mainstream practice for multinational corporations, it has also become the dominant discourse of responsibility and social obligation on the behalf of private firms, conflating the deeper questions of moral obligation into a management tool, both for communicating and compensating the impact of business as usual. Related to CSR and the literature on sustainable development, the notion of sustainability has two opposite  conceptions, one weak, maintaining the practices and objectives of corporations unaltered,  with a marginal technological fix, in a context of global warming and growing ecological footprint, and the other, called strong sustainability, that considers that technological progress is not enough. In the latter the very purpose of corporations, their responsibility and their actions have to be thoroughly reconsidered. 

This paper starts with a  characterization and criticism of the concept of corporate social  responsibility and business ethics. The notion of CSR (and it could also be said of stakeholder theory) does not tackle the issue of environmental impact of corporations and human dignity in any meaningful sense. Most activities of CSR are either weak compensation or strong communication and marketing plans and reports. The underlying notion of ethics – business ethics – is also lacking substance and thoroughness. A brief discussion on ethics and moral theory, related to economics and business practice, tackles the issue of responsibility and obligation, namely in relation to shareholder value doctrine.   

The issue of CSR is then, in the second part of the essay, related to the debate of weak versus strong sustainability. A deeper understanding of sustainability is developed. This section includes an extended discussion of the limits of the technological fix for climate change and environmental impact. 

In the third part of the paper, and on the basis of the revamped concept of (strong) sustainability, a discussion of ethics and the moral dimension of corporations is ensued by a definition of the relevant context for moral and ethical issues. This leads to the criticism of shareholder value theory and a rethinking of stakeholder theory.

 

Introduction

 

In recent decades, corporations have been asked to tackle issues such as poverty, human rights, climate change, and, more recently still, sustainable goals (UN 2006; SDG).



  1. Concepts and critique of CSR and business ethics

 

Even though there is some rationale behind CSR as an effective tool for pursuing the SDG, business ethics and CSR are still, as generally practiced, rather limited perspectives on business and production as well as insufficient for either thinking the complexity of managerial and work lives and or for implementing or supporting radical changes in behaviors and culture of capitalist organizations and consumption. The same can be said about related concepts such as stakeholder theory and management communication. 

 

One critique of CSR and business ethics has to do with the blunt contradiction between their final aims and means with regard to the doctrine of shareholder value and profit maximization at all costs. Ethics and CSR are related to human flourishing, social values and not just subsumed to a material gain category. 

Genuine human well-being is not conflatable to material acquisition of material good, and services either. It is a perverse consequence of one size fits all in economics and business culture and literature that cannot consider human diversity and cultural difference. 



  1. Weak versus strong sustainability: A Critical Analysis

 

The concept of sustainability has become increasingly central to discussions about economic development, environmental protection, and social justice. However, not all approaches to sustainability are equally effective in addressing the complex challenges facing our planet. This essay argues that strong sustainability offers significant advantages over weak sustainability in addressing contemporary environmental and social challenges.

Weak sustainability, rooted in neoclassical economics, assumes that natural capital and human-made capital are perfectly substitutable (Solow, 1993). This approach suggests that environmental degradation can be offset by technological advancement and economic growth. For example, the depletion of natural resources might be considered acceptable if it generates sufficient financial capital to develop alternative technologies.

In contrast, strong sustainability, as articulated by ecological economists like Herman Daly (1996), recognizes that natural capital and human-made capital are complementary but not interchangeable. This paradigm acknowledges that certain ecological processes and natural resources are irreplaceable and must be preserved regardless of economic considerations.

 

The key Advantages of Strong Sustainability can be listed as follow

 

  1. a) Ecological Integrity

Strong sustainability’s primary advantage lies in its recognition of ecological thresholds and planetary boundaries (Rockström et al., 2009). Unlike weak sustainability, it acknowledges that:

  • Ecosystems have critical thresholds beyond which damage becomes irreversible
  • Biodiversity loss cannot be meaningfully compensated by technological solutions
  • Natural capital provides essential services that cannot be replicated artificially

 

  1. b) Intergenerational Justice

Strong sustainability better addresses intergenerational equity by:

  • Preserving critical natural capital for future generations
  • Maintaining ecosystem services essential for human wellbeing
  • Preventing the transfer of environmental debts to future generations

 

  1. c) Economic Resilience

While weak sustainability promotes continued economic growth within existing frameworks, strong sustainability advocates for:

  • Circular economy principles that minimize waste and maximize resource efficiency
  • Diverse, localized economic systems that enhance resilience
  • Economic models that recognize environmental limits to growth

 

  1. d) Social Justice

Strong sustainability integrates social justice considerations more effectively by:

  • Acknowledging the disproportionate impact of environmental degradation on vulnerable populations
  • Promoting equitable access to natural resources
  • Recognizing indigenous knowledge and rights in environmental stewardship

 

Practical Implications

The adoption of strong sustainability principles leads to significantly different policy and business approaches:

 

Policy Framework

 

Implementation of absolute limits on resource extraction

Stringent protection of critical ecosystems

Carbon budgets based on ecological limits rather than economic convenience

 

Business Practices

 

Emphasis on circular business models

Priority given to conservation over offsetting

Integration of true cost accounting

 

Technology Development

 

Focus on regenerative rather than merely efficient technologies

Emphasis on appropriate technology that respects ecological limits

Innovation directed toward reducing absolute resource use

 

Addressing Common Criticisms

Critics often argue that strong sustainability is impractical or economically damaging. However, these criticisms typically can be summarised in the three following aspects:

  • Underestimate the long-term costs of environmental degradation
  • Overlook the innovation potential within ecological constraints
  • Fail to account for the rising costs of weak sustainability approaches

 

Strong sustainability offers clear advantages over weak sustainability in addressing contemporary environmental challenges. Its recognition of ecological limits, emphasis on intergenerational justice, and integration of social considerations provide a more robust framework for achieving genuine sustainability. While implementing strong sustainability principles may require significant changes to current economic and social systems, the alternatives offered by weak sustainability are increasingly proving inadequate in the face of mounting environmental challenges.

The transition to strong sustainability is not merely desirable but necessary for ensuring long-term human wellbeing and ecological stability. As climate change accelerates and biodiversity loss continues, the pragmatic superiority of strong sustainability becomes increasingly evident.

 

  1. A revamped concept of sustainability and development of corporations and society

 

It is important to be more explicit in formulating a concept of sustainability about the living and ecological world we live in, the human flourishing, namely in the objectives to be attained not just on the side of shareholder value.

Focusing on human personal growth and development with considerations about the lifetime perspective of workers, citizens – with long term  consideration. 

This notion of human development or flourishing has to be considered both at the individual and the collective levels. The notion of communities are here relevant, if they are not considered meaningless in too many a case in CSR projects.

Sustainability has a wider ontological nature and broader normative content such as value, environment conservation and community development.

 

 

Conclusions

 

The evolution of Corporate Social Responsibility (CSR) from a moral imperative to a management tool reflects a broader tension in how businesses approach their societal obligations. This analysis has demonstrated that conventional CSR frameworks, while widespread, often fail to address fundamental questions of environmental sustainability and human dignity. Instead, they frequently default to superficial compensatory measures or marketing-driven initiatives that perpetuate rather than challenge problematic business practices.

Our examination of the weak versus strong sustainability paradigms reveals the inadequacy of purely technological solutions to address contemporary environmental challenges. While weak sustainability maintains existing corporate structures with minimal adjustments, strong sustainability demands a fundamental reconceptualization of corporate purpose and responsibility. This distinction is crucial as it highlights the limitations of current CSR approaches in addressing urgent environmental and social challenges, particularly in the context of accelerating climate change and increasing global inequality.

Moreover, this investigation has exposed significant shortcomings in traditional business ethics frameworks, particularly regarding their treatment of corporate obligations beyond shareholder value. By critically examining the relationship between ethical theory and economic practice, we have demonstrated the need for a more robust moral framework that transcends the limitations of conventional stakeholder theory. This necessitates a shift from viewing ethics as a constraint on business practice to understanding it as a fundamental driver of corporate purpose and decision-making.

 

Several key implications emerge from this analysis:

First, corporations must move beyond superficial reporting and token initiatives to integrate sustainability into their core business models. This requires fundamental changes in governance structures, performance metrics, and incentive systems that currently prioritize short-term financial gains over long-term societal impact.

Second, the concept of stakeholder engagement needs substantial reimagining. Rather than merely consulting stakeholders, companies must develop mechanisms for meaningful participation in decision-making processes, particularly regarding environmental and social impacts. This includes giving voice to traditionally marginalized groups and future generations.

Third, regulatory frameworks must evolve to support strong sustainability. This means moving beyond voluntary CSR initiatives to establish binding standards that reflect the true cost of environmental and social externalities. Such frameworks should incentivize innovation in sustainable business models rather than merely penalizing non-compliance.

Looking forward, this research suggests that meaningful corporate responsibility requires a radical shift from current practices. Companies must move beyond the superficial application of CSR principles to embrace a model of strong sustainability that fundamentally reshapes corporate purpose and behavior. This transformation demands not only technological innovation but also a thorough reexamination of the moral foundations of business practice and the relationship between corporations and society.

Practical recommendations for implementing these changes include:

 

  • Developing new metrics and reporting standards that capture the full spectrum of corporate impacts on society and the environment
  • Restructuring corporate governance to include diverse stakeholder perspectives in decision-making processes
  • Creating incentive systems that reward long-term sustainability over short-term profit maximization
  • Investing in research and development focused on transformative rather than incremental solutions to sustainability challenges
  • Building educational and training programs that integrate strong sustainability principles into business education

 

The path forward requires courage from business leaders, wisdom from policymakers, and engagement from stakeholders at all levels. Only through such collective action can we hope to transform corporate responsibility from a peripheral concern into a central driver of business purpose and practice in service of a more sustainable and equitable future.

 

References

Daly, H. E. (1996). Beyond Growth: The Economics of Sustainable Development. Beacon Press.

Rockström, J., et al. (2009). A safe operating space for humanity. Nature, 461(7263), 472-475.

Solow, R. M. (1993). An almost practical step toward sustainability. Resources Policy, 19(3), 162-172.

 

 


OpenEdition vous propose de citer ce billet de la manière suivante :
Marc Jacquinet (28 décembre 2024). Beyond Corporate social responsibility (CSR) and shareholder theory: Contesting the relevant context of sustainability. Critique du management. Consulté le 28 avril 2025 à l’adresse https://doi.org/10.58079/12zvv


Marc Jacquinet

https://orcid.org/0000-0003-1157-060X

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