MGNT2610 A & B

Why CSR? Legal Environment, Corporate Social

Responsibility and Business Ethics
Dr. Stephen FROST
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Critiques of capitalism
From Karl Marx to Thomas Piketty, capitalism
critiqued as:
• Exploitative
• Economically unequal
• Unsustainable
• Anti-democratic
• Leading to human rights abuse
• An incentive to imperialism & war
From the 1950s,
business has been
viewed as a ‘problem’
• Clearly, business and capitalism have
their supporters
• But the critics have been loud and
influential
• Business has been viewed by critics as
the cause of problems, not the solution
to problems (and it still often viewed
this way by many)
 March 10, 1906: Courrières mine disaster in Courrières, France. 1,099 people died,
including children, in the worst mine accident in Europe; This disaster was
surpassed only by the Benxihu Colliery accident in China on 26 April 1942, which
killed 1,549 miners

March 25, 1911: Triangle Shirtwaist Factory fire in New York City. This was a major
industrial disaster in the US, causing the death of more than 100 garment workers
who either died in the fire or jumped to their deaths

A long list: September 21, 1921: Oppau explosion in Germany. Occurred when a tower silo
storing 4,500 tonnes of a mixture of ammonium sulfate and ammonium nitrate

Environmental
fertilizer exploded at a BASF plant in Oppau, now part of Ludwigshafen, Germany,
killing 500–600 people and injuring about 2,000 more

damage & July 6, 1988: Piper Alpha disaster. An explosion and resulting fire on a North Sea oil
production platform killed 167 men. The total insured loss was about US$3.4

death
billion. To date it is rated as the world's worst offshore oil disaster in terms both of
lives lost and impact to industry.

March 24, 1989: Exxon Valdez oil spill. The Exxon Valdez, an oil tanker bound for
Long Beach, California, hit Prince William Sound's Bligh Reef, dumping an
estimated minimum 10.8 million US gallons (40.9 million litres, or 250,000 barrels)
of crude oil into the sea.
 The worst business
disaster of all…
BHOPAL DISASTER
• Methyl Isocyanate leak from Union Carbide
India Limited storage tank
2 DECEMBER
• Deaths: At least 3,787; over 16,000 claimed
1984
• Non-fatal injuries: At least 558,125
• Location: India
NGOs emerged to deal with the costs of bad
business
 Perhaps the best known definition of
Sustainable Development came from “Meeting the needs of the
present without compromising
a very important report from the the ability of future generations
United Nations called Our Common
Most well Future.
to meet their own needs”

known
definition of ppl r complaining about business, ppl are thinking about the
sustainability sustainability. combine we got CSR
Source: Report of the World Commission on Environment and
Development: Our Common Future, (1987) World Commission on
Environment and Development
What role capitalism and business?
As our great economic machine grinds relentlessly
forward into a future of declining fossil fuel supplies,
climate change and ecosystem failure, humanity, by
necessity, is beginning to question the very structure of
the economy that has provided so much wealth, and
inequity, across the world. … there need be no
fundamental contradiction between sustainable
development and capitalism

Jonathon Porritt, Author and founding director of Forum

for the Future
The world
Business is the problem, nowadays transform to business become the solution sustainable approach.
Government NGOs
• à 1980s – business
caused problems, & Govt.,
NGOs, IGOs solved them
• 1980s à Business started
to be included in
developing solutions to
problems
• And what we see now,
with CSR, is simply the IGOs Business
development of that idea
“Like it or not…”
“Like it or not, the responsibility for insuring a
sustainable world falls largely on the shoulders
of the world’s enterprises, the economic engines
of the future.”

Professor Stuart Hart

Kenan-Flager Business School, USA
 ‘Our Common Future’ also
discussed the inter-relationships
between our social, economic
and natural environments. These
areas are inextricably linked.
Almost every activity we
undertake, has an impact on:
• Society – people
• Economy – profit
• Environment – planet
Sustainability: in all areas of
human activity, we need to
reconsider what we do and how
we do it, to ensure the positive
impacts achieved in one area are

The Triple Bottom Line not out-weighed by negative

impacts in another.
The Story of Stuff (video)
The Linear System
Cradle to Cradle – Rethinking the linear system
C&A’s C2C T-shirt
C2C Certified products are designed as nature intended, with
products considered as biological nutrients - designed to be reused,
recycled into new products, or safely composted.

This approach to product design means that organic cotton farmers

can grow their crops without hazardous fertilizers and pesticides,
and those involved in the production processes are not exposed to
harmful chemicals because none are used. In addition, by using
renewable energy, offsetting carbon emissions and cleaning the
water used in the production process, C2C Certified products
support both the health of the ecosystems and communities in
which they are manufactured and the overall health of our planet.

C2C Certified T-shirts will be available from a starting price of €7.00

(HK$ 63.59)
C&A’s C2C T-shirt
Your 01 02 03
homework Search for a company that
has started to rethink the
Come to class next week
prepared to share a link via
We will discuss some of
the companies you suggest

before the
linear system uRreply to show the at the start of the class
company you’ve chosen is next week
moving away from the
linear system. The

next class
company you choose can
be in any sector