What They Tell You

Corporations are becoming more responsible. They’re committed to sustainability, diversity, and stakeholder value. Corporate Social Responsibility (CSR) shows that markets can solve social problems without government intervention. Consumers can vote with their wallets for ethical companies. Enlightened self-interest leads corporations to do good because it’s good for business.

What They Don’t Tell You

CSR is mostly public relations. Corporations spend far more on advertising their good deeds than on the good deeds themselves. When profits conflict with principles, profits win. CSR distracts from the need for regulation and accountability. Many CSR initiatives actually serve corporate interests more than social ones. And the structure of corporations—maximizing shareholder value—fundamentally conflicts with broader responsibility.

The Rise of CSR

In recent decades, corporations have embraced the language of responsibility:

  • “Triple bottom line” (people, planet, profit)

  • “Stakeholder capitalism”

  • “ESG” (Environmental, Social, Governance)

  • “Purpose-driven” business

Every major corporation now has sustainability reports, diversity initiatives, and charitable programs.

The Reality Behind the Rhetoric

But look at what corporations actually do:

ExxonMobil: Knew about climate change in the 1970s, funded denial for decades, continues to fight climate action while advertising green initiatives.

BP: Spent $200 million on its “Beyond Petroleum” rebranding while investing 96% of capital in oil and gas.

Fast fashion companies: Advertise recycling programs while producing billions of disposable garments.

Tech companies: Tout diversity while actual demographics barely change.

Banks: Market sustainable investing while funding fossil fuels and deforestation.

The Structural Problem

Why does CSR fail? Because corporate structure demands it:

Fiduciary duty: Managers are legally obligated to maximize shareholder returns. Social goals that reduce profits are actually a breach of duty.

Competitive pressure: If a company spends on social good while competitors don’t, it loses competitive advantage.

Short-term focus: Quarterly earnings pressure discourages investments with long-term social benefits.

Information asymmetry: Consumers can’t verify CSR claims, so companies have incentives to exaggerate.

The Greenswashing Game

“Greenwashing” is when companies appear environmental without substance:

  • Spending more on advertising green initiatives than on the initiatives themselves

  • Highlighting tiny improvements while ignoring major harms

  • Using vague terms (“eco-friendly,” “natural,” “sustainable”) that mean nothing

  • Creating subsidiary companies to take on dirty activities

  • Lobbying against regulation while advertising responsibility

The Math Doesn’t Work

Consider a company that:

  • Makes $10 billion in profit from environmentally harmful activities

  • Donates $100 million to environmental causes

  • Spends $200 million advertising its environmental commitment

Net harm is enormous, but the image is green.

CSR as Political Strategy

CSR serves strategic purposes beyond PR:

Preempting regulation: “We’re already doing good voluntarily; no need for laws.”

Capturing critics: Funding NGOs and academics creates obligations and splits opposition.

Attracting talent: Young workers want meaningful work; CSR provides the appearance of purpose.

Legitimizing business: General goodwill protects the company politically.

The Case for Regulation

If voluntary responsibility worked, we wouldn’t need:

  • Environmental laws (corporations would stop polluting on their own)

  • Labor laws (corporations would treat workers fairly)

  • Consumer protection (corporations would never deceive customers)

  • Anti-trust laws (corporations would never abuse market power)

But we do need all of these because when profits conflict with responsibility, profits win.

What Real Corporate Responsibility Looks Like

Some things actually work:

Binding regulations: Rules that apply to all companies equally, with enforcement and penalties.

Stakeholder power: Strong unions, consumer organizations, and community groups that can hold corporations accountable.

Transparency requirements: Mandatory disclosure of environmental impacts, political spending, executive pay.

Legal liability: Making corporations pay for the harm they cause.

Changed corporate governance: B-Corps, cooperatives, and other structures that don’t require profit maximization.

The Accountability Gap

CSR is accountability without accountability:

  • Corporations choose what to measure and report

  • Goals are set by corporations themselves

  • No external verification or enforcement

  • No consequences for failure

This isn’t accountability—it’s marketing.

The Bottom Line

CSR is not inherently bad—some good does get done. But CSR as a substitute for regulation is a dangerous myth. It allows harmful practices to continue behind a veneer of virtue.

Real responsibility means binding rules, real accountability, and the power to enforce them. Everything else is public relations.