CSR: Ethical Business Strategy
Corporate Social Responsibility or CSR defines as the concept of management or an ordinary business course that the companies operate in to enhance the societal and environmental aspects positively. According to the United Nations Industrial Development Organization (2022), corporate social responsibility is not only important to, but also a strategic advantage to the companies and businesses nowadays. Birch et al. (2017) has also defined corporate social responsibility as a strategic way through which an equilibrium between economic, environmental, and social aspects or imperatives along with the efficient course of business actions. Where corporate governance systematizes business rules, processes, and practices with ethical alignment, CSR refers as a potential step directed towards effective corporate governance.
As Zubeltzu-Jaka, Andicoechea-Arondo, & Etxeberria (2018) have detailed, corporate governance traditionally focuses on financial factors which improves the stakeholder management in the business arena. On the other hand, corporate social responsibility (CSR) approaches as strategic ways to limit the issues linked to economic, social, and environmental imperatives (Birch et al., 2017). Certain businesses globally have appeared as primary example or illustration of corporate social responsibility and its positive outcomes. In closure, corporate social responsibility or CSR is vital from the business perspectives since it enhances the societal imaging, brand imaging, and morale in the workplace.
Greenwashing
Greenwashing, as another important term related to corporate governance, is defined as a process or practice that makes the organizations or companies look more environmental-friendly or socially responsible than it actually is. Peterson & Dzafic (2016) defines greenwashing as a phenomenon that incorporates promotion of social and environmental concerns in organization-perspective by bending or manipulating the CSR information. Further, as stated by Aggarwal & Kadyan (2011) in their study, companies that follow greenwashing usually adopts showing as more environment-friendly by marketing itself as ‘green’ or ‘eco-friendly’, rather than eradicating the adverse effects on the environment.
Greenwashing, however being a strategic phenomenon, manipulates the consumers and their perception. As Özsoy & Avcilar (2016) have elaborated, as much as an organization or business involves in greenwashing – especially the reputed organizations, the higher is the positive customer perception received. This eventually increases the brand value, positive customer attitude towards brand, and credibility – irrespective of the company’s manipulated exposure.
Overall, greenwashing has an effective placement in company’s CSR reports as this tend to empathize positivity of the organizations. Concluded by the views of Balluchi, Lazzini, & Torelli (2020), the concept of greenwashing thus reveals that however a company may engage or involve into CSR practices, greenwashing in addition can only raise its level of legitimacy.
