ECON 330 Triple Bottom Line, Corporate Social Responsibility, and Sustainability

ECON 330 Triple Bottom Line, Corporate Social Responsibility, and Sustainability

ECON 330 Triple Bottom Line, Corporate Social Responsibility, and Sustainability

The triple bottom line, corporate social responsibility, and sustainability are all related concepts that focus on the idea of companies being responsible not just to their shareholders, but also to the environment and to the communities in which they operate. The triple bottom line refers to the three primary ways in which a company can be responsible: financially, environmentally, and socially. The triple bottom line is a business model that takes into account not just profit, but also social and environmental factors. Corporate social responsibility is a narrower term that generally refers only to a company’s social responsibilities (Ahlering et al., 2021). In other words, corporate social responsibility is the responsibility of businesses to improve their social impact. Sustainability includes both environmental and social components, but also emphasizes the importance of maintaining ecological balance over time. In other words, sustainability refers to the ability of businesses to continue operations while minimizing their environmental impact. All three of these concepts are connected because ultimately they all aim to create a more sustainable future for businesses and for society as a whole.

An example of a socially responsible action by a corporation would be to reduce the environmental impact of their operations. This could mean reducing energy consumption, investing in renewable energy sources, or reducing the amount of waste produced. Reducing the environmental impact can often be costly for a company, but it can also improve sustainability and increase profits in the long run (Raza et al., 2020). For instance, implementing energy conservation measures can save a company money on its energy bills in the short term. And companies that invest in renewable energy sources can often receive government subsidies or tax breaks. Finally, reducing waste can lead to cost savings from reduced disposal and cleanup costs.

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From this assignment, I learned that there is a cost to corporations when they do not behave responsibly and

ECON 330 Triple Bottom Line, Corporate Social Responsibility, and Sustainability
ECON 330 Triple Bottom Line, Corporate Social Responsibility, and Sustainability

sustainably. When a corporation does not take into account the environmental and social costs of their actions, it can lead to negative externalities (He & Harris, 2020). For example, if a company dumps toxic waste into the river, it can cause health problems for the local community. This is an externality because the company does not have to pay for the damage that it causes. In order for corporations to be socially responsible and sustainable, they need to factor in the costs of their actions (Shabbir & Wisdom, 2020). By taking these costs into account, corporations can make more informed business decisions that will benefit not only shareholders but also society as a whole.

References

Ahlering, M. A., Kazanski, C., Lendrum, P. E., Borrelli, P., Burnidge, W., Clark, L., … & Wilson, C. (2021). A Synthesis of Ranch-Level Sustainability Indicators for Land Managers and to Communicate Across the US Beef Supply Chain. Rangeland Ecology & Management79, 217-230. https://www.sciencedirect.com/science/article/pii/S1550742421001020

He, H., & Harris, L. (2020). The impact of Covid-19 pandemic on corporate social responsibility and marketing philosophy. Journal of business research116, 176-182. https://www.sciencedirect.com/science/article/pii/S0148296320303295

Raza, A., Rather, R. A., Iqbal, M. K., & Bhutta, U. S. (2020). An assessment of corporate social responsibility on customer company identification and loyalty in banking industry: a PLS-SEM analysis. Management Research Review43(11), 1337-1370. https://www.emerald.com/insight/content/doi/10.1108/MRR-08-2019-0341/full/html

Shabbir, M. S., & Wisdom, O. (2020). The relationship between corporate social responsibility, environmental investments and financial performance: evidence from manufacturing companies. Environmental Science and Pollution Research27(32), 39946-39957. https://link.springer.com/article/10.1007/s11356-020-10217-0