Some people believe that corporations have a responsibility to promote the well being of the societies and environments in which they operate Others believe that the only responsibility of corporations provided they operate within the law is to make as mu

Corporations influence society and environment in epic proportions either positively or negatively. Some people believe that they must endeavour to contribute to the environment and society in which they function, whereas others opine that as long as they operate within law their motive must be to maximize profits for their shareholders. While, from environmental perspective, they are duty bound to mitigate the damage their operation might cause to the local ecosystem; however, given that corporations by their very existence contribute to the society in many ways, enforcing them to drain investor’s capital for different societal objectives would be unjust.

Admittedly, corporations bear a responsibility to contribute to the well-being of the environment primarily due to their culpability for the environmental damage their functioning might result as well as their ability to compensate the same. Since the industrial revolution, the environment has drastically suffered from the operations of myriad corporations through green house gas emission, pollution of water bodies, land contamination, deforestation, etc. Therefore, if corporations don’t assume the responsibility to work towards the prevention and minimization of these environmental harms resulting from their activities, the very survival of human civilization is threatened thanks to the increasing consequences of global warming and climate change.

Moreover, they have adequate man power, technical know-how and resources to effectively ensure the well-being of their local and even global environment. For example, textile industries releasing dye-polluted water in the local water streams can easily operate a sewage treatment plant. Timber utilizing industries can take initiatives for afforestation; whereas, solid waste generating factories can employ effective waste management techniques. Bigger corporations also have the potential to find alternative environmentally benign ways for their operation. For instance, giant automobile manufacturers can invest for the research and development of electric or bio-fuel driven cars.

However, corporations by their existence contribute to the society in different ways and, thus, should not be enforced as such. Any industry prefers to resource labour from the local job market. Given that they obey labour laws, they not only provide livelihood to a multitude but also enhance their employability by training them. Similarly, by procuring raw materials, industries support other smaller businesses and thus indirectly providing job assurance to many. Furthermore, by adhering to consumer laws, corporations contribute to the society by providing affordable products and services to the consumers for without a local industry or business, people will be forced to resource the products or services from abroad at higher costs. These products and services, in turn, also enhance the quality and standard of life for many. Extravagant corporate taxes levied on the corporations further contribute to the exchequer which is ultimately used for the societal welfare.

Finally, corporations have multiple stakeholders in the form of investors demanding profits, employees asking better pay rates, consumers demanding quality but cheap products and so on. With so many capital requiring commitments, any move to mandate all the corporations to contribute for the overall good of the society may risk the financial stability of many. Conversely, when corporations aim to maximize profits, within law, it not only profits the share holders - who are also the part of the society but also ensure more employment and other numerous benefits mentioned above. Yet, when a corporation voluntary takes initiatives to promote the welfare of the society, it stands to benefit tangibly and intangibly. Standing up for societal causes helps a corporation to develop a long lasting goodwill among the people. This, in turn, may create a new consumer base thus returning the investment.

In conclusion, since corporations are culpable for the environmental damage as well as capable to minimize it, they have the responsibility to promote its well-being. However, because corporations by their functioning contribute to the society in many forms as illustrated, they must not be enforced to give back more. Yet, they can be encouraged by considering the many underlying benefits of corporate social responsibility.