Corporate Social Responsibilty Transformation Literature Review

Notes to Reader[edit | edit source]

Put any information relevant to reviewing, contributing, or using this review page.

Background[edit | edit source]

Search Strategy & Terms[edit | edit source]

Key words terms (KWT)

1. "Government Corporate Social Responsibility" OR "Government Impact Investing"
2. "Government Policy Pros and Cons"
3. "Government Policy Analysis"

Strategies

1. Searched Corporate Social Responsibility & Impact Investing using KWT1
2. Searched Government/ Institutional Policies using KWT2 and KWT3

Literature[edit | edit source]

TODO[edit | edit source]

• Lit Review more on Government Policies
  • Finish by Sunday, November 17th, 2024

Corporate Social Responsibility & Impact Investing[edit | edit source]

The Cyclical Transformations of the Corporate Form: A Historical Perspective on Corporate Social Responsibility[edit | edit source]

Zotero citation field with the URL (DOI preferred).

• Theoretical Framework
  • Corporate Theories
    • Aggregate Theory
      • Corporations as collections of shareholders, acting collectively.
      • CSR only justified if it aligns with shareholder interests (profit-driven).
    • Artificial Entity Theory
      • Corporations as state-created entities with obligations to public welfare.
      • CSR seen as fulfilling a "social contract" with the state.
    • Real Entity Theory
      • Corporations as independent entities with broader responsibilities beyond shareholders.
      • Supports CSR as legitimate even if it doesn't directly benefit shareholders.
  • Capitalist Models
    • Liberal Market Economies (LMEs) (e.g., U.S., U.K.)
      • Prioritizes shareholder primacy; limited CSR unless financially beneficial.
      • Aligns with aggregate theory; minimal state intervention.
    • Coordinated Market Economies (CMEs) (e.g., Germany, Japan)
      • Stakeholder-oriented, supporting long-term CSR integration.
      • Aligns with real entity theory; encourages CSR for broader societal welfare.
    • Statist Market Economies (e.g., France)
      • CSR as part of duty to support state goals; aligns with artificial entity theory.
  • Types of CSR
    • Philanthropic CSR
      • Voluntary, unrelated to core business.
    • Strategic CSR
      • Integrated with business strategies for competitive advantage.
    • Operational CSR
      • Embedding social responsibility in daily operations.
  • Shareholder Theory (Relation to CSR)
    • Shareholder Primacy (Milton Friedman)
      • Corporations should prioritize shareholder profit over social goals.
    • Stakeholder View
      • CSR can be justified if it aligns with broader stakeholder interests.
• Gap
  • CSR Types to Corporate Theories
    • Aggregate Theory vs. Strategic CSR
      • Aggregate theory limits CSR if it doesn't benefit shareholders; strategic CSR may bridge this gap by aligning CSR with profit motives.
    • Artificial Entity Theory and Operational CSR
      • Operational CSR can align with state welfare goals, supporting the artificial entity theory.
    • Real Entity Theory and Philanthropic CSR
      • Real entity theory allows CSR without financial return, supporting philanthropic CSR.
  • Capitalist Models to CSR Implications
    • Liberal Economies
      • CSR is financially motivated and voluntary, focusing on short-term gains.
    • Coordinated Economies
      • Long-term CSR integration, fostering societal goals and stability.
    • Statist Economies
      • CSR may be mandated by the state, aligning with public or government priorities.

Behaviour Change in Impact Investing[edit | edit source]

• N/A

Impact Investing Transforming How We Make Money while Making a Difference[edit | edit source]

• Theoretical Framework
  • Blended Value
    • Value creation is through the combination of economic, social and environmental returns.
• Gap
  • Barriers of Implementation
    • Philanthropists usually expect donations for social issues rather than investments.
    • Often seen as distractions to profit-driven strategies.
• Design
  • Applicable Vehicles to have Impact
    • Public Equities
      • Shareholder advocacy campaigns influences decision-making.
    • Private Equities
      • Impact-driven lenders and equities to provide direct investment into impact.
  • Accountability
    • Requires frameworks and tools to measure blended value and return on investments from social-driven investments.

Impact investing: A review of the current state and opportunities for development[edit | edit source]

• Theoretical Framework
  • History of Impact Investing
    • SRI began in the 1970s with investors avoiding industries with negative social impacts, like tobacco and firearms.
    • Focus on negative screening, excluding harmful industries from portfolios.
    • ESG criteria emerged, incorporating environmental, social, and governance factors into investment assessments.
    • Created foundational standards for assessing corporate responsibility.
    • Evolved to focus on intentional, measurable positive outcomes in addition to financial returns.
    • Differentiates from SRI by aiming for proactive impact in areas like poverty alleviation and sustainability.
  • Core Principles of Impact Investing
    • Intentional
      • Investments are made with a deliberate goal to address social or environmental challenges
    • Impact Measurement
      • Reliable, quantifiable impact data is essential for evaluating and reporting social and environmental outcomes.
    • Performance Management
      • Continuous monitoring ensures alignment with impact goals, adjusting strategies as needed.
    • Market Development
      • Transparency and knowledge-sharing promote collective growth and ecosystem strength.
  • Key Actors in the Impact Investing Ecosystem
    • Supply Side
      • Institutional Investors
        • Pension funds and banks integrating ESG standards offer sustainable investment options, adding credibility and capital.
      • Development Finance Institutions (DFIs)
        • Support high-impact sectors in emerging markets with public-private funding.
      • Philanthropic Foundations/Family Offices
        • Often prioritize impact over financial returns, providing patient capital for high-risk, high-impact projects.
    • Demand Side
      • Social Enterprises
        • Blending financial and social objectives, these entities rely on impact capital to fund sustainable business models.
    • Intermediaries
      • Financial Intermediaries
        • Connect investors and investees, providing transaction support, including crowdfunding platforms and banks.
      • Support Organizations
        • Incubators and accelerators offer mentorship, resources, and investment readiness programs.
• Gap
  • Challenges in Impact Investing
    • Definitional Clarity
      • Lack of universally accepted definitions creates confusion, hindering collaboration.
    • Funding Structure Innovation
      • Traditional debt and equity models may not suit social enterprises; alternatives like revenue-based loans and blended finance are emerging.
      • Demand exists for patient, flexible capital to accommodate the unique needs of impact-driven organizations.
    • Measurement and Accountability
      • Reliable metrics for social/environmental impact are challenging; tools like IRIS+ support standardization but are still developing.
    • Transaction Costs
      • High transaction costs in customized deals can hinder smaller investments, limiting accessibility for smaller social enterprises.
  • Innovative Financing Structures
    • Revenue-Based Loans
      • Flexible loans tied to revenue streams, reducing pressure for fixed repayment, suitable for early-stage enterprises.
    • Social Impact Bonds
      • “Pay-for-success” models where governments repay investors only if target outcomes are achieved, aligning incentives with impact.
    • Blended Finance
      • Combines concessional capital with commercial funding, de-risking projects to attract private investors to high-impact opportunities.
  • Opportunities for Market Development
    • Institutional Involvement
      • Entry of large institutions adds capital, stability, and influence, encouraging impact investing to move closer to the mainstream.
    • Ecosystem Building
      • Networks like GIIN support standards and collaboration, fostering a unified impact investing community.
    • Policy and Tax Incentives
      • Government support, such as tax relief and co-investment programs, encourages private investment in social and environmental goals.
    • Retail Market Growth
      • Rising interest from individual investors, especially millennials and women, offers significant growth potential for retail impact investing products.

Overcoming the Challenges of Impact Investing: Insights from Leading Investors[edit | edit source]

• Gap
  • Core Challenges
    • Institutional investors face legal ambiguity whether fiduciary duties encourage SRI.
    • Lack of infrastructure for SRI (i.e. intermediaries).
    • Limited investment opportunities.
    • Lack of expertise within organizations.
• Design
  • Key Strategies
    • Financial-First Investments
      • Prioritize financial returns to meet fiduciary duties.
    • Due Diligence
      • Standardized due diligence.
      • Provide external advisors.
    • Provide Diversification
      • SRI should provide diversification with existing asset classes.
    • Collaboration
      • Early adopters should collaborate to increase market-development.

Government/Institutional Policies[edit | edit source]

The Pros and Cons of Government Regulation (Porket, 2003)[edit | edit source]

https://iea.org.uk/wp-content/uploads/2016/07/upldbook341pdf.pdf

• Theoretical Framework
  • Types of Rules
    • Formal (Written/Structured)
    • Informal (Spontaneous)
    • Constitutive (Defines structure, boundaries of system)
    • Regulative (Govern specific features in systems)
    • Permissive (Freedom)
    • Restrictive (Restrict objectives)
  • Government Regulation
    • Permissive/ Restrictive Rules
    • Restrictive
      • Limits freedom/ innovation. Increased oversight, increasing operational costs.
      • Promotes safety, and fair market.
      • Economic conservative prone.
    • Permissive
      • Self-regulation promotes flexibility, innovation, and greater response to market fluctuations/demand.
      • Entities prioritize profits over safety/ethics.
      • Social liberal prone.
  • Rule Enforcement
    • Zero-tolerance
      • Minor infractions are penalized.
      • Could decrease cooperation.
    • Zone-of-indifference
      • Violations occur for major infractions.
      • Reduce enforcement cost.
  • Regulation Constraints
    • Regulations must align with economic and social values.
    • Regulations should abide to political and economic frameworks. Disregarding leads to push-back.
    • Regulations disregarding societal values lead to resistance.
  • Compliance
    • Compliance is ignored when heavy goal-oriented and financially not viable.
      • Increased UK Labour regulation lead to high compliance costs and created a downturn in the economy and reduced competitiveness/ productivity.
    • Compliance is followed when objectives align with organizational values.

Analyzing Public Policy (John, 2013)[edit | edit source]

https://www.taylorfrancis.com/books/mono/10.4324/9780203136218/analyzing-public-policy-peter-john

• Theoretical Framework
  • Types of Public Policy Approaches
    • Institutional
      • Organizations structure outcomes (rules)
    • Group/ Networks
      • Influence of associations (Stakeholder interaction)
    • Exogenous
      • External factors influence (market trends)
    • Rational Actor
      • Bargaining/ preference form individual actors
    • Idea-based
      • Influences by individually circulating ideas
    • All five should be used in unison: Evolutionary Theory
  • Policy Change vs. Stability
    • Policy Change is influenced by external factors, changing ideas or innovation.
    • Policy stability is influenced by stakeholders, community goals and embedded norms.
• Gap
  • Research lacks the identification of causal models in policy-making.

The Performance of Government in Energy Regulations (Mead, 1979)[edit | edit source]

https://www.jstor.org/stable/pdf/1801672.pdf

• Theoretical Framework
  • Resource Conservation Paths
    • Free-market allocation
    • Government intervention
  • Energy Policies (U.S.)
    • Tax Subsidies
      • Increase cash flow/ production
      • Low-prices caused over consumption (oil & gas)
    • Prorationing
      • Idle capacity and resource waste (economic inefficient)
      • Taken out in 1972
    • Import Quotas
      • Raised domestic prices caused over consumption of U.S. resources, caused energy crisis.
    • Price controls
      • Low oil and natural gas prices caused increase in demand and dependence on imports.
      • Decreases conversational goals.
      • Aids low-income society, reduces monopoly.
  • Political Inefficiency
    • Policies reduce efficiency of intended objective because of political pressures
    • Stakeholders tend to steer interests to the most influential
• Design
  • Improvements in Energy Policies
    • Increase composition of free-market for allocation of scarce energy resources
      • Markets are more efficient at supply and demand
    • Reduce government intervention
      • Subsidies for oil & gas are counterproductive to conservation goals
      • Reduce subsidies can increase markets efficiency in exploration and production in sustainable fashion
      • Reduce price control to create a fair market, (solution: negative income taxes)

Open Innovation in the Power & Energy (P&E) Sector (Greco, et al., 2017)[edit | edit source]

https://www.sciencedirect.com/science/article/abs/pii/S0301421517300575?fr=RR-1&ref=cra_js_challenge

• Theoretical Framework
  • Knowledge Transfer Partnerships
    • Collaborating between firms and universities
      • Creates innovation, enhances R&D
  • Open Innovation Factors
    • Government policies
      • Funding towards entrepreneurship
    • Academic Involvement
      • Resources to provide innovation
    • Market involvement
      • Consumer and value chain involvement causes improved products
    • OI can lead to beneficial societal and environmental impacts
      • Can lead to increase profits for firms, increased skill in associate students (productivity)
      • Improved knowledge for universities
• Gap
  • Lack of involvement in studies regarding P&E sector
    • Most studies revolve around the high-tech sector for Open Innovation
  • Limited data of long-term benefits and impacts on open innovation
  • High costs and long-term profitability prevent innovation
  • Market is unpredictable for potential capital investment and ROI
• Design
  • Encourage academia-industry projects and innovation
  • Support radical approaches and designs
    • Provide subsidies and tax cuts to unique innovation, to improve economic efficiency

Innovation in the energy sector: Lessons learnt from R&D expenditures and patents in selected IEA countries[edit | edit source]

Theoretical Framework

• Knowledge Transfer Partnerships

Bibliography[edit | edit source]

[1]

J. L. Porket, “The Pros and Cons of Government Regulation,” Economic Affairs, vol. 23, no. 4, pp. 48–54, Dec. 2003, doi: https://doi.org/10.1111/j.1468-0270.2003.00444.x.

[2]

P. John, Analyzing Public Policy. Routledge, 2013. doi: https://doi.org/10.4324/9780203136218.

[3]

W. J. Mead, “The Performance of Government in Energy Regulations,” The American Economic Review, vol. 69, no. 2, pp. 352–356, 1979, doi: https://doi.org/10.2307/1801672.

[4]

M. Greco, G. Locatelli, and S. Lisi, “Open innovation in the power & energy sector: Bringing together government policies, companies’ interests, and academic essence,” Energy Policy, vol. 104, pp. 316–324, May 2017, doi: https://doi.org/10.1016/j.enpol.2017.01.049.

1. Ecological restoration in mining areas in the context of the Belt and Road initiative: Capability and challenges (Z. Chen et al., 2022)

Google Scholar Search Prompt: Mining Companies Supporting Ecological Restoration Projects

General Topic: Transition from intensive mining in developping countires to eco-friendly practices

Industrial Transformation Responsibility

• BRI (Belt and Road Initiative) countires are trending to implement policies to comply with ecological restoration
  • China has established “treatment after pollution” to “restoration while mining” and “restoration of vegetation coverage” to “restoration of ecological function”
• Social policies include participants of governments, enterpirses, NGO's and citizens to enhance success
• Economic policies are driven through tax breaks, supporting infastructure, or corss-brain/ cross-government eco-compensation policies
• Integration of international standards such as Society for Ecological Restoration

Multi-stakeholder Models

• More successful/ developped countries involve the public involvemnt
  • Developing and BRi countries have underdevlopped regulations, insufficient actions and proactiveness, and lack of public participation
• Polluter pays model causes mining companies to pay the economic cost of pollution
  • Developped countries lack proactiveness where companies view economic repayment in short-term environmental benefits

Economic Issues

• Lack of sufficient funding
  • Quantity of mines, large-scale and long-term, lack of funding from government/ private investment/ local population
  • Challenge of facing economic backwardness (developing countires)
• Lack of advanced technolgy
  • Regional specific issues with climate and monitoring technology
  • Techological advancement is one of the largest factors for successful transition

2. Lessons from Corporate Influence in the Opioid Epidemic: Toward a Norm of Separation (Marks, 2020)

Google Scholar Search Prompt: Pharmaceutical Companies and Health Initiatives for Opioid Abuse

General Topic: Transition from coprorate influence

Public and Private Partnerships

• Public and private partnerships (PPP) allowed pharmaceutical companies toinfluence health policies and perceptions

Network between Institutions and Private Sector

• Large funding rom opiod manufacturers to universities affecting public perception, thus a seperation of private and institution partnerships

3. Phasing out of environmentally harmful subsidies: Consequences of the 2003 CAP reform (Schmid et al., 2019)

Google Scholar Search Prompt: Subsidy Reforms for Biodiversity and Environmental Health

General Topic: Subsidy reforming can lead to environmental and economic outcomes in farming

Economic and Environmental Impact

• EU's Common Agricultural Impact (CAP) removing financial support for production to reducing environmental degradation
  • Policy framework and measurement indicators prioritizes soil health, water conservation, air quality and biodiversity
• Results were reduced soil erosion, lower greenhouse gas emissions and improved water quality
• Economic models shifted to long-term focus
  • Reduce short-term intensive farming

4. Governance transformed into Corporate Social Responsibility (CSR): New governance innovations in the Canadian oil sands (Wanvik, 2016)

Google Scholar Search Prompt: Government social responsibility transformations

General Topic: Corporate role in transition into social responsibility transformation (Oil & Gas)

Model Framework

• Corporate and private sector led initiatives lead to
  • More flexibility and efficiency, higher stakeholder participation, increased compliance (tailored)
  • Reduced government oversight, provincial and federal economic driven results, private over public interests
• Multi-Stakeholder Engagement
  • Creates multiple voices and interests rather than one governmental view
• Confidentiality
  • Reduces public interest and corporate accountability

5. **Analysing the impacts of a reform on harmful fishery subsidies in Spain using a social accounting matrix (Alberto Roca Florido and Emilio Padilla Rosa, 2024)**

Google Scholar Search Prompt: Reallocating subsidies from harmful to sustainable industries

General Topic: Theoretical reallocation of subsidies of fishery into scoial and economic consequences

Reallocation of Subsidies

• Subsidies redirected to long-term R&D research
  • Provide sustainability in marine industry
  • Basic, applied, and experiemental research
  • Benefit environemntal regulations and community welfare
  • Comply with international standards
• SAM (Social Accounting Matrix)
  • Economic ripple effect of subsidy reform
    • Household income, employment and production in Spain
  • Transition needs to mitigate negaticve impacts on houseolds reliant on fishery
    • Provide training, safety nets, aletrnative employment pathways into sustainable industry

6. **Impacts of Energy Subsidy Reforms on the Industrial Energy Structures in the Malaysian Economy: A Computable General Equilibrium Approach (Yusma and Hussain Ali Bekhet, 2016)**

Google Scholar Search Prompt: Reallocating subsidies from harmful to sustainable industries

General Topic: Theoretical reallocation of subsidies of fossil fuel into scoial and economic consequences

Economic and Environmental Benefit

• Completely removal fossil fuel subsidy
  • GDP increased 5.74%
  • Government expenditures decreased 7.13% and increased revenue 2.99%
  • Energy consumption decreased by 2.83%
  • Electricity usage increased by 0.44%
• Fuel tax subsidy removed
  • GDP decreased by 0.01%
  • Government revenue increased by 0.03%
  • Minimal energy consumption reduction
• Combined fossil fuel and tex subsidy removal
  • GDP increased by 5.73%
  • Energy consumption decreased by 3.56%
  • Electricity usage increased by 1.07%

Computable Gneral Equilibrium (CGE) Model

• Considers energy consumption, output, gDP and government revenue
• Determines disruption in each sector

7. Effects of agricultural reforms on the agricultural sector in Nigeria (Ugwu and Kanu, 2011)

Google Scholar Search Prompt: theoretical subsidy reforming agriculture

General Topic: Policy transformation affecting economic and environmental impacts in agriculture

Economic and Environmental Impact

• GDP rose form 20% in the 1980's to 40% in the 2000's
• Reforms initally caused job loss but later created employment in rural communities
• Crop production increased by 50%
• Subsidies reduced by 30%, reallocating to infatsructure and social impact

Policies

• Diversification of sectors (reduce dependance on oil and increase agriculture)
• Rural development (productivity and infastructure)
• Subsidies towards production costs
• Six national commodity boards created to stabilize crop rpice and pricing mechanisms for farmers

References

1. Z. Chen et al., “Ecological restoration in mining areas in the context of the Belt and Road initiative: Capability and challenges,” Environmental Impact Assessment Review, vol. 95, p. 106767, Jul. 2022, doi: https://doi.org/10.1016/j.eiar.2022.106767.
2. Marks, Jonathan H. “Lessons from Corporate Influence in the Opioid Epidemic: Toward a Norm of Separation.” Journal of Bioethical Inquiry, vol. 17, no. 2, 13 July 2020, pp. 1–17, www.ncbi.nlm.nih.gov/pmc/articles/PMC7357445/#CR5, https://doi.org/10.1007/s11673-020-09982-x.
3. Schmid, Erwin, et al. “Phasing out of Environmentally Harmful Subsidies: Consequences of the 2003 CAP Reform.” Ecological Economics, vol. 60, no. 3, Jan. 2007, pp. 596–604, https://doi.org/10.1016/j.ecolecon.2005.12.017. Accessed 28 Nov. 2019. ‌
4. Wanvik, Tarje I. “Governance Transformed into Corporate Social Responsibility (CSR): New Governance Innovations in the Canadian Oil Sands.” The Extractive Industries and Society, vol. 3, no. 2, Apr. 2016, pp. 517–526, https://doi.org/10.1016/j.exis.2016.01.007.
5. Alberto Roca Florido, and Emilio Padilla Rosa. “Analysing the Impacts of a Reform on Harmful Fishery Subsidies in Spain Using a Social Accounting Matrix.” Journal of Economic Structures, vol. 13, no. 1, 18 June 2024, https://doi.org/10.1186/s40008-024-00329-y. Accessed 24 Aug. 2024.
6. Yusma, Nora, and Hussain Ali Bekhet. “Impacts of Energy Subsidy Reforms on the Industrial Energy Structures in the Malaysian Economy: A Computable General Equilibrium Approach.” International Journal of Energy Economics and Policy, vol. 6, no. 1, Mar. 2016, pp. 88–97, dergipark.org.tr/en/pub/ijeeep/issue/31916/351058. Accessed 28 Oct. 2024.
7. Ugwu, Daniel S., and Ihechituru O. Kanu. “Effects of Agricultural Reforms on the Agricultural Sector in Nigeria.” Department of Agricultural Economics and Extension, Enugu State University of Science and Technology, P. M. B, 01660 Enugu, Enugu State, Nigeria, 12 Dec. 2011, d1wqtxts1xzle7.cloudfront.net/70541771/Effects_of_agricultural_reforms_on_the_a20210929-7176-2rwcrp.pdf?1632918021=&response-content-disposition=inline%3B+filename%3DEffects_of_agricultural_reforms_on_the_a.pdf&Expires=1730134731&Signature=MIuGac6tiMCTJQigQTJoaYQqXGRmX2qq1zP-GdlXEfP6khebyGAVDewBunISFFGqa9lvlt~RJ79dtykXsrOEZEVk6XbfZjOV-BoTnZArhmFrduMUcDj7NNyB2nRrUb2X-Y-7uz4-v~vzXusuv8tG1vPy7dXCA3oGq6ej5MeaGC4FzKwLph-YhRL6Yt8ONjS4ZCf9wveX6v4sdK1x6zm4SPhToVQ9kXuFwCMtEEp68~pX4ZD8uNZyNaRlFVEdDqFfcXqqBcQd-LdfO7T9mSj2gNClWn312i293Yxti1R7b6ruSzg1uHcrFnh33~dBtTMCxnWAxyfAsZl0CLsVY5xdTA__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA.