Why Some Corporations Choose To Be Socially Responsible

Do you know what makes your pans non-stick or your toothpaste and hand soap fight bacteria? According to the European Commission Department for Health and Consumers, products like these can contain chemicals such as pesticides that cause cancer, reproductive and developmental issues, endocrine disruption, and environmental issues. While the EU has developed Registration, Evaluation and Authorization of Chemicals (REACH) to address this issue, the United States Government Accountability Office has made no recommendations for creating a similar program. So why would a company then choose to create their own regulations for their products? Authors Caroline E. Scruggs and Harry J. Van Buren III investigate in their article “Why Leading Consumer Product Companies Develop Proactive Chemical Management Strategies” from Business and Society.

The abstract:

Scholars have studied the various pressures that companies face related to socially responsible behavior when stakeholders know the particular social issues under consideration. Many have examined social responsibility in the context of environmental responsibility and the general approaches companies take regarding environmental management. The issue of currently unregulated, but potentially hazardous, chemicals in consumer products is not well understood by the general public, but a number of proactive consumer product companies have voluntarily adopted strategies to minimize use of such chemicals. These companies are exceeding regulatory requirements by restricting from their products chemicals that could harm human or environmental health, despite the fact that these actions are costly. They do not usually advertise the details of their strategies to end consumers. This article uses interviews with senior environmental directors of 20 multinational consumer product companies to investigate why these companies engage in voluntary chemicals management. The authors conclude that the most significant reasons are to achieve a competitive advantage and stay ahead of regulations, manage relationships and maintain legitimacy with stakeholders, and put managerial values into practice. Many of the characteristics related to the case of chemicals management are extendable to other areas of stakeholder management in which risks to stakeholders are either unknown or poorly understood.

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