CSR Theories and Strategic Models

Introduction

Corporate social responsibility (CSR) is not simply a programme of charitable donations or a communication exercise. It is a way of understanding how an organisation creates value, exercises power and accepts responsibility for its effects on people, society and the natural environment. CSR strategy connects ethical expectations with organisational purpose, governance, operations, risk management and performance.

Theories help managers answer different questions. Stakeholder theory asks: whose interests and claims should the organisation consider? Legitimacy theory asks: how does the organisation maintain social acceptance? Institutional theory asks: why do organisations in the same environment often adopt similar policies? Agency theory asks: how can managers’ interests be aligned with those of owners and other principals? Social contract theory asks: what obligations does an organisation owe to society in exchange for permission to operate? Shared value and sustainability models ask how social and environmental concerns can be integrated into competitive strategy.

No single theory explains every CSR decision. Effective leadership requires selecting and combining theories according to the organisation’s industry, ownership structure, stakeholders, social context and strategic objectives.

Learning Objectives

By the end of this chapter, learners should be able to:

1. Explain the main theories underlying CSR and corporate ethics.
2. Compare the assumptions and managerial uses of stakeholder, legitimacy, institutional, agency and social contract theories.
3. Apply Carroll’s CSR pyramid, the triple bottom line, shared value and corporate sustainability models to organisational decisions.
4. Distinguish symbolic CSR from substantive CSR.
5. Analyse a CSR problem and recommend a strategically and ethically defensible response.
6. Identify limitations, governance risks and measurement challenges associated with CSR models.

1. CSR as a Strategic and Ethical Concept

A business organisation is economically productive, but it is also a social institution. It employs people, uses public infrastructure, affects communities, consumes resources and may influence public policy. Consequently, business decisions have consequences beyond immediate financial returns.

CSR can be understood as the organisational responsibility to manage these economic, legal, ethical and social effects in a manner consistent with sustainable development and stakeholder well-being. Strategic CSR goes further than isolated initiatives. It embeds responsibility into:

• organisational purpose and values;
• board oversight and executive accountability;
• product and service design;
• procurement and supply-chain management;
• employment practices;
• environmental management;
• risk assessment and compliance;
• stakeholder engagement; and
• performance reporting and incentives.

A useful distinction is between instrumental and normative reasoning. Instrumental reasoning supports CSR because it may improve reputation, reduce risk, attract employees or create competitive advantage. Normative reasoning supports CSR because stakeholders have rights and because organisations have duties, even when no immediate financial return is expected. Mature CSR strategy recognises both dimensions without reducing ethics to profitability.

2. Stakeholder Theory

Stakeholder theory is most strongly associated with R. Edward Freeman. A stakeholder is an individual or group that affects, or is affected by, the achievement of an organisation’s objectives. Stakeholders may include shareholders, employees, customers, suppliers, governments, local communities, civil society organisations, creditors and future generations.

The theory challenges the narrow view that the sole purpose of a corporation is to maximise shareholder wealth. It does not necessarily deny the importance of shareholders; rather, it argues that long-term organisational value depends on managing relationships among multiple parties.

2.1 Stakeholder identification and classification

Managers commonly classify stakeholders according to:

• Power: the ability to influence organisational decisions;
• Legitimacy: whether the stakeholder’s claim is socially or legally recognised; and
• Urgency: how quickly the claim requires attention.

A stakeholder map can help managers identify competing interests. For example, a mining company may face claims from investors seeking returns, employees seeking safety, communities seeking employment and environmental protection, regulators seeking compliance, and future generations whose interests are represented indirectly.

Stakeholders may also be classified as:

• Primary stakeholders: essential to organisational survival, such as employees, customers, investors and suppliers;
• Secondary stakeholders: able to influence or be affected by the organisation but not essential to its immediate survival, such as media, advocacy groups and some community organisations; and
• Vulnerable or voiceless stakeholders: groups with limited power, including children, displaced communities, non-human species and future generations.

2.2 Strategic application

Stakeholder theory supports a structured decision process:

1. Identify affected and influential stakeholders.
2. Understand their interests, rights and vulnerabilities.
3. Assess conflicts and possible trade-offs.
4. Engage stakeholders through appropriate methods.
5. Design alternatives that reduce harm and create shared benefits.
6. Explain the decision and monitor its effects.

The theory is especially useful for materiality assessments, community relations, human rights due diligence and sustainability reporting. Its main difficulty is that it does not provide a universal formula for ranking competing claims. Managers must use ethical reasoning, law, evidence and transparent justification.

3. Legitimacy Theory

Legitimacy theory views the organisation as operating within a broader “social contract”. Organisational survival depends partly on whether society perceives the organisation’s actions as appropriate, desirable or acceptable according to prevailing values and norms.

Legitimacy is not identical to legal compliance. An organisation may comply with minimum legal requirements but still lose legitimacy if its conduct is considered unfair, unsafe or deceptive. Conversely, an organisation may operate in a legally uncertain environment while gaining legitimacy through responsible conduct and transparent engagement.

3.1 Legitimacy gap

A legitimacy gap occurs when there is a difference between society’s expectations and the organisation’s actual behaviour or perceived behaviour. Such gaps may arise from:

• an actual failure, such as pollution or labour exploitation;
• changing public expectations;
• improved public awareness of previously hidden impacts; or
• misleading communication that creates expectations the organisation cannot meet.

Organisations may respond by changing their operations, improving disclosure, engaging stakeholders or attempting to alter public perceptions. The most credible response is substantive change. Communication without operational improvement may become “greenwashing” or “ethics-washing”.

3.2 Managerial relevance

Legitimacy theory explains why organisations publish sustainability reports, adopt recognised standards, establish community programmes and make public commitments. These actions can provide evidence that the organisation is responsive to social expectations. However, disclosure is valuable only when it is accurate, balanced, comparable and supported by evidence.

A legitimacy-based approach should therefore distinguish:

• Substantive legitimacy: actual improvement in conduct and impacts; and
• Symbolic legitimacy: attempts to appear responsible without proportionate operational change.

4. Institutional Theory

Institutional theory explains how organisations are influenced by the rules, norms and cultural expectations of their environment. Organisations often adopt similar CSR structures not only because these structures are efficient, but because they are viewed as appropriate or necessary for acceptance.

Three forms of institutional pressure are commonly identified:

1. Coercive pressure: laws, regulations, contractual conditions and demands from powerful stakeholders.
2. Normative pressure: professional standards, ethical codes, education and expectations of experts.
3. Mimetic pressure: imitation of competitors or leading organisations, particularly when the correct response is uncertain.

For example, a company may establish a human rights policy because legislation requires it, because professional bodies expect it, or because competitors have adopted similar policies.

Institutional theory helps explain why CSR practices such as sustainability committees, supplier codes, environmental management systems and non-financial reporting become widespread. It also warns that formal structures may be decoupled from actual practice. An organisation may possess an impressive policy that has little effect on purchasing decisions, working conditions or executive incentives.

Managers should therefore ask not only, “Do we have a policy?” but also, “Who implements it, what resources support it, which decisions does it influence, and what evidence demonstrates its effect?”

5. Agency Theory and CSR Governance

Agency theory examines relationships in which one party, the principal, delegates work to another party, the agent. In corporations, shareholders may delegate management to executives. Problems can arise because managers possess more information than owners and may pursue personal objectives, such as status, compensation, job security or reputation.

CSR creates both opportunities and risks in agency relationships. Responsible investment may protect long-term value, but managers may also use CSR spending to enhance their personal reputation or pursue pet projects. Alternatively, short-term performance pressure may cause managers to underinvest in safety, environmental protection or employee development.

Agency theory supports governance mechanisms such as:

• independent and competent boards;
• audit, risk and sustainability committees;
• transparent reporting;
• internal controls and assurance;
• executive incentives linked to credible long-term indicators;
• whistleblowing and grievance mechanisms; and
• shareholder and stakeholder oversight.

A critical caution is that poorly designed targets can create new risks. If an executive is rewarded solely for reducing carbon emissions, the organisation may shift impacts elsewhere, manipulate boundaries or neglect labour rights. Balanced scorecards and qualitative judgement are therefore preferable to a single narrow CSR metric.

6. Social Contract Theory

Social contract theory argues that organisations operate because society grants them permission, directly or indirectly, to use resources, employ people, make profits and exercise power. This permission is conditional. It depends on the organisation contributing to social welfare and respecting fundamental rights.

The social contract may be expressed through law, regulation, licences, public trust, community acceptance and informal expectations. A corporation that systematically harms workers or communities may retain a legal licence temporarily but lose its social licence to operate.

This theory is particularly relevant in industries with significant public impacts, including energy, pharmaceuticals, finance, transport, mining, telecommunications and digital platforms. It encourages leaders to consider questions such as:

• What benefits does the organisation provide to society?
• What risks and burdens does it impose?
• Who receives the benefits and who bears the costs?
• Are affected people able to participate in decisions?
• What remedies are available when harm occurs?

Social contract reasoning supports fairness, transparency, accountability and remedy. It also highlights that corporate authority is not unlimited merely because an action is profitable or technically legal.

7. Carroll’s CSR Pyramid

Archie B. Carroll’s CSR pyramid presents four categories of corporate responsibility:

1. Economic responsibilities: the organisation must be financially viable and produce goods or services valued by society.
2. Legal responsibilities: it must obey applicable laws and regulations.
3. Ethical responsibilities: it should do what is fair and avoid harm, even where the law is silent.
4. Philanthropic responsibilities: it may contribute resources to communities and social causes as a voluntary expression of corporate citizenship.

The pyramid is a teaching model rather than a strict sequence. Economic performance does not excuse unethical behaviour, and philanthropy cannot compensate for serious legal or ethical misconduct. For instance, donations to a local school do not make unsafe factory conditions acceptable.

The model helps managers test a proposal across four questions:

8. The Triple Bottom Line

John Elkington’s triple bottom line proposes that organisational performance should be assessed through people, planet and profit. The model broadens performance beyond financial accounts.

• People concerns employees, human rights, consumers, communities, equity and social well-being.
• Planet concerns emissions, biodiversity, resource use, waste, pollution and ecological resilience.
• Profit concerns financial viability, productivity, innovation and economic value.

The three dimensions are interconnected. Energy efficiency may reduce environmental impacts and operating costs. Safe and fair employment may improve productivity and retention. However, positive relationships are not automatic. A profitable project may harm biodiversity, while an environmentally beneficial project may require substantial investment.

A major challenge is measurement. Financial profit is usually expressed in a common monetary unit, whereas social and environmental outcomes are diverse and often difficult to value. Organisations should avoid adding incomparable numbers together without a valid method. Instead, they can use a dashboard of indicators, such as:

The triple bottom line is most useful when it influences decisions, budgets and accountability rather than functioning only as a reporting slogan.

9. Shared Value

The shared value concept, associated with Michael Porter and Mark Kramer, proposes that organisations can create economic value by addressing social problems connected with their business. It differs from philanthropy because the social benefit is integrated into the organisation’s competitive strategy.

Three broad approaches are commonly identified:

1. Reconceiving products and markets to meet social needs;
2. Redefining productivity in the value chain; and
3. Strengthening local clusters and business ecosystems.

Examples include affordable financial services for underserved groups, energy-efficient products, farmer development programmes that improve supply quality, and redesigning workplaces to reduce illness and increase productivity.

Shared value is not a complete theory of corporate ethics. Some responsibilities cannot be justified by their profitability. A company may have a duty not to use forced labour even if eliminating it increases costs. Shared value is therefore best combined with rights-based ethics, stakeholder engagement and legal compliance.

10. Corporate Sustainability Models

Corporate sustainability concerns the ability of an organisation to remain economically viable while preserving the social and ecological conditions on which long-term prosperity depends. Sustainability models vary, but several principles are widely used.

10.1 Strong and weak sustainability

Weak sustainability assumes that losses in natural capital may sometimes be compensated by gains in human-made or financial capital. Strong sustainability argues that certain ecological systems and social thresholds cannot be replaced by money or technology. A damaged wetland, extinct species or destroyed cultural heritage may not be fully substitutable.

This distinction affects investment decisions. A weak-sustainability approach may approve environmental damage if adequate financial compensation is provided. A strong-sustainability approach may establish no-go zones or absolute ecological limits.

10.2 Circular economy

A circular economy seeks to reduce the traditional linear pattern of take, make and dispose. It emphasises durability, repair, reuse, remanufacturing, sharing and recycling. Corporate strategy may therefore examine product life cycles, material choices, reverse logistics and business models based on access rather than ownership.

Circularity does not automatically guarantee sustainability. Recycling may consume energy, products may be designed for planned replacement, and rebound effects may increase total consumption. Life-cycle evidence is necessary.

10.3 Science-based and net-zero approaches

Contemporary sustainability strategy increasingly uses time-bound emissions targets, transition plans, climate-risk assessment and supply-chain measurement. A credible net-zero plan should prioritise actual emissions reductions and treat offsets as limited supplementary measures, not as a substitute for decarbonisation.

Leaders should distinguish:

• Absolute emissions: total emissions released;
• Emissions intensity: emissions per unit of output, revenue or another denominator; and
• Value-chain emissions: emissions arising upstream and downstream, often called Scope 3 emissions.

An intensity reduction can occur while total emissions rise if production expands faster than efficiency improves. For this reason, organisations should report both absolute and intensity measures where relevant.

11. Applying the Models to Organisational Decisions

The following integrated framework can guide a CSR decision:

Step 1: Define the decision and material impacts

State the operational choice clearly. Identify likely effects on people, the environment, financial performance, rights and organisational legitimacy.

Step 2: Map stakeholders

Identify stakeholders, their interests, power, legitimacy, urgency and vulnerability. Include those who are not represented in formal consultations.

Step 3: Test responsibilities

Use Carroll’s pyramid to check economic, legal, ethical and philanthropic dimensions. Legal compliance is a baseline, not the complete ethical analysis.

Step 4: Examine the social contract and legitimacy

Ask whether the decision is consistent with public expectations and whether it could create a legitimacy gap. Consider transparency, consent, remedy and distribution of benefits and burdens.

Step 5: Analyse institutional and agency pressures

Identify regulatory requirements, professional norms, industry imitation and internal incentive problems. Check whether policies are genuinely implemented or merely symbolic.

Step 6: Assess shared value and sustainability

Explore whether the decision can create social and economic value simultaneously. Assess life-cycle impacts, ecological limits, resilience and long-term viability.

Step 7: Decide, disclose and review

Select the option with the strongest overall ethical and strategic justification. Assign accountability, establish indicators, disclose material limitations and review outcomes.

12. Illustrative Case: GreenRoute Logistics

Background

GreenRoute Logistics, a fictional regional delivery company, operates a fleet of 600 diesel vans. Its major customers are retailers that have begun requesting lower-emission deliveries. The company is considering replacing 120 vans with electric vehicles and installing charging infrastructure.

Problem

Electric vehicles require substantial initial investment. Some drivers are concerned about training and route changes. A community near the proposed charging depot is worried about noise, traffic and electricity demand. The company also discovers that the batteries and minerals used in the vehicles have complex supply-chain risks.

Analysis through the theories

Stakeholder theory identifies drivers, customers, shareholders, nearby residents, suppliers, regulators, electricity providers and future generations as relevant stakeholders. Drivers require training and safe working arrangements; residents require meaningful consultation; customers require credible emissions information.

Legitimacy theory suggests that announcing an electric fleet without addressing battery sourcing or community impacts could create a legitimacy gap. The company must communicate both benefits and limitations.

Institutional theory explains pressure from regulation, customer procurement standards and industry practice. GreenRoute should not adopt a model merely because competitors have done so; it must assess whether the model fits its routes and infrastructure.

Agency theory highlights the risk that executives may pursue a highly visible fleet project for reputational benefits while ignoring total costs or driver concerns. Board oversight and balanced performance measures are needed.

Carroll’s pyramid requires financial viability, legal compliance, ethical attention to supply-chain and community effects, and consideration of voluntary community investment.

Triple bottom line directs attention to operating costs and resilience, employee and community impacts, and emissions and resource effects.

Shared value may arise if electric vehicles reduce fuel and maintenance costs, help customers meet climate commitments and improve urban air quality. However, the company must not claim that all impacts are solved by electrification.

Approach and solution

GreenRoute adopts a phased pilot involving 40 vehicles on routes with suitable distances and charging access. It creates a joint committee including drivers, operations managers, a community representative and an independent environmental adviser. The company requires supplier due diligence on labour and mineral sourcing, publishes baseline emissions and monitors both absolute emissions and emissions per delivery.

Executive evaluation includes cost control, safety, employee retention, verified emissions reductions and grievance resolution. The company also agrees to review local traffic and noise impacts after six months.

Outcome

The pilot reveals lower maintenance costs but also charging delays on peak days. Revised route planning and additional overnight charging capacity improve reliability. The company postpones a full fleet conversion until battery supply-chain evidence and grid capacity are stronger. This decision is strategically slower but more credible and ethically defensible.

Learning points

1. A CSR decision should be tested through several complementary theories.
2. Stakeholder participation can reveal operational risks that financial analysis misses.
3. A visible environmental initiative can still create social and supply-chain harms.
4. Targets should include outcomes, safeguards and independent verification.
5. Responsible leadership sometimes means delaying expansion until evidence and controls are adequate.

13. Challenges and Limitations

CSR theories and models are useful but incomplete. Important limitations include:

• Conflicting interests: stakeholders may have incompatible claims, and no model automatically resolves every conflict.
• Measurement problems: social value, biodiversity and human rights outcomes are difficult to quantify.
• Greenwashing: communication may exceed actual performance.
• Voluntary action limits: voluntary CSR may be inadequate where powerful organisations impose serious harms.
• Power asymmetry: consultation is not meaningful if affected communities cannot influence decisions or obtain remedy.
• Short-term incentives: quarterly performance pressure may undermine long-term sustainability.
• Cultural variation: expectations of responsible conduct differ across countries, although fundamental rights should not be treated as optional.
• Unintended consequences: an intervention may shift impacts to another location, stakeholder or stage of the value chain.

Managers should therefore combine CSR models with legal compliance, human rights principles, risk management, reliable data and independent accountability.

14. Contemporary Leadership and Best Practice

Effective CSR leadership has several characteristics. First, it establishes a clear purpose that connects commercial activity with social and environmental responsibility. Second, it assigns responsibility at board and executive levels. Third, it embeds CSR into capital allocation, procurement, product development and incentives rather than treating it as a communications function.

Best practice includes:

• conducting stakeholder and human rights due diligence;
• identifying material impacts through evidence and engagement;
• setting measurable, time-bound and realistic objectives;
• using both absolute and intensity indicators where appropriate;
• reporting negative as well as positive performance;
• obtaining independent assurance for significant claims;
• protecting whistleblowers and providing accessible grievance mechanisms;
• reviewing supplier performance rather than relying only on contractual promises; and
• using technology, including data analytics and AI, with attention to privacy, bias, explainability and accountability.

AI can support emissions forecasting, supply-chain monitoring and analysis of stakeholder feedback. It cannot determine ethical priorities by itself. Automated systems may reproduce biased data, overlook unrepresented communities or create false confidence in incomplete measurements. Human judgement and governance remain essential.

Chapter Summary

CSR theories provide different lenses for understanding corporate responsibility. Stakeholder theory emphasises relationships, interests and participation. Legitimacy theory explains the importance of social acceptance and the risks of legitimacy gaps. Institutional theory shows how regulation, professional norms and imitation shape organisational practices. Agency theory focuses on governance, information asymmetry and the alignment of managerial incentives. Social contract theory presents corporate activity as conditional on societal permission and responsibility.

Carroll’s CSR pyramid distinguishes economic, legal, ethical and philanthropic responsibilities. The triple bottom line broadens performance assessment to people, planet and profit. Shared value links social problem-solving with competitive strategy, although it cannot replace duties that apply regardless of profitability. Corporate sustainability models emphasise long-term viability, ecological limits, social resilience, circularity and credible transition planning.

The strongest CSR decisions integrate these perspectives. They identify stakeholders, assess rights and impacts, test legal and ethical responsibilities, examine legitimacy and institutional pressures, evaluate long-term sustainability, establish accountable governance and disclose results honestly. Strategic CSR is therefore not a single programme; it is a disciplined approach to responsible organisational decision-making.

Key Terms

Stakeholder: An individual or group that affects or is affected by an organisation.

Stakeholder theory: The view that organisations should consider the interests of multiple affected parties.

Legitimacy: Social acceptance that an organisation’s conduct is appropriate and justified.

Legitimacy gap: A difference between social expectations and perceived organisational behaviour.

Institutional theory: A theory explaining how rules, norms and cultural expectations shape organisations.

Coercive pressure: Influence arising from laws, regulations or powerful contractual demands.

Normative pressure: Influence arising from professional standards and ethical expectations.

Mimetic pressure: The tendency to imitate other organisations under uncertainty.

Agency theory: The study of delegated relationships and conflicts between principals and agents.

Social contract: The implicit agreement through which society permits organisations to operate.

Social licence to operate: Ongoing community and societal acceptance of organisational activity.

Carroll’s CSR pyramid: A model comprising economic, legal, ethical and philanthropic responsibilities.

Triple bottom line: Assessment of performance through people, planet and profit.

Shared value: The creation of economic value through addressing social needs connected to business strategy.

Corporate sustainability: Long-term organisational viability that respects social and ecological conditions.

Weak sustainability: The assumption that some forms of natural capital may be substituted by human-made capital.

Strong sustainability: The view that certain ecological and social assets cannot be fully substituted.

Greenwashing: Misleading communication that exaggerates environmental responsibility.

Materiality: The significance of an issue to organisational decisions and stakeholder judgement.

Human rights due diligence: A process for identifying, preventing, mitigating and accounting for human-rights impacts.

Review Questions

5 Short Answer Questions

1. What is the central concern of stakeholder theory?
2. Distinguish substantive legitimacy from symbolic legitimacy.
3. Name the three forms of institutional pressure.
4. What are the four levels in Carroll’s CSR pyramid?
5. What do the three dimensions of the triple bottom line represent?

5 Long Answer Questions

1. Explain how legitimacy theory and institutional theory provide different explanations for corporate sustainability reporting.
2. Discuss the contribution and limitations of agency theory to CSR governance.
3. Explain why shared value should not replace rights-based or ethical responsibility.
4. Compare weak sustainability and strong sustainability using an organisational investment example.
5. Describe how a board could integrate stakeholder theory into strategic decision-making.

3 Analytical / Application Questions

1. A food manufacturer discovers that a low-cost supplier uses excessive working hours but complies with local law. Analyse the issue using stakeholder theory, Carroll’s pyramid and social contract theory. Recommend a response.
2. A technology company publishes ambitious carbon-intensity targets while its total emissions continue to rise. Evaluate the claim using the triple bottom line and legitimacy theory.
3. A company plans to close a rural facility and automate production. Develop a decision framework that considers shareholders, employees, the local community, customers, environmental impacts and long-term competitiveness.

Multiple Choice Questions with Answers

Question 1

Which theory focuses most directly on the interests of groups affected by organisational decisions?

A. Agency theory

B. Stakeholder theory

C. Institutional theory

D. Legitimacy theory

Correct Answer: B. Stakeholder theory

Question 2

A legitimacy gap exists when:

A. An organisation earns less profit than expected

B. A company has no philanthropic programme

C. Social expectations differ from perceived organisational behaviour

D. A board delegates authority to executives

Correct Answer: C. Social expectations differ from perceived organisational behaviour

Question 3

Which is an example of normative institutional pressure?

A. A new environmental law

B. A competitor’s advertising campaign

C. A professional code requiring ethical conduct

D. A shareholder selling shares

Correct Answer: C. A professional code requiring ethical conduct

Question 4

Which responsibility is at the foundation of Carroll’s pyramid?

A. Philanthropic

B. Ethical

C. Legal

D. Economic

Correct Answer: D. Economic

Question 5

The triple bottom line refers to:

A. Risk, return and liquidity

B. People, planet and profit

C. Law, ethics and philanthropy

D. Inputs, processes and outputs

Correct Answer: B. People, planet and profit

Question 6

What is a central concern of agency theory in CSR governance?

A. The alignment of managers’ interests with those of principals

B. The ecological substitutability of natural capital

C. The classification of stakeholder urgency

D. The design of charitable donations

Correct Answer: A. The alignment of managers’ interests with those of principals

Question 7

Which action best represents shared value?

A. Making an unrelated charitable donation

B. Ignoring social effects to reduce costs

C. Developing affordable products that meet a social need and generate revenue

D. Publishing a sustainability slogan without operational change

Correct Answer: C. Developing affordable products that meet a social need and generate revenue

Question 8

What distinguishes strong sustainability from weak sustainability?

A. Strong sustainability rejects all business activity

B. Strong sustainability holds that some natural systems cannot be fully substituted

C. Strong sustainability measures only financial performance

D. Strong sustainability requires philanthropy in every decision

Correct Answer: B. Strong sustainability holds that some natural systems cannot be fully substituted

Question 9

Why can a reduction in emissions intensity fail to demonstrate lower total emissions?

A. Intensity measures are always illegal

B. Output may grow faster than intensity declines

C. Absolute emissions cannot be measured

D. Intensity is unrelated to production

Correct Answer: B. Output may grow faster than intensity declines

Question 10

Which response is most likely to be substantive rather than symbolic CSR?

A. Issuing a sustainability slogan without changing operations

B. Increasing advertising about environmental leadership

C. Changing practices, measuring outcomes and providing accountability

D. Copying a competitor’s policy without implementation

Correct Answer: C. Changing practices, measuring outcomes and providing accountability