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When Principles Pay: Corporate Social Responsibility and the Bottom Line resources

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preface We have always known that heedless self-interest was bad morals; we know now that it is bad economics. —Franklin Delano Roosevelt, January 20, 1937 Are principled behavior and profitable behavior intrinsically in conflict, or can corporations do well and also do good? Newspaper headlines sug- gest a conflict—we see stories of mortgage companies enriching themselves by predatory lending to poor families, defense contractors entering into improper relationships with defense department officials, coal companies and automobile companies lobbying aggressively to allow continued emis- sions of greenhouse gases, and investment banks and rating agencies pack- aging junk bonds as high-quality debt. These examples all suggest that businesses have found it necessary to behave in an unprincipled fashion to make money. The headlines, however, give only part of the story: what you can easily miss is that some of the worst predatory lenders are now bank- rupt, the defense contractor executives responsible for improper relation- ships with the defense department have been fired and the company fined, and many of the investment bankers responsible for the excesses of the structured finance binge of 2006 and 2007 will have lost their jobs by the time this book is in print. True, the auto companies and coal companies are still lobbying aggressively—but almost as if to spite them the world’s most valuable and profitable car company is Toyota, which has positioned itself as the green car company par excellence. Perhaps the headlines are mislead- ing; perhaps there is a cost to antisocial corporate behavior that is felt on a slightly longer timescale than the apparent gains. And of course headlines are notoriously biased—they only tell us what is deemed newsworthy, and good behavior is rarely as newsworthy as bad. So we don’t see headlines telling us that for the last decade BP has been reducing its greenhouse gas emissions voluntarily, that Starbucks works to reduce the environmental

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