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When Principles Pay: Corporate Social Responsibility and the Bottom Line Page 247 (263 of 288)
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1. Introduction
1. David P. Baron, Business and Its Environment, 5th ed. (Upper Saddle
River, NJ: Prentice Hall, 2005), 666.
2. Milton Friedman, “The Social Responsibility of Business Is to Increase its
Profits,” The New York Times, September 13, 1970.
3. There are actually some more conditions that have to be met for the invis-
ible hand to be exemplary—See Chapter 2 of my book Nature and the Market-
place (Washington, D.C.: Island Press, 2000).
4. That is to say, people value and are willing to pay for the existence of
forests even if they personally make no use of them. Existence value is a major
category of value for threatened species and for many wild places.
5. Forest Reinhardt, “Global Climate Change and BP Amoco,” Harvard
Business School Cases, April 7, 2000.
6. Geoffrey Heal, “Environmental Disaster—Not All Bad News,” Financial
Times, October 30, 2000.
7. The opportunity cost of an activity is a source of revenue foregone by carry-
ing out that activity. It is not a cash cost—there is no bill associated with it. A com-
monly encountered opportunity cost is that associated with the internal use of a
company’s earnings, which could be invested outside the company to earn a return.
The external return is the opportunity cost of the internal use of the funds.
8. Richard H. K. Vietor, Forest Reinhardt, and Peggy Duxburym, “StarKist
(A),” Harvard Business School Cases, April 22, 1994.
9. For more details, see J. Gary Taylor and Patricia J. Scharlin, Smart Alli-
ance: How a Global Corporation and Environmental Activists Transformed a Tar-
nished Brand (New Haven, CT: Yale University Press, 2004).
10. For background on Monsanto, see Ulrich Steger et al., “Monsanto’s
Genetically Modified Organisms: The Battle for Hearts and Shopping Aisles,”
Harvard Business School Cases, January 1, 2001; Michael D. Watkins and Ann
Leamon, “Robert Shapiro and Monsanto,” Harvard Business School Cases, April
10, 2001. The investment advisory group Innovest has an interesting analyst’s
