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Integrating Economic, Social, and Environmental Performance
Is there really a way to achieve a triple bottom line in a way that actually builds
up all three facets of performance—economic, social, and environmental? Advocates
of CSR understandably argue that this is possible and should be the way all firms are
evaluated. Increasingly, evidence is mounting that attention to a triple bottom line is
more than being “responsible” but instead just good business. Critics argue that CSR
detracts from the fundamental economic role of businesses; others argue that it is
nothing more than superficial window dressing; still, others argue that it is an attempt
to preempt the role of governments as a watchdog over powerful multinational
corporations.
While there is no systematic evidence supporting such a claim, a recent review
of nearly 170 research studies on the relationship between CSR and firm performance
reported that there appeared to be no negative shareholder effects of such practices.
In fact, this report showed that there was a small positive relationship between CSR
[5]
and shareholder returns. Similarly, companies that pay good wages and offer good
benefits to attract and retain high-caliber employees “are not just being socially
[6]
responsible; they are merely practicing good management.”
The financial benefits of social or environmental CSR initiatives vary by
context. For example, environment-friendly strategies are much more complicated in
the consumer products and services market. For example, cosmetics retailer The
Body Shop and StarKist Seafood Company, a strategic business unit of Heinz Food,
both undertook environmental strategies but only the former succeeded. The Body
Shop goes to great lengths to ensure that its business is ecologically sustainable. It
[7]
actively campaigns against human rights abuses and for animal and environmental
protection and is one of the most respected firms in the world, despite its small size.
Consumers pay premium prices for Body Shop products, ostensibly because they
believe that it simply costs more to provide goods and services that are
environmentally friendly. The Body Shop has been wildly successful.
StarKist, too, adopted a CSR approach, when, in 1990, it decided to purchase
and sell exclusively dolphin-safe tuna. At the time, biologists thought that the dolphin
population decline was a result of the thousands killed in the course of tuna harvests.
However, consumers were unwilling to pay higher prices for StarKist’s
environmental product attributes. Moreover, since tuna were bought from commercial
fishermen, this particular practice afforded the firm no protection from imitation by
competitors. Finally, in terms of credibility, the members of the tuna industry had

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