A Shift in Focus

While a few governments have been late to acknowledge human effects on climate (i.e., global warming), many businesses have been pro active in adopting policies and practices that address not only environmental concerns, but also various social issues.

This approach to doing business falls under the term "corporate social responsibility" (CSR). The practice ideally benefits business, employees, the community, and the environment.

A number of pulp and paper companies, and suppliers to the forest products industries, have publicly adopted CSR business practices. Among those are Georgia-Pacific, Louisiana-Pacific, Mohawk Fine Papers, Neenah Paper, Potlatch, Verso Paper Corporation, Air Liquide, Akzo Nobel, BE&K, and others.

Public as well as corporate perceptions of what constitutes CSR can vary significantly. It includes operational decisions (treating employees fairly and protecting the environment) and decisions that have local or broader social effects.

Of course, not all companies that call themselves socially responsible live up to the claim, which can raise doubts about the validity of similar claims by other companies. And even companies that are conscientious about being good corporate citizens are challenged to meet expectations 100% of the time.

Various studies have shown that CSR may increase profitability, others show little or no effect on the bottom line. Likewise, its validity as a business practice is promoted by some economists and debunked by others. Even so, more and more companies seem to be deciding that there are multiple benefits to CSR.

With so much emphasis being placed on short-term returns in recent years, at least one potential benefit of CSR is that it encourages companies to take a long-term view. How will decisions they make today affect future growth and profitability? Too many companies that focused on immediate profits at the expense of good corporate citizenship (and management) have found that later costs—in fines, in lost productivity, in customer dissatisfaction, etc.—could be severe.