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Corporate Responsibility Initiatives: Helpful or Harmful?

Geography research on corporate responsibility highlights the market's limitations when it comes to solving pressing world problems

Release Date: October 14, 2011

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"What geographers have shown is that relying on the market to address these societal concerns is not necessarily always enough," says UB's Hamilton.

BUFFALO, N.Y. -- Corporate responsibility initiatives are often described as "win-win" scenarios: By adopting ethical practices such as buying Fair Trade goods, companies help solve social or environmental problems while building brand reputation. Industry benefits. Society does, too.

The viewpoint, while common, is too simple, according to a new paper by University at Buffalo geographer Trina Hamilton.

Hamilton's article, titled "Putting Corporate Responsibility in its Place," was published online on Oct. 6 in Geography Compass, a peer-reviewed journal. The paper explores how research in the field of geography has led to a better understanding of the pros and cons of corporate responsibility initiatives.

Hamilton's conclusion: Geographers offer a nuanced and often critical view of corporate responsibility projects. Recent research in the discipline shows that, left to their own devices, market- or industry-led initiatives will often be diluted over time. Some initiatives result in only short-term or partial solutions to pressing problems. In the worst cases, they may end up harming the communities they are thought to support.

"From a traditional management school perspective, corporate responsibility initiatives are examined as win-win scenarios. The standard focus is on whether corporations are doing well by doing good," said Hamilton, an assistant professor of geography. "What geographers are interested in, in contrast, is whether an initiative actually solves a particular social or environmental issue."

"What geographers have shown," Hamilton added, "is that relying on the market to address these societal concerns is not necessarily always enough."

To complete her analysis, Hamilton conducted a review of recent studies on corporate responsibility in her field. Taken as a whole, the body of research that Hamilton examined demonstrated that even well-meaning companies can have a hard time crafting effective initiatives.

Certification regimes that claim to ensure ethical production of goods offer one example of how corporate responsibility projects can result in negative consequences.

In some cases, businesses have created diluted certification schemes that have gained acceptance over existing systems with tougher standards. In other cases, access to certification systems is inequitable, with small-scale farmers, miners, foresters and manufacturing firms unable to afford to participate.

Another problem with corporate responsibility initiatives is misinformation. Hamilton's fellow geographers have documented cases in which confused consumers have purchased "ethical" products that, in fact, offer few of the assumed or advertised benefits.

And, attempts to create universal standards can backfire due to cultural differences. One retailer-imposed demand that agricultural workers receive access to child care further disempowered female laborers. These women were unwilling to leave their children with strangers, but were also no longer allowed to bring them in the fields with them.

Hamilton, an expert in corporate responsibility, said the work of geographers highlights the market's limitations when it comes to pressing world problems.

Geography research on corporate responsibility can inform policymaking, helping governments decide when to intervene, she said. Studies in the field can also provide activists with valuable information, helping nongovernmental organizations figure out how they can best target their efforts.

While various organizations have devoted many resources to studying the success of corporate social responsibility (CSR) initiatives, or to ranking companies based on corporate responsibility, geographers offer a more holistic view, Hamilton said.

The University at Buffalo is a premier research-intensive public university, a flagship institution in the State University of New York system and its largest and most comprehensive campus. UB's more than 28,000 students pursue their academic interests through more than 300 undergraduate, graduate and professional degree programs. Founded in 1846, the University at Buffalo is a member of the Association of American Universities.

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