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Do-gooding policies help firms when they get prosecuted
"THERE is one and only one social responsibility of business," wrote Milton Friedman, a Nobel prize-winning economist. "To use its resources and engage in activities designed to increase its profits." Plenty of climate-change campaigners would argue with that (see page 71). But even if you accept Friedman's premise and regard corporate social responsibility (CSR) policies as a waste of shareholders' money, things may not be absolutely clear-cut. New research suggests that CSR may create monetary value for companies--at least when they are prosecuted for corruption.
The largest firms in America and Britain together spend more than $15 billion a year on CSR, according to an estimate last year by EPG, a consulting firm. This could add value to their...