28.10 Ethics

Ethical Standards & Dilemmas

Ideally, ethics guide corporate social responsibility (CSR) practices. Key ethical standards that shape CSR include transparency, accountability, and sustainability.

• Transparency involves being open and honest about business operations and CSR activities, ensuring stakeholders have access to accurate information.
• Accountability means that companies take responsibility for their actions and their impacts on society and the environment.
• Sustainability focuses on long-term strategies that balance economic growth with environmental protection and social equity.

Real-world examples highlight the ethical challenges companies face. For example, sourcing materials from suppliers in developing countries often raises questions about fair labor practices while keeping costs low.

A well-known case is Apple’s response to reports of excessive overtime, unsafe working conditions, and low wages in its supplier factories. Apple addressed these problems by introducing strict supplier codes of conduct, increasing oversight, and working to improve conditions across its supply chain.

Another example is the challenge of greenwashing, where companies exaggerate or falsely claim their products or practices are environmentally friendly. This was seen in the case of Volkswagen’s emissions scandal, where the company falsely marketed its cars as low-emission. Volkswagen faced significant backlash and legal consequences.

Promoting Ethical Practices

Compliance officers promote ethical practices within companies. They work to ensure that the company adheres to relevant laws and regulations. Compliance officers monitor the company’s activities, conduct regular audits, and provide training to employees on ethical standards and practices.

By maintaining high ethical standards and addressing challenges transparently, companies can build trust with their stakeholders and contribute positively to society. Promoting ethical practices not only enhances a company’s reputation but also ensures long-term success and sustainability.