The Economics of Ecolabelling - SEAFOOD Ecolabelling: Principles and Practice - page 51

A useful place to start is with the definition of CSR. As defined by Portney (2005),
CSR is a consistent pattern of private firms doing more than they are required
to do, under applicable laws and regulations governing the environment, in the
communities in which they operate. Portney (2005) concludes that firms are most
likely to pursue CSR because it is profitable.
First, CSR can improve demand conditions. For example, some consumers may
reward firms practicing CSR by being more loyal to them. This may take the
form of higher willingness to pay for 'green' products or buying more from green
firms whose prices are the same as those of other firms selling seemingly identical
products. Nonetheless, the empirical evidence in this area is somewhat ambiguous
(Margolis & Walsh 2001).
Second, CSR can improve the public image of firms supplying green products,
or entirely differentiate corporations, in the perception of consumers. Whole Foods
Markets in the US was established as a market that specialised in natural foods, and
is now the largest of the natural food store supermarket chains, a distinctly differ-
ent type of market from the more standard supermarket chains such as Safeways,
Albertsons and Stop n Shop. Similarly, Marks & Spencers has distinguished itself
in the UK market. The distinction can be reflected in the customer base - higher
income, more educated and more interested in the characteristics of the goods they
buy from both health and environmental perspectives. This distinction may or may
not be reflected in the share price of the corporation on the stock exchange. Finally,
Wal-Mart's decision to carry MSC- and GAA-certified seafood may be seen as an
attempt by Wal-Mart to address some of the criticisms it has faced in the US market
regarding its record on environmental and social issues (Financial Times 2006).
Third, CSR can improve factor-supply conditions. 'Green' corporations may
find it easier to recruit skilled or highly motivated employees, and the employees
of these firms may be more productive because of the goodwill they have for their
employer and the work that they do. More directly relevant to seafood, actively
promoting sustainable fisheries may reduce the risk of future supply disruptions
from overfished fisheries and lower the expected future costs of sourcing fish. It
is not unreasonable to believe that it may have been in Unilever's self-interest to
help establish the MSC. As one of the world's largest buyers of fish at the time, the
strategy to motivate the fishing industry and management community to improve
the sustainability of fisheries is one means of ensuring a reliable supply of fish at
reasonable cost in the future. Given Unilever's strong market position at that time
(prior to divestiture of some of its European operations), asserting it would buy
only from sustainable sources was one way to promote that strategy, and by taking
an early role it could help to distinguish Unilever in an increasingly green-sensitive
marketplace.
In the case of fisheries, promotion of MSC-certified fish as a form of CSR yields
other dividends in the form of risk reduction for processors and retailers. Purchase
of certified fish reduces public conflicts with environmental groups, which can turn
away consumers. Traceability guaranteed via the chain-of-custody process can