A Brief Note On Corporate Social Responsibility

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Firms who embrace Corporate Social Responsibility are more valuable than those who do not. Through practicing Corporate Social Responsibility concepts, firms are able to increase profitability through improved reputation and decreased government regulation, while also providing solutions to social problems that businesses have either created themselves, or to which they have contributed through their operations. Examples of these actions can be seen in the breakfast-food industry, specifically in Kellogg’s, a key player in the cereal industry.
In 2007, the New York Times published an article titled “Kellogg to Phase Out Some Food Ads to Children,” written by Andrew Martin. The writing explains that, in response to a lawsuit proposed by two advocacy groups, Kellogg imposed self-regulation on cereals that would be marketed to children. Cereals would need to meet nutrition guidelines as specified by the company. If the food did not meet those requirements, and could not be reformulated to do so, the cereal would not be allowed to be advertised on children’s television networks, would not be able to contain prizes that encourage purchases, and would not be allowed to feature licensed characters, i.e. Disney Princesses, in order to promote sales to children. In response to the industry imposing these self-regulations, the lawsuit proposed by the Center for Science in Public Interest and the Campaign for a Commercial-Free Childhood was dropped. (Martin, 2007). Clearly, there is an immediate cost-benefit to Kellogg’s for self-imposed regulation in this case, the firm avoided legal costs associated with this suit. In addition, the company was able to improve its reputation. The agencies which originally brought the suit reversed their rhetoric, and instead encouraged other firms in the cereal industry to follow the example set by Kellogg’s. Some U.S. congressional members have additionally proposed increased regulation of the food industry and its marketing to children, but in response, the food companies have decided, instead, to self-regulate. Since 2007, no laws restricting marketing unhealthy foods to children have been imposed. However, many companies have joined self-imposed regulation groups, such as the Better Business Bureaus’ Children’s Food and Beverage Advertising Initiative, which is “designed to shift the mix of foods advertised to children under 12 to encourage healthier dietary choices and lifestyles.” (Council of Better Business Bureaus, 2014).
The American Psychological Society, along with many other reputable organizations, have published studies which correlate the increase in childhood obesity to advertising aimed at children. (American Psychological Association, 2014) If Kellogg, then, has marketed cereals with exorbitant sugar levels and high fat-content which provide the recommended daily value of calories in one serving, they have directly contributed to public health problems such as cardiovascular disease, high cholesterol, and high blood pressure, just a few side effects of childhood obesity, as recognized by the Center for Disease Control. (The Centers for Disease Control and Prevention, 2014) Though self-imposed regulations on marketing these foods to children are relatively new in the United States, a drop in the childhood obesity rate can already be observed. As exemplified in the New York Times article, “Obesity Rate for Young Children Plummets 43% in a Decade,” overall purchases of sugary foods and beverages have dropped
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