Corporate Finance: Financial Ethics 101 Part Seven — Corporate Social Responsibility (CSR) in the age of AI
While ‘Morality of the Firm’ focuses on deep-seated ethical values, CSR often manifests as structured initiatives
Section A: Focusing on the ordinary consumers (aka the brokeys)
Bishop Fulton Sheen said in 1956, “Take for example, an exclusive diet of novels and TV. When people just sit, glued to a TV drama in which emotions are provoked and evoked. The emotions of love and hate and jealousy and fear and dread and anxiety and so forth…What are all these emotions directed against? Fictitious characters, a book, paper! Why can’t you see that after a while our emotions are like the spring on a screen door. Pulled and pulled so often, and after a while, it loses all of its resiliency. And then later on in life, there comes real objects, and problems.”
Now, excluding novels and focusing on the human absorption of video media, watching a mirror-like screen invites the viewer to regress to a childlike state. The viewer undergoes a temporary loss of ego as he or she identifies with the powerful position of apprehending the world on the screen, much as the infant apprehended the mirror image.
More damaging, as we watch videos and devour ready-made experiences, we may come to consider ourselves to take place of the character on the screen! A useful question becomes: After watching YouTube/TikTok/etc., do you feel more curious and energized to act, or more detached from your own life?
Section B: Focusing on the producers
As a successful business leader in a competitive economy, LinkedIn folks tell us to have fear of feeling complacent e.g. think you’re 30 days from going out of business. As such, the following quote from the former CEO of IBM, Thomas J. Watson, is fitting: “Whenever an individual or a business decides that success has been attained, progress stops.”
But then, we have Tom Cruise’s Digger monologue exposing capitalist rot/techtatorship, and the people who condemn the exploitation of the producers while enjoying its rewards. Here is the edited scene.
[Digger Rockwell confronts the European Parliament]
Rockwell: Ah remember chatin wit a guy…he woz sayin… “Is it just me, or does anyone else find it ironic that millions watchin movies cheer for disobedient underdogs who resist their political oppressors; yet proudly obey whatever rules are violently enforced without ever questionin their authority?” Now, I beguns thinking that responsibility is a value. It makes life darn meaningful! But … what can I say? Another fine day ruined by responsibility!
[Pauses for a moment]
Rockwell: Ah said to the poor fella… just let me adjust my tin foil hat here real quick…See, seeing the bad guy being defeated on TV makes us believe we did it, so we don’t need to do anythin anymore.
[Looks at the members of the Parliament]
Rockwell: What’s the point of this uhm… story? It’s a reality check thing! Every one of YOU, no matter how conscientious you pretend to be — you wanna a drive around the cheapest fuel. See you wanna keep your lights on, your heat and air conditioning running…
[The Parliament starts booing and shouting at Rockwell]
Rockwell: You want dirt.cheap.tickets. to Mayhorca, so you can roast your pale asses in a hammock. You wanna to carve into a goood steak! Yeah, you want a two-day delivery of shit that you don’t need. You wanna charge up, charge up them cellphone batteries so you can gawk at your TikTok and your YouTube…. You want energy. Energy so that you can ask A.Ah… to solve the very same disasters that it’s fuelin!
[The Parliament goes silent]
Rockwell: So you want freedom, freedom to bask in the comfort of your unsustainable lives!
[The Parliament starts booing and jeering again]
Let’s then talk of entrepreneurs are producer: The Intersection of the Fields of Entrepreneurship and Development Economics: A Review Towards a New View by Jolanda Hessels and Wim Naudé argues that policy makers find it difficult to promote economic development through entrepreneurship (and SMEs) because the positive impact of entrepreneurship is overestimated and its negative impact underestimated. Also, because there’s no unified scientific approach (from both entrepreneurship economics and development economics) towards the role of entrepreneurship in economic development which results to lack of proper measurement and data.
Now, the authors define the practice of entrepreneurship as the resource, process, and state of being through which individuals with ability and agency utilize positive opportunities in the market for generating individual and/or social value.
(i) Entrepreneurship as a resource refers to entrepreneurial capital and entrepreneurial ability.
(ii) Entrepreneurship as a process means it involves discovery and exploitation of opportunities to generate individual value, and value for society more broadly. Often this will not be captured in measures of development, leading to either to a micro-macro paradox or ineffectiveness of policy measures to promote entrepreneurship.
(iii) Entrepreneurship as a state of being means it can be intrinsically valued and does not have to be instrumental.
Even though entrepreneurs are actually the exceptions in corporatocracies, the authors say that when they are healthy/creative/passionate about what they do, they are likely to positively motivate their employees and subsequently increase returns at the firm and macro-level. BUT, the authors make a point on how results from work satisfaction cannot be directly translated to life satisfaction as entrepreneurship may reduce time spent on leisure and with family members.
The authors also recognise the role of entrepreneurship on environmental sustainability (sustainability that meets the needs of present generations without compromising the needs of future generations) and social sustainability (income and wealth equality). We will further discuss on the former.
Section C: The circular economy as part of the sustainable economy
“What do lawyers learn in law school? They learn to win… What we’ve got to start thinking about is how do we solve problems.” — Benjamin Solomon Carson Sr., American politician.
The sustainable economy was developed in a spectrum — from an operational concern (defensive efforts to reduce waste) to strategic efforts through innovations to considerations inhabiting all decision making. This was possible through quantification or pricing of previous non-quantifiable aspects.
Now, sustainable economic growth is economic development that attempts to satisfy human needs in a manner that sustains natural resources and the environment for future generations. Thus, economic sustainability is effectively the ability of an economy to support a defined level of economic production indefinitely.
Lovers of Parisian nightlife undoubtedly notice its incredible wealth of street lighting. So it’s not to difficult to understand why its called ville lumière or the City of Lights.
On July 3rd every year is the International Plastic Free Day, which aims to discourage the use of plastic bags for ‘use-and-throw’ purposes, be it for food packaging or buying groceries. It was created in 2009 as part of the Break Free From Plastic movement. Six years later, on December 9th 2015, traditional Independence Day celebrations were cancelled in Tanzania in favour of cleaning up the streets.
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But it was up until 2023 when Tanzania got its first green bond from a bank. This is Africa, but what about Europe? The 2020 European Green Deal (referred to by Ursula Getrud von der Leyen as Europe’s man of the moon moment) aimed to make Europe the first climate-neutral continent by 2050, delivering on the commitments (however minimal) under the Paris Agreement.
Let’s get into history: The Paris Agreement, entered into force on 4th November 2016, is a global agreement to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future. Now, American economist William Dawbney Nordhaus received the 2018 Nobel Memorial Prize in Economic Sciences for integrating climate change into long-run macroeconomic analysis. And by 2019, there were reports of Asian nations taking a stand against importing wastes.
- However, apart from efforts from the Paris Agreement, by 2020, amid COVID-19, air pollution remained the most pressing environmental health threat according to IQAir (a Swiss-based air quality technology company). The 2020 World Air Quality Report, prepared by IQAir, mentioned that 22 of the top 30 most polluted cities globally were in India. However, the report said that the lockdown measures and changes in human behaviour in response to the spread of COVID-19 had resulted in healthier air globally.
- India’s air pollution improved in 2020 (even though it was still dangerously high); but even until October 2026, Delhi is among of the top picks.
Even if you don’t believe in climate change, wouldn’t you like to breathe clean air?
Climate change disproportionately affects people and regions of more vulnerable economic status, widening class division. As evidence for this, news outlets said that the 2026–2027 super El Niño event could be particularly severe in countries already affected by conflict, displacement and poverty — Because rich residents living by the shore can just build defences against rising seas, while poor ones have to vacate their homes and things like that.
Now, let’s move into the circular economy. This aims to replace the highly wasteful and destructive linear economic model of industrial mechanisms. The linear model is also referred to as the traditional linear model of “take, make, use, dispose” which is of course based on the take-make-waste system of extracting minerals; turning them into manufactured products and then disposing of them at the end of their useful life. In contrast, in a circular economy, a greater reliance is placed on reusing existing materials in a series of loops (minimizing waste and resource use).
YouTuber Alexandre Magnin says that running a circular economy means running the economy as nature runs its own business. As such, Cradle to Cradle (C2C), as opposed to Cradle to Grave, is a sustainable design framework that forms a foundational pillar of the circular economy. Now, as a step towards the circular economy, African countries formed the African Circular Economy Alliance (ACEA). But the EU did something much stronger! The European Commission constructed the European Union Circular Economy Act (CEA) as a landmark legislative proposal. The goal of CEA: increasing the circular material use rate and harmonizing national waste regimes.
Conclusion — To whom it will concern
With all its sham, drudgery and broken dreams, it is still a beautiful world. Money is yours but resources belong to the society.
One Medium writer notes that we have been conditioned by educational systems to believe that the free market perfectly rewards intelligence. But the truth is: the market is entirely indifferent to your IQ, your reading list, or your potential. Indeed. In Economics, we often see that post-WWII capitalism doesn’t reward work (at the individual-level), it rewards ownership!
Having established this, a word for the nepos — It is ethical if people considered not only what their money earns, but also the impact that their money has on our common future. Heck, even Wall Street-driven Quantitative Finance have come to meet the circular economy (when it prices, models, and manages the financial risks and cash flows of regenerative, closed-loop business models).
I slept, and dreamed that life was beauty;
I woke, and found that life was duty.
A man can dream tho.
A man…can…dream!
Since services provided by nature are an indispensable input to economic activity, when economists overlook the role that nature plays in economic activity, they underestimate the risks from environmental damage to economic growth and human welfare. Enter green development. This is development without disturbing nature. This is in contrast to ‘GDP growth worship’ which has contributed to environmental damage and what has been termed as ‘fungal networks’.
- However, as something to note, green development shouldn’t encourage moral licensing (whereby people engaged in one act which they consider good feel more licensed to engage in bad behaviour).
Now, Austrian-British economist Friedrich August von Hayek wrote, “‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded.” BUT, on a positive note, the deepest economic crises are also crucibles for new economic thinking. For example, the Great Depression led to Keynesian macroeconomics. The WWII cemented support for the welfare state and the mixed economy. COVID-19 made major stakeholders to stop and think: what kind of future do we want? This led to thoughts of a COVID-19 green recovery that places climate and nature at its heart. [A COVID-19 green recovery includes strategies for achieving cleaner air, healthier water, enhanced biodiversity conservation and plans for climate action.] Similarly, the age of AI brought discussion of a post-economic society — where labour-for-survival, and resource scarcity lose their central organizing power over human life.
Sources:
EU website and YouTube videos.
Google Images.
