Corporate social responsibility (CSR) and the environment: Does CSR increase emissions?

This paper develops a corporate social responsibility (CSR) model under a time-consistent emission tax in a monopoly market. This paper also analyzes the effects of CSR behavior on economic welfare and the environment. The results show that (i) the promotion of CSR invariably enhances social welfare, (ii) when environmental damage is serious and the cost efficiency of emission reduction is low, then a pure profit-maximizing monopolist has some incentives for behaving as a socially responsible firm to enhance its own net profit, and (iii) in stark contrast to common belief, CSR can yield an emission-increasing effect. Consequently, this paper reveals that CSR is not always beneficial for the environment.