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Wall Street Journal

The ‘Corporate Social Responsibility' Mask

Supporters 'corporate social responsibility' say businesses should pursue environmental and social goals, not merely profits. Prominent among them is Klaus Schwab, founder of the World Economic Forum. According to an independent investigation this year, Mr. Schwab engaged in unauthorized spending and inappropriate behavior toward colleagues. Mr. Schwab, who stepped down as WEF executive chairman in April, rejected the findings. If the oversight on his actions fell short, one might ask, how can corporate social responsibility provide the oversight to prevent business fraud? Corporate social responsibility usually carries a connotation of goodwill, with companies striving to improve the world by supporting initiatives to protect the environment, foster diversity, or invest in struggling communities. Yet some companies use CSR scores to avoid detection of financial fraud.