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By voluntarily withdrawing the prescription drug which generated worldwide revenues of almost $3 billion a year Merck had hoped to reinforce its reputation as a responsible firm by going further than it was obliged to do.
This work was taken up by Harold Johnson (1971, p.50) who wrote of "conventional wisdom", defining a socially responsible firm as one which made "larger profits for its stockholders … [and] takes into account employees, suppliers, dealers, local communities, and the nation".
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And research suggests male CEOs with daughters run more socially responsible firms.
The cost of recycling e-waste in America would, of course, come down if responsible firms doing the work had access to greater volumes of electronic trash.
But a few quarters of earnings that lagged behind those of every other Wall Street firm would invite outrage from subordinates, who would flee for other, less responsible firms, and from shareholders, who would call for his resignation.
B the Change Media, which recently raised $2m in startup capital, will launch a quarterly print magazine and website this summer, and plans to organize events for socially and environmentally responsible firms.
Shadow chancellor George Osborne will unveil proposals for a "green Isa" today, which will allow investors to benefit from generous tax-free savings allowances if they put their money with environmentally responsible firms.
Mr Izzo, of PSEG, argues that the EPA's standards are scientifically grounded, and that to water them down would be to penalise responsible firms like his which have gone ahead and made the necessary investments.
About 80% of young people questioned for a new survey in the US were interested in jobs that had a positive impact on the environment, and more than 90% said they would choose to work for environmentally friendly and socially responsible firms.
In line with Chih et al. (2008), Kim et al. (2012) conclude that socially responsible firms are less likely to engage in earnings management and to manipulate real operating activities than other firms.
On the other hand, Besley and Ghatak (2007) found that breaking CSR promises will result in lower profits, whereas more responsible firms will earn higher profits due to their reputational premium.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com