What term describes the responsibility of a business for its effects on the environment and social welfare?

The correct term that describes the responsibility of a business for its effects on the environment and social welfare is Corporate Social Responsibility (CSR). CSR is a concept that refers to the voluntary practices that businesses engage in to promote positive social and environmental impact beyond their financial obligations. This includes taking accountability for their actions and implementing initiatives that benefit society and the environment, such as reducing carbon footprints, supporting community projects, and ensuring fair labor practices.

In contrast, the other terms do not encompass the broader social and environmental responsibilities of a business. Corporate Governance primarily focuses on the framework of rules, processes, and practices that dictate how a company is directed and controlled, emphasizing accountability and transparency within the organization rather than on its social or environmental impact. Shareholder Value centers on maximizing returns for shareholders and does not inherently include social responsibility, while Environmental Management specifically addresses a company's strategies and practices aimed at managing its environmental footprint, but does not encompass the wider range of social responsibilities that fall under CSR.