CSR as a legitimatizing tool in carbon market: Evidence from Latin America's Clean Development Mechanism

Clean Development Mechanism (CDM) has incorporated sustainable development as one of their objectives. This objective gives companies an increasing motivation to contribute to sustainable development through their corporate social responsibility (CSR). However, perceived profitability of companies with carbon commodification were negatively associated with CDM projects. This paper aims to identify CSR activities in CDM in three Latin American countries, namely, Brazil, Mexico, and Peru and understand the drivers behind of these CSR initiatives. The study is based on the evaluation of 593 projects registered and Polanyi's theory. We identified some CSR activities corresponding to the social, environmental and economic indicators in the three countries. This is not to say that all CDM developers are acting in a socially responsible manner. Certain CSR activities in most of the cases were implemented as a way to legitimize and as a means to achieve social acceptance.