Corporate Social Responsibility Main Concepts of csr csr

Corporate Social Responsibility

Main Concepts of CSR

• CSR (Carrol, 1979)

• Firms have responsibilities to societies including economic, legal, ethical and discretionary (or philanthropic).

• - See also DeGeorge (1999) on the “Myth of the Amoral Firm”

Main Concepts of CSR

Key Issues in CSR

• Labour rights:

• child labour
• forced labour
• right to organise
• safety and health

• Environmental conditions

• water & air emissions
• climate change

• Human rights

• cooperation with paramilitary forces
• complicity in extra-judicial killings

• Poverty Alleviation

• job creation
• public revenues
• skills and technology

Context Globally

• Liberalisation of markets – reduction of the regulatory approach

• Emergence of global giants, consolidation of market share

• Development of the ‘embedded firm’ and the global value chain

• Development of supplier networks in developing countries

Key drivers of CSR

Key Drivers: NGO Activism

• Facilitators: IT (esp Internet), media, low cost travel

• Boycotts, brand damage, influence legislation, domino effect

• e.g. Shell in Nigeria, Exxon in Cameroon, Sinopec in Sudan, Apparel Industry (Nike, Gap), GMO, Wood Products, etc.

Domino Effect in the US Wood Products Industry: 7 out of top 10 shift policy on old growth within 18 months

Key Drivers: Responsible Investment

• Roots of: South Africa Apartheid Divestment

• Significant size: US SRI = 2.3 trillion $ in 2005 or 10% of all professionally managed investments

• Shareholder activism: shareholder resolutions; voting process

• Influence corporate reporting and disclosure requirements

• New rules on CSR reporting

Principles for Responsible Investment www.unpri.org

Investor opinion survey (IFC)

Key Drivers: Litigation

• Foreign Direct Liability

• Alien Tort Claims Act (ATCA): human rights, environmental rights

• Unocal Burma
• Coca-Cola Columbia
• Rio Tinto Papau New Guinea
• Del Monte Guatemala
• The Gap Saipan
• Shell Nigeria Other tools: RICO, False Advertising
• E.g. Saipan ‘sweatshop’ cases; Katsky v. Nike

United Nations Initiatives

• UN Global Compact

• UN Principles for Responsible Investment

• UNEP Equator Principles

• ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration)

• UNHCHR Business and Human Rights

• UNODC Anti-corruption

• UNCTAD Corporate Responsibility Reporting, World Investment Report

Implications for Enterprises

• New social and product liability patterns

• Development of Codes of Conduct and CSR reporting

• Expanding sphere of influence

• Application of Code of Conduct to value chain
• CSR management: value chain management = compliance management

Implications for Enterprises: TNC as an “organ of society”

Sphere of Influence

Sphere of Influence

Implications for Development

• CSR ‘cascade effect’ on members of the global value chain

• labour conditions (e.g. OSH, right to organise, wages)
• environmental controls
• transfer of new management techniques

• Compensation for weak legal environment in LDCs

• Impact on economic development & national competitiveness???

Implications for Development: is CSR good for growth?

• “…[CSR] is liable to hold back the development of poor countries through the suppression of employment opportunities within them.”

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