1963-2018 - 55 years of Research for Social Change

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New Publication Questions Corporate Social Responsibility

27 Jul 2004

In November 2003, UNRISD held a two day conference in the United Nations Office at Geneva entitled “Corporate Social Responsibility: Towards a New Agenda?” The ensuing edition of Conference News, which summarizes the issues raised by speakers and presents the main findings and policy implications, is now available to download from this Web site.

Rapid growth in the number and size of transnational corporations (TNCs), their global reach and their visibility in people’s daily lives have heightened societal concerns about their social, environmental and developmental impacts. In response, an increasing number of companies are adopting a range of voluntary initiatives associated with improvements in working conditions, environmental performance, and company relations with workers, consumers, local communities, activists and other stakeholders. At the core of this “corporate social responsibility” (CSR) agenda are specific policies and practices involving codes of conduct, environmental management systems, stakeholder dialogues, community investment and philanthropy, as well as reporting, auditing and certification related to social and environmental aspects. In contrast to earlier decades, regulatory responsibility has shifted, to some extent, from state institutions to companies, business associations and civil society organizations (CSOs).

As the CSR agenda has gathered momentum, so too has an international debate regarding its merits and limitations. UNRISD has been particularly concerned with its developmental impacts and implications. As concerns have mounted, there have been increasing calls for regulatory approaches that emphasize corporate accountability, binding regulation and international law to control TNC activities.

To examine these issues, UNRISD organized a conference on 17–18 November 2003 that attracted 200 participants mainly from UN agencies, CSOs, research centres and the CSR service industry. The conference had four main objectives:

- to present findings from UNRISD and other research on the developmental implications of CSR policies and practices;
- to consider the potential and limits of new types of relations with TNCs involving public-private partnerships and non-governmental systems of regulation;
- to discuss the substance and significance of recent proposals, demands and campaigns calling for “corporate accountability”; and
- to examine the role the UN is playing, or should play, in the emerging corporate accountability agenda and international regulation of TNCs.

The conference report summarizes the presentations, discussions and debates in terms of four areas of analysis: the developmental implications of CSR; the assessment of multistakeholder initiatives (MSIs) and public-private partnerships; corporate accountability and the regulatory role of the UN; and future directions for the CSR agenda.

The conference discussions revealed that a particular discourse and selected voluntary initiatives have, indeed, taken off during the past decade. But presentations from researchers examining the scale and impact of CSR in developing countries questioned the number of enterprises seriously engaged, the way CSR policies are imposed on developing countries through TNC supply chains, and the fact that certain key development issues are still largely ignored in the mainstream CSR agenda. These issues include poverty reduction, tax avoidance, transfer pricing and corporate lobbying for regressive policies, as well as the limited capacity of many micro, small and medium-sized enterprises (SMEs) to raise standards and compete with TNCs.

Conference presentations by several UN officials and others highlighted the eclectic nature of the regulatory role of the UN vis-à-vis TNCs. The Global Compact generated considerable debate, with some participants seeing it as a useful forum for dialogue and learning, and others concerned that both the Compact and UN-business “partnership” initiatives have crowded out the consideration of more effective regulatory approaches, and done more to legitimize TNCs and facilitate their business activities in developing countries than to fundamentally improve their social and environmental performance. The recently drafted United Nations Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights were generally viewed in a positive light, but there was considerable uncertainty regarding their political future. The conference discussions gave rise to various proposals for regulatory reform, including the effective implementation of existing UN norms and instruments; using the procurement power of the UN to promote CSR; strengthening the monitoring and investigative role of UN bodies; and embarking on the longer-term task of developing a comprehensive global regulatory infrastructure to deal not only with labour, consumer and environmental protection, but also with taxation and competition.

A recurring theme throughout the conference centred on the fact that the scope, scale and quality of CSR essentially depend on the institutional and political contexts in which companies operate. Despite some tendencies within the CSR movement to see voluntary approaches as an alternative to government regulation and law, the discussions highlighted the crucial role of public governance—involving government policy, civil society activism, international regulation and rights-based institutions—in shaping effective CSR practices, as well as the need to better articulate voluntary and legalistic approaches. They also emphasized the need for CSR policy makers and practitioners to be more sensitive to the developmental impacts of TNCs, and the priorities and realities of developing countries.