Towards global corporate social responsibility

This paper discusses the definition of corporate social responsibility (CSR), the boundaries to which responsibilities should be limited and the initiatives being taken at an international level by various different actors in the field of CSR. The author focuses on the varying degrees of legislation or voluntary cooperation in the different initiatives described.

The initiatives discussed include:

• Private international relations. This is described as a growing public questioning of corporate practices that has been fuelled by the explosion ofcommunicating power via the Internet and electronic media; the activism of non-governmental organizations (NGOs); and the growing sense of accountability of private-sector management to shareholders sensitive to ethical issues. In this new world, political objectives can be achieved in other ways than through the traditional machinery of governments, treaties, regulation and international institutions. Such pressure can be effective but it is clearly not comprehensive or systematic.
• Statements of principle. These have a role in setting benchmarks for corporate behaviour and embodying companies' commitment to these aims. These generally include strategic goals as opposed to specific commitments but a number of enterprises, including leading companies from developing countries, have signed up to processes such as the Global Compact, and various UN agencies are working with them to develop the concepts in more detail. However, monitoring arrangements are informal and it is often open to debate what the principles mean in practice. As such, statements of principle have been challenged by much cynicism.
• Partnerships. Some businesses are forming tri-sector partnerships with governments and communities.

The author claims that all the initiatives described can be accused of focusing on either high-level principle or ground-level projects, and missing the important middle ground. Codes of conduct and practice are one way of meeting this gap but must be consistently enforced.

There are a huge number of overlapping initiatives, with different starting points, different participants, different legal bases, and different monitoring and compliance arrangements.In some ways this is a strength. The system as a whole creates a powerful yet flexible 'web'. Deficiencies in one area may be met by the strength of another strand in the web – for instance, where there is no formal code of practice in place, investor, consumer or NGO pressure can lead to the development of a new scheme. The system as a whole can be regarded as showing a combination of flexibility and robustness, while beingcapable of further development and deepening. Nonetheless, it is also open to criticism. The complexity can be counter-productive, leading to confusing and competing demands on companies. Most of the system is essentially voluntary, allowing companies to avoid engagement.

Fundamentally, both strengths and weaknesses reflect the same underlying factor – the lack of a clear international consensus which would make codification of the requirements possible.