1、Corporate Social Responsibility Concepts,key issues,context Key CSR drivers Implications for global enterprise Implications for developmentWeek 10:CSR and International ManagementMain Concepts of CSRSocial Contract(Donaldson,1982;Donaldson and Dunfee,1999)There is a tacit social contract between the
2、 firm and society;the contract bestows certain rights in exchange for certain responsibilities.Stakeholder Theory(Freeman,1984)A stakeholder is“any group or individual who can affect or is affected by the achievement of an organisations purpose.”Argues that it is in the companys strategic interest t
3、o respect the interests of all its stakeholders.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”Key Issues in CSRLabour rights:child labour forced labour right to orga
4、nise safety and healthEnvironmental conditions water&air emissions climate changeHuman rights cooperation with paramilitary forces complicity in extra-judicial killingsPoverty Alleviation job creation public revenues skills and technologyContext Globally Liberalisation of markets reduction of the re
5、gulatory 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 countriesKey drivers of CSRAround the world NGO Activism Responsible investment Litigation Gov&IGO initiativesDevelopi
6、ng Countries Foreign customers Domestic consumers FDI Government&IGOKey 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 Produ
7、cts,etc.Domino Effect in the US Wood Products Industry:7 out of top 10 shift policy on old growth within 18 monthsDate of Policy ShiftCompanyIndustry RankAug-1999 Home Depot 1Nov-1999 Home Base 6Nov-1999 Wickes 9Jan-2000 Menards 3Aug-2000 Lowes2Aug-2000 84 Lumber 4Dec-2000 Payless Cashways 5Key Driv
8、ers:Responsible InvestmentRoots of:South Africa Apartheid DivestmentSignificant size:US SRI=2.3 trillion$in 2005 or 10%of all professionally managed investmentsShareholder activism:shareholder resolutions;voting processInfluence corporate reporting and disclosure requirementsNew rules on CSR reporti
9、ngSignatories will1 incorporate ESG issues into investment analysis and decision-making processes.2 be active owners and incorporate ESG issues into our ownership policies and practices.3 seek appropriate disclosure on ESG issues by the entities in which we invest.4 promote acceptance and implementa
10、tion of the Principles within the investment industry.5 work together to enhance our effectiveness in implementing the Principles.6 each report on our activities and progress towards implementing the Principles.Principles for Responsible Investmentwww.unpri.orgAsset owners.Do you expect to implement
11、 ESG policies in your emerging market investments?Investor opinion survey(IFC)Foreign Direct Liability Alien Tort Claims Act(ATCA):human rights,environmental rightso Unocal Burma o Coca-Cola Columbia o Rio Tinto Papau New Guinea o Del Monte Guatemala o The Gap Saipan o Shell Nigeria Other tools:RICO
12、,False Advertising E.g.Saipan sweatshop cases;Katsky v.NikeKey Drivers:Litigation$30,000,000 settlementUnited Nations Initiatives UN Global Compact UN Principles for Responsible Investment UNEP Equator Principles ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Socia
13、l Policy(MNE Declaration)UNHCHR Business and Human Rights UNODC Anti-corruption UNCTAD Corporate Responsibility Reporting,World Investment ReportImplications for EnterprisesThe Extended FirmRegional Plants/JV PartnersSuppliers/DistributorsNew social and product liability patternsDevelopment of Codes
14、 of Conduct and CSR reportingExpanding sphere of influenceApplication of Code of Conduct to value chainCSR management:value chain management=compliance managementCSR DriversTransnational CorporationsImplications for Enterprises:TNC as an“organ of society”“every individual and every organ of society
15、should promote respect for these rights and freedoms and to secure their universal and effective recognition.”-UN International Declaration of Human RightsInternational principles apply only to governmentsInternational principles apply to governments and companiesIt would be a strange tort system th
16、at imposed liability on state actors but not on those who conspired with them to perpetrate illegal acts through coercive use of state power.-1997 Eastman Kodack Co.v.KalvinTrend in international lawImplications for Enterprises:CSR ManagementHow do companies address socio-environmental&legal complia
17、nce issues?Policies-Code of Conduct Systems-Compliance Management Reporting-Accounting and ReportingCSR Management:Systems approachSustainable business development does not come about of its own accord.Rather,commitment to sustainability demands that corporate processes be reliably controlled and th
18、at everyones actions-in finance as much as in environmental and social areas-be coordinated.Prerequisites for this are binding guidelines,unambiguous corporate goals and a clear organizational structure.-Deutsche TelekomCSR Management:Management structureExample:ChiquitaBoard of DirectorsPresident&C
19、EOGroup PresidentsChief Financial OfficerVP of Human ResourcesGeneral CounselCorporate Responsibility OfficerSteering CommitteeAudit Committee of BoardCSR Management:Plan,Do,Check,Act methodPlan Consult stakeholders Establish code of conduct Set targetsDo Establish management systems and personnel P
20、romote code complianceCheck Measure progress Audit ReportAct Corrective action Reform of systemsCode of Conduct:Widespread adoption among TNCsAdoption of More than half of the 100 largest firms by global revenue(Fortune Global 100)More than a third of the 100 largest firms by foreign assets(UNCTAD W
21、IR 100)57%of all foreign assets 51%of all foreign sales 65%of all foreign employeesCodes found among all industrial sectors.Source:OECD 1999 survey of 233 codesCode of Conduct:Issue emphasis varies by industrySource:OECD 1999 survey of 233 codesCode of Conduct:Emerging consensus on key issuesSource:
22、Conference Board 1999,Survey of 123 CodesCode of Conduct:Cascade effectSource:OECD 1999 survey of 233 codesCode of Conduct:Cascade effectSource:Conference Board 1999,Survey of 123 CodesSphere of InfluenceWho is to be influenced?Sphere of InfluenceWhat issues are to be influenced?Sphere of InfluenceH
23、ow are those issues to be influenced?Sphere of InfluenceExample:MattelWho:suppliers,JVs and branch plantsWhat:OSHHow:focus on manufacturing processes,HR,factory design CSR Management:Governing the value chainCompliance Management:Management by certification Introduced 1998 By 2005:763 factories,47 c
24、ountries Introduced 1995 By 2002:37,000 factories,112 countries Compliance Management:Management by certificationISO 26000:Social Responsibility To be Introduced in 2009 or 2010 NOT a Management System(?)NOT a Certifiable Standard(?)Principles of SR1.Ethical behaviour 2.Respect for rule of law 3.Res
25、pect for international norms of behaviour 4.Respect for and considering of stakeholder interests5.Accountability 6.Transparency 7.Precautionary approach 8.Respect for human rightsOrganizational GovernanceHuman RightsLabour PractisesEnvironmentFair operating practisesConsumer issuesCommunity&society
26、developmentCore SubjectsImplementing SR7.2 Defining scope7.5 Implementing in daily practise7.7Evaluating performance7.8Enhancing credibility7.4 Integrating into organizationISO 26000 RoadmapISO 26000 Roadmap7.3 Working With Stakeholders7.3 CommunicatingCSR Management:Supply chain specificCSR Managem
27、ent:CSR reporting becomes mainstream%of Large Firms Issuing a CSR Report64%CSR Management:Emerging standards in CSR ReportingGlobal Reporting Initiative(GRI)A multi-stakeholder initiativewww.globalreporting.org International Standards of Accounting and Reporting(ISAR)A project of UNCTADwww.unctad.or
28、g/isarImplications for DevelopmentCSR cascade effect on members of the global value chain labour conditions(e.g.OSH,right to organise,wages)environmental controls transfer of new management techniquesCompensation for weak legal environment in LDCs Impact on economic development&national competitiven
29、ess?Implications for Development:CSR managementCSR performance among 100 emerging market enterprisesSource:UNCTAD,2008Implications for Development:CSR managementCSR performance among 100 emerging market enterprisesSource:UNCTAD,2008Implications for Development:CSR managementCSR performance among 100
30、 emerging market enterprisesSource:UNCTAD,2008Implications 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.”David Henderson“CSRs adoption would reduce competition and economic freedom,and undermine the market economy.”Implications for Development:Experiments in quantificationDoes an increase in CSR correspond with an increase in labour costs?
