Policy Brief

Corporate Social Responsibility: doing well… and doing good

By NATASCHA WEISERT – Industrial Development Officer, UNIDO, and MANUELA BOESENHOFER– CSR Consultant, UNIDO.

© Chappatte in “Bilan” (Switzerland) – www.globecartoon.com

 

The emergence of Corporate Social Responsibility (CSR) over the past decade quickly gave rise to the expectation that private business would tackle some of the world’s most pressing economic, social and environmental problems. By employing CSR as a tool for risk and reputation management along the supply chain, and by seeking to engage producers and consumers alike, enterprises worldwide embarked on a myriad of initiatives that tried – and often succeeded – in combining profitable business ventures with a contribution to sustainable development.

Public sector actors, in turn, have long approached various aspects of sustainable development from a regulatory perspective. The Rio Declaration on Environment and Development, the Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the United Nations Convention Against Corruption, are just some of the milestone agreements that governments have signed up to, and followed up with national legislation and associated policies and strategies.

However, while important achievements can be claimed on both sides, there is a gap between public and private sector activity to address sustainable development that remains wide open. Top-down public sector initiatives aim to ensure compliance with critical minimum requirements and punish wrongdoing in business. They don’t encourage responsible business behaviour beyond the legal minimum or engage industry through incentive schemes and dialogue. In contrast, voluntary business initiatives typically address environmental and social concerns from the bottom-up. However, the objectives pursued by private business are rarely determined by sound socioeconomic analysis or development approaches. Usually they are led by the most acute, humanitarian and “heartbreaking” issues, a quest for economic viability in a “business case” for CSR, or, in the worst cases, by public relations and marketing objectives.

It is not that public and private efforts in the area of sustainable development have never been aligned. Numerous CEOs have supported high-level public goals, such as the mitigation of climate change, through open letters to inter-governmental negotiations or through inter-business coalitions for joint action. Business actors have also recognized governments’ regulatory work in the area of sustainable development as important pillars of their individual CSR initiatives and activities. At the same time, public sector-sponsored CSR awards and incentive schemes to promote responsible business practices are proliferating at national and international levels. These include UN-led activities, such as the Global Compact or the Growing Inclusive Markets initiative, multi-stakeholder processes, such as the development of the social responsibility guidance standard ISO 26000, and the development of CSR policies or strategies in countries as diverse as India, Lithuania, and Nigeria.

However, the potential for using CSR strategically as a vehicle to stimulate sustainable patterns of private sector development and to foster solid publicprivate partnerships for the greater public good has not been fully exploited – and particularly not in developing countries. While a better alignment would surely require a new culture of public-private dialogue on development issues that goes beyond making pledges for the achievement of broad and largely undefined values, the benefits to be reaped from concerted action could be significant for either side. Private sector actors could draw on well-targeted (and meaningfully funded) incentive schemes and benefit from reduced regulatory uncertainty. The public sector, in turn, would be able to stimulate and more effectively leverageprivate sector activity to achieve priority development objectives and to mobilize a critical mass of support among key business players to implement its policies.

In a developing country context, the exploration of possible linkages between national policy frameworks aimed at poverty reduction, economic development, and environmental sustainability on one side, and the planned activities of business in the fields of socially and environmentally responsible business practices on the other, could be a good starting point for such public-private dialogue. National policy frameworks often tackle the key sustainable development issues under different pillars or headings – one related to the economic/industrial domain, another one emphasizing the importance of social, health and cultural issues, and a third one stressing the importance of efficient resource use and environmental protection. Whereas private sector involvement is usually encouraged to stimulate economic growth under the first pillar, its possible – and potentially significant – contribution to meeting social and environmental development objectives is often overlooked.

It is, for example, not too hard to imagine how a national policy towards an important development objective, such as increasing the proportion of population with access to clean drinking water, could be combined with a set of incentives that encourage enterprises to make relevant technologies and services affordable for target populations. At the international level, where governments struggle with such diffuse and complex challenges as climate change, energy security, or inclusive patterns of globalization, the importance of achieving the broad-based understanding and involvement of key business players in collective actions is even more significant.

The quest for the development of viable CSR-based public policy frameworks should therefore start with the identification of relevant entry points:

• Where and to what extent could business activities be brought in line with national or international development priorities?
• How could governments most effectively facilitate such behaviour?

If addressed in this manner, CSR-based policy initiatives could go a long way to closing the gap between ‘doing well’ and ‘doing good’.

December 7th, 2009 at 09:28 1 Comment »

 

1 Comment »

Sender:         Anonymous
Comments: I see that the British Chamber of Commerce in Germany is holding a conference in Berlin on 21 January entitled: Corporate Responsibility in a Changing World – How Should Companies and Governments Face the Challenges of 2010?
Details from the British Embassy in Berlin.