UNRISD Conference Examines Corporate Social Responsibility and Development Today

3 Mar 2004

Author(s): Peter Utting

Corporate Social Responsibility and Development: Towards a New Agenda?

Summary on the Conference held on 17-18 November 2003, in Geneva

While transnational corporations (TNCs) are increasingly acknowledging the need to improve their social, environmental and human rights record in developing countries, the voluntary initiatives they have adopted have generated considerable criticism and prompted calls for alternative regulatory approaches. In November 2003, UNRISD hosted a two-day conference that brought together some leading researchers and writers to discuss:

- the developmental impacts of “corporate social responsibility” (CSR);

- the potential and limits of public-private partnerships and non-governmental systems of regulating TNCs;

- the substance and significance of recent proposals, demands and campaigns calling for “corporate accountability”;

- and the appropriate role of the United Nations in international regulation of TNCs.

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

New types of regulatory relations with TNCs, involving so-called multistakeholder initiatives or “non-governmental systems of regulation”, which set standards and promote company reporting, monitoring, auditing and certification, have attempted to address some of the limitations associated with voluntary approaches to CSR. They were generally seen as constituting innovative forms of regulation adapted to the new realities of globalization and global democratic governance. Their future role, however, was uncertain given their cost and complexity, and the tendency for such initiatives to multiply, diverge and compete. Various participants called for a more co-ordinated approach, greater emphasis on complaints procedures and sensitivity to the reality of SMEs in developing countries.

Recent demands and proposals promoting “corporate accountability” and legalistic approaches to regulation were seen by many conference participants as an important corrective to the emphasis of the past two decades on deregulation and weaker forms of voluntary initiatives. This new approach also attempts to ensure that key issues to do with corporate power, privilege and duties assume centre stage. The challenges faced by the emerging “corporate accountability movement”, however, are considerable - not least the need to build broad-based coalitions to mobilize support and overcome resistance.

Presentations by several UN officials and others highlighted the eclectic nature of the United Nations’ regulatory role vis-à-vis TNCs. Views on 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 had crowded out the consideration of more effective regulatory approaches and done more to legitimise TNCs and facilitate their business activities in developing countries than fundamentally improve their social and environmental performance. The recently drafted “UN Norms on the Responsibilities of TNCs 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 generated various proposals for regulatory reform, including the effective implementation of existing 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 taxation and competition.

A conference report analysing the main debates and recommendations will shortly be published and summaries of presentations by 23 speakers are available on this website.