1.

Defining Corporate Social Responsibility

CSR analyses economic, legal, moral, social

and physical aspects of environment.
Barnard(1938)

...being the managers of other people's money than

of their own, it cannot well be expected that they
should watch over it with the same anxious
vigilance with which partners in a private
copartnery frequently watch over their own. Like
the stewards of a rich man, they ... consider
attention to small matters as not for their master's
honour and very easily give themselves a
dispensation from having it.

1.1 Introduction

Corporate Social Responsibility (or CSR) is a concept which has

become dominant in business reporting. Every corporation has a
policy concerning CSR and produces a report annually detailing its
activity. And of course each of us claims to be able to recognise
corporate activity which is socially responsible and activity which is
not socially responsible. There are two interesting pints about this:
firstly we do not necessarily agree with each other about what is
socially responsible; and although we claim to recognise what it is or
is not when we are asked to define it then we find this impossibly
difficult. Thus the number of different definitions is huge and is this
chapter we will look at some of these.
 1.2 Definitions of CSR(Corporate Social Responsibility)

The broadest definition of corporate social responsibility is concerned

with what is or should be the relationship between global corporations,
governments of countries and individual citizens. More locally the definition
is concerned with the relationship between a corporation and the local society
in which it resides or operates. Another definition is concerned with the
relationship between a corporation and its stakeholders.

For us all of these definitions are pertinent and each represents a

dimension of the issue. A parallel debate is taking place in the arena of
ethics should corporations be controlled through increased
regulation or has the ethical base of citizenship been lost and needs
replacing before socially responsible behaviour will ensue? However
this debate is represented it seems that it is concerned with some sort
of social contract between corporations and society .

This social contract implies some form of altruistic behaviour

the converse of selfishness whereas self-interest connotes
selfishness. Self-interest is central to the Utilitarian perspective
championed by such people as Bentham, Locke and J. S. Mill. The
latter, for example, is generally considered to have advocated as
morally right the pursuit of the greatest happiness for the greatest
number although the Utilitarian philosophy is actually much more
based on selfishness than this something to which we will return
later. Similarly Adam Smiths free-market economics, is predicated
on competing self-interest.

These influential ideas put interest of the individual above interest

of the collective. The central tenet of social responsibility however is
the social contract between all the stakeholders to society, which is an
essential requirement of civil society. This is alternatively described as
citizenship but for either term it is important to remember that the
social responsibility needs to extend beyond present members of
society. Social responsibility also requires a responsibility towards the
future and towards future members of society. Subsumed within this is
of course a responsibility towards the environment which we will
also return to later because of implications for other members of
society both now and in the future.
 There is however no agreed definition of CSR so this raises the
question as to what exactly can be considered to be corporate social
responsibility. According to the EU Commission [(2002)],

CSR is a concept whereby companies integrate social and

environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis.

1.2.1 Corporations are part of society

A growing number of writers however have recognised that the

activities of an organisation impact upon the external environment
and have suggested that one of the roles of accounting should be to
report upon the impact of an organisation in this respect. Such a
suggestion first arose in the 1970s and a concern with a wider view
of company performance is taken by some writers who evince
concern with the social performance of a business, as a member of
society at large.

Indeed the desirability of considering the social performance

of a business has not always however been accepted and has been
the subject of extensive debate. Thus Hetherington (1973: 37) states

There is no reason to think that shareholders are willing to

tolerate an amount of corporate non-profit activity which
appreciably reduces either dividends or the market
performance of the stock.

Conversely, writing at a similar time, Dahl (1972: 18) states

....every large corporation should be thought of as a social enterprise;

that is an entity
whose existence and decisions can be justified insofar as
they serve public or social purposes
 Similarly Carroll (1979), one of the early CSR theorists states that:

business encompasses the economic, legal, ethical and

discretionary expectations that society has of organization at
a given point in time.

More recently this was echoed by Balabanis, Phillips and Lyall (1998),
who declared that:

in the modern commercial area, companies and their

managers are subjected to well publicised pressure to play
an increasingly active role in [the welfare of] society.

1.2.2 Profit is all that matters

Some writers have taken the view that a corporation should

not be concerned with social responsibility and you are certain to
come across the statement from Milton Friedman, made in 1970:

there is one and only one social responsibility of business

to use its resources and engage in activities designed to
increase its profits so long as it stays within the rules of the
game, which is to say, engages in open and free competition
without deception or fraud.

Equally some people are more cynical in their view of

corporate activity. So Drucker (1984) had the opinion that:

business turns a social problem into economic opportunity

and economic benefit, into productive capacity, into human
competence, into well-paid jobs, and into wealth.

1.2.3 CSR is conditional

While Robertson and Nicholson (1996) thought that:

a certain amount of rhetoric may be inevitable in the area of

social responsibility. Managers may even believe that making
statements about social responsibility insulates the firm from
the necessity of taking socially responsible action.
 Moir (2001) is more ambivalent:

whether or not business should undertake CSR, and the forms

that responsibility should take, depends upon the economic
perspective of the firm that is adopted.

So we can see that CSR is a contested topic and it is by no

means certain that everybody thinks that it is important or relevant
to modern business.

1.3 The effects of organisational activity

It is apparent of course that any actions which an organisation

undertakes will have an effect not just upon itself but also upon the
external environment within which that organisation resides. In
considering the effect of the organisation upon its external
environment it must be recognised that this environment includes
both the business environment in which the firm is operating, the
local societal environment in which the organisation is located and
the wider global environment. This effect of the organisation can take
many forms, such as:

The utilisation of natural resources as a part of its production processes

The effects of competition between itself and other organisations in the
same market
The enrichment of a local community through the creation of employment
opportunities
Transformation of the landscape due to raw material extraction or waste
product storage
The distribution of wealth created within the firm to the owners of that
firm (via dividends) and the workers of that firm (through wages) and the
effect of this upon the welfare of individuals
And more recently the greatest concern has been with climate change and
the way in which the emission of greenhouse gases are exacerbating this.

It can be seen therefore from these examples that an organisation

can have a very significant effect upon its external environment and
can actually change that environment through its activities.
 It can also be seen that these different effects can in some
circumstances be viewed as beneficial and in other circumstances be
viewed as detrimental to the environment. Indeed the same actions
can be viewed as beneficial by some people and detrimental by
others.

We are now, more than ever, aware of the

potentially negative impact of business on the
environment, whatever the nature or size of the
business. There can only be positive results from
developing sustainability from benefiting your
own bottom line to benefiting tomorrows industry
to benefiting the environment in which we all live.
- Tony Blair, UK Prime Minister, May 2000

1.4 The principles of CSR

Because of the uncertainty surrounding the nature of CSR activity

it is difficult to define CSR and to be certain about any such
activity. It is therefore imperative to be able to identify such
activity and we take the view that there are three basic principles
which together comprise all CSR activity. These are:
Sustainability;
Accountability;
Transparency.

1.4.1 Sustainability

This is concerned with the effect which action taken in the

present has upon the options available in the future. If resources are
utilised in the present then they are no longer available for use in the
future, and this is of particular concern if the resources are finite in
quantity.
Thus raw materials of an extractive nature, such as coal, iron or
oil, are finite in quantity and once used are not available for future
use. At some point in the future therefore alternatives will be needed
to fulfil the functions currently provided by these resources.

This may be at some point in the relatively distant future but of

more immediate concern is the fact that as resources become depleted
then the cost of acquiring the remaining resources tends to increase,
and hence the operational costs of organisations tend to increase1.

Sustainability therefore implies that society must use no more

of a resource than can be regenerated. This can be defined in terms
of the carrying capacity of the ecosystem (Hawken 1993) and
described with input output models of resource consumption.
Thus the paper industry for example has a policy of replanting trees
to replace those harvested and this has the effect of retaining costs
in the present rather than temporally externalising them.

Viewing an organisation as part of a wider social and economic

system implies that these effects must be taken into account, not just
for the measurement of costs and value created in the present but also
for the future of the business itself. Measures of sustainability would
consider the rate at which resources are consumed by the organisation
in relation to the rate at which resources can be regenerated.
Unsustainable operations can be accommodated for either by
developing sustainable operations or by planning for a future lacking
in resources currently required. In practice organisations mostly tend
to aim towards less unsustainability by increasing efficiency in the
way in which resources are utilised. An example would be an energy
efficiency programme.

1.4.2 Accountability

This is concerned with an organisation recognising that its

actions affect the external environment, and therefore assuming
responsibility for the effects of its actions. This concept therefore
implies a quantification of the effects of actions taken, both internal
to the organisation and externally. More specifically the concept
implies a reporting of those quantifications to all parties affected by
those actions. This implies a reporting to external stakeholders of the
effects of actions taken by the organisation and how they are
affecting those stakeholders.
 This concept therefore implies a recognition that the
organisation is part of a wider societal network and has
responsibilities to all of that network rather than just to the owners
of the organisation. Alongside this acceptance of responsibility
therefore must be a recognition that those external stakeholders have
the power to affect the way in which those actions of the
organisation are taken and a role in deciding whether or not such
actions can be justified, and if so at what cost to the organisation
and to other stakeholders.

Accountability therefore necessitates the development of

appropriate measures of environmental performance and the
reporting of the actions of the firm. This necessitates costs on the part
of the organisation in developing, recording and reporting such
performance and to be of value the benefits must exceed the costs.
Benefits must be determined by the usefulness of the measures
selected to the decision-making process and by the way in which they
facilitate resource allocation, both within the organisation and
between it and other stakeholders. Such reporting needs to be based
upon the following characteristics:
Understandability to all parties concerned;
Relevance to the users of the information provided;
Reliability in terms of accuracy of measurement,
representation of impact and freedom from bias;
Comparability, which implies consistency, both over time and
between different organisations.

Inevitably however such reporting will involve qualitative

facts and judgements as well as quantifications. This
qualitativeness will inhibit comparability over time and will tend to
mean that such impacts are assessed differently by different users
of the information, reflecting their individual values and priorities.

A lack of precise understanding of effects, coupled with the

necessarily judgmental nature of relative impacts, means that few
standard measures exist. This in itself restricts the inter-organisation
comparison of such information.
 Although this limitation is problematic for the development of
environmental accounting it is in fact useful to the managers of
organisations as this limitation of comparability alleviates the need to
demonstrate good performance as anything other than a semiotic.

1.4.3 Transparency

Transparency, as a principle, means that the external impact of the

actions of the organisation can be ascertained from that organisations
reporting and pertinent facts are not disguised within that reporting.
Thus all the effects of the actions of the organisation, including
external impacts, should be apparent to all from using the information
provided by the organisations reporting mechanisms. Transparency is
of particular importance to external users of such information as these
users lack the background details and knowledge available to internal
users of such information. Transparency therefore can be seen to
follow from the other two principles and equally can be seen to be a
part of the process of recognition of responsibility on the part of the
organisation for the external effects of its actions and equally part of
the process of transferring power to external stakeholders.

1.5 Conclusion

There is a sound business case for social responsibility.

-Department of Trade & Industry

As we can see, CSR is a broad subject which leads to a variety of

opinions and can be considered in a number of different ways. In the
rest of the book we will look at these aspects in more detail and at the
actual implementation of CSR in a business.
1.6 Changing emphasis in companies

Companies themselves have also changed. No longer are they

concerned with greenwashing the pretence of socially responsible
behaviour through artful reporting. Now companies are taking CSR
much more seriously not just because they understand that it is a key
to business success and can give them a strategic advantage, but also
because people in those organisations care about social responsibility.

So it would be reasonable to claim that the growing importance

of CSR is being driven by individuals who care but those
individual are not just customers, they are also employees,
managers, owners and investors of a company. So companies are
partly reacting to external pressures and partly leading the
development of responsible behaviour and reporting. So
accountability one of the central principles of CSR is much more
recognised and is being responded to by increasing transparency
another of the principles of CSR.

2. Introduction

2.1. Background and objectives

This article will discuss the different Corporate Social Responsibility
(CSR) issues that emerged within four multinationals (Apple, Canon, Coca-Cola
and Walmart). There is no clear definition of CSR. In Corporate Social
Responsibility, Legal and semi-legal frameworks supporting CSR Lambooy
gives an overview of several definitions of CSR.
The European Commission defines CSR as the responsibility
of enterprises for their impacts on society.
This is the definition which is the most suitable for the context of the
articles research question. As this article will focus on companies from the US
and Japan, the authors also provide an overview of the focus on CSR from the
US and Japanese perspective. In the US there is no governmental regulation
regarding CSR or business best practices. Instead, according to findings from
Bennett American, companies have a marked tendency to use codes of conduct.

The American CSR perspective could be described as following a principles-

based approach, with codes of conduct that prescribe values and principles
which company members as a whole should aspire to follow. In contrast,
Japanese companies prefer to focus on areas where their contributions can be
statistically measured.

Interest in social aspects of CSR is significantly less pronounced than in

other industrialized countries.
In Japan there are no specific provisions regulating CSR. However, the 1988
law that promotes specific non-profit activities is of major significance in this
context.
Early notions of CSR on an academic level can be traced back to the 1960s.
In 1991 Carroll presented CSR as a multi-layered concept that consists of four
interrelated aspects: economic, legal, ethical and philanthropic responsibilities.
Carroll proposed a pyramid that analyses the dimension of CSR. It starts
with economic responsibilities; companies are created to provide goods and
services to the public and to make a profit. This is the foundation upon which
the other three responsibilities rest. The second layer consists of the legal
responsibilities of a company. The ethical responsibilities are practices that have
not been codified into the law. Societal members expect a company to do what
is right and fair. Lastly, at the top of the pyramid companies have a philanthropic
responsibility. Business organisations are expected to be good corporate citizens
and to improve the quality of life.
Multinationals and their operations slowly began to be scrutinised by
different segments of society from the beginning of 2000.
CSR has evolved into a complex concept that is now a key component of
the corporate decision-making of a number of multinationals that are considered
to be the frontrunners in integrating CSR. However, this evolution came with a
cost that various corporations had to pay. Campaigns and public scandals
involving issues ranging from environmental pollution to child labour and racial
discrimination resulted in unwanted media attention. This raises the question of
whether reputation damage is a main motivation behind the adoption of CSR
policies by a multinational.
Due to the lack of public regulations regarding corporate best practices in
most countries, sustainability reporting has become increasingly relevant.
Although there is no specific regulation of CSR, according to the Modernisation
Directive (2003/51/EC) large companies are obliged to include financial and -
non-financial key performance indicators in their annual report. In this context
an annual report is considered a directors report. Together with the balance
sheet and a profit and loss account it represents the annual accounts.
The annual report also includes information on environmental and employee
matters. According to the Securities Exchange Act of 1934, the US Securities
and Exchange Commission (hereafter SEC) requires public companies to
disclose and report on certain types of business and financial data to the SEC
and the companys stockholders. The SEC has issued an interpretative release to
guide US public companies on the disclosure requirements related to climate
change. Transparency in corporate practices seems desirable for stakeholders.
 However, nowadays leading multinationals voluntarily prepare sustainability
reports based on the Global Reporting Initiative (GRI) Guidelines.The GRI
Guidelines are a set of guidelines for businesses created to stimulate socially-
responsible corporate behaviour.

The GRI was initiated in 1997 by the UN Environment Programme (UNEP)

and CERES. The GRI has developed reporting guidelines for companies to
assist them in disclosing non-financial information about the way they pursue
their activities. The guidelines address environmental and social conduct, but
also include other subjects, e.g. corruption and human rights.
This article provides an overview of four case studies regarding different
multinationals, namely Apple, Canon, Coca-Cola and Walmart. These
companies have been involved in CSR conflicts in
different areas. This article will investigate whether the conflicts have affected
the CSR policy of these multinationals and whether the companies subsequently
set concrete targets. Coca-Cola, for example, has set a target to reduce its overall
carbon footprint by 15% by 2020, compared to its 2007 baseline.
Two Dutch researchers, Alex van de Zwart and Professor Rob van
Tulder, of Rotterdam Erasmus University, conducted a study into civil
society campaigns.
Their research shows that companies that have been on thin ice
usually become leaders in the business sector concerning CSR issues.
The multinationals Apple, Coca-Cola and Walmart have been involved
in environmental and social conflicts. Coca-Cola was boycotted in
India because the local communities were suffering from droughts. In
1992 Walmart was caught using child labour in factories in
Bangladesh. In May 2010 newspapers reported on the suicides at
Apples manufacturer for iPhones and iPads, Foxconn. Overall Canon
has a detailed and clear CSR report and has not faced any major
scandals such as Coca-Cola, Walmart and Apple.

2.2. Methodology

The four cases will be compared by studying a CSR conflict that each one of the
multinationals faced and that became, to a certain extent, a turning point for the
CSR policies of these multinationals. Each of the multinationals response to the
conflict will be analysed, how the company resolved the conflict and whether
the company implemented specific CSR policies with measurable targets as a
response to the conflict. The research is based on desk research. The article
makes use of publicly available information on the companys website, online
newspapers and non-governmental organization (NGO) reports, as well as
academic journals and books.

The parent companies of the multinationals are based in different countries:

Japan and the US. This means that different legal systems and jurisdictions are
applicable. This article will not look at the legal systems of the US and Japan
concerning the disclosure of annual reports and sustainability reports, since this
exceeds the scope of the article.
3. Coca-Cola

3.1. Coca-Colas profile

Coca-Cola started its business in 1886 as a local soda producer in Atlanta,

Georgia (US) selling about nine beverages per day. By the 1920s, the company
had begun expanding internationally, selling its products first in the Caribbean
and Canadian markets and then moving in consecutive decades to Asia, Europe,
South America and the Soviet Union. By the end of the 20th century, the
company was selling its products in almost every country in the world. In 2005
it became the largest manufacturer, distributor and marketer of non-alcoholic
beverages and syrups in the world. Coca-Cola is a publicly-held company listed
on the New York Stock Exchange (NYSE).

3.2. Coca-Colas CSR policies and reporting

In 2007 Coca-Cola launched its sustainability framework Live Positively

embedded in the system at all levels, from production and packaging to
distribution. The companys CSR policy Live Positively establishes seven core
areas where the company sets itself measurable goals to improve the business
sustainability practices. The core areas are beverage benefits, active healthy
living, the community, energy and climate, sustainable packaging, water
stewardship and the workplace.
Coca-Cola has a Code of Business Conduct which aims at providing
guidelines to its employees on amongst other things competition issues and
anti-corruption. The company has adopted international CSR guidelines such as
Global Compact and Ruggies Protect, Respect and Remedy Framework
(Ruggies Framework),but these guidelines do not seem to be integrated into the
Code of Business. However, these CSR initiatives are included in other
activities or policies of the company. For instance, the UN Global Compact
principles are cross-referenced in the companys annual Sustainability Reviews
and Ruggies Framework is partly adopted in the companys Human Right
Statement. After the conflict in India, in 2007 Coca-Cola formed a partnership
with the World Wildlife Fund (WWF) and became a member of the CEO Water
Mandate, as water is one of the companys main concerns.
Every year Coca-Cola publishes a directors report denominated The Coca-
Cola Company Annual Report; the last one was published in March 2011 and
comprises the companys activities during 2010.

In this report there is a small section dedicated to CSR and it includes a

brief description of the initiatives in community development and water
preservation that the company has developed. Since 2001, Coca-Cola also
annually publishes a separate report devoted to CSR called The Coca-Cola
Company Sustainability Review. These reviews, which are published every two
years, are verified and assured by a third party, the sustainability rating firm
FIRA Sustainability Ltd. This verification provides moderate assurance on the
reliability of the information reported by Coca-Cola. Both reports the annual
company review and the sustainability reports are elaborated based on the GRI
G3 guidelines, which were adopted by the company in 2001. Due to its
relevance to Coca-Colas business, the company also annually reports on the
progress of the water stewardship programmes targets.

3.3. Coca-Colas conflicts

Several campaigns and demonstrations followed the publication of a report

issued by the Indian NGO Centre for Science and Environment (CSE) in 2003.
The report provided evidence of the presence of pesticides, to a level exceeding
European standards, in a sample of a dozen Coca-Cola and PepsiCo beverages
sold in India. With that evidence at hand, the CSE called on the Indian
government to implement legally enforceable water standards. The report gained
ample public and media attention, resulting in almost immediate effects on
Coca-Cola revenues.
The main allegations made by the NGO against Coca-Cola were that it sold
products containing unacceptable levels of pesticides, it extracted large amounts
of groundwater and it had polluted water sources.These conflicts will be
discussed under 3.3.1 and 3.3.2.
3.3.1. The presence of pesticides

Regarding the allegation about Coca-Cola beverages containing high levels

of pesticide residues, the Indian government undertook various investigations.
The government set up a Joint Committee to carry out its own tests on the
beverages. The tests also found the presence of pesticides that failed to meet
European standards, but they were still considered safe under local standards.
Therefore, it was concluded that Coca-Cola had not violated any national laws.
However, the Indian government acknowledged the need to adopt appropriate
and enforceable standards for carbonated beverages.
 In 2006, after almost three years of ongoing allegations, the CSE published
its second test on Coca-Cola drinks, also resulting in a high content of pesticide
residues (24 times higher than European Union standards, which were proposed
by the Bureau of Indian Standards to be implemented in India as well).
CSE published this test to prove that nothing had changed, alleging that the
stricter standards for carbonated drinks and other beverages had either been lost
in committees or blocked by powerful interests in the government.
Finally, in 2008 an independent study undertaken by The Energy and
Resources Institute (TERI) ended the long-standing allegations by concluding
that the water used in Coca-Cola in India is free of pesticides.
However, because the institute did not test the final product, other
ingredients could have contained pesticides.
3.3.2. Water pollution and the over-extraction of groundwater

Coca-Cola was also accused of causing water shortages in among other

areas the community of Plachimada in Kerala, southern India. In addition,
Coca-Cola was accused of water pollution by discharging wastewater into fields
and rivers surrounding Coca-Colas plants in the same community. Groundwater
and soil were polluted to an extent that Indian public health authorities saw the
need to post signs around wells and hand pumps advising the community that
the water was unfit for human consumption.
In 2000, the company established its production operations in Plachimada.
Local people claimed that they started experiencing water scarcity soon after the
operations began. The state government initiated proceedings against Coca-Cola
in 2003, and soon after that the High Court of Kerala prohibited Coca-Cola from
over-extracting groundwater. By 2004 the company had suspended its
production operations, while it attempted to renew its licence to operate. Coca-
Cola argued that patterns of decreasing rainfall were the main cause of the
draught conditions experienced in the area. After a long judicial procedure
and ongoing demonstrations, the company succeeded in obtaining the licence
renewal to resume its operations. In 2006 Coca-Colas successful re-
establishment of operations was reversed when the
government of Kerala banned the manufacture and sale of Coca-Cola products
in Kerala on the ground that it was unsafe due to its high content of pesticides.
However, the ban did not last for long and later that same year the High
Court of India overturned Keralas Court decision.More recently, in March
2010, a state government panel recommended fining Coca-Colas Indian
subsidiary a total of $47 million because of the damage caused to the water and
soil in Kerala. Also, a special committee in charge of looking into claims by
community members affected by the water pollution was set up.
The long legal procedures against the Indian government that Coca-Cola had
to face were not the only consequence of the conflict. The brand suffered a great
loss of consumer trust and reputational damage in India and abroad.
 In India there was an overall sales drop of 40% within two weeks after the
release of the 2003 CSE report. The impact in annual sales was a decline of 15%
in overall sales in 2003 in comparison to prior annual growth rates of 25-30%.
This highly publicised conflict in India also caught the attention of consumers in
the US. After a series of demonstrations by students who joined two activist
groups in the US, ten American universities temporarily stopped selling Coca-
Cola products at their campus facilities.

3.4. Coca-Colas CSR policies post-conflicts

Two years before the water conflict in India in 2003, Coca-Cola adopted the
GRI Guidelines and started reporting on sustainability. By 2003, the company
had already experienced a few CSR-related conflicts in other parts of the world.
However, none of them had the grave consequence of a loss of trust in the
company and its products by consumers and the public in general.
According to Pirson and Malhotra, the main reason why this controversy
ended so badly for Coca-Cola lies in its response to the problem. Coca-Cola
denied having produced beverages containing elevated levels of pesticides, as
well as having over-exploited and polluted water resources. By denying all
claims and trying to prove its integrity, instead of demonstrating concern
towards the situation, Coca-Cola failed to regain consumers trust. The Indian
population viewed Coca-Cola as a corporate villain who cared more about
profits than public health. In comparison, previous conflicts experienced by the
company in the US and Belgium were better handled because it included
stakeholder engagement in its strategy.
It appears that the company became aware of its mistake after the
controversy had been ongoing for a couple of years. In 2008 Jeff Seabright,
Coca-Colas vice president of environment and water resources, recognized that
the company had not adequately handled the controversy. He acknowledged that
local communities perception of their operation matters, and that for the
company () having goodwill in the community is an important thing.
Although Coca-Cola still denies most of the allegations, the reputational
damage experienced after the controversy in India pushed Coca-Cola to take
damage-control measures. Those measures at first consisted of statements to
confirm Coca-Colas integrity. For example, Coca-Cola dedicated a page in the
Corporate Responsibility Review of 2006 to address the controversy. The
statement consisted mainly of providing information supporting its good
practices and water management of its operations in India. But this statement
did little to combat the declining sales and increasing losses exceeding
investments.
Coca-Cola gradually changed its strategy to include damage-control measures
that addressed the Indian communities grievances. In 2008 the company
published its first environmental performance report on operations in India,
which covered activities from 2004 to 2007.It also created the Coca-Cola India
Foundation, Anandana, which works with local communities and NGOs to
address local water problems. But perhaps the most outstanding change of
strategy by Coca-Cola consisted of launching various community water projects
in India. An example is the rainwater harvesting project, where Coca-Colas
operations partnered with the Central Ground Water Authority, the State Ground
Water Boards, NGOs and communities to address water scarcity and depleting
groundwater levels through rainwater harvesting techniques across 17 states in
India. These techniques consist mainly of collecting and storing rainwater while
preventing its evaporation and runoff for its efficient utilisation and
conservation. The idea behind this is to capture large quantities of good quality
water that could otherwise go to waste. By returning to the ecosystem the water
used in its operations in India through water harvesting, the company expected
that this project could eventually turn the company into a net zero user of
groundwater by 2009.
In the 2012 Water Stewardship and Replenish Report, Coca-Cola stated that
its operations in India have achieved full balance between groundwater used in
beverage production and that replenished to nature and communities ahead of
the global target.
It appears that the controversy in India was a learning experience for the
company, and that it motivated the company to adopt a more proactive CSR
policy on a global scale that focuses on water management. In June 2007, Coca-
Cola implemented a water stewardship programme and committed itself to
reduce its operational water footprint and to offset the water used in the
Companys products through locally relevant projects.
To achieve those commitments Coca-Cola established three measurable
objectives:
Reducing water use by improving water efficiency by 20% over 2004
levels by 2012. The latest data available from 2010 shows a 16%
improvement over the 2004 baseline.
Recycling water through wastewater treatment and returning all water
used in manufacturing processes to the environment at a level that
supports aquatic life and agriculture by the end of 2010. By September
2011, the progress observed concerning this target was 96%.
Replenishing water used by offsetting the litres of water used in finished
beverages by 2020 through local projects that support communities and
nature (i.e. watershed protection and rainwater harvesting).
Currently, Coca-Cola reports that it holds a global portfolio of 386
community water partnerships or community-based replenish projects.61
By 2011, about 35% of the water used in finished beverages was
replenished.
 It is noteworthy that Coca-Cola publishes, in addition and separate to the
sustainability reports, an annual water report. In these reports the company
publishes assessments of and the progress in its water initiatives. Some of the
assessments are made by the Global Environment & Technology Foundation, an
American NGO experienced in facilitating the creation of public-private
partnerships.
Also in 2007, Coca-Cola entered into a partnership with WWF. Its core
objectives are increasing understanding on watersheds and water cycles to
improve Coca-Colas water usage, working with local communities in various
locations worldwide, and developing a common framework to preserve water
sources.
Finally, and also in the same year, the company became a member of the
public-private initiative CEO Water Mandate, which is a public-private initiative
that assists companies in the development, implementation and disclosure of
water sustainability policies and practices.
4. Walmart

4.1. Walmarts profile

Walmart Supercenters (hereafter Walmart) has a full offering of groceries

and general merchandise in a single store. Walmart offers to its customers a one-
stop shopping experience and is the largest private employer in the US as well
as being the worlds largest retailer. It has more than 10,130 retail units under 69
different banners in 27 countries. They all share a common goal: Saving people
money so they can live better.
Walmart employs 2.2 million associates worldwide68 and generated net sales
of $ 443 billion during the fiscal year of 2012.
Walmart was founded in 1962, with the opening of the first Walmart
discount store in Rogers, Arkansas (US). The company was incorporated as
Wal-mart Stores, Inc. on 31 October 1969.
The companys shares began trading on OTC (Over-The-Counter) markets
in 1970 and were listed on the NYSE two years later.

4.2. Walmarts CSR policies and reporting

Several authors have pointed to Walmart as an important emerging private

actor in the transformation of lawmaking in the CSR field, referring to it as a
global legislator.
They highlight how Walmart is able to use its contractual relationships to
regulate behaviour among its suppliers around the globe with respect to product
quality, working conditions for the suppliers employees, and ethical conduct.
 Since 2007 Walmart publishes its annual report on its website. It was initially
called the Global Sustainability Report and later changed to Global
Responsibility Report in 2011. Mike Duke, Walmarts CEO (Chief Executive
Officer), says This change reflects the new social and environmental
dimensions we have added to our efforts () We believe transparency and
accountability are part of being a good and responsible company.
Walmarts annual report publishes its constant and progressive work towards
social responsibility issues. The Global Responsibility Report 2011 is divided
into three main reporting parameters: Environment, Social and Goals.

Walmarts 2011 report covers every corner of CSR issues. It points out how
its successful Sustainability 360 model has helped Walmart to be the retail
leader in the market. It also communicates the significant progress made by and
the new reduction goals of greenhouse gas emissions of its supply chain by
2015. Walmarts financial contributions in kind, such as investments in
education, health, commitments to fight hunger, support for local farmers and
access to healthier and affordable food, can also be found in Walmarts Global
Responsibility Report 2011.
Walmarts current performance, policies and financial figures at first sight
portray Walmart as a role model company on CSR.

4.3. Walmarts conflicts

Walmart has faced many obstacles over the years. It seems that legal and
social challenges have acted as important reasons for the development of its
code of conduct and annual reporting. This statement can be illustrated in two
relevant cases: Walmart Stores Inc. v. Dukes et al. and the press reports accusing
Walmart of using child labour.

4.3.1. Walmart Stores Inc. v. Dukes et al.

Walmart Stores Inc. v. Dukes et al. started a decade ago and is still being
heard by the US Courts. It commenced as a national class action against
Walmart. Plaintiffs Betty Dukes, Patricia Surgeson, Edith Arana (plaintiffs),
on behalf of themselves and others similarly situated, allege that female
employees in Walmart and Sams Club retail stores were discriminated against
based on their gender. They stated that they were discriminated against
regarding pay and promotion to top management positions, thereby violating the
Civil Rights Act of 1964 .In 2004, the US District Court for the Northern
District of California certified a national class of female employees challenging
retail store pay and management promotion policies and practices under the
Federal Rule of Civil Procedure Article 23(b)(2). Walmart appealed to the Ninth
Circuit in 2005, arguing that the seven lead plaintiffs were not typical or
common of the class.
 Walmart appealed to the Supreme Court in August 2010 after the US Court of
Appeals for the Ninth Circuit upheld class certification.
Finally, the situation changed on 20 June 2011 when the US Supreme Court
reversed the class certification.
The Court held that the nationwide class certification approved by the lower
courts was not consistent with the Federal Rule of Civil Procedure Article 23(a)
governing class actions.
Justice Antonin Scalia concluded that the millions of plaintiffs and their
claims did not have enough in common:82 Without some glue holding the
alleged reasons for all those decisions together, it will be impossible to say that
examination of all the class members claims for relief will produce a common
answer to the crucial question why I was disfavored.
Dukes v. Walmart Stores, which in 2001 was estimated to comprise more
than 1.5 million women, included all women employed by Walmart nationwide
at any time after 26 December 1998.
It would have been the largest class action lawsuit in US history.
Despite the Supreme Court resolution, time, money and efforts invested up
to this point, the case did not end there. In October 2011, the plaintiffs lawyers
filed an amended lawsuit limiting the class to female Walmart employees in
California.86 This suit is expected to be the first of many additional class-action
lawsuits against the retailer at the state or regional level.
The new lawsuit, filed in the US District Court for the Northern District of
California, alleges discriminatory practices against more than 90,000 women
regarding pay and job promotion as well as requiring non-discriminatory pay
and promotion criteria.

4.3.2. Walmart caught using child labour in Bangladesh

At the end of 2005, the Radio Canada programme Zone Libre made public
the news that Walmart was using child labour at two factories in Bangladesh.
Children aged 10-14 years old were found to be working in the factories for less
than $50 a month making products of the Walmart brand for export to Canada.
Referring to Walmarts policy at that time consisting of cutting ties with
suppliers when violations occurred, the NGO Maquila Solidarity Network said
that cutting and running is the worst possible response to reports of child labour
or other sweatshop abuses.
Critiques said that it only discourages workers from telling the truth to
factory auditors for fear of losing their jobs and encourages suppliers to hide
abuses or to subcontract work to other factories that will escape inspection.
Nevertheless, Walmart ceased business with the two factories immediately.
Walmart alleges that despite its effort to inspect all factories, it is difficult to
enforce its own corporate code of conduct with thousands of subcontractors
around the world.
4.4. Walmarts CSR policies post-conflicts

Walmart developed its first Code of Conduct (COC) Standard for Suppliers in
1992,95 which mainly focuses on quality standards for suppliers only. However,
Walmarts first general report (Report on Ethical Sourcing), which includes
suppliers, customers and associates, was generated in 2006. This report was
elaborated after the filing of the lawsuit by the female employees in 2001 and
the damaging campaigns and press publications accusing Walmarts suppliers in
Bangladesh of using child labour. Walmarts reporting culture was imitated by
the rest of the companies in the market. Nowadays, Walmart has been qualified
as a global legislator in CSR policies.
The 2005 Report on Ethical Sourcing reported that Walmart had ceased to do
business with 141 factories, primarily because of underage labour violations.
The Report also contains a chart with the main violations found during the
audits. Gender discrimination was not mentioned at any stage throughout the
whole document. Walmarts 2005 and 2012 COC Standard for Suppliers
explicitly establish that Walmart would not tolerate the use of child labour.
The 2005 COC sets the age of 14 as the minimum age for suppliers and
subcontractors to hire workers.
It also specifies non-discrimination on the basis of gender and other personal
characteristics or beliefs. It is important to highlight that gender discrimination
was not given any special treatment in the 2005 COC or in the general report.
Walmarts zero tolerance policy for underage workers was changed in 2005.
If a single underage worker was found in a factory, Walmart ceased business
ipso facto. At the beginning of 2005, if two underage workers were found, the
factory would receive a warning and had to change and correct in the follow-up
audit.
If more than two underage workers were found or the company did not
make corrections, the factory was permanently banned from Walmarts
production. This decision was based on NGO advice from the Bangladesh case
mentioned in the above section. If Walmart cuts business with these factories,
many workers could be laid off for lack of production, suppliers will hide abuses
and workers will not tell the truth to auditors in order not to lose their jobs.
Walmart has a strict corporate code of conduct in the industry but according to
investigations Walmart is not able to enforce its code in developing countries.
Currently, Walmart publishes a full and complete report on CSR issues
called Global Responsibility Report which covers the three dimensions of
People, Planet, Profit. This report emphasizes gender equality and a diverse
workforce.
Walmart has a Gender Equality and Diversity gender policy that can be
found in its Global Responsibility Annual Report. In 2009, Walmart took the
commitment one step further with the incorporation of the Advisory Board on
Gender Equality and Diversity.
 The board is aimed at providing equal and enhanced opportunities for all in
top leadership roles.106 These policies have generated an increase in female
officials and managers from 23,873 employees in 2005 to 25,246 employees in
2010.
Walmart has also committed itself to achieving three goals in its
Sustainability Report: using 100% renewable energy, creating zero waste, and
selling products that sustain people and the environment. These criteria are
established and measured by Walmart at the end of the 2012 report. Walmart
indicates every year its completed goals and the progress in the ones that have
not yet been achieved. An example of quantifiable measures is creating a zero
waste Walmart by eliminating landfill waste from US stores by 2025.
Although Walmart does not follow the GRI Guidelines, it has measurable
targets on audits. For instance, Walmart requires its suppliers who produce toys
in China to sign up to the ICTI CARE Process. The ICTI CARE Process was
created by the international toy industry to achieve a safe and human working
environment for toy factory workers worldwide. In addition, Walmart conducts
internal validation audits by Walmarts Ethical Sourcing team. These validation
audits ensure that the ICTI CARE process is properly implemented and that it
meets Walmarts Standards for Suppliers.

5. Apple

5.1. Apples profile

Apple Inc. (hereafter Apple) was established in 1977 and is registered on the
NASDAQ Global Select Market exchange.110 According to its Form 10-K111
Apple designs, manufactures and markets mobile communications, media
devices, personal computers and portable digital music players, and sells a
variety of related software, services, peripherals, networking solutions, and
third-party digital content and applications.112 Its products are sold through
Apples retail stores, online stores and third parties.
Apple is a world leader in producing innovative electronic goods and
technology. In 2011 Apples net sales were estimated at $108.2 million. Its net
sales in 2011 increased by 60% compared to 2010.113 Apple worldwide
employs 60,400 full-time people and 2,900 temporary employees and
contractors. The company utilizes outsourcing through the manufacturing of its
products overseas; most of the factories are located in Asia.
4.2. Apples CSR policies and reporting
As required by the SEC, Apple has made the Form 10-K annual report available
on its website. The Form 10-K contains amongst other things information on
Apples business strategy and organisation, the companys risk factors, legal
proceedings and financial data. It also includes the business conduct policy of
Apple: Apple conducts business ethically, honestly and in full compliance with
all laws and regulations. This applies to every business decision in every area of
the company worldwide.114 Furthermore, the business conducts deals with
corporate governance, information disclosure, non-corruption and bribery,
environmental health and safety.
Apple has considered the GRI G3.1 indices relating to the economy, the
environment, human rights, society and labour for its publication on
Governance, Product Environmental Reports, Recycling and Facilities
Environmental Report and Supplier Responsibility. For Supplier Responsibility,
Apple, for example, has taken into account the indicator which reports on
measures it has taken to contribute to the elimination of child labour. With
regard to Product Environmental Reports, Apple has used the EN26
performance indicator,115 and sets out initiatives to lessen the environmental
impact of its products. Apple designs its products with the aim of being as
energy efficient as possible, and it is the only company that can claim all
electronic goods are Energy Star qualified.116 Apples products have become
more powerful while, at the same time, fewer materials are used and fewer
carbon emissions are generated.

Almost all of Apples products are outsourced for manufacturing overseas.

On its Supplier Responsibility website Apple states: Apple is committed to the
highest standards of social responsibility across our worldwide supply chain. We
insist that all of our suppliers provide safe working conditions, treat workers
with dignity and respect, and use environmentally responsible manufacturing
processes. Our actions from thorough site audits to industry-leading training
programs demonstrate this commitment.117
The Supplier Code of Conduct (Supplier Code) outlines Apples expectations for
the suppliers it does business with.118 As a condition for doing business with
Apple, suppliers have to commit to the Supplier Code. For the Supplier Code,
Apple has adopted the Electronics Industry Code of Conduct (EICC),119 the
guidelines and standards for the electronics sector. Through onsite audits Apple
ensures that suppliers comply with the Supplier Code. The final assembly
manufactures are audited every year and the components suppliers are audited
arbitrarily. Apple obliges its suppliers to respect the human rights of its workers,
to inform the workers of their rights, and to treat them with dignity and respect.
Apple requires from its suppliers that they prevent discrimination, involuntary
and underage labour, excessive working hours and that they pay workers with
wages and benefits in accordance with the applicable laws and regulations.

4.3. Apples conflicts

The limited transparency of Apples supplier sustainability policy has often been
criticized in the media.120 In February 2010 Apple also turned down two
shareholders sustainability proposals to establish a sustainability report on
Apples environmental policies and the impact that climate change has on the
company. The other proposal was to establish a board of directors sustainability
committee.

4.3.1. Labour and human rights

A well-known conflict involving Apples suppliers is the suicides at Foxconn.It
is the largest contracted electronics manufacturer in the world, with dealings
involving Dell and Sony. Foxconn is the manufacturer of iPhones and iPads and
employs over 900,000 workers, of whom 420,000 employees work at the
Foxconn Shenzhen plant. This plant covers 15 factories, including dormitories, a
hospital, a bank, a grocery store and restaurants. The workers live and work
inside the complex.
In 2006 the Chinese local press reported on the excessively long working
hours and the discrimination of mainland Chinese workers by Taiwanese
superiors. In May 2010 several media sources reported several cases of suicide
at Foxconn. From 2009 to 2010 a total of 13 workers had committed suicide.
The first worker, Sun Danyong, committed suicide after he had been
interrogated on the loss of an iPhone 4 prototype that he had in his
possession.125 When the former CEO Steve Jobs was asked about the suicides
at Foxconn, he responded: Foxconn is not a sweatshop.126
During an undercover investigation it was discovered that the reason for the
multiple suicides was related to internal management.127 The facilities of
Foxconn are fine, but the management is poor, revealed Zhu Guangbing, who
organised the investigation. According to Audrey Tsui,128 a professor at the
National University of Singapore Business School, Foxconn maintains a
military-style management approach. The workers were not allowed to interact
with each other. Workers who violated the rule were penalized with a fine or
were held to be in contempt by the manager.
The weekly working hours of workers were up to 70 hours, ten hours above
the maximum hours set by Apples Supplier Code. The Foxconn factory has
good facilities. The workers have access to swimming pools and tennis courts.
Foxconn organises activities such as chess clubs, mountain climbing or fishing
expeditions. But with a 70-hour workweek, employees did not have any time to
enjoy these facilities.
However, interviews with several Foxconn workers by Dreamworks China
revealed that not all the employees were dissatisfied. Some believed that the
working conditions at smaller factories are worse. One of Foxconns workers
stated that employees at Foxconn thought the media had exaggerated the
suicides regarding their connection to Foxconn and that possibly some suicides
had a sentimental or romantic cause.130
In February 2011, the media reported the child labour issues had worsened at
the suppliers for computers, iPods and iPhones.131 Apples Supplier
Responsibility Report 2011 revealed 91 underage workers at the suppliers.
4.3.2. Workers health and safety
Concerning workers health and safety conditions at the suppliers, in May 2010
two workers were killed and sixteen employees were injured during an
explosion at Foxconn. An Apple spokesperson stated: We are deeply saddened
by the tragedy at Foxconns plant in Chengdu, and our hearts go out to the
victims and their families. We are working closely with Foxconn to understand
what caused this terrible event.132 In the same month, The Guardian reported
that workers from Wintek had been poisoned by n-hexane, a toxic chemical used
to clean the touch screens of iPhones. The employees complained that the
compensation Wintek offered for the health damage was not sufficient. The
workers who did receive compensation were asked to resign from their jobs.133
4.4. Apples CSR policy post-conflicts
Apple makes sure that suppliers comply with the Supplier Code by conducting
audits. The audits cover working and living conditions, health and safety but
also environmental practices at the facilities. According to Apples Supplier
Responsibility Report 2010, Apple conducted 102 audits in 2009. In 2011 Apple
conducted 229 audits, an increase of 80% compared to 2010. An audit is
conducted by an Apple auditor and supported by local third-party auditors.134
In the Supplier Responsibility Report 2010, published in February 2011,
Apple included a paragraph responding to the suicides at Foxconn.
In the Supplier Responsibility Report 2011, Apple reports that during
inspections Apple discovered ten facilities with underage labour violations. One
of the facilities had a large number of underage workers. Because the
management did not want to address the problem, Apple terminated businesses
with this facility.135 Where underage labour has been discovered, suppliers are
required to pay educational expenses, living stipends and lost wages for six
months or until the worker reaches the age of sixteen.
In November 2010, Apple set up a training programme to prevent the future
hiring of underage workers. The human resources managers are trained in
Chinese labour law. Training human resources managers, however, will not
solve child labour issues. When the costs of labour, energy and raw materials
rise and there is a shortage of labour, factory owners are forced to cut costs or to
find cheaper labour. Child labour can easily be hidden by providing fake wages
and work schedule data. Also, it is difficult to prevent child labour when
underage workers want to work to provide for their families. The Supplier
Responsibility Report of 2012 states that suppliers are obliged to return
underage workers to school and finance their education through Apples Child
Labour Remediation Program.136 Regarding abolishing underage labour, Tim
Cook, the CEO of Apple, stated: We would like to totally eliminate every case
of underage employment. We have done that in all of our final assembly. As we
go deeper into the supply
chain, we found that age verification system isnt sophisticated enough. This is
something we feel very strongly about and we want to eliminate totally.137
 In the Supplier Responsibility Progress Report of 2011 Apple addressed the
issue of the use of n-hexane. Apple obliged Wintek to stop using n-hexane and
required Wintek to repair its ventilation system and to work with a consultant to
improve its environmental health and safety systems.138
In order to take action it is important for companies to be transparent about
their supply chain. In February 2012 Apple announced it would be the first
technology company to join the Fair Labour Association (FLA) as a
participating company.139

6. Canon

6.1. Canons profile

Canon Inc. (hereafter Canon) was founded in 1937. Its headquarters are in Japan
and the company is listed on the NYSE. Although the digital camera is the most
well-known product to consumers, Canon also produces devices for office and
industry use.140 Canon is planning to invest more in medical image recording
equipment and ophthalmic devices.141 Canons regional headquarters are
established on every continent and, together with other companies, they form
the Canon Group. Canon has a global network of more than 200 companies and
employs more than 160,000 people worldwide. Canon Inc. alone employs more
than 26,000 people.142 It is dedicated to advancements in technology and
commits approximately 10% of its total revenue each year to Research &
Development. Canon is consistently one of the top few companies to be granted
the most number of patents over the last 18 years.143 In the year 2010 Canon
Groups net sales were estimated at $45,764 million.144
6.2. Canons CSR policies and reporting
It seems that Canon invests a great deal of effort into its CSR reporting. It
publishes a separate sustainability report. Apart from that, a lot of information
regarding its compliance with different standards and its positive role in society
(fund raising and other activities) can be found on its webpage. The company
introduced a CSR strategy based on the Kyosei philosophy in 1988.145 At that
time this philosophy was not yet widely used, but in recent years the philosophy
has come to be commonly used in Japan, in business, politics and in daily
life.146 It is used to imply a range of concepts and meanings. Canon refers to
kyosei defined as living and working together for the common good.147
Currently, Canon has a CSR policy and a CSR mission statement.148 It has
Canons Global Code of Conduct.149 Canon follows the GRI Sustainability
Reporting Guidelines 2006150 and its CSR report
is examined by an external auditor.151 These external commentators are asked
to use a part of the G3 Sustainability Reporting Guidelines as the basis for
developing their opinions, namely four reporting principles relating to defining
the content of the report.152
Canon is listed in different sustainability indexes, such as the Morningstar
Socially Responsible Investment Index (Japan) and the Ethibel Sustainability
Index Global (Belgium).153 On Canons website information is included about
its attempt to reduce CO2 emissions, setting up a consultation process with
stakeholders and conducting environmentally-friendly manufacturing. The
Canon Group Environmental Charter addresses the theme of maximizing
resource efficiency from the dual approaches of environmental assurance and
economic activities. It considers overall product lifecycles and sets
environmental assurance activities for the entire group.154 Relief activities and
fund-raising campaigns are carried out in regions affected by sudden disasters
(earthquakes, heavy snowfall, floods, typhoons, fires).155 The company is also
active in recycling. For example, in Singapore it recently joined other
companies in a cartridge recycling project.156 A Cradle-to-Cradle philosophy
was used to design the newest generation Energy Star-compliant Canon devices
which consume significantly less energy in their manufacture, transportation and
use. The result of this is a smaller total carbon footprint.157 These technologies
have reduced CO2 emissions by approximately 11,000,000 tons and saved
consumers 350 billion Japanese Yen in electricity costs from 2003 to 2010.158

6.3. Canons conflicts

6.3.1. Stress-related illnesses
When trying to analyze the companys behaviour it was difficult to find reliable
independent articles. Nevertheless, one article from 2007 deserves attention.159
In Canon Denmark a problem of stress-related illnesses occurred. These
illnesses were the result of changes in the organization and increasing pressure
to perform. As this caused many problems for business managers, human
resources (HR) and increased the workload for other employees, Canon
Denmark started to develop a policy to reduce stress in the workplace. While it
was carrying out research for that policy, the government of Denmark also
strengthened the anti-smoking legislation and the works council was demanding
changes to a number of existing policies. The company realized that a specific
stress-reduction policy was not enough and started to examine not only its own,
but the European and global Canon policies as well.160
6.3.2. Employees not allowed to sit down during working hours
Internet research also presented a couple of articles related to Canon Electronics
Inc., a company based in Japan, forcing its employees to stand during their work
and demanding that they walk at a specific pace. As it was not possible to find
an NGO report on this topic or any other completely reliable source, this
research is based on blogs and comments by alleged employees. In Hisashi
Sakamakis theory (Representative Director of Canon Electronics) forcing
employees to stand not only saves money but increases productivity and
enhances employee relationships.161 It can be called into question whether
removing chairs enhances productivity in the long run. It is fair to assume that
people feel under pressure when they are not allowed to sit down or when they
are forced to walk at a prescribed speed. The previously mentioned Canon
Denmark case clearly showed that work-related stress has a negative effect on
the whole working process and that good management focused on preventing
stressful situations is crucial. Good practices from one company should apply to
the whole group. The annual report should provide information on the way the
company follows best practices in its worldwide operations and this should well
exceed legal requirements.162 Clear conclusions on how this case was
addressed, if addressed at all, cannot be made due to the non-ability of the
author of this article to understand the Japanese language. But at the same time
it points to a lack of transparency in reporting on this issue. An official report
from the company would be appreciated as it is difficult to assess the situation
from an European point of view.

6.4. Canons CSR policies post-conflicts

This chapter of the article focuses on comparing Canons sustainability reporting
on employee matters between the years 2007 and 2010. Since its founding,
Canon has promoted Health First as one of its Guiding Principles. Even in the
Canon Inc. sustainability report of 2007 it can be read that Canon took action in
preventing lifestyle-related diseases. With the government enactment of health-
promoting policies and laws, such as Health Japan 21 and the Health Promotion
Law, lifestyle checks and tests are performed during periodic medical
examinations. Based on these examination results, all Canon Group companies
in Japan have set common numerical targets with the aim of preventing
lifestyle-related diseases. Their focus was (and still is) on cholesterol and
smoking rates.163
Canons experience in managing stress, from the previously mentioned
Canon Denmark case, had convinced the company to focus on prevention, rather
than the treatment of problems. A clear shift from reactive to proactive
management was made. When looking through its webpage, this is now clearly
seen.
Canon also took the opportunity to develop action-based policies. In August
2007 Canon launched a new policy that covered topics such as: Work-life
balance, aging workforce, health and safety, stress management, respect and
tolerance, smoking, alcohol and substance abuse, nutrition and exercise. Some
of these policies can also be measured. To ensure an appropriate work-life
balance excessive working hours were constrained through the strict
implementation of a no-overtime day. During 2009, an average in-house ratio
of 80% adherence to prescribed working hours on no-overtime days was
achieved and the number of total overtime hours worked per employee for that
year was down by approximately 100 hours from 2008.164 On no-overtime
days in 2010 the same 80% average of employees left work at the designated
time as the year before.165 Data can be found for cholesterol and smoking
targets and performance. From 2004 to 2006, smoking rates dropped from 33 to
30%, exceeding the goal of 31%. The target of a 10% decrease regarding high
cholesterol was not achieved; the report stated that it had dropped from 11.7 to
11%.166 In 2010 the smoking rates dropped to 27.5% and high cholesterol to
9.2%.167 For the aging workforce, Canon implemented a system for re-
employing retired employees until the age of 65. In 2006, 73 of the 211 who had
reached retirement age chose for re-employment, and by the end of that year 177
were working under this system.168 In 2010, 139 of the 234 employees who
had reached retirement age chose for re-employment, with 451 working under
this system by the end of that year.169 The initial focus of the policy in 2007
was stress management for all employees. It developed a series of seminars for
employees on the topic. Concerning this issue it increased its focus on soft (i.e.
non-cash) benefits and managers competence coaching and leadership, it
decreased the long-term absence rates, it allowed HR to focus on strategic
workforce planning and development issues, it developed HR and management
competences, and it structured the approach to deal with stress.170
The sustainability report of 2011 mentions that Canon organised seminars
for managers in China and Vietnam and intercultural training seminars at
operational sites in Europe.171 In addition, research shows that there has been a
shift from reporting on basic needs to reporting on intellectual improvement.
The Canon Europe Sustainability Report 2010-2011 shows its active
encouragement for employees to have a healthy work and life balance.172 But
greater emphasis is given to education, development and performance. As
almost three-quarters of the employees expressed their overall satisfaction with
working for Canon,173 apparently Canon met their needs and it is time for
Canon to set higher goals.
To sum up, in the case of Canon and CSR it is about meeting the legal
requirements and also exceeding the minimum CSR standards. This brief
overview has focused on employee matters as problems in other areas of CSR
were not addressed in the available resources. The case study presents a change
in Canons CSR reporting from a reactive to an active approach. The Canon
reports mainly emphasize environmental reporting; however, that exceeds the
scope of this article (as it does not mention issues). As Canon meets CSR
standards it should be encouraged to go even further as this is the area of the law
that brings prosperity to society. Canons development should therefore never be
finished.
7. Comparing the different case studies

This section will provide a comparison of the companies response to the

conflicts studied and whether such conflicts had an effect on their CSR policy.
In order to compare the companies CSR policies it is important to recognise
the distinction between the four companies. The parent companies of Apple,
Coca-Cola and Walmart are based in the US, while Canon is situated in Japan.
Because the parent companies are based in different countries, different legal
systems and jurisdictions apply. However, the multinationals are US-listed
companies on the NASDAQ (Apple) and NYSE (Canon, Coca- Cola and
Walmart).

7.1. Reporting according to sustainability guidelines

Coca-Cola, Canon and Walmart have an extensive CSR report. Unlike Coca-
Cola, Canon and Walmart, Apple does not publish a separate sustainability
report but publishes information on the environment and supplier responsibility
on its website. Coca-Cola has committed itself to a series of quantifiable targets
on which it reports on an annual basis. The company reports using GRI G3.1
guidelines. The report is verified by a third party. Although Walmart has a large
sustainability report, it is the only company that does not follow the GRI
Guidelines. Despite the fact that Walmart does not have its sustainability report
externally verified as a whole, the greenhouse gas emissions inventory and
targets are verified by the Environmental Resources Trust.174 For the
publication on governance, the environment and suppliers responsibility, Apple
has also considered the GRI G3.1 Guidelines. For its Supplier Code Apple has
adopted the EICC guidelines, which provide guidelines on Labour and Human
Rights, Health and Safety, Environmental Impact, Ethics and the Management
System. Canon, on the other hand, is not a member of EICC. For Canons
sustainability report and the extensive information on its website, Canon has
also adopted the GRI Guidelines. For a review of and comments on Canons
sustainability report, Canon has asked the external experts to follow the GRI
Guidelines.
6.2. The companies response to the conflicts
As was illustrated in the case study on Coca-Cola, the company reacted slowly
to the conflict in India. The initial reactions of the company were limited to
attempting to prove that some of the allegations against it were wrong. Thus,
Coca-Colas strategy was focused on establishing a corporate image of integrity
and on regaining consumer trust by, for example, addressing the conflict and
justifying its position in the companys Corporate Responsibility Review of
2006. However, the damage that Coca-Colas operations had caused was too
severe to be solved through statements or attempts to be transparent about the
conflict. Even though some of Coca-Colas actions did not result in a violation
of Indian laws such as the claim that Coca-Colas beverages contained illegal
levels of pesticides the reputational damage was disconcerting. Losing access
to such an important market and allowing a stained reputation to affect the
companys business in other locations (for example, at various University
campuses in the US) override the costs of implementing a comprehensive CSR
policy such as the one it now has.
According to legal analysts, Walmart is the most often sued company in the
US with an estimated number of 8,000 lawsuits being filed against it so far.175
Such conflicts have had adverse effects on Walmarts reputation. In 2004
McKinsey & Company prepared a confidential report for Walmart stating that 2
to 8% of Walmarts consumers have stopped shopping at Walmart because of the
negative publicity.176 Also, when NBC News announced its report on
Walmarts suppliers using child labour, Walmarts shares decreased by $2.375 in
just two days.177 The class action lawsuit of 2001 against Walmart, alleging
gender discrimination in the workplace, received a lot of media attention.
Despite the fact that the lawsuit, if successful, would have been the largest of its
kind in US history, Walmart responded to the conflict by fighting back and
contesting the charges. But the Dukes v. Walmart Stores case did not proceed
when the US Supreme Court reversed the case for being inconsistent with the
legislation on class actions. Nonetheless, Walmart took some steps to implement
CSR measures and policies to prevent discrimination. However, Walmarts
female employees have taken separate lawsuits against Walmart and have filed
them in various states in the US that are still in progress.
In 1992 the media exposed the fact that Walmarts suppliers in Bangladesh
were using child labour. Undertaking audits on foreign factories was a corporate
practice of the multinational. In its 2005 Report on Ethical Sourcing, Walmart
reported having increased audits from 8 to 20% of the total audits. This report
also finds an increase in workers age violations by suppliers factories. The
company claimed in the same report that the increase in violations was due to
Walmarts adoption of more rigorous standards, including an increase in
unannounced audits, and a reclassification of violations strengthening their
severity although the rating criteria to determine what a minor and moderate
offence are is not reported by Walmart.
 The company pledged to be using the audits on its suppliers to improve
working conditions in factories by, for instance, giving suppliers the opportunity
to remedy the underage-related violations instead of breaking the business
relationship. However, many still criticise the fact that Walmarts corporate
ideology consisting of offering low prices everyday is part of the source of the
child labour problem not only in Bangladesh, but along its entire supply chain. It
is argued that Walmart, in its efforts to maintain operations costs as low as
possible, is paying its suppliers too little to meet even minimal standards.178
The medias reports on the suicides at Foxconn, the underage labour and the
poisoning of workers by n-hexane also had adverse impacts on Apples image.
On 30 March 2012, the day after the FLA published the results of its
investigation into Foxconn, Apples shares dropped by 1.69%. Apples response
was to address these issues in a separate paragraph in its annual Supplier
Responsibility Progress Report 2011. Regarding the underage labour, Apple
stated that it demands that suppliers take instant remedies to send the children
back to school, to pay for their education, and to prevent the future hiring of
children.
Concerning the poisoning by n-hexane, Apple required Wintek to discontinue
the use of n-hexane and to repair its ventilation system.
The case studies of Apple and Walmart show that both companies suppliers
were caught using underage labour. However, the companies had, at the time of
the conflicts, different policies on child labour. According to Walmarts Code of
Conduct Standard for Suppliers 2005, the minimum age for employment or
work shall be fourteen years of age. On the other hand, Apples Supplier Code
sets a more strict minimum age for employment. The workers have to be fifteen
years of age, or the minimum age for employment that is set in that country or
the age for completing education in that country, whichever is higher.
Canon appears to be a company with the least amount of problems. Although
due to the lack of sufficient information no strong conclusions can be drawn,
there are three observations that can be made based on what was found. Firstly,
in this research it became evident that, from the four multinationals studied,
Canon is the company with the longest history of implementing what we now
refer to as CSR. Canon appears to be a company that is true to its Japanese
origins with the corporate philosophy of kyosei as part of its global corporate
plan.179 Canons case could then be seen as following a reverse path towards
corporate responsibility in comparison with the other three companies here
studied. Instead of arguing that conflicts have a relevant effect on a companys
CSR policies, it could be said that Canons long-established ideology of kyosei
as part of Japanese culture is an important factor which drives responsible
conduct and prevents conflicts. This hypothesis, however, would require further
research to find an answer and is beyond the scope of this article.
Secondly, it was found in Canons case study that, even though the few
problems found were not severe, Canon seemed to be serious about the case of
stress-related illnesses in Denmark. Canons approach to that issue appears to be
more proactive in comparison to the other companies studied. Whereas other
companies would have viewed stress-related illnesses as an insignificant issue,
Canon viewed increasing employees well-being as an opportunity to improve
its policies both in Denmark and in its global operations; perhaps because
reducing stress improves productivity. This could be a good example of how
having higher standards when assessing problems can prevent them from
becoming greater, or can simply improve the company as a whole including its
employees. However, we shall not try to claim too much based on this single
case. It is important to keep in mind that such a proactive approach was taken by
a subsidiary of Canon located in one of the richest and most politically-
advanced countries in the world. Perhaps such socially-responsible behaviour is
not being observed by other subsidiaries of Canon in developing countries,
where regulations and law enforcement are less stringent. But even when taking
such a precaution, it is still not clear why Canon has not experienced lawsuits or
scandalous media attention like the other multinationals studied here have done.
These puzzling observations could be an interesting topic for further research
that can potentially find how a multinational has successfully implemented a
CSR policy.

And thirdly, in comparison with other mentioned companies that reported or

acknowledged, to some extent, the existence of past conflicts, Canons
sustainability report does not refer to concrete issues. This could be due to the
fact that, unlike in the cases of the other companies, no major scandals have
occurred. Even though Canons sustainability reporting is extensive, it does not
address, for example, the stress-related illness issues in Denmark. This could
raise doubts about to what extent Canon is being transparent about the
challenges it faces.
7.3. The effect of a conflict on a companys CSR policy
The case studies evidenced changes in the companys CSR policies after
experiencing a conflict. Nowadays, Coca-Cola implements various initiatives
tailored to address the water problems in India, which includes research,
partnerships with the Indian local government and international organizations
and community projects. Moreover, the company did not stop there. Water
management is one of the core elements of Coca-Colas global CSR policy and
the company is committed to meet targets concerning water management
efficiency. Coca-Cola does not admit that the conflict in India was the main
motivation.
Concerning the poisoning by n-hexane, Apple required Wintek to discontinue
the use of n-hexane and to repair its ventilation system.
The case studies of Apple and Walmart show that both companies suppliers
were caught using underage labour. However, the companies had, at the time of
the conflicts, different policies on child labour. According to Walmarts Code of
Conduct Standard for Suppliers 2005, the minimum age for employment or
work shall be fourteen years of age. On the other hand, Apples Supplier Code
sets a more strict minimum age for employment. The workers have to be fifteen
years of age, or the minimum age for employment that is set in that country or
the age for completing education in that country, whichever is higher.
Canon appears to be a company with the least amount of problems. Although
due to the lack of sufficient information no strong conclusions can be drawn,
there are three observations that can be made based on what was found. Firstly,
in this research it became evident that, from the four multinationals studied,
Canon is the company with the longest history of implementing what we now
refer to as CSR. Canon appears to be a company that is true to its Japanese
origins with the corporate philosophy of kyosei as part of its global corporate
plan. Canons case could then be seen as following a reverse path towards
corporate responsibility in comparison with the other three companies here
studied. Instead of arguing that conflicts have a relevant effect on a companys
CSR policies, it could be said that Canons long-established ideology of kyosei
as part of Japanese culture is an important factor which drives responsible
conduct and prevents conflicts. This hypothesis, however, would require further
research to find an answer and is beyond the scope of this article.
Secondly, it was found in Canons case study that, even though the few
problems found were not severe, Canon seemed to be serious about the case of
stress-related illnesses in Denmark. Canons approach to that issue appears to be
more proactive in comparison to the other companies studied. Whereas other
companies would have viewed stress-related illnesses as an insignificant issue,
Canon viewed increasing employees well-being as an opportunity to improve
its policies both in Denmark and in its global operations; perhaps because
reducing stress improves productivity. This could be a good example of how
having higher standards when assessing problems can prevent them from
becoming greater, or can simply improve the company as a whole including its
employees.

However, we shall not try to claim too much based on this single case. It is
important to keep in mind that such a proactive approach was taken by a
subsidiary of Canon located in one of the richest and most politically-advanced
countries in the world. Perhaps such socially-responsible behaviour is not being
observed by other subsidiaries of Canon in developing countries, where
regulations and law enforcement are less stringent.
But even when taking such a precaution, it is still not clear why Canon has
not experienced lawsuits or scandalous media attention like the other
multinationals studied here have done. These puzzling observations could be an
interesting topic for further research that can potentially find how a
multinational has successfully implemented a CSR policy.
And thirdly, in comparison with other mentioned companies that reported or
acknowledged, to some extent, the existence of past conflicts, Canons
sustainability report does not refer to concrete issues. This could be due to the
fact that, unlike in the cases of the other companies, no major scandals have
occurred. Even though Canons sustainability reporting is extensive, it does not
address, for example, the stress-related illness issues in Denmark. This could
raise doubts about to what extent Canon is being transparent about the
challenges it faces.

7.3. The effect of a conflict on a companys CSR policy

The case studies evidenced changes in the companys CSR policies after
experiencing a conflict. Nowadays, Coca-Cola implements various initiatives
tailored to address the water problems in India, which includes research,
partnerships with the Indian local government and international organizations
and community projects. Moreover, the company did not stop there. Water
management is one of the core elements of Coca-Colas global CSR policy and
the company is committed to meet targets concerning water management
efficiency. Coca-Cola does not admit that the conflict in India was the main
motivation
behind the adoption of its ambitious water management policies. However,
given the severe image damage and the consequent revenue losses experienced
it is very likely that the conflict in India influenced the corporate decision to
implement a CSR policy on water management efficiency in its global
operations. Also, Coca-Cola has improved its reporting activities by being up to
date with the advances in GRI guidelines.
Walmart also updated its policies against discrimination. Its Global
Responsibility Report emphasizes gender equality, a diverse workforce and
appointing women to top management positions. Walmart has incorporated an
Advisory Board on Gender Equality and Diversity that aims to provide equal
opportunities in leadership positions. The report even dedicates a separate
paragraph on Empowering women at Walmart.

Regarding Walmarts underage labour issue in Bangladesh, in 2005 Walmart

changed its zero tolerance child labour policy due to NGO Maquila Solidarity
Networks advice. Now, instead of immediately cutting business relationships
with suppliers hiring up to two underage workers, they receive a warning and
are obliged to take corrective measures for the next audit. Only when the
supplier has hired more than two underage workers and has not corrected the
situation does Walmart permanently terminate business relationships. This new
policy was adopted in order assure that suppliers report the reality of working
conditions.
Apples suppliers have often been involved in public scandals. In order to
ensure that Apples suppliers comply with the Supplier Code, the suppliers are
subjected to onsite audits by Apple auditors, supported by local third-party
auditors. In 2011 Apple carried out 229 audits, 80% more than in 2010. To
abolish child labour Apple has set up a Child Labour Remediation Program.
Apple has received criticism about not being transparent. But after the scandals,
Apple has not only addressed the conflicts in its Supplier Responsibility
Progress Reports but in January 2012 for the first time Apple released a list of
97% of its suppliers. Apple has also invited ABC News to Foxconn to look at
the working and living conditions at the plant. On top of that, Apple has set a
new standard in transparency; in February 2012 Apple announced it will be the
first participating technology company to join the FLA. The Foxconn audit
showed at least 50 violations, most of them violating Chinas labour law and
Apples Supplier Code of Conduct on excessive overtime.
Finally, Canons lesser problem of stress-related illnesses was taken very
seriously by the company. As previously mentioned, the company implemented
changes in the CSR policies of the Danish subsidiary itself, as well as in
Canons global policy.

To conclude, reputation damage can be an important factor for adopting and

adjusting a CSR policy so as to contribute to a better society. The media,
campaigns and other civil society actions can affect companies prestige or
consumer trust in their products and can decrease customers levels of
consumption, as well as the share prices of public companies. These risks can
motivate companies to take active measures to prevent conflicts with their
stakeholders. Thus, the adoption of CSR policies can serve as another effective
way for companies to manage risks and avoid tremendous losses or penalties
due to a lack of appropriate provisions.

7. Conclusions

This article presented four case studies on the CSR policy of Apple, Canon,
Coca-Cola and Walmart. These multinationals have been involved in social and
environmental conflicts. The article researched the conflicts, the measures the
companies have taken to resolve these conflicts and their CSR policy in relation
to those conflicts. The article aims to answer the foolwing question: Do
conflicts affect a companys CSR policy?
In general, the authors found that the four analysed multinationals had already
implemented a basic CSR policy before experiencing the conflicts studied.
Canon is the company with the longest history of implementing what we now
refer to as CSR. Canon introduced the corporate philosophy of kyosei as part of
its global corporate plan in 1988. Another early implementer of CSR policies is
Walmart. Since the early 1990s Walmart had codes of conduct in place for their
suppliers. Coca-Cola had taken early steps to report on the companys activities
and adopted the GRI guidelines in 2001. Apple has made its annual supplier
responsibility progress report available on its website since 2007.
Although most of the companies conflicts were of a different nature and
with different degrees of severity, in the cases of Apple, Coca-Cola and Walmart
the issues resulted in a poor corporate reputation. Coca-Colas conflict in India
involved claims of water pollution and over-extraction of groundwater as well as
allegations that Coca-Cola beverages produced in that country contained high
levels of pesticide residues. The media attention that the conflict received was so
widespread that the negative effects on the corporate image was not limited to
India, but they also spread to the US. In addition, this conflict affected the
company economically, with dropping sales and revenue losses.
The conflicts experienced by Walmart that were studied in this research were
of a labour nature. One of them consisted of a class action lawsuit by (former)
female employees, the Dukes v. Walmart Stores case, where the plaintiffs alleged
gender-based discrimination. This lawsuit was not the first one to be
experienced by Walmart, which is one of the most often sued companies in the
US. But its relevance rests in the fact that the plaintiffs were suing on behalf of
themselves and all women employed by Walmart nationwide since December
1998, amounting to approximately 1.5 million women. After a long litigation
process, the US Supreme Court concluded that the case could not be ruled in the
plaintiffs favour because they did not have enough in common. The second
analysed conflict experienced by Walmart consisted of media attention alleging
that two of Walmarts sub-contractors in Bangladesh were using child labour.
Apples suppliers were also caught using underage labour. In addition, Apple
is often linked to the suicides at Foxconn. The employees work up to 70 hours a
week, ten hours above the maximum set by Apples Supplier Code. Also, in
February 2011 The Guardian reported on another labour issue that Apple faced:
the poisoning of Wintek workers by n-hexane.
Finally, Canon had non-severe problems that related to stress-related
illnesses among employees in the companys subsidiary in Denmark, as well as
to findings that Japanese employees were forbidden to sit down during working
hours. Neither these conflicts nor any other conflict that Canon has had ever
resulted in much media attention.
The responses of the multinationals to the conflicts varied, ranging from
attempting to repair reputation damage and denying the claims, to providing a
remedy.

Coca-Colas initial approach consisted of denying that the accusations were

true. The company was very open about this and used the media, its website and
its reports to make statements about its position in the conflict.
For instance, Coca-Cola replied to news articles and made public
statements, and it also included in both its sustainability report for India and on
its website an update about the conflict in India. These efforts, however, mainly
had the purpose of re-establishing the integrity of the company by providing
evidence to prove that the accusations were untrue. But as was illustrated in the
case study, making public statements and reporting on the conflict were not
sufficient for the company to repair the reputation damage and to regain the trust
of Indian customers. In response, the company took a more proactive approach
that aimed at repairing and preventing damage to Indian water resources.
Walmart faced a lawsuit, which it strongly contested and it denied the claims.
The case against Walmart did not succeed, but currently the claimants have
taken out another lawsuit based on individual cases per state which shows an
eminent threat. When Walmart was caught using child labour it responded by
reporting in its 2005 Report on Ethical Sourcing the existence of child labour in
the factories of its sub-contractors. While confirming the accusations in the
media, this report also turns this unfavourable situation into a positive one by
claiming that the increase in underage violations were due to the implementation
of more stringent anti-child labour measures. The labour issues with the
suppliers had an impact on Apples reputation. About 18 months after the media
reported on the suicides, Apple joined the FLA, striving to set a new standard in
the electronics industry and having a supply chain that can be seen as a model
for the industry. Although Canon did not have to deal with any damage to its
reputation, after the stress-related illness in Denmark had occurred, the company
also took a proactive approach in preventing the emergence of future conflicts.
In its European and global Canon policies, Canon therefore included measures
to reduce stress in the workplace.
The case studies provide evidence that after the multinationals experienced a
conflict, the companies made changes to their CSR policies. A common feature
of Canon, Coca-Cola and Walmarts policy changes is the establishment of
specific goals that they aim to achieve at company level. Although Apple did not
set concrete targets, it has pledged to change its supplier responsibility practice.
Furthermore, the sustainability reports in which the four multinationals present
their CSR policies are created as long-term commitments and not just to resolve
the current conflict.
Perhaps Coca-Cola can be said to be the company that adopted one of the
most ambitious CSR policies after experiencing the conflict in India. Coca-Cola
appears to be strongly determined to address its operational impacts on the
environment, particularly on water. Given the nature of the impacts, the
company has the possibility of carrying out research and taking steps towards
preventing and remedying damage, with results that can be measurable.

Coca-Cola initiated such efforts by adopting initiatives that are tailored to

remedy the water problems it caused in India and to improve its image towards
its customers. Such initiatives include research and partnerships with the Indian
local government. Subsequently, Coca-Cola adopted water management as one
of the core elements of its global CSR policy and the company has committed
itself to meet quantifiable targets concerning water management efficiency.
Coca-Cola does not admit that the conflict in India is the main motivation
behind the adoption of the water policies. However, given the severe damage to
its reputation and the consequent revenue losses experienced it is very likely
that the conflict in India influenced the corporate decision to implement a CSR
policy on water management efficiency in its global operations.
Walmart as an early implementer of CSR regulations strengthened its
existing policies after the conflicts. It now has policies to appoint women to
management positions and set up a board in charge of fighting gender
discrimination. Walmart has also increased the number of audits to control child
labour employment.
Negative publicity eventually resulted in Apple setting a new standard for
the electronics industry. After the FLA report on Foxconn, Apple stated that it
fully supported the recommendations of the FLA and publicly committed itself
to try to change it practices. The FLA, external stakeholders and consumers will
look to see if Apple adheres to its pledge.
To conclude, the case studies of Apple, Coca-Cola and Walmart illustrate
that the multinationals have adopted changes in their CSR and reporting policies
after the conflicts occurred. These companies are transparent about those
conflicts by publicly addressing them either through the media or in their annual
or sustainability reports. Although Canon has not mentioned any labour issues,
internet research showed that Canon was involved in labour issues as well. In
order to uphold sustainability standards it is important for companies to be
transparent.
As was presented in the research by Zwart & Tulder, companies that have
been on thin ice usually turn into frontrunners as far as CSR is concerned.
Apple, Coca-Cola and Walmart have been under public scrutiny, but nowadays
they can be seen as companies which have become models for their industry.
Coca-Cola has taken a proactive approach and implemented initiatives to solve
the water problems. Walmart strives to be the greenest corporation in the world.
Apple is aiming to set a new standard in the industry. Time will only tell
whether it will stick to its promise to change its supplier responsibility practice.
Canon is different in this respect, as its CSR policy was not impacted by media
pressure. At first instance it might appear as if it is not comparable to the other
mentioned companies. However, this article shows that companies like Canon
need to be closely monitored as well.