Evolution and Concept of CSR

UNIT 2 PERSPECTIVE IN GLOBAL

CONTEXT
Structure
2.1 Introduction
2.2 CSR in Europe
2.3 CSR in USA
2.4 CSR in Scandinavian Countries
2.5 CSR in Latin America
2.6 CSR in Developing Countries
2.7 International Initiatives Related to CSR
2.8 Let Us Sum Up
2.9 Keywords
2.10 Bibliography and Selected Readings
2.11 Check Your Progress – Possible Answers

2.1 INTRODUCTION
In the previous unit you have read about the concepts and definitions of CSR.
You also read about various theories of CSR. We know that over the years, the
understanding of CSR has undergone several changes. One of the reasons for the
shift in the understanding from voluntarism to due diligence is the number of
disasters that have happened at the production sites of Western companies mostly
in the developing countries. The meaning of CSR varies substantially from country
to country. It would be relevant here to look at the perspective of CSR from the
view point of different countries and regions. In this unit you will learn about the
Perspectives and drivers of CSR for different regions of the world.

After reading this unit you will be able to

Discuss about approaches to CSR of different countries in Europe and
Scandinavian Countries
Discuss the perspective of CSR in US and Latin America
Describe the drivers for CSR in developing countries
Discuss various international initiatives related to CSR

2.2 CSR IN EUROPE

The European Commission in its 2011-14 strategy on CSR has defined CSR as
‘the responsibility of enterprises for their impact on society’. The Commission
believes in CSR being company led with public authorities playing a supportive
role through a mix of voluntary policy measures and regulations.

CSR has been a subject of interest among both businessmen and governments in
Europe. However, there has been contrasting positions taken by European
Commission (EC) and NGO’s and trade unions. While EC has been rejecting
regulation and emphasizing on CSR being a voluntary initiative for business to
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practice, the European parliament along with NGOs and trade unions have been Perspective in Global Context
demanding for regulations and compulsory reporting of the social and
environmental impacts of the businesses.

The Commission promotes CSR and encourages countries to follow international

guidelines and principles. The EU policy on CSR is based on various actions to
support this approach. They include:
1) Enhancing the visibility of CSR and disseminating good practices
2) Improving and tracking levels of trust in business
3) Improving self and co-regulation processes
4) Enhancing market rewards for CSR
5) Improving company disclosure of social and environmental information
6) Further integrating CSR into education, training, and research
7) Emphasizing the importance of national and sub-national CSR policies
8) Better aligning European and global approaches to CSR.
A Public Consultation of CSR 2011-14 was launched by the Commission to
evaluate the CSR strategy.
Some core components of the EU’s 2011 CSR strategy include:
The development of CSR should be led by enterprises themselves.
But public authorities should play a supporting role through a smart mix of
voluntary policy measures and, where necessary, complementary regulation,
for example to promote transparency, create market incentives for
responsible business conduct, and ensure corporate accountability.

Enterprises must be given the flexibility to innovate and to develop an

approach to CSR that is appropriate to their circumstances.

2.2.1 Approaches of various countries in Europe

1) Austria
Austria is a very regulated country with its Company’s Act dating back to 1966.
The Sustainable Strategy adopted by the Austrian government in 2002 aims at
integrating economic, social, and environmental spheres. The strategy emphasizes
on sustainable public procurement and concerns with ecological, social, and
ethical aspects of supply chain. CSR reporting is recommended in the CSR guiding
vision since 2009. Eco-efficiency and sustainable consumption are the key drivers
of CSR in Austria.

2) UK
UK is considered as a leader in CSR, particularly because UK houses world’s
greatest thinkers, practitioners, and campaigners in this field. The amount of
finances given by the companies to the society is considered as the key indicator
of CSR in UK which generally is ½ to 1 percent of their pre-tax profits. UK also
has a Minister of CSR, appointed by the government. To encourage CSR, UK
has passed several regulations to complement the voluntary initiatives taken by
companies. e.g.
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Evolution and Concept of CSR Amendment to the Pensions Act, 2000 which requires the occupational
pension funds to disclose the extent of CSR issues taken into consideration
while making investments.

Companies Act, 2000 requires the companies to take into account the wider
interest of the stakeholders while acting on the interest of the shareholders.
It also directs the companies to disclose the policies related to environment,
workplace, social and community matters and about the effectiveness of
these policies.

Modern Slavery Act, 2015 which require the companies to combat modern
slavery in its business and supply chain.

3) France
In France there has been a moderate development of CSR. The labour relations
in France are governed by a system of state regulations and agreements. There
are also several initiatives that go beyond the legal requirements. Certain laws
affecting CSR were passed in the beginning of 21st century.

“The Law on Employment and Saving Plan of 19 February 2001, which

asks fund managers to take into account social, environmental and ethical
considerations in the choice of investments.

The Law on New Economic Regulations of 15 May 2001, which requires

listed companies to introduce environmental and social information within
their yearly reports to shareholders.

The Law on Retirement Reserve Funds of 17 July 2001, which requires

environmental and social information to be introduced in the yearly reports
of retirement funds.” (Mullerat, 2013)

In the year 2007, the ‘Diversity Charter’ was signed by 1700 companies. It
is a business initiative which was launched to fight discrimination.

To address environmental issues through a five-way dialogue between

business, local authorities, government, NGOs and trade unions, the Grenelle
Environment Forum was initiated in 2007.

Several actions have also been launched to support the CSR initiatives of
Small and Medium Enterprises in France. e.g. A group of 3300 SME
managers called the “Centre des Jeunes Dirigeants” developed a
methodology for “Global Performance Standard” in 2008.

4) CSR in Germany
In Germany, the Federal Ministry for Labour and Social Affairs is the lead ministry
for CSR in the Federal Government of Germany. The ministry has established
National CSR Forum to bring together the stakeholders to work towards social
responsibility and to provide needed support to the government to develop the
national CSR strategy.

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 Perspective in Global Context
2.3 CSR IN USA
According to Milton Friedman, the social responsibility of business is to increase
its profit. Traditionally, the companies looked at CSR from the view point of
business footprint where the companies were concerned only with making a
positive impact. However, the consumers in US now expect the companies to go
beyond the issues that impact their operations and take up larger societal
challenges. A recent survey by Cone communication says that 87 percent of the
consumers said that they purchased a product because the company advocated
for an issue they care about and 76% of the consumers said that they would
refuse to purchase a product if they found out that the company supported an
issue contrary to their beliefs (Cone Communications, 2017). Thus, consumer
expectations and behaviour in support of CSR can be called as the key driver to
CSR in USA. Given similar price and quality of any product, the consumers in
US are more likely to switch brands in favour of those which are associated with
good causes.

The labour and capital markets in US being unregulated, the state provisions for
welfare is very low. Hence, education, health and other such community issues
are taken up under Corporate Social Responsibility. Both CSR activities and
reporting are not considered as a regulatory compliance issue in USA. As there
is no obligation to undertake social and environmentally responsible practices,
CSR is usually characterized by voluntary societal engagements by businesses.
Such responsible behaviour by the businesses which goes beyond financial
reporting requirements is known as corporate citizenship. Businesses are obliged
to engage in economic, legal, ethical, and philanthropic activities.

In US, the U.S. Bureau of Economic and Business Affairs (EB) leads a corporate
social responsibility team with the primary objective of promoting responsible
business, encouraging sustainable development, and building economic security.
It provides the companies and the stakeholders with the needed guidance to engage
in corporate citizenship. The CSR team of EB provides support on various issues
including corporate citizenship, human rights, supply chains, anticorruption,
health and social welfare, employment and industrial relations, environment
protection, natural resource management, intellectual property, women’s
empowerment etc. The EB’s policies are drawn majorly from OECD’s ‘Guidelines
for Multinational Enterprises.’

Let us discuss in brief some of the EB’s corporate policies (Camilleri, 2017):

1) Corporate Citizenship and Human Rights

In US, the Bureau of Democracy, Human Rights and Labour (DRL) has a mandate
of promoting and monitoring human rights. For this purpose, it has set up a
Human Rights Democratic Fund (HRDF) which is used in the promotion of
democratic principles. Such efforts by DRL have helped US to minimize human
rights abuses and bring a positive change across the globe.

Similarly, the Office to Monitor and Combat Trafficking in Persons (TIP) focuses
on corporate policy, planning, public awareness and tracing of supply chain and
transparency to reduce forced labour in supply chain. The office also funds an
emergency global assistance project that helps people identified as trafficked
persons.
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Evolution and Concept of CSR 2) Labour Supply Chains

Human trafficking was made illegal in US in the year 2000. The law requires
manufacturers earning revenue of more than $100 million to list out their efforts
towards bringing down slavery and human trafficking in their supply chains.
DRL also promotes labour rights in the supply chain by enforcing labour laws
and providing due diligence.

For example: EB, in cooperation with DRL and other stakeholders, has
coordinated the U.S. Department of State’s participation in the Kimberley
Process to stem the flow of conflict diamonds and to address their traceability
across supply chains (Camilleri, 2017).

The Kimberly Process is a commitment to remove conflict diamonds from

the global supply chain. The Kimberley Process (KP) is a multilateral trade
regime established in 2003 with the goal of preventing the flow of conflict
diamonds. The core of this regime is the Kimberley Process Certification
Scheme (KPCS) under which States implement safeguards on shipments of
rough diamonds and certify them as “conflict free”. Kimberley Process (KP)
defines conflict diamonds as: ‘rough diamonds used to finance wars against
governments’ - around the world.
Source: https://www.kimberleyprocess.com/en/what-kp Accessed on 12/04/2019

3) Anticorruption
You are all aware of the ill effects of corruption. It is not just bad for economic
growth and sustainable development of any country, it also deters the foreign
investors from investing in many countries. The Foreign Corrupt Practices Act
was brought into effect in US in 1977. This law penalizes the US nationals and
companies who indulge in bribing foreign officials in commercial transactions.
The Presidential Proclamation 7750 of January 2004 also denies refuge to corrupt
officials. US has also been an active participant in the United Nations Convention
Against Corruption (UNCAC) and member of the OECD’s Anti-Bribery
Convention.

4) Health and Social Welfare

There were several exploitative practices being followed by the insurance
companies in the US. Some of these practices include screening of pre-existing
condition and charging higher premium in case a person has any ailment at the
time of buying a policy, cancellation of insurance policy on various technicalities
when illness is imminent, imposing annual or lifetime limits on the health coverage
benefits that can be claimed by individuals etc. In 2010, reform on the Patient
Protection and Affordable Care Act (PPACA), also known as Obamacare and
the Health Care and Education Reconciliation Act (HCERA) were passed which
were designed to remove the exploitative practices of the insurance companies.

5) Environmental Sustainability
US has a long tradition of environmental leadership from 1969 when the National
Environmental Policy Act (NEPA) was passed with the intention of maintaining
productive harmony between the requirements of present and future generations.
The Environmental Protection Agency (EPA) formulates policies and instruments
that would promote sustainable use of resources. Similarly, the Bureau of Energy
34 Resources (ENR) promotes the use of secure, reliable, and clean energy in US. It
is also responsible for maintaining good governance and transparency in the Perspective in Global Context
energy sector.

The first National Action Plan on Responsible Business Conduct was launched
by the US Government on December 16, 2016. The National Action Plan is a
reflection of Government’s commitment to fight corruption and promote human
rights by partnering with domestic and international stakeholders. It encourages
companies to follow high standards of responsible business conduct.

Activity 1
Write a comparative analysis of approaches to CSR in Europe and US.
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2.4 CSR IN SCANDINAVIAN COUNTRIES

Scandinavia is considered as the global leader in CSR and sustainability.
Historically, Scandinavia referred to the countries of Denmark, Norway, and
Sweden. However, in recent years, Finland is also included as a part of Scandinavia
by many people. The CSR in Scandinavia stems from the notion that companies
sometimes must pursue a social issue not based on the risk or cost involved or on
the feasibility but for the simple reason that it is the right thing to do. The key
driver of CSR in the Scandinavian countries is the long-term vision of shared
value creation. Scandinavian firms like Novo Nordisk, Ikea, H&M, Norsk Hydrom
Novozymes and Statoil have long demonstrated effective value creation for the
company and its stakeholders (Strand, 2014).

The Scandinavian companies also perform very well in various CSR and
sustainability performance measurements including Dow Jones Sustainability
Index (DJSI) and the Global 100 Index. The Scandinavian countries have also
figured out in the top 10 rank of the Adjusted Global Competitiveness Index
published by the World Economic Forum in 2013. These countries have also
consistently topped the annual Transparency International Corruption Perceptions
Index. Thus, the Scandinavian countries lead in most of the CSR and sustainability
performance indicators.

Let us now discuss some of the factors influencing CSR in the Scandinavian
countries (Strand et. al., 2015)

1) Stakeholder Engagement and Corporate Reputation: Studies have shown

that there is a strong relation between the CSR performance of a firm and
the level of stakeholder support and corporate reputation enjoyed by it. The
impact of CSR performance has been so much so that it overshadows other
considerations like financial performance, quality of goods and services
and innovations. The CSR performance is directly linked to the stakeholder
engagement as it is the center of effective CSR and sustainability.
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Evolution and Concept of CSR 2) Creating Shared Value: Creating shared value means creation of economic
value by creating value for the society by addressing the needs and
challenges of the society. This concept of creating shared value has a
Scandinavian origin. The firms of Scandinavian origin have always
demonstrated a shared value strategy.

For example: Novo Nordisk, a Danish pharmaceutical company initiated

a strategy to grow its market in China by improving diabetes care. The
strategy was to increase the demand for the insulin products manufactured
by the company by improving diagnosis of diabetes. For this, the company
invested in physical training, patient education and local production. This
would not just improve company sales but also improve the lives of
Chinese citizens by improving diabetes diagnosis, care, and treatment.

3) Institutional Influence: The political parties in the Scandinavian countries

have promoted the egalitarian policies and given due consideration to the
welfare of present and future generations thus backing the virtues of
stakeholder engagement. These countries have in place the institutions that
would facilitate socially responsible behaviour of the companies. Some of
the important influencers include mandatory representation of employees
on the Boards of Directors. Also, they have a flatter pay structure in which
the CEO to average worker pay ratios are very modest. Such policies lead
to greater likelihood of stakeholder engagements.

4) Cultural Influence: Scandinavian culture is very much reflected in the

Scandinavian management and is depicted in the form of consideration of
well-being of stakeholders and not just shareholders, power sharing,
participation, cooperation, consensus building etc. The Scandinavian
countries are said to have the most feminine cultures in the world where
gender roles overlap. Both men and women are supposed to display the
finer qualities of being modest, tender and being concerned with the quality
of life. The CSR agenda of stakeholder engagement and being concerned
with the needs of the future generation aligns well with the Scandinavian
feminine culture.

2.5 CSR IN LATIN AMERICA

2.5.1 What Drives CSR in Latin America?
The drivers to CSR can be classified into two:
i) Altruism: Selfless concern for the wellbeing of others
ii) Utilitarianism: Considers best action to be one that maximizes utility
In Latin America, the philanthropic traditions in the past have been rooted in
religious beliefs. A large part of the regions tradition of charity has been derived
from the region’s catholic background. Thus, altruism and solidarity have been
significant drivers of CSR in Latin America’s private sector. Most of the business
leaders, particularly from the family owned firms, speak of their commitment to
the society as doing the right thing from ethical point of view

Two important utilitarian motives driving CSR in Latin America include (i)
managing risks and (ii) gaining competitive advantage through image building.
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Corporates may engage with the community in order to avert any identified risk. Perspective in Global Context
For example, Ausol, a multinational corporation in Argentina, involved in
construction and maintenance of highways, works with local communities and
this helps them gain community goodwill which is important as highways have
several disruptive features. Improvement in the firm’s image or market share is
another utilitarian motive which drives its social commitments. For example,
Posada Amazonas, an eco-tourism project in the Peruvian Amazon basin, invited
an indigenous community to work and eventually become owners. Their
participation makes it a unique experience for travellers (Pérez and Taboada,
2003). A strong blend of altruistic and utilitarian drives is most sustainable for
business as a purely altruistic motive may not be favourable during economic
downturns and a purely utilitarian motive may fail to establish the needed connect
with the social partners.

2.5.2 How has CSR Evolved in Latin America?

There are two ways in which CSR has evolved in different countries:-
i) Through responsible business operations which is generally governed by
regulations
ii) Community investment
In US, CSR has grown through regulations and hence is driven by responsible
business operation. The details of which will be discussed in the next section. In
Latin America however, regulation of responsible business operations is less
common. This is mainly because Latin America does not have strong worker’s
organizations like trade unions or social groups like women and ethnic groups.
Without pressure from society and such organized groups, the government is
less likely to create standards which imply extra cost to the business organizations.
In light of the lack of government framework for responsible business practices,
the corporations interested in creating a common baseline for responsible business
practices took it on themselves to create the standards.

For example

Abrinq Foundation, a non-profit in Brazil, offers a logo (or a special seal) to

companies committed to fighting the use of child labour. Corporations are
certified through Arbinq’s Child Friendly Companies Programme once they
pass a series of social audits from unions, employees, and NGOs. Companies
use the logo to market their corporate value to youths (Grayson and Hodges
2002).

CSR in Latin America has evolved more through community investment. The
corporations in Latin America are investing in communities to create a stable
society. Community investments improve the bottom line or the net earnings of
the corporate as it improves the life of the communities which are the consumers
of their products. There have also been incidences where the corporations have
influenced government regulations to enhance the impact of CSR activities.

For Example

In 1990, after a flood devastated the state of Chihuahua in Mexico, the business
community approached the state government with a plan to give assistance
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Evolution and Concept of CSR
to those most in need: a special tax of 0.2 percent on earnings to be paid by
each of the 29,000 business enterprises in the region with the condition that
members of the business community themselves would manage the funds
generated. The overwhelming success in providing disaster relief and
rebuilding the community prompted the business community to make this
“Community Investment” tax permanent under state law. In 1994, the
Chihuahuan Business Foundation was established to administer these funds
(Gutierrez and Jones, 2007).

2.5.3 Recent Trends of CSR in Latin America

1) The firms are working towards deepening the CSR model so that the
corporate responsiveness of the firms is effectively mirrored in dealings
between their subsidiary units and the ultimate stakeholders.
2) Large corporations are extending their CSR practices to suppliers.
3) Another important trend is the rapid increase in cross sector alliances. For
example, Federation of Brazilian Banks, Febraban, collaborated with a
network of NGOs called the Brazilian Semi-Arid Articulation to provide
cisterns for the dry northeast region of the country. In this collaboration,
the bank provided the funds and the NGOs provided the required training,
low cost methodologies and local management. The entire dialogue between
the two was facilitated by the government.

4) Another trend that is catching up is the building up of relational capital

with the grass root organizations. This begins with helping the communities
to organize and take collective action, helping the organizations to work
together and scaling up the local operations.
Check Your Progress - 1
Notes: a) Write your answers in about 50 words.
b) Check your answer with possible answers given at the end of the unit.
1) What are the various actions on which the EU policy on CSR is based?
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2) List out the factors influencing CSR in Scandinavian countries.

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 Perspective in Global Context
2.6 CSR IN DEVELOPING COUNTRIES
To understand how CSR is conceived, incentivized, and practiced in developing
countries, let us understand what are the various drivers for CSR in these countries.
In this section we will discuss the 10 drivers for CSR in developing countries as
discussed by Wayne Visser (2008).

1) Cultural Traditions: CSR in developing countries draws its roots from

the traditions of philanthropy, business ethics and community push. Kautilya,
the great Indian statesman and philosopher advocated moral principles-
based business practices. In the African continent, the philosophy of
‘Ubuntu’ or African humanism is the foundation upon which rests the modern
inclusive approaches to CSR. Similarly, CSR in Nigeria is based on the
religious beliefs, charitable traditions, and communalism.

2) Political Reform: The socio-political reform process also had a great bearing
on CSR activities in the developing countries. For example, in South Africa,
CSR has been driven to a great extent by the move towards democracy and
reforms towards justice.

3) Socio-economic Priorities: A good business will always have its CSR

guided by the socio-economic needs of a country. e.g. In Nigeria, the CSR
is guided by the country’s socio-economic challenges like poverty
alleviation, education, infrastructure development, health care etc. On the
other hand, the CSR in Western countries is guided by issues like climate
change, fair trade, consumer protection, socially responsible production,
green marketing etc.

4) Governance Gaps: Good governance requires a government to provide

for the basic needs of the citizens like housing, education, health care, roads,
electricity, etc. Many a times, in developing countries, the governments
fail to provide for these basic services and in such cases, CSR is seen as a
way to fill in these governance gaps. However, there are several criticisms
to this approach as businesses are primarily responsible towards their
shareholders. Also depending on profitability, the multinationals would
disinvest from a region to invest in regions that would be more profitable.
Hence the local governance should be more proactive to ensure
accountability and inclusiveness and not depend on CSR to fill in the
governance gaps as is the trend in many developing countries.

5) Crisis Response: Different crisis in the developing countries also act as a

catalyst to CSR response. These crises could be natural, industrial,
environmental, social, health related or economic. Catastrophic events like
natural disasters also bring into play immediate CSR responses. The
corporate response to tsunami in Asia is a classic example.

For example: Unilever (Sri Lanka) is one of the largest and oldest
multinational companies in Sri Lanka. The Asian tsunami in 2004 had
resulted in mass launch of CSR programmes in Sri Lanka. Unilever played
to its strength while shaping its tsunami CSR response. It used its
organizational strength of wide distributional network which was made
available to emergency relief operations working with the local agencies
to distribute food and other necessary products. There were also employee 39
Evolution and Concept of CSR
donations to the central relief fund. After the initial relief work, Unilever
started with its rehabilitation and reconstruction projects under which it
undertook rebuilding of 150 homes in Sri Lanka.
6) Market Access: Another important driver of CSR is to gain market access
by viewing unfulfilled needs of those at the bottom of the pyramid as an
untapped market. Besides, CSR also helps the companies of the developing
countries to access the markets of the developed countries. There is a strong
relationship between CSR reporting and international sales and the
companies from developing countries need to comply with the international
stock market listing requirements in order to globalize.
7) International Standardization: Growing adoption of ISO 14001 and the
Global Reporting Initiative’s Sustainability Reporting Guidelines shows
that CSR codes and standards are also important drivers of CSR in
developing countries. CSR is also driven by standardization imposed by
multinationals on their subsidiaries and operations in developing countries
in their bid to achieve global consistency and to deal with social issues in
developing countries like child labour and role of women in workplace.
8) Investment Incentives: Another important driver of CSR is Socially
Responsible Investment (SRI) which involves investing in companies that
promote environmental stewardship, consumer protection and human rights.
9) Stakeholder Activism: In developing countries where the government does
not have strong control over the environmental, ethical, and social operations
of companies, activism by stakeholder groups becomes an important driver
for CSR. The development agencies, trade unions, international NGOs and
business associations are the four major stakeholders which emerge as major
activists for CSR in developing countries. This activism could be in the
form of civil regulation, litigation against companies and international legal
instruments.
10) Supply Chain: The ethical requirements imposed by multinationals on their
supply chains acts as another significant driver for CSR in developing
countries. This began with fair trade auditing and labelling of agricultural
products produced in developing countries. Multinational supply chains in
the developing countries especially those in sporting and clothing sector
are marred with poor labour conditions and human right abuse issues. To
deal with such conditions, standards like SA 8000 were developed which
are used by multinationals in selecting their suppliers in developing
countries.
Activity 2
Visit a CSR project being implemented in the city of your residence and
discuss with the CSR project head about the key driver for the company to
take up that project. Write their response.
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 Perspective in Global Context
2.7 INTERNATIONAL INITIATIVES RELATED
TO CSR
In this section we will discuss some of the international initiatives related to
CSR on which the guidelines of CSR strategies of various countries have been
built. Some of these initiatives are as follows:
i) United Nations Global Compact
ii) United Nations Guiding Principles on Business and Human Rights
iii) ISO 26000 Guidance Standard on Social Responsibility
iv) International Labour Organization Tripartite Declaration of Principles
Concerning Multinational Enterprises on Social Policy
v) OECD Guidelines for Multinational Enterprises
i) United Nations Global Compact
UN Secretary General Kofi Annan announced the UN Global Compact in January,
1999 and it was officially launched in July, 2000 at the UN Headquarters in New
York. It was established as an organization which would work on the mandate
set by the UN General Assembly to “promotes responsible business practices
and UN values among the global business community and the UN System”. UN
Global Compact is one of the largest international corporate sustainability
initiatives. It aims to mobilize sustainable companies to take up shared
responsibility to create a better world. It helps the companies to align their
strategies to the ten basic principles of the UN Global Compact and to take
strategic action towards attaining developmental goals like the Sustainable
Development Goals. It also acts as driver of change across various aspects of
corporate sustainability including 12 social issues like child labour, children’s
right, education, forced labour, human rights, indigenous people, labour, migrant
workers, persons with disabilities, poverty, gender equality, women’s
empowerment; five environmental issues like biodiversity, climate change,
energy, food and agriculture, water and sanitation and three issues related to
governance like anti-corruption, peace and rule of law. The UN Global Compact
inspires guides and supports companies to do responsible business.
The ten principles of the United Nations Global Compact are:
Human Rights
Principle 1: Businesses should support and respect the protection of
internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold the freedom of association and the
effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and
occupation.
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Evolution and Concept of CSR
Environment
Principle 7: Businesses should support a precautionary approach to
environmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; and
Principle 9: encourage the development and diffusion of environmentally
friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.
Source: https://www.unglobalcompact.org/what-is-gc/mission/principles

Case Study UN Global Compact Initiative

Empowering Refugee Women Project Brazil is receiving increasing numbers
of refugees from African and Middle Eastern countries. In response, Global
Compact Network Brazil, in partnership with UNHCR and UN Women, has
teamed up with local and foreign companies and NGOs to help women refugees
navigate the job market. Over the course of the project, the partnership has
succeeded in raising awareness about the issues women refugees face in Brazil,
with more than 10 companies having offered employment and training
opportunities to over 80 women refugees. As an example of the WEPs in action,
this project is demonstrative of the collective action that can be taken to build
an employment pipeline for marginalized women.
Source: Women’s Empowerment Principles Global Trends Report, 2018

ii) United Nations Guiding Principles on Business and Human Rights:

Commonly known as the UNGPs it is a list of 31 principles implementing the
‘Protect, Respect and Remedy’ framework. These principles provided the first
global standards to address the issue of adverse impact of business activity on
human rights. It was developed by the Special Representative of the Secretary
General, John Ruggie and was unanimously endorsed by the United Nations
Human Rights Council, making it the first corporate human rights responsibility
initiative to be endorsed by the United Nations.

The UN Guiding Principles help the businesses to fulfil their obligations towards
respecting human rights and complying with the existing laws. It helps prevent
risks of human rights violation in business activities. It also lays down remedies
for any breach of the existing laws.

These principles are based on three pillars:

a) The State’s duty to protect human rights: It is the duty of the state to protect
the human rights of its subjects through various mechanisms like policy
making, regulation and enforcement.

b) The corporate responsibility to respect human rights: The guiding principles

states that the private sector has an important role in protecting and upholding
the human rights. In order to avoid infringing on the rights of the individuals,
the corporate must act with due diligence.
42
c) Access to remedies when the rights are breached: The third pillar states that Perspective in Global Context
it is the state’s responsibility to provide access to remedy to the individuals
whose human rights have been infringed upon. For this, the state may use
judicial, administrative, and legislative means. It is also the responsibility
of the corporates to prevent and remediate any infringement of human rights
for which they are responsible.

In this unit we will restrict to the principles related to corporate responsibility to

respect human rights. Out of the total 31 principles, a total of 14 principles are
related to the corporate responsibility to respect human rights. The principles
under this head are classified as foundational and operational principles. Let us
look at each of them:

Foundational Principles

1) Business enterprises should respect human rights. This means that they
should avoid infringing on the human rights of others and should address
adverse human rights impacts with which they are involved.

2) The responsibility of business enterprises to respect human rights refers

to internationally recognized human rights – understood, at a minimum,
as those expressed in the International Bill of Human Rights and the
principles concerning fundamental rights set out in the International
Labour Organization’s Declaration on Fundamental Principles and Rights
at Work.

3) The responsibility to respect human rights requires that business

enterprises: a) Avoid causing or contributing to adverse human rights
impacts through their own activities, and address such impacts when they
occur; b) Seek to prevent or mitigate adverse human rights impacts that
are directly linked to their operations, products or services by their business
relationships, even if they have not contributed to those impacts.

4) The responsibility of business enterprises to respect human rights applies

to all enterprises regardless of their size, sector, operational context,
ownership, and structure. Nevertheless, the scale and complexity of the
means through which enterprises meet that responsibility may vary
according to these factors and with the severity of the enterprise’s adverse
human rights impacts.

5) In order to meet their responsibility to respect human rights, business

enterprises should have in place policies and processes appropriate to
their size and circumstances, including: a) A policy commitment to meet
their responsibility to respect human rights; b) A human rights due
diligence process to identify, prevent, mitigate and account for how they
address their impacts on human rights; c) Processes to enable the
remediation of any adverse human rights impacts they cause or to which
they contribute.

Operational Principles

6) As the basis for embedding their responsibility to respect human rights,

business enterprises should express their commitment to meet this
responsibility through a statement of policy that: (a) Is approved at the 43
Evolution and Concept of CSR
most senior level of the business enterprise; (b) Is informed by relevant
internal and/or external expertise; (c) Stipulates the enterprise’s human
rights expectations of personnel, business partners and other parties
directly linked to its operations, products or services; (d) Is publicly
available and communicated internally and externally to all personnel,
business partners and other relevant parties; (e) Is reflected in operational
policies and procedures necessary to embed it throughout the business
enterprise.

7) To identify, prevent, mitigate, and account for how they address their
adverse human rights impacts, business enterprises should carry out human
rights’ due diligence. The process should include assessing actual and
potential human rights impacts, integrating, and acting upon the findings,
tracking responses, and communicating how impacts are addressed.
Human rights due diligence: (a) Should cover adverse human rights
impacts that the business enterprise may cause or contribute to through
its own activities, or which may be directly linked to its operations,
products or services by its business relationships; (b) Will vary in
complexity with the size of the business enterprise, the risk of severe
human rights impacts, and the nature and context of its operations; (c)
Should be ongoing, recognizing that the human rights risks may change
over time as the business enterprise’s operations and operating context
evolve.

8) To gauge human rights risks, business enterprises should identify and

assess any actual or potential adverse human rights impacts with which
they may be involved either through their own activities or as a result of
their business relationships. This process should: (a) Draw on internal
and/or independent external human rights expertise; (b) Involve
meaningful consultation with potentially affected groups and other relevant
stakeholders, as appropriate to the size of the business enterprise and the
nature and context of the operation.

9) In order to prevent and mitigate adverse human rights impacts, business

enterprises should integrate the findings from their impact assessments
across relevant internal functions and processes, and take appropriate
action. (a) Effective integration requires that: (i) Responsibility for
addressing such impacts is assigned to the appropriate level and function
within the business enterprise; (ii) Internal decision-making, budget
allocations and oversight processes enable effective responses to such
impacts. (b) Appropriate action will vary according to: (i) Whether the
business enterprise causes or contributes to an adverse impact, or whether
it is involved solely because the impact is directly linked to its operations,
products, or services by a business relationship; (ii) The extent of its
leverage in addressing the adverse impact.

10) In order to verify whether adverse human rights impacts are being
addressed, business enterprises should track the effectiveness of their
response. Tracking should: (a) Be based on appropriate qualitative and
quantitative indicators; (b) Draw on feedback from both internal and
external sources, including affected stakeholders.

44
 Perspective in Global Context
11) In order to account for how they address their human rights impacts,
business enterprises should be prepared to communicate this externally,
particularly when concerns are raised by or on behalf of affected
stakeholders. Business enterprises whose operations or operating contexts
pose risks of severe human rights impacts should report formally on how
they address them. In all instances, communications should: (a) Be of a
form and frequency that reflect an enterprise’s human rights impacts and
that are accessible to its intended audiences; (b) Provide information that
is sufficient to evaluate the adequacy of an enterprise’s response to the
particular human rights impact involved; (c) In turn not pose risks to
affected stakeholders, personnel or to legitimate requirements of
commercial confidentiality

12) Where business enterprises identify that they have caused or contributed
to adverse impacts, they should provide for or cooperate in their
remediation through legitimate processes.

13) In all contexts, business enterprises should: (a) Comply with all applicable
laws and respect internationally recognized human rights, wherever they
operate; (b) Seek ways to honour the principles of internationally
recognized human rights when faced with conflicting requirements; (c)
Treat the risk of causing or contributing to gross human rights abuses as
a legal compliance issue wherever they operate.

14) Where it is necessary to prioritize actions to address actual and potential

adverse human rights impacts, business enterprises should first seek to
prevent and mitigate those that are most severe or where delayed response
would make them irremediable.

iii) ISO 26000 Guidance Standard on Social Responsibility

The ISO Committee on Consumer Policy was the first to identify the need to
work on social responsibility standards in 2001. ISO 26000 provides guidance
on how businesses can operate in a socially responsible way. It is concerned
with the issues organizations need to address in order to function in a socially
responsible way and with the best practices in social responsibility. ISO 26000
cannot be used as a certification standard as the provisions in it are only voluntary
guidance and not requirements.

The guidance in ISO 26000 is based on the best practices developed by existing
private and public sector social responsibility initiatives. It is consistent with
various international conventions and declarations including International Labour
Organization (ILO), United Nations Global Compact Office (UNGCO),
Organization for Economic Co-operation and Development (OECD).
The core subjects on which guidance is given are:
i) Organizational Governance
ii) Human Rights
iii) Labour Practices
iv) The Environment
v) Fair Operating Practices
45
Evolution and Concept of CSR vi) Consumer Issues
vii) Community Involvement and Development
iv) International Labour Organization Tripartite Declaration of Principles
Concerning Multinational Enterprises on Social Policy (MNE
Declaration)

The MNE Declaration provides guidance to enterprises on responsible and

inclusive workplace practices. It facilitates outreach and understanding of Decent
Work Agenda in the private sector. It is the only instrument that has been widely
adopted by governments, employers, and workers around the world. It was
adopted 40 years ago and has been amended twice in 2000 and 2006 and revised
in 2017. Its principles are based on international labour standards and cover
areas such as employment, training, conditions at work, industrial relations etc.

The MNE Declaration lays down principles in the fields of employment, training,
conditions of work and life, and industrial relations which governments,
employers’ organizations, workers’ organizations, and multinational enterprises
are recommended to observe on a voluntary basis.

What Does MNE Declaration Contain

The MNE Declaration consists of General Policies laid down for all the parties
concerned with the declaration including guidelines for multinational enterprises
and governments of hosts countries. It also contains guidelines related to various
aspects of Employment, Training, Conditions of Work and Life and Industrial
Relations.

1) Employment
Under this section, the declaration sets guidelines on various aspects. We
will be looking at some of the key points under each section

i) Employment Promotion: These are a set of instructions or guidelines to

multinational enterprises for employment promotion in the host
countries. It says that

“Multinational enterprises, particularly when operating in developing

countries, should endeavour to increase employment opportunities and
standards, taking into consideration the employment policies and
objectives of the governments, as well as security of employment and
the long-term development of the enterprise.” (ILO, 2017).

It instructs the MNEs to work in harmony with the national social

development policies. It also instructs them to give priority to the
employment of nationals of the host country.

ii) Social Security: It instructs the governments to establish social security

as a fundamental element of national security systems. It instructs
Multinational Enterprises to complement the public social security
systems through their employer sponsored programmes.

iii) Elimination of forced or compulsory labour: It instructs the Governments

to take steps to eliminate forced labour and protect the victims of forced
labour and help them get compensation and rehabilitation and sanction
46
 the perpetrators of forced labour. The governments should provide Perspective in Global Context
support to the employers to take measures to identify, prevent and
mitigate forced labour. It also instructs enterprises to take measures to
prohibit and eliminate forced labour in their operations.

iv) Effective abolition of child labour- minimum age and worst forms: It
instructs the governments to have national policies in place to prohibit
and eliminate child labour and raise the minimum age for employment
to a level consistent with complete physical and mental development
of young persons. It also instructs multinational enterprises to abide by
the minimum age for employment and prohibit and eliminate child
labour in their operations.

v) Equality of opportunity and treatment: Government policies should

promote equality of opportunity and treatment in employment and
eliminate any discrimination based on race, colour, sex, religion, social
origin etc. Government should promote equal pay for both men and
women. Multinational enterprises should also be guided by the principle
of non-discrimination in their operations.

vi) Security of Employment: It instructs the governments to study the impact

of multinational enterprises on employment in various industrial sectors.
It also instructs the multinational enterprises to make efforts to provide
stable employment for workers employed by them. It also instructs
them to notify to the concerned government authorities about changes
in operations that may have major employment effects like mass layoffs
in case of closure of the operation.

2) Training
It instructs the governments to develop national policies for employment
linked vocational training and guidance. It also instructs multinationals to
provide relevant training to workers at all levels to develop useful skills,
promote lifelong learning and development. It also instructs the multinational
enterprises to provide services of the expertise of their skilled personnel for
training programme organized by governments.

3) Conditions of Work and Life

i) Wages, benefits, and conditions of work
The wages, benefits and conditions of work provided to the workers by
the MNEs should be comparable to those provided by comparable
employers in the host country. It instructs the MNEs to take into
consideration the needs of workers and their families, cost of living,
living standards of various social groups, social security benefits and
other economic factors. It also instructs the governments to ensure that
the activities of MNEs provide as much benefit as possible to lower
income groups and less developed areas.

ii) Safety and Health

It instructs the Governments to ensure that MNEs provide adequate
safety and health standards and provide safe and healthy working
environments to their employees. International labour standards and
ILO codes of practices and guidelines on occupational safety and health 47
Evolution and Concept of CSR should be taken into account. They should provide information on safety
and health standards relevant to their operations to all concerned
including workers, worker organizations and other competent authority
in the countries they operate.

4) Industrial Relations
MNEs should observe standards of industrial relations
i) Freedom of association and right to organize
It instructs the MNEs to uphold the right of their employees to join
organizations of their choice, subject to the rules of the organizations
concerned and protect them against acts of anti-union discrimination.
It also instructs the governments of the host countries that when they
offer special incentives to attract foreign investment these incentives
should not limit worker’s freedom of association and right to organize
and bargain collectively. It instructs that the representatives of workers
should have the freedom to hold meetings for consultation or exchange
of views.
ii) Collective Bargaining
The workers of MNEs should have the freedom to form representative
organizations for collective bargaining. It instructs the MNEs to
authorize representative of workers to conduct negotiations with the
representatives of management who are authorized to take decisions of
the issues under negotiation. It instructs the governments to provide
the worker’s organizations with the information on the industries in
which the enterprise operates which would help them in laying down
objective criteria in the collective bargaining process.
iii) Consultation
It instructs MNEs to allow mutual consultations on matters of mutual
concern between employers, workers, and their representatives.
iv) Access to remedy and examination of grievances
It instructs the governments to protect the workers in their territory
against business related human rights abuses. MNEs should use their
leverage to encourage their business partners to provide effective means
to enable remediation of human rights abuses. It also instructs the MNEs
to respect the rights of the workers and have a proper grievance redressal
mechanism in place.
v) Settlement of industrial disputes
It instructs the governments and the MNEs to make available a
conciliation machinery to assist in settlement of industrial disputes
between the employers and workers.
5) OECD Guidelines for Multinational Enterprises
The OECD Guidelines for Multinational Enterprises are a set of
recommendations for responsible business conduct addressed by
Governments adhering to the guidelines to the multinational enterprises
operating in and from these adhering countries. The guidelines were first
adopted in 1976 and have been revised 5 times since then, the latest being
48 in 2011.
What Do the Guidelines Contain? Perspective in Global Context

There are 11 chapters to the guidelines. The first chapter on Concepts and
Principles deals with the concepts and principles which are the backbone of
these guidelines. The second chapter on General Policies contains a set of
recommendations in the form of policies which are the basis for various principles.
This chapter deals with various provisions like dealing with adverse impacts,
implementing due diligence, stakeholder engagement etc. The third chapter in
Disclosures contains recommendations to the enterprises to be transparent in
their operations and responsive to the increasing demand for information. The
fourth chapter on Human Rights deals with the recommendations for the
enterprises to meet their responsibilities towards various internationally
recognized human rights. This chapter is aligned with the UN “Protect, Respect
and Remedy” Framework and ‘Guiding Principles on Business and Human
Rights.’ The fifth chapter on Employment and Industrial Relations deals with
the role of the Guidelines in promoting the observance of International Labour
Standards as set by the ILO by the enterprises. The sixth chapter on Environment
reflects on the ‘Rio Declaration on Environment and Development’ and ‘Agenda
21’. It provides recommendations for the enterprises to contribute towards
environment protection through better planning and management. Chapter Seven
on Combating Bribery, Bribe Solicitations and Extortion provides
recommendations for enterprises to fight and eliminate bribery from the system.
The eighth chapter on Consumer Interests draws its recommendations from the
OECD Committee on Consumer Policy and Committee on Financial Markets
and other international organizations. It calls on enterprises to ensure quality
and reliability of the products produced by them by following fair trade, marketing,
and advertising practices. The ninth chapter on Science and Technology aims to
promote transfer of technology to the host countries. The tenth chapter on
Competition focuses on the importance of enterprises carrying out their activities
in consonance with the competition laws and regulations and refraining from
anti-competitive activities and agreements. The eleventh chapter on Taxation
covers recommendations on fundamental taxation.

The policies on which the guidelines are based focus on two aspects: (i) Positive
contribution of multinational enterprises to sustainable development and (ii)
avoiding adverse impacts. Let us discuss some of the important policies on which
the guidelines are based:

1) Adverse Impacts: Enterprises should avoid causing adverse impacts on

matters covered by the guidelines either through their own activities or
through activities linked to the enterprise by business relationships like
business partners, supply chain or other entities linked to the business
operations.

2) Due Diligence: This means to make identification and prevention of adverse

impacts an integral part of business decision making and risk management
systems of an enterprise. The enterprises with large supply chains are
expected to identify the general areas where there is a risk of adverse impacts
and prioritize suppliers for due diligence.

3) Stakeholder Engagement: During planning and decision making of the

projects, the enterprises should engage the stakeholders specially when the
project is going to impact them. For example, if the project involves
49
Evolution and Concept of CSR extensive use of land or water or any such resource which could adversely
impact the local community, their views need to be taken into account.

4) Fostering Confidence and Trust: Enterprises should develop a relationship

of mutual trust and confidence with the communities in which they work.
They are also required to work within the statutory frameworks of human
rights, environment, health and safety, taxation etc. and not seek undue
exemptions.

5) Human Capital Formation and Capacity-building: Enterprises should work

closely with the local community and create employment opportunities for
the locals. To build their capacities, it should also provide training to the
employees. Promoting awareness and compliance with the company policies
and Guidelines is also encouraged.

6) Corporate Governance: Supporting and upholding good corporate

governance principles is recommended. The practices of good corporate
governance are drawn from the OECD Principles of Corporate Governance
and OECD Guidelines of State-Owned Enterprises.

Implementing the Guidelines

The guidelines are implemented in different countries through the National
Contact Points. During instances of conflict the interested party could submit a
‘Specific Instance’ to the NCP regarding the non-observance of the Guidelines.

National Contact Points: The governments adhering to the Guidelines are

obliged to set up National Contact Points (NCPs) whose main role is to undertake
promotional activities, handle inquiries and resolve issues arising out of non-
compliance to the Guidelines. The NCPs report to the OECD investment
committee and meet on a regular basis and share their experiences.

Specific Instances: The NCPs are not judicial bodies but focus on problem solving
by mediation. In case of any non-observance of guidelines, the interested party
can submit a specific instance to the NCP. Once a specific instance has been
submitted, it is subjected to three phases.

Phase 1: Initial Assessment: This phase involves initial analysis of the issue and
to determine if it requires further examination.

Phase 2: Offer of Good Offices: If the matter requires further investigation, the
NCPs facilitate access to consensual means to resolve the issues. For this matter,
it consults with the parties and if necessary, it asks for advice from the relevant
stakeholders. It also offers mediation whereever relevant to help resolve the issue.

Phase 3: Conclusion: Finally it issues a report if the agreement is reached, a

statement if the party is not willing to participate in the procedures or if no
agreement is reached or if the specific instance does not require any further
examination after the initial assessment . The UN initiative for CSR specially
also include the Sustainable Development Goals adopted in 2015. This has been
discussed in detail in Block 4 of Course 2.

50
Check Your Progress - 2 Perspective in Global Context

Notes: a) Write your answers in about 50 words.

b) Check your answer with possible answers given at the end of the unit.
1) Write any two principles of UNGC.
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

2) What are the core subjects on which guidance is given under ISO 26000?
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................
.......................................................................................................................

2.8 LET US SUM UP

The perspective on CSR varies from country to country. In this unit you have
read about the perspectives of some of the European countries including Austria,
Germany, France, and UK. You have also read about the CSR initiatives in US,
Latin America, and Scandinavian countries. This unit also discusses about various
drivers for CSR in developing countries. There are several international initiatives
which are key expressions of the broader systems of public and private governance
from which the private initiatives emerge. In this unit you have also read about
such initiatives like United Nations Global Compact, United Nations Guiding
Principles on Business and Human Rights, ISO 26000 Guidance Standard on
Social Responsibility, International Labour Organization Tripartite Declaration
of Principles Concerning Multinational Enterprises on Social Policy and OECD
Guidelines for Multinational Enterprises.

2.9 KEYWORDS
Drivers of CSR : Drivers are the factors that encourage companies to
be more socially responsible.
Shared Value : Shared Value is based on the idea that companies
can increase profits and enhance competitiveness by
solving societal problems.
Collective Bargaining : Collective bargaining is a process of negotiation
between employers and a group of employees aimed
at agreements to regulate working salaries, working
conditions, benefits, and other aspects of workers’
compensation and rights for workers. 51
Evolution and Concept of CSR
2.10 BIBLIOGRAPHY AND SELECTED READINGS
Business for Social Responsibility, Inter-American Development Bank, United
Nations Global Compact, UN Women (2018). Women’s Empowerment Principles
Global Trends Report, 2018.
Camilleri, M. (2017). Corporate Citizenship and Social Responsibility Policies
in the United States of America. Sustainability Accounting, Management and
Policy Journal 8(1)
Grayson, D. and Hodges, A. (2002). Every body’s Business: Managing Risks
and Opportunities in Today’s Global society. New York: DK Publishing, Inc.
Gutierrez, R. and Jones, A. (2007). Effects of Corporate Social Responsibility in
Latin American Communities: A comparison of Experiences. International
Corporate Social Responsibility Series, October, 2007.
ILO (2017). Tripartite Declaration of Principles Concerning Multinational
Enterprises, 2017, 5 edition.
Mullerat, R. (2013). Corporate Social Responsibility: A European Perspective.
The Jean Monnet/Robert Schuman Paper Series. European Commission.

OECD (2014). Responsible Business Conduct Matters. OECD Guidelines for

Multinational Enterprises, OECD.
Perez, F.P. and Taboada, J. (2003). Posada Amazonas. Research Report on the
State of Sustainability of SMEs in Latin America.

Strand, R. (2014). Scandinavia Can be an Inspiration for Creating Shared Value.

Financial Times Dated 25th April, 2014.

Strand, R.; Freeman, R. E. and Hockerts, K. (2015). Corporate Social

Responsibility and Sustainability in Scandinavia: An Overview. Journal of
Business Ethics 127: 1-15

Visser, W. (2008). Corporate Social Responsibility in Developing Countries. In

Andrew C., Dirk M., Abagail McW., Jeremy M., and Donald S. S. (Eds). The
Oxford Handbook of Corporate Social Responsibility, pp. 473 – 499.
Websites:
https://www.un globalcompact.org/what-is-gc/mission/principles
http://www.conecomm.com/2017-cone-communications-csr-study-pdf accessed
on 11/1/2019
https://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.

2.11 CHECK YOUR PROGRESS – POSSIBLE

ANSWERS
Check Your Progress – 1
Answer 1: The EU policy on CSR is based on various actions to support this
approach. They include:

52
1) Enhancing the visibility of CSR and disseminating good practices Perspective in Global Context

2) Improving and tracking levels of trust in business

3) Improving self and co-regulation processes
4) Enhancing market rewards for CSR
5) Improving company disclosure of social and environmental information
6) Further integrating CSR into education, training, and research
7) Emphasizing the importance of national and sub-national CSR policies
8) Better aligning European and global approaches to CSR.
Answer 2: Factors influencing CSR in the Scandinavian countries:
5) Stakeholder Engagement and Corporate Reputation
6) Creating Shared Value
7) Institutional Influence
8) Cultural Influence
Check Your Progress-2
Answer 1: Two principles of UNGC are:
Principle 1: Businesses should support and respect the protection of internationally
proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Answer 2: The core subjects on which guidance is given are:

viii) Organizational Governance
ix) Human Rights
x) Labour Practices
xi) The Environment
xii) Fair Operating Practices
xiii) Consumer Issues
xiv) Community Involvement and Development

53