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Concerns about the negative effects of globalisation and increasing international trade flows have led to a demand for universal CSR standards. With international business influencing all corners of the globe, the risk of inadequate labour standards is high if proper frameworks for safe and sustainable practices are not in place. In response to this demand, collaborations between the public and private sectors have produced a number of global CSR norms and guidelines that all international companies are encouraged to adopt.
UN Global Compact
The UN Global Compact was created as a multi-stakeholder platform for engagement between participating enterprises. Over 10,000 of such corporations now form part of this wide-reaching network designed for the promotion of CSR. Based on its 10 universal principles, including human rights and working standards, the UNGC encourages collaboration between businesses and interest groups in the struggle to promote sustainable practices in both home and host countries.
Signatories to the UNGC are expected to make any necessary changes to their business operations in order to abide by the 10 principles, with include ensuring they are not complicit in human rights abuses, eliminating all forms of forced and compulsory labour, and removing any discrimination in respect of employment. Signatories are held to their obligations through the pressure of international scrutiny – businesses must publish annual reports that details the way their operations support the Global Compact and are encouraged to actively promote the principles through media communications.
The resulting transparency of a company’s commitment to the UNGC and the consequent pressure from the international community ensures that signatories comply with their obligations in order to maintain a good reputation in the international sphere. Growing levels of commitment to this international standard reflects the alignment between the objectives of both the private sector and the wider global community.
ISO 2600 Guidance on Social Responsibility
Unlike other ISO standards, the ISO 2600 cannot be certified and therefore provides only guidance on social responsibility. This standard provides the information and guidance necessary for companies to enhance their social responsibility efforts, encouraging adherents to go beyond what is required of them by law. The guidance provided sets the stage and promotes a shared understanding of the concepts and terms related to social responsibility, trends and characteristics, as well as principles and practices that should underpin business operations in order to achieve positive results.
ISO 2600 is aimed at all types of organisations regardless of their activity, size or location, and therefore promotes clarity and encourages participants to share best practices. Developed with the help of representatives from all spheres, the ISO 2600 represents an international consensus on the CSR norms that should be encouraged.
Like with the UNGC, companies are incentivised to adhere to this standard due to the scrutiny faced by the international community. Increasingly, commitment to such standards and good corporate responsibility records are key factors in measuring a company’s overall performance. The pressure to contribute towards a common goal – effective CSR – thus generates a reputational mechanism that ensures widespread compliance
OECD Guidelines for MNEs
One of the most comprehensive set of recommendations, the OECD Guidelines offer international businesses a framework for responsible conduct by sector. These guidelines have been developed and updated by governments in collaboration with the private sector, NGO’s and international organisations, reflecting a sweeping effort to combat any adverse impacts of international trade.
Despite the largely voluntary nature of the guidelines, their strength in the active role of national governments in ensuring that enterprises adhere to the standards. Participating governments are obliged to set up National Contact Points, which are tasked with managing promotional activities and enquiries, as well as helping to resolve any issues that arise from deviation. The OECD Guidelines are therefore the only government-backed international CSR instrument that contains a dispute resolution mechanism. By integrating consequences for non-compliance, which are borne by both the companies and their respective governments, this standard elevates CSR from the traditional voluntary sphere and give the instrument great force.
34 countries currently adhere to the OECD guidelines, demonstrating the increasing emphasis on long-term sustainable business practices. Rather than being merely philanthropic in nature, the Guidelines encourage businesses to make positive contributions to the economic, environmental and social progress of the countries in which they operate. Responsible business practices are thus integrated into the core business function, rather than maintaining a peripheral nature.
The strengthening partnership between the private sector, governments and NGOs suggests that businesses are increasingly seen as instrumental in solving global challenges. With extensive trade links and supply chains, collaborations between these parties are necessary to mitigate any externalities that arise from poor management of business activities.
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