The notion of corporate social responsibility has taken root in the workings of many key multinational corporations operating around the world today. The World Business Council for Sustainable Development1 defines Corporate Social Responsibility as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"2
A recent example of corporate social responsibility can be witnessed in Internet search giant Google’s threats of leaving the Chinese market over concerns of hacking and censorship.
This news analysis will outline several notable examples of corporate social responsibility throughout the world, from the Sudan Divestment initiatives to responses to the Haiti earthquake to the sustainability efforts by Body Shop and Unilever.
Sudan Divestment Initiatives
A Fordham University International Law Journal article argues that the global response to the Darfur genocide, in the form of economic divestment from Sudan, represented one of the first concerted expressions of corporate social responsibility worldwide.3 The Sudan Divestment Taskforce UK outlines why targeted divestment represents an efficacious method whereby companies may make a difference in the behavior of the Sudanese government:
Targeted divestment seeks to withdraw foreign involvement in those sectors which provide revenues directly to the Sudanese government and elite but do not benefit the wider population. […]Cutting these foreign ties will cut the flow of revenue [from] foreign firms to the Sudanese government and Janjaweed militia.4
Although much of the initial divestment took place pursuant to the US Sudan Divestment Bill (around 2007-2008), efforts by the taskforce still continue. Divestment from Sudan is ongoing because of inaction by the Sudanese government on the issue. To pressure the Sudanese government, TIAA-CREF, New York-based fund house, recently pulled out its investments in ONGC [Oil and Natural Gas Corporation Ltd, the public sector petroleum company in India].5 In addition, TIAA-CREF pulled out of three other Asian oil groups due to concerns over human rights in Sudan.6
In response, the Sudanese government dismissed the fund’s move, citing economic reasons why divestment was a foolhardy measure:
Foreign Ministry Spokesman Muawiya Osman Khalid responded that the "company which withdrew its deposits was mostly suffering from financial problems rather than attempting to establish a political position," according to a state news agency. Mr. Khalid added that such a step will likely not have any effect on the Asian investments in Sudan. He pointed out that several other American companies […] have rejected the call on them to take their investments and deposits out of Sudan.7
Given that the crisis in Darfur is still ongoing, the cumulative effect of divestment on the region and the conflict remains to be seen, though skepticism of this method clearly exists among many quarters.
Corporate Responses to the Haiti Earthquake of 2010
On January 12, 2010, the island nation of Haiti was hit by a devastating earthquake. Public response was swift, with many charities and non-profits springing into action to alleviate the misery caused by the natural disasters. Corporations were not far behind in launching initiatives to benefit the affected Haitian population, sometimes in concert with non-profit organizations.
The Corporate Social Responsibility Newswire reported on January 26, 2010 that
Rebuilding Together [a national non-profit] announced that they are working with Honeywell [a technology and manufacturing corporation], one of their long-established partners, in order to provide immediate aid to the earthquake relief efforts in Haiti. Honeywell has announced that they will commit $1 million, including a 100% match of employee donations, to fund Rebuilding Together's revitalization and rebuilding projects in Haiti. Additionally, Honeywell is making its business jets available to provide airlift support to deliver 1,500 lbs. of medical supplies, including urgently-needed, high-value antibiotics.8
In addition, by January 2010, several leading US corporations (some of which are outlined below) had announced measures by which they would support the efforts of UNICEF’s relief operations:
Major League Baseball made a $1 million contribution to aid the children and families affected by the earthquake and the National Basketball Association and National Basketball Players Association together contributed $1 million to support UNICEF's efforts to provide emergency assistance.
Jefferies & Co. is donating all net commissions earned from global trading operations on January 15th, as well as volunteered salaries from the firm's 2,500+ employee partners globally. The company will also make a corporate donation, for a total donation of $1 million.
UPS and the UPS Foundation have contributed $150,000 in funding and over $100,000 in in-kind shipping and freight, leveraging the company's global network to ensure life-saving supplies get to Haiti as quickly as possible.
Thus, corporations have proven a useful forum for the mobilization of philanthropic efforts, especially in the context of disaster relief, because of specialized infrastructure and skills (as in the case of credit card companies and shipping conglomerates) and because of their nature as societal units facilitating the exchange of human efforts in an interconnected world.
In addition to responding to political events and injustices around the world, corporations often seek to incorporate value-driven practices into their daily operations. As supply chains have become globalized, many corporations source their products and hire their personnel from different corners of the globe. Along with the potential for economic efficiency, this situation has resulted in widespread scrutiny of business practices, particularly in the developing world. The global outcry over Nike’s use of sweatshops in Third World is one example of this phenomenon.9 Contemporary exemplars of corporate social responsibility include the Body Shop and Unilever.
The Body Shop, according to its 2010 sustainability statements:
[has] never, and will never, test cosmetic products on animals.
spends around $11.5 million annually buying ingredients, gifts and accessories from communities across the world, paying a fair price and giving producers access to a global market that would normally be out of their reach.
seeks out small-scale farmers (in areas such as Samoa, Namibia, Ghana, India and Guatemala), traditional craftspeople, rural cooperatives and even tribal villages - all of them highly skilled experts at their work.
partnered with ECPAT (End child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes) and the Somaly Mam Foundation to raise funds and awareness to combat sexual trafficking on August 3, 2009.10
However, corporate social responsibility is not merely an American phenomenon. Numerous multinationals headquartered elsewhere also take pains to highlight their sustainability initiatives and responsible business practices. Unilever, a British-Dutch multinational specializing in foods, beverages, cleaning agents, and personal care products, provides one such example. Some of Unilever’s ethical business practices are highlighted below, from the most recent sustainability data:
In early 2009 Unilever and the International Union of Nutritional Sciences (IUNS), a leading NGO, announced a three-year partnership aimed at communicating scientifically based nutrition principles to the public, while developing future leaders in nutrition and health.
Unilever is financing the Micronutrients and International Health Chair at Wageningen University in the Netherlands for five years. This is to support research on micronutrient deficiencies in the developing world.
In 2008 [Unilever] contributed €91 million to communities (compared to €89 million in 2007). This helped to support around 16 500 community organisations around the world, through cash contributions and support in-kind.
In partnership with the Councils of Children's and Adolescents' Rights, Tutorship Councils, local government and the community, Unilever Brazil has devised practical initiatives that support children's development and ensure they do not have to be left alone while their parents are at work. These include crèches, medical care and advice on nutrition, as well as systems to prevent pupils from dropping out of school.1112
We see, therefore, that some multinationals worldwide, are paying close attention to their global and local impact, in order to function as ethical entities and/or appeal to the ethical consumer.
Corporate Social Responsibility, in the twin senses of reacting humanely to injustice and incorporating ethical practices into the business model, has quickly become a key focus of business decisions in a globalized world. Some skeptics may conclude that such efforts constitute mere window-dressing; others may question the ability of corporations to induce good behavior in governments or effect real change on a global basis. While such concerns are warranted, it is also true that CSR has potential to create global business norms in the absence of an international regulatory body of commerce, and is thus important to consider in the context of increasing economic globalization.
