Understanding of CSR and Its Standards

Nasrullah, Nakib Muhammad; Rahim, Mia Mahmudur

doi:10.1007/978-3-319-02350-2_2

Nakib Muhammad Nasrullah⁵ &
Mia Mahmudur Rahim⁶

Part of the book series: CSR, Sustainability, Ethics & Governance ((CSEG))

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1 Citations

Abstract

In defining CSR, there is no overall agreement or consensus. There is a lack of an all embracing definition. Moreover, there is no universal definition of CSR. As a result, there remains an uncertainty about what CSR exactly is; how it can be defined accurately or conclusively. The reason may be rooted in its interchangeable and overlapping character with other terminologies such as ‘corporate citizenship’, ‘the ethical corporation’, ‘corporate governance’, ‘corporate sustainability’, ‘social responsible investment’, and ‘corporate accountability’. The reason may also lie in the fact that the contemporary CSR agenda essentially involves the concept of stakeholders and development as an integral issue of business operation in the present context. This holistic character of CSR creates confusion about the exactness of associated issues which is well expressed in the words of Jeremy Cooper of Australian Securities and Investment:

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Notes

1.
Michael Hopkins ‘Corporate Social Responsibility: An Issue Paper’ (Working Paper No. 27, Policy Integration Department, World Commission on Social Dimension of Globalisation, 2004) 1 http://www.ilo.org/public/english/bureu/integration/download/publicat/4_3_285_wcsdg-wp-27-27.pdf 12 July 2007.
2.
M. Van Marrewijk, ‘Concept and Definitions of CSR and Corporate Sustainability: Between Agency and Communion’ (2003) 44:2-3 Journal of Business Ethics 95, 105.
3.
Jamie Snider and others in their articles titled ‘Corporate Social Responsibility in 21^st century: A View from the World’s Most Successful Firms’ said that an exact definition of CSR is elusive since beliefs and attitudes regarding its nature fluctuate with the relevant issue of the day. As such, viewpoints have varied over time and occasionally are even oppositional. See also T. Pinkston, A B Carroll, ‘A Retrospective Examination of CSR Orientations: Have They Changed?’ (1996) 15:2 Journal of Business Ethics 199, 207.
4.
Australian Parliamentary Joint Committee and Financial Service, Corporate Responsibility: Managing Risks and Creating Value (Report 2006) 4; See above n 1, 1; see also Michale Bowfield and Jerdej George Frynas, ‘Setting New Agendas: Critical Perspectives on Corporate Social Responsibility in the Developing World’ (2005) 81:3 International Affaires 499, 501; see also Dirk Matten and Jeremy Moon, “Implicit” and “Explicit” CSR: A Conceptual Framework for Understanding CSR in Europe (2008) 33:2 The Academy of Management Review 404, 405.
5.
Ibid.
6.
Marrewijk, above n 2, 95.
7.
Ibid.
8.
Ibid; See M. Friedman. ‘The social responsibility of business is to increase its profit.’ The New York Times Magazine (New York) 13 September 1970, 32-33, 12l2-126.
9.
Marrewijk, above n 2, 96.
10.
For more information see the definitions given since 1990s by different organisations and individuals such as the Commission of the European Communities in 2001, 2002 and 2003, World Business Council for Sustainable Development in 1999 and 2000, Michael Hopkins in 1998 and 2003, Marsden in 2001, and Anderson in 2003. They converge on the point of stakeholders’ interests.
11.
Marrewijk, above n 2, 96.
12.
James E. Post, Anne T. Lawrence and James Weber, Business and Society (10^th ed. 2002) 59.
13.
With early contributions of Mcguire (1963), Goodpaster and Mathews (1982), and the Committee for Economic Development (1971), including Van Marrewijk (2001) and Gobbles (2002).
14.
Marrewijk, above n 2, 97.
15.
Ibid.
16.
A. B. Carroll ‘Corporate Social Responsibility: Evolution of a Definitional Construct’ (September, 1999) 38: 3 Business & Society 268, 269.
17.
Ibid 270.
18.
Ibid 280.
19.
Ibid 288.
20.
Alexander Dahlsrud, ‘How Corporate Social Responsibility is Defined: An Analysis of 37 Definitions’ (2008) 15: 1 Corporate Social Responsibility and Environmental management, 1, 8-11.
21.
European Commission, Green Paper: Promoting a European Framework for Corporate Social Responsibility (2001) http://www.europa.eu.int 5 July 2007.
22.
Dahlsrud, above n 20, 8.
23.
Ibid; the definition of the Commission of the European Communities mentioned in the text were made in 2001. But the later definition made in 2002 speaks broadly of CSR as it says: Corporate responsibility is about companies having responsibilities and taking actions beyond their legal obligations and economic/business aims. These wider responsibilities cover a range of areas but as frequently summed up as social and environmental-where social means society broadly defined, rather than simply social policy issues. This can be summed up as the triple bottom line approach, i.e, economic, social and environmental.
24.
Dahlsrud, above n 20, 9.
25.
European Commission, above n 21.
26.
Ibid.
27.
Ibid.
28.
A B Carroll, The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders’ (1991) 34:4 Business Horizons 39, 40, 41.
29.
Ibid.
30.
Dahlsrud, above n 20.
31.
Ibid.
32.
Antonio Argandona, From Ethical Responsibility to Corporate Social Responsibility (2007) IESE Business School, University of Navarra http://www.stthmoas.edu/cathstudies/cst/conferences/thegood company/final papers/Argandona per cent 20final per cent20pape.pdf 24 August 2004.
33.
Simon Zadek, The Civil Corporation: The New Economy of Corporate Citizenship (1^st ed. 2001) 7.
34.
The Concept of Triple Bottom Line was developed by J Elkington in his book ‘Cannibals with Forks: Triple Bottom Line of 21^st Century Business in 1997.’
35.
G P Lantons, ‘The Boundaries of Strategic Corporate Social Responsibility’ (2001) 18: 7 Journal of Consumer Marketing 595, 597.
36.
Carroll, above n 28, 39-41.
37.
Australian Government Corporations and Market Advisory Committee Report ‘Corporate Social Responsibility (2006) 71.
38.
Dahlsrud, above n 20, 4.
39.
See the International Instruments dealing with corporations’ responsibilities such as the OECD Guidelines for Multinationals, ILO Tripartite Declaration, the UN Global Compact and so on.
40.
See ILO, Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977, revised 2000) http://www.ilo.org/public/english/employment 4 September 2007.
41.
Ibid; see also Social Accountability International, Social Accountability 8000 (1998) http://www.ceppa.org 4 September 2007. SA (8000) is designed to describe the labour standards in the developing countries, and Global Reporting Initiatives Guidelines concerning labour practices and decent work.
42.
The right to work as mentioned in the Triple Bottom Line though, does not fall within the purview of core labour rights, but as these are concerned with employees’ labour issues, can be considered as labour rights.
43.
United Nations, Global Compact (2000, revised in 2004) http://www.unglobalcompact.org 4 September 2007.
44.
Ibid.
45.
See ‘Triple Bottom Line of Sustainable Development’ Amnesty International’s Guidelines for Companies, Social Accountability 8000, Global Reporting Initiative Guidelines (GRI).
46.
Carroll, above n 28, 39-41.
47.
United Nations, Global Compact, above n 43.
48.
Ibid.
49.
Ibid.
50.
International Chamber of Commerce, Business Charter for Sustainable Development (1991) http://www.iccwbo.org/home/environment_energy/charter.asp 4 September 2007.
51.
See Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (2000), http://www.oecd.org 4 September 2007.
52.
Ibid.
53.
United Nations Research Institute for Social Development, Corporate Social Responsibility and Business Regulations: How should Transnational Corporations be regulated to minimize malpractice and improve their social, environmental and human rights record in developing countries? (2004) http://www.unrisd.org 24 October 2007.
54.
Hu Xiaoyong, Corporate Codes of Conduct and Labour Related Corporate Social Responsibility: Analysing the Self Regulatory Mechanisms of Multinational Enterprises and Their Impacts to Developing Countries (2006) The Japan Institute for Labour Policy and Training http://www.jil.go.jp/profile/documents/Hu-pdf 27 October 2007.
55.
Levis Julian, ‘Adoption of Corporate Social Responsibility Codes by Multinational Companies’ (2006) 17:1 Journals of Asian Economics 50, 51.
56.
The adoption of self-regulatory code of conduct on CSR helps a company achieve social licence. Because, the social actors through protests, use of media and boycotts license (to do business) the company that over comply. Meeting the requirements of social licence can be made through compliance with CSR and the existence of a CSR code gives an evidence on their compliance.
57.
Jenkins Rhys, Corporate Codes of Conduct: Self-Regulation in a Global Economy (2001) United Nations Research Institute for Social Development http://www.unrisd.org 25 October 2007.
58.
Peter Utting, Corporate Social Responsibility and Business Regulations: How Should Transnational Corporations be Regulated to Minimize Malpractice and Improve their Social, Environmental and Human Rights Record in Developing Countries? (2004) United Nation Research Institute for Social Development http://www.unrished.org 24 October 2007.
59.
Rhys, above n 57.
60.
Ibid.
61.
Peter Utting, Rethinking Business Regulation: From Self-Regulation to Social Control (2005) United Nations Research Institute for Social Development http://www.unrished.org 24 October 2007.
62.
Dara O Rouke, ‘Outsourcing Regulation: Analysing Non-governmental Systems of Labour Standards and Monitoring’ (2003)33:1 The Policy Studies Journal 1, 10.
63.
The term Washington Consensus was initially coined by in 1989 by John Williamson to describe a set of ten specific economic policy prescriptions that he considered to constitute a “standard” reform package promoted for crises-wrecked developing countries by Washington DC based institutions such as the international Monetary Fund, World Bank and the US treasury Department. The phrase Washington Consensus is today a very popular and often pilloried term in debates about trade and development. It is often seen as synonymous with ‘neoliberalism’ and ‘globalisation’.
64.
Utting, above n 61.
65.
European Commission Directorate General for Employment and Social Affaire, ABC of the Main Instruments of Corporate Social Responsibility (2004) http://europa.eu.int/comm/employment_social/soc_dial/csr_index.htm 30 September 2009.
66.
Hu Xiaoyong, ‘ Corporate Codes of Conduct and Labour Related Corporate Social Responsibility: Analysing the Self-Regulatory Mechanisms of Multinational Enterprises and Their Impacts to Developing Countries (2006) The Japan Institute for Labour Policy and Training (2006) http://www.jil.go.jp/profile/documents/Hu-pdf 27 October 2009.
67.
It is noteworthy that the reporting on the basis of triple bottom line under Global Reporting Initiative first developed in 2002 and in 2006 it was focusing the disclosure of the management approach of company’s economic social and environmental aspects.
68.
OECD Guidelines for Multinational Enterprises, above n 51.
69.
The OECD Guidelines were amended in 1979, 1987and in 1991.
70.
Lea Hanakova, ‘Accountability of Transnational Corporations under International Standards’ (LL.M Book, University of Georgia School of Law, 2005) http://digitalcommons.law.uga.edu/stu_llm/17 18 May 2007.
71.
Business for Social Responsibility (BSR) Report (November 2000) http://www.bsr.org 16 October 2009. The current text was enriched with the entirety of social responsibilities after a revision. The revision added a number of issues to the main text including an extension of labour rights, a direct referral to human rights assigning the multinational responsibilities, and a reference to their responsibility to the supply chain (i.e., business partners, suppliers and sub-contractors). More importantly the applicability guidelines cover extraterritorial activities of TNCs.
72.
The recommendations made by the Guidelines to implement these rights express all four fundamental principles and rights at work which are set by ILO Declaration in 1998.
73.
The OECD Guidelines for Multinational Enterprises, above n 51.
74.
Ibid; The text of the environmental issues in the Guidelines is the reflection of the principles and objective as introduced by Rio Declaration of Environment and Development and Agenda 21 (within the framework of the Rio-Declaration. Agenda 21 outlines the main issues regarding sustainable development and identifies key threats and challenges to achieving desired goals.
75.
Ibid.
76.
Ibid.
77.
Ibid; The principles relating to combating bribery reflects the contents of the OECD Convention of Combating Bribery of Foreign Public officials which came into force on 15 February 1999.
78.
Ibid.
79.
Ibid.
80.
Section 1.4 of the OECD Guidelines says “the Guidelines are not aimed at introducing differences of treatment between multinational and domestic enterprises; they reflect good practice for all. Accordingly, multinational and domestic enterprises are subject to same expectations in respect to their conduct wherever the Guidelines are relevant to both.”
81.
OECD Guidelines, above n 51, Sect. 1.5.
82.
Ibid part 2.
83.
Ibid.
84.
Ibid.
85.
Phillip H. Rudloph, ‘The Tripartite Declaration of Principles Concerning Multinational Enterprises’ in Rammon Mullerat (ed), Corporate Social Responsibility: The Corporate Governance of the 21 ^st Century (2005) 217.
86.
Ibid.
87.
ILO Tripartite Declaration, above n 40.
88.
Ibid.
89.
Ibid.
90.
Rudloph, above n 85, 218.
91.
Hanakova, above n 70.
92.
ILO Tripartite Declaration, above n 40.
93.
Ibid; this statement provides co-regulatory approach for handling corporate social activities.
94.
Ibid.
95.
Ibid.
96.
Hans Corell, ‘The Global Compact’ in Ramon Mulert (ed.) Corporate Social Responsibility: the Corporate Governance of 21 ^st Century (2005) 235.
97.
Ibid.
98.
United Nations, Global Compact (2000, revised in 2004) http://www.unglobalcompact.org 04 September 2007.
99.
Principles 1 and 2 of the UN Global Compact.
100.
Principles 3, 4, 5, and 6 of the UN Global Compact.
101.
Principles 7, 8, and 9 of the UN Global Compact.
102.
Principle 10 of the UN Global Compact (revised in 2004).
103.
Lisa Whitehouse, ‘Corporate Social Responsibility, Corporate Citizenship and the Global Compact: A New Approach to Regulating Corporate Social Power’ (2003)3:3 Global Social Policy 299, 307.
104.
Global Compact Office, The Global Compact: Corporate Leadership in the World Economy, (2001) New York, United Nations.
105.
Ibid.
106.
Corell, above n 96, 235.
107.
Ibid.
108.
Ibid.
109.
Hevina Dashwood, ‘Corporate Social Responsibility and the Evolution of International Norms’ in John J. Kirten and Michael Trebilcock (ed.) Hard Choices, Soft Law: Voluntary Standards in Global Trade, Environment and Social Governance (2004) 189.
110.
George Kell, The UN Global Compact: Concept, Achievements, Future (2002) United Nations http://www.unglobalcompact.org 20 September 2007.
111.
Dashwood, above n 109, 353.
112.
United Nations Industrial Development Organisation (UNIDO), Survey of Small and Medium Enterprises in the Global Compact (2004) http://www.unido.org/file-storage/download/?fileper cent5fid=22104 21 September 2007.
113.
S. Prakash Sethi, Setting Global Standards, Guidelines for Creating Codes for Multinational Corporations (1st 2003) p.; Lea Hanakova, Accountability of Transnational Corporations under International Standards (LL.M theses, University of Georgia School of Law, 2005) 40 http://digitalcommons.law.uga.edu/stu_llm/17 10 September 2007.
114.
Whitehouse, above n 103, 310.
115.
Ibid; Corporate Europe Observatory, Global Compact Give TNCs a Free PR Ride (2000), Amsterdam: Corporate Europe Observatory http://www.unglobalcompact.org 10 September 2007.
116.
Dashwood, above n 109, 353.
117.
Jakob Ragnwaldh and Paola Konopik, The UN Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with Regard to Human Rights’, in Ramon Mullerat (ed.) Corporate Social Responsibility: The Corporate Governance of 21 ^st Century (2005) 251, 252.
118.
The Sub-Committee is the main subsidiary body of the United Nations Council on Human Rights, and is composed of 26 human rights experts acting in their personal capacity.
119.
United Nations High Commission on Human Rights, Norms on the Responsibilities of Transnational Corporations and Other Business Enterprisers with Regard to Human Rights (2003) http://www.unchr.ch/huridoca.nsf/(Symble)/E.CN.4.Sub.2.2003.12.Rev 4 September 2007.
120.
UN Secretariat, The Interim Report of Secretary –General Special Representative, (2006) http://www.business-humanrights.org/Documents/SRSG-Report 3 June 2009.
121.
Weissbrodt David and Muria Kruger, ‘Norms on Responsibility of Transnational Corporations and Other Business with Regard to Human Rights’ (2003) 97:4 The American Journal of International Law 901,904.
122.
UN Norms above n 119; see also Caroline Hillemanns ‘UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights’ (2003) 4:10, German Law Journal 1,4. http://www.gernmanlawjournal.com/article.php?id=330. 15 October 2007.
123.
Ibid.
124.
Ibid.
125.
Ibid.
126.
Ibid.
127.
Ibid.
128.
Ibid.
129.
Ibid.
130.
Ibid.
131.
Ibid; see also Heenan Blaikie, ‘Corporate Social Responsibility and Codes of Conduct: The Privatisation of International Labour Law’ (Paper presented at Canadian Council on International Law Conference 15 October 2004) 13.
132.
Ibid.
133.
Ibid.
134.
Rangwaldh and Paola Konopik, above n 117, 253.
135.
UN Norms, above n 119.
136.
Ibid.
137.
Rangwaldh and Konopik, above n 117.
138.
Weissbrodt and Kruger, above n 121, 909.
139.
Ibid.
140.
Ibid.
141.
Ibid.
142.
UN Norms, above n 119.
143.
OECD Guidelines for Multinational Enterprises, part-1, Para 4; ILO Tripartite Declaration, Para. 11.
144.
Hillemanns, above n 122.
145.
Ibid.
146.
Ibid.
147.
The UN Norms, above n 119.
148.
Utting, above n 61.
149.
Ibid.
150.
Ibid; Xiaoyong, above n 54.

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Faculty of Law, University of Dhaka, Eastwood, New South Wales, Australia
Nakib Muhammad Nasrullah
School of Accountancy, Queensland University of Technology, Brisbane, Queensland, Australia
Mia Mahmudur Rahim

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Nasrullah, N.M., Rahim, M.M. (2014). Understanding of CSR and Its Standards. In: CSR in Private Enterprises in Developing Countries. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-319-02350-2_2

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