CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility and Globalization

Corporate social responsibility (CSR) advocates maintain that businesses should assume the major role in making the world a better place. In general CSR activists ask corporations to adopt socially responsible policies on labor, environmental and human rights issues, but there may also be special interest demands, e.g., animal rights, women's rights, technology transfer, rainforest conservation, etc., that a company may be called upon to address.

Social responsibility, in one form or another, has been on the minds of American business for over 100 years. In the late nineteenth century, US pharmaceutical companies established codes of conduct that stressed their need to serve public health while making profits. In 1977, the Reverend Leon Sullivan proposed a human rights code - later expanded into the Global Sullivan Principles of Social Responsibility - for companies doing business in South Africa. By the 1980s, over one hundred mutual funds and investment funds were screening investments for human rights or environmental records.

But the current idea of social activists telling large corporations how to run their businesses - and companies listening - is much newer. Nevertheless, responding to the demands of activists over issues of corporate social responsibility (CSR) has today become integral to the way many large businesses operate. In March 2002, Starbuck's vice-president of corporate social responsibility told The Financial Times, "Activists play a vital and vibrant role in our continued growth and evaluation of who we are as a company." And, as the following examples show, Starbuck's is not alone.

• Following criticism of its labor practices in El Salvador and elsewhere, Gap established a Code of Vendor Conduct for its contract manufacturers and hired 80 compliance officers to oversee labor, health and safety issues in its contract operations around the world.
• After Shell Oil was spotlighted trying to sink an oil platform in the North Atlantic in 1996, and then accused of ecological and labor abuses in Nigeria, the company began reporting on its global social and environmental efforts. It also initiated $50 million in annual social investments in Nigeria.
• Nike, targeted over its use of child labor, contributed $7.7 million dollars to the International Youth Foundation to found the Global Alliance for Workers and Communities to monitor labor conditions in its contract factories overseas.
• In response to outside criticism, Chiquita Brands obtained independent certification for its 119 banana farms in Central and South America, and upgraded its operations to reduce the use of chemicals.

(Source: Corporate Social Responsibility and Globalization: A Reassessment by Randall Frost)