Corporate Social Responsibility

In 2000, the World Business Council for Sustainable Development defined Corporate Social Responsibility (CSR) 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.” Since then, as transnational corporations have expanded their operations to less developed countries, the CSR movement has taken on a global perspective. The United Nations, non-governmental organizations (NGOs), civil society organizations, and foundations have actively pursued the CSR agenda.

While, for the most part, corporate participation in the global CSR movement has been voluntary, the UN and the Office of the United Nations High Commissioner for Human Rights have linked CSR to responsibility for the realization of human rights, including economic and social human rights. This linkage raises the prospect of the UN system and national legislatures and courts holding transnational corporations responsible for respecting civil and political rights and fulfilling economic and social rights that have yet to be formally defined or established in international law.

The most aggressive form of the CSR movement is represented by the 2003 drafting and pursuit of "Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights" by the United Nations Human Rights Council's Sub-Commission on the Promotion and Protection of Human Rights.

As explained in a Commentary on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, under these proposed, but, fortunately, dormant for the present time, norms, transnational businesses would have a duty to fulfill a broad range of economic and social rights, including the requirements:

• to "encourage social progress and development by expanding economic opportunities - particularly in developing countries and, most importantly, in the least developed countries;" and
• to "respect the right to enjoy economic, social, cultural and political development in which all human rights and fundamental freedoms can be fully realized and in which sustainable development can be achieved so as to protect the rights of future generations."

The norms movement has resulted in a call for imposing on businesses the requirement that they perform "human rights impact assessments," or HRIAs, in connection with private sector projects. Before beginning any project, transnational corporations would have to submit an HRIA for government and public consideration. As explained in a Human Rights Impact Discussion Paper prepared for U.N. Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, in the HRIA, the corporation would be required to:

• Describe the proposed business activity;
• Catalogue the legal, regulatory and administrative frameworks to which the activity is subject;
• Catalogue the human rights frameworks that apply to the business activity, even those arising from international conventions which the host country has not ratified;
• Explain how the business activity may change the human rights environment, an explanation that even HRIA advocates acknowledge is a "difficult and subjective enterprise" that may require complying businesses to "devise multiple scenarios;"
• Prioritize the human rights challenges for the company and make recommendations to address those challenges (i.e., modify project design; collaborate with governments, local communities, and other “helpful” actors such as civil society organizations and other companies in the area);
• Incorporate the human rights recommendations into a management plan, which includes ongoing monitoring, adjustments, and regular consultation with “affected” parties; and,
• Engage an “experienced team with knowledge of relevant international standards and local culture” (i.e., a team of normative watch-dogs) to perform the HRIA.

The Special Representative has issued a series of reports relating to CSR and human rights responsibilities of transnational corporations, including:

• An interim report on the issue of human rights and transnational corporations and other business enterprises;
• A report on the effects of the working methods and activities of transnational corporations on the enjoyment of human rights;
• A report on resolving key methodological questions regarding human rights impact assessments;
• A report describing global patterns on business recognition of human rights;
• A report on State responsibilities under treaty body commentaries to regulate and adjudicate corporate activities under the United Nations core human rights treaties;
• A report setting forth the results of legal workshops on corporate responsibility under international law and issues in extraterritorial regulation of transnational corporations;
• A report mapping international standards of responsibility and accountability for corporate acts;
• A report analyzing the results from questionnaire surveys of governments and Fortune Global 500 firms regarding their human rights policies and management practices; and
• A report mapping international standards of responsibility and accountability for corporate acts.

In large part, the Special Representative will rely on United Nations Global Compact to promote CSR norms and the HRIA process. The Global Compact is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, the environment and anti-corruption.

In June 2007, the Global Compact, in conjunction with the International Finance Corporation of the World Bank and the International Business Leaders Forum, published a draft “Guide to Human Rights Impact Assessment and Management.”

Other organizations leading the push for an enforceable link between CSR and human rights include the Business Leaders Initiative on Human Rights and the Business and Human Rights Resource Centre.

Many attempts have also been made to develop a standardized formula that companies can use to report on their corporate social responsibility performance. One such framework has been developed by the Global Reporting Initiative (GRI), and is quickly becoming the “de facto global standard for reporting.” Initially launched in 1997, the GRI has partnered with the United Nations Environment Programme (UNEP), and has been officially inaugurated at the United Nations. The GRI is a multi-stakeholder network of experts who work to develop “Sustainability Reporting Guidelines,” which businesses can use to report on their “economic, environmental, and social performance.” These reports are useful for companies in benchmarking their performance as it pertains to laws, norms and voluntary initiatives, demonstrating how corporate social responsibility influences their decision-making, and comparing their corporate social responsibility performance records over time and with the performance of other organizations.

The GRI consistently updates its Guidelines in order to reflect changes within the realm of corporate social responsibility. The “G3 Guidelines” are the most current edition of the framework, and have been voluntarily adopted by over 1,500 companies worldwide. The Guidelines detail the type of information that should be included in a sustainability report by explaining what constitutes relevant information (“materiality”), how to decide what stakeholder input to include in the report (“stakeholder inclusiveness”), and how the organization contributes to “the improvement or deterioration of economic, environmental, and social conditions, developments, and trends at the local, regional, or global levels” (“sustainability context”). All reports should also provide a complete picture of the organization’s corporate social responsibility performance by incorporating both positive and negative elements, using a consistent format to allow for comparison of reports over time, being sufficiently detailed to give an accurate representation of the organization’s performance, occurring on a regular basis, being sufficiently accessible and understandable to stakeholders, and being conducted in a transparent manner. Each sustainability report has three sections which include a company profile, outlining the organization’s management approach to corporate social responsibility, and reporting on various Performance Indicators.

In addition to establishing reporting guidelines, the GRI also highlights various “priority” issues. One of their current priorities is the issue of corporate social responsibility as it pertains to human rights. The issue of human rights is reflected in the G3 Guidelines as a Performance Indicator, where it calls for quantitative information on how nine specified aspects of human rights are being implemented by organizations. In 2008, the GRI published a report in conjunction with Claremont McKenna College which assessed the human rights performance of 100 sample countries, concluding that, though most companies have policies which address issues of human rights within company practice, “more quantitative results and performance oriented indicators are needed to measure the effectiveness of policies and actions that a company implements to ensure human rights.” However, the GRI acknowledges that the roles and responsibilities of corporations, civil society, and government in regards to human rights are not clear. Thus, the GRI is using this priority issue to help define the “expectations, roles, and responsibilities” of various stakeholders in regards to human rights.

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