CSR and global sourcing
Corporate Social Responsibility (CSR) is the voluntary social and ecological engagement of corporations beyond the mere compliance of law. CSR is corporate action in the daily business activities (market), it contains ecologically relevant aspects (environment) and governs the employer-employee relations (working place) as well as the exchange with the business environment.
Following an ever changing business environment (mainly due to globalisation), improved information and communication technology and changing societal demands on multinational or transnational corporations, incentives grow to implement CSR. Society and consumer challenge corporations to act responsible. Corporations, especially brand names, have their own interest to protect their brand, and to invest on social responsible practices. CSR is not a closed concept: As each business has its own impact on the society and the environment, CSR can contain different policies. Since globalisation is an ongoing process, demands might change, and new demands arise. Corporations that develop sensitivity on CSR might avoid risks in the presence and gain attractiveness in the future.
Voluntary standards on social and working conditions are an enlightning example. in the 1990ies brand names preferred unilateral approaches upon so-called codes of conduct to govern their own business behaviour and that of their suppliers. International standards like that of the International Labor Organisation (ILO) on working conditions are the major source for codes of conduct (coc) on social standards and working conditions. Other important international organisations and vocal points for orientation are the Organisation for Economic Co-operation and Development (OECD) and the United Nations, namely the United Nations Conference on Trade and Development (UNCTAD) . Those organisations developed model codes or issued recommendations for states and corporations on how to act more responsible, following scandals in factories mostly in developing countries. In our decade, most large scale corporations have implemented codes of conduct and cooperate within sectors, with nongovernmental organisations (NGOs), state agencies, and service organsiations to commonly implement standards. Those examples include so-called Public Private Partnerships (PPP) or multistakeholder initiatives (MSI) like SA8000 of the Social Accountability Initiative (SAI). Another major example of those initiatives is the Global Compact of the United Nations. The Global Compact also shows, how policies on CSR develop and change. In the meantime, policies on anti-corruption have become a new principle. Following the financial and economic crises, new ideas and even ideologies that guide business behaviour might evolve. On state and European level, CSR also gathers momentum and is a quite new topic within the European Commission.
Those developments are not at all irrelevant for small and minor corporations. Globalisation also for them means new opportunities and options, but also new risks. Remaining attractive for consumers and business partners is an important goal. The implementation of high quality standards is not enough. Social and ecological factors are getting more and more important. International standard setting is led by many actors making the international business world to a jungle of standards. Keeping up business to those standards and even go beyond helps to become a winner of globalisation.