CSR, CR, Sustainability, CSP (MVO) The Anglo-American vs the Continental Conceptual Approach of CSR (not only the

shareholder-stakeholder debate) Dennis Meadows (The Limits of Growth 1972/2004): Take responsibility for others in place and in time World Commission on Environment and Development (Buntland Commission) Our Common Future (1987): Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

CSR, the debate While it was clear that business sought a profit from providing goods and services in response to societys demands, it was much less obvious what constraints should be put on its activities and who should impose them. Was all profit legitimate, provided that the company stayed within the law? What was a fair distribution of the wealth business created between shareholders, employees and wider society? Should companies give part of their wealth back to the communities within which they operated? Could markets be relied upon to set a fair choice, whether for labor, products or natural resources? Could governments reliably decide what was in the public interest? (Blowfield-Murray, 2008) Societys expectations and business regulation CSR is nothing more or less than decent business conduct and perceived as such by society Societys expectations of business role in society Society has not entirely left the judgment on what is decent business conduct to business itself and has with respect to the most important norms and vulnerable interests of others (stakeholders) intervened with regulation (hard law, soft law) Business has also taken responsibility by adopting (individual or collective) selfregulation based either on own values or as a means to avoid regulation by society There is continuous negotiation between society and business, but the ultimate decision on the best form of regulations of its norms is up to society The weakness in the current system is that societys authority regarding business is still state-based, but contemporary globalization has raised a fundamental problem: a system of global governance without global government, the so-called governance gap

Corporate citizenship A company should behave like a good citizen in business. The law does not (and cannot) contain or prescribe the whole duty of a citizen. A good citizen takes account of the interests of others besides himself and tries to exercise an informed and imaginative ethical judgment in deciding what he should and should not do. This, it is suggested, is how companies should seek to behave. The substantive Triple P CSR-norms People: employees (e.g. human rights codetermination) and third parties (human rights; individuals and communities)

Planet: no depletion of natural resources (e.g. energy, water, fish, palm oil, forests) and protection of the environment (e.g. climate, water, air, soil) Profit: reasonable profit conforming to the basic rules of society, both those embodied in ethical custom (fair disclosure, fair competition, no bribery)

Core characteristics of CSR Voluntarism Internalizing or managing externalities Multiple stakeholder orientation Alignment of social and economic responsibilities Practices and values Beyond philanthropy

CSR is a concept, whereby companies integrate social and environmental concerns in their business and in their interactions with their stakeholders on a voluntary basis CSR is the responsibility of an enterprise for its impact on society CSR is 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 The Voluntary-Mandatory debate on CSR An ideological debate (business and regulators vs society) Irrelevant both from a philosophical and a practical point of view regulatory mix so container concept not only from content (3P-substance) but also from type of norm (form) point of view need two definitions, norm vs process

The ISO 2600 definition CSR is the responsibility of an organizations for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that contributes to sustainable development, health and the welfare of society takes into account the expectations of stakeholders is in compliance with applicable law and consistent with international norms of behavior; and is integrated through the organization and practiced in its relationships

Corporate Social Responsibility (norms) CSR is the responsibility of corporations to meet the legitimate expectations of society for the corporation to conduct its businesses in ways that produce economic, social and ecological benefits to all relevant stakeholders and society at large

Some of these expectations are embodied in hard laws, to be enforced by the courts of law, others in soft laws, self-regulation or in general ethical values, to be enforced by the courts of law (in interpreting open legal norms) or the courts of public opinion. NB Some Soft Law instruments contain self-serving legal standards CSR (process) CSR as a process is the structured and systematic approach in which corporation are embedding all aspects of the CSR-norms in their daily operations at all relevant levels, monitor compliance and results and report to all relevant stakeholders and society at large OECD definition Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, management, shareholders, and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set and the means of attaining those objectives and monitoring performance. OECD Corporate Governance and stakeholders Corporations should recognize that the contributions of stakeholders constitute a valuable in the long-term interest of corporations to foster wealth creating cooperation among stakeholders. The governance framework should recognize that the interests of the corporation are served by recognizing the interest of stakeholders and their contribution to the long-term success of the corporation. The Corporate Governance regulatory mix To ensure an effective governance framework, it is necessary that an appropriate and effective legal, regulatory and institutional framework is established upon which all market participants can rely in establishing their private contractual relations. This corporate governance framework typically comprises elements of legislation, regulation, self-regulatory arrangements, voluntary commitments and business practices that are the result of a countrys specific circumstances, history and tradition.