Corporate Social Responsibility the current debate

Introduction: What is Corporate Social Responsibility?

It is a long-neglected challenge in today’s world of economic globalisation and liberalisation to regulate the freeing-up of markets and the increasing dominance of transnational corporations (TNCs) in global trade, investment and supply chains. Specifically, it must be ensured that this neoliberal agenda does not undermine socially ethical and inclusive patterns of development and ecologically sustainable working practises. Whilst in the past many policy makers, social and environmental activists and academics looked to the state to protect against the detrimental effects of markets and the concentration of capital, with the rise of neoliberal orthodoxy in the 1970s the inherent contradictions and failures in the neoliberal system were not only downplayed by those in positions of power, but also associated more with “state failure” than a failure on the part of the private business sector (Internet 1), despite the increasing role of the private sector in regulating market and corporations. It was largely assumed that the market and its physical representations, the TNCs, could be kept in check by minimalist state intervention and corporate self-regulation. However, twenty years of ‘actually existing neoliberalism’ (Brenner and Theodore, 2002) have proven that the market alone cannot satisfactorily regulate capital flow and the consequences of capitalism across the board – a further governing body must be brought in. Thus a quandary was thrown up by adherence to the market-led approach – who should regulate the TNCs? In response to this, a discourse and a set of policies, practices and global institutions concerned with corporate social responsibility (CSR) arose and gained ground from the 1980s onward. Despite evidence that this was not the best course of action, CSR discourse centred heavily on the promotion of purely voluntary initiatives to minimise malpractice or improve the social, environmental and human rights sectors of business performance, as well as on the regulatory role of non-state actors in standard-setting and implementation.

This report will examine several strands of the debate surrounding CSR: section 1 examines the soft voluntary initiatives that characterise corporate regulation, and talk of a gradual hardening of regulatory responses, paving the way for ‘co-regulation’ and stakeholder-led initiatives and, more recently, leanings towards legalistic approaches within the emerging corporate accountability agenda. This section will also briefly examine the importance of the ‘ethical’ stance of corporations to the new ethically responsible consumer. The latest Christian Aid report on CSR notes that: “Within a decade a whole new corporate language, championed by [TNCs] has evolved around the notion of more ethical business practice.” (Internet 2). TNCs today are savvy to the CSR debate: how are they tailoring their activities and advertising to capture the imaginations of the new ‘ethical’ consumer? In this vein, will corporations ever take the notion of CSR seriously as long as there is profit to be had in irresponsibility?

The remainder of the report will ground the debate surrounding CSR within the activities of one corporation – Royal Dutch Shell – in an attempt to illustrate the appalling and irresponsible regulatory approaches adopted by many of the largest TNCs, and consequently, why voluntary corporate regulation is unacceptable and the reluctance of governments (sub-national, national and supra-national) to intervene should be of grave concern.