By: Marc Proksch, Chief, Business and Development, Trade and Investment Division, ESCAP
The concept of corporate social responsibility (CSR) has evolved. This was clear when the United Nations convened the Rio+20 Conference on Sustainable Development in Rio de Janeiro in June 2012. Prior to the Rio+20 Conference, the Global Compact Office organized the Corporate Sustainability Forum in cooperation with the Rio+20 Secretariat, the UN System and the Global Compact Network Brazil from 15 to 18 June 2012. The Forum brought together 2,700 business leaders, investors, academics, government officials, environmentalists and grassroots activists. . Delegates discussed sustainability in 120 separate sessions in the following substantive areas: (1) energy and climate; (2) water and eco-systems; (3) agriculture and food; (4) economics and finance; (5) social development; (6) urbanization and cities; (7) education for sustainable development and responsible management education. In all these areas issues related to innovation and collaboration were discussed.
ESCAP co-organized a session at the Forum entitled “A Changing World: Business as Unusual”. The session contained two panel discussions which discussed the ways business has to change their operations to address sustainable development. The principal outcomes of the session are reflective of the outcomes of the Forum in general and include the following: (1) businesses are part of the solution to sustainable development and need to shift their CSR attention from how to spend their money (on charity) to how they make their money (i.e. in a sustainable and socially responsible manner; (2) businesses have to move from traditional CSR to corporate sustainability and move from focus on shareholder to focus on stakeholder; (3) Governments have responsibilities too and should provide an enabling environment for business to allow them to adequately address sustainability issues, including enforcement and implementation of laws and regulations and curbing corruption; (4) CSR efforts have to be visible and recognized to provide incentives to businesses to practice corporate sustainable principles; (5) There is an urgent need to move from talk to action; (6) Businesses need to adopt mandatory plans on the mitigation of adverse effects of their operations on environment and communities; (7) Partnerships are necessary at all levels, including between global organizations and local governments and institutions.; (9) The tone of dialogue between government and private sector has to change towards a language businesses understand and which creates mutual trust and cooperation; (10) Engaging all stakeholders is the best way forward to promote the concept of corporate sustainability; (11) Businesses have to be more aware of the impact of disasters on their operations and play an active role in the reduction of disaster risk and mitigation of disaster impacts on local communities.
Since the Rio conference, 20 private companies from 14 ESCAP regional member countries made just over 23 commitments in various areas which is just below 13% of all commitments made by private business world-wide. To reach scale, economic incentive structures must be realigned so that sustainability is valued and profitable. This issue is of particular importance in the Asia-Pacific region. Companies in this region often do not have a good record in ensuring sustainability, putting growth and profits first. Only 16 per cent of the participants in the Rio Forum were from the region of which two-thirds were from business.
Towards a convergence of CSR instruments
Against the backdrop of taking a more active rather than reactive approach when it comes to the role of business and the private sector in development, a shift away from the traditional concept of CSR is necessary. As a result, new terms have emerged, such as corporate sustainability (CS), corporate responsibility (CR) or responsible business practices (RBPs). The idea behind this new terminology is to emphasize a shift from a mindset based on charity to a mindset which focuses on a new way of doing business. At the same time, given the multiplicity of instruments to evaluate corporate sustainability, there is a need for convergence of these instruments to reduce reporting requirements and provide the right incentive for businesses to take sustainability serious.
An OECD-ESCAP Conference on this issue was organized as part of the Asia-Pacific Business Forum (APBF) 2012 which was organized by ESCAP in Kuala Lumpur, Malaysia on 15 and 16 October 2012. The objectives of the Conference were: (1) to highlight the new features of the recently transformed landscape of leading international CR instruments; (2) to show how this new landscape has resulted in a more convergent and coherent CR framework for companies operating in Asia and the Pacific; (3) to highlight the key features of the increasingly convergent management paradigm for CR: risk-based due diligence, reporting, stakeholder engagement; and discuss how business in Asia and the Pacific can implement and benefit from it; (4) to increase understanding of CR tools and provide examples of good practices by business in Asia and the Pacific; (5) to demonstrate how social dialogue and access to consensual and non-adversarial means such as mediation and conciliation can contribute to the resolution of societal issues linked to company operations; (6) to explore how “good offices” mechanisms such as that provided by OECD National Contact Points can play a constructive role in resolving corporate responsibility challenges in Asia.
The Conference concluded that convergence of CR instruments was useful as it reduced confusion, achieved more alignment and less deviance, contributed to more and deeper collaboration between stakeholders and cut costs in trying to comply with many different instruments. However it was also noted that proliferation of instruments is not always a bad thing as long as it does not confuse users and leads to greater CSR implementation. It was also observed that local instruments are important and may have more impact than international instruments. The Conference suggested that there was a need to simplify the CSR concept; in particular, there was a call for a mega linkage document for convergence, the need to develop more local tools and enforce a certification mechanism for CR. The adoption of international CR instruments should be obligatory and not be seen as marketing tools.
In conclusion, it can be observed that there is a shift among businesses from the traditional interpretation of CSR as charity and philanthropy to a more comprehensive uptake of responsible business practices globally. However, in the Asia-Pacific region there is still some way to go. While many businesses are willing to adopt responsible business practices and sustainability frameworks, governments need to do more to provide an enabling environment, including proper regulatory frameworks. ESCAP has taken a pro-active approach to the implementation of the Rio+20 Outcome Document and has established a Sustainable Business Network within the context of its Business Advisory Council (EBAC). EBAC advises the Executive Secretary of ESCAP and its Secretariat, as well as member countries, on development issues from the perspective of business. Realizing the need for more sustainable business practices, EBAC has increasingly focused on enhancing the business role in promoting inclusive and sustainable development. For that purpose, it has set up a number of task forces in the areas of “green” business, social enterprise, and inclusive trade and investment. EBAC and its Sustainable Business Network are co-organizers of the Business Forum on Energy, a special event of ESCAP’s Asia-Pacific Business Forum organized on 29 May 2013 during the Asia-Pacific Energy Forum, which will take place in Vladivostok, Russian Federation from 27 to 30 May 2013. The annual main event of APBF is scheduled to take place in Sydney, Australia on 24 and 25 November 2013 and will also address sustainability issues, a recurrent theme of APBF.
For more information, please contact: Marc Proksch, Chief, Business and Development, Trade and Investment Division, ESCAP.