An Expanding Conception of Social Responsibility? Of Sustainability Fields and Changing Corporate Perceptions Alvise Favotto, University of Glasgow Kelly Kollman, University of Glasgow
Paper’s Central Question / Argument Question: – To what extent are transnational corporations engaging with global CSR norms and changing how they define and fulfil their social obligations? Methods: – A content analysis of management statements in CSR reports, 50 from the US and 50 from Western Europe, over a 20 year period. Findings: – TNCs have expanded how they define their social responsibilities and are changing accountability practices. – Moved from a liability to a social connection model of responsibility – Engagement is mediated by home country and by issue area
Private CSR Authority and Governance Why has private governance emerged and become more prominent? – Governance gaps opened up by economic globalization (Cutler, Haufler and Porter, 1999; Hall and Bierstekker 2002). – NGO targeting and shaming of globalized TNCs (Keck and Sikkink, 1998) – Rise of neo-liberal norms underpins legitimacy of voluntary codes and market mechanisms (Bernstein 2002) How have global CSR rule-makers gained authority? – Private governance schemes draw on different types of authority to gain legitimacy among market actors (Cutler et al 1999; Avant et al 2010) – Moral, market, expert and capacity authority
Rise of Organizational Field for Sustainability Rise of sustainability organizational field: – CSR standards bodies have increased authority by adopting common norms, structures and practices to gain capacity and expert authority (Dingwerth and Pattberg 2009). – Focus on procedures that are trusted by business actors – Core norms and practices: sustainable development; transparency; multi-stakeholder decision-making; auditing; setting targets; reporting. Implementation of CSR norms and practices is less well-understood. – We have a poor understanding of what TNCs will take responsibility for, on what basis, or to whom / how they hold themselves accountable. Uncovering how firms define their responsibility practices complements CSR code effectiveness literature (Prakash and Potoski 2006 ; Gulbrandson 2004; Bernhagen and Mitchell 2010).
Methods and Data Content analysis of the management statements published in CSR reports of 100 TNCs (50 US and 50 German) at 3 points in time ( ; 2005; ) – Firms are drawn from Compustat Database – Two sub-samples are roughly matched in terms of firm size and mix of sectors – Time periods represent formation of sustainability field. – German / US comparison examines reception two different CSR traditions A self-generated coding frame: motivation; global CSR codes mentioned; stakeholders mentioned; CSR areas mentioned. Complement quantitative approach to TNC norm reception and practice with qualitative textual analysis
CSR Reporting by German and US Firms over Time
% OF CSR REPORTS Period CSR areas mentioned Corruption Environment Giving/ community Human rights Labour/ Employees Remuneration
% OF CSR REPORTS Period Stakeholder mentioned Business partners Community Customers Employees IOs NGOs Political regulators Shareholders Suppliers Trade Unions
% OF CSR REPORTS Period Cod e participation GRI ISO SA UN Global Compact UN Guiding Principles % OF CSR REPORTS Period Global CSR norms Continuous improvement Materiality Stakeholder dialogue Sustainability Transparency
% OF CSR REPORTS CountryGermanyUSA Period CSR areas mentioned Corruption Environment Giving/ community Human rights Labour/ Employees Lobbying Remuneration
% OF CSR REPORTS CountryGermanyUSA Period Stakeholders mentioned Business partners Community Customers Employees IOs NGOs State Regulators Shareholders Suppliers Trade Unions
% OF CSR REPORTS CountryGermanyUSA Period Global CSR norms Continuous improvement Materiality Stakeholder dialogue Sustainability Transparency % OF CSR REPORTS CountryGermanyUSA Period Code participation GRI ISO SA UN Global Compact UN Guiding Principles
Analyzing Changing Nature of TNCs’ Social Responsibilities TNCs’ expanded notion of social responsibility. – Moving from liability to social connection model Notions of responsibility are mediated by home country traditions. – Citizenship (US) v stakeholder capitalism (Germany) Notions of responsibility are also mediated by issue. – Success of environmental sustainability engagement
Social Connection Model of CSR We seek broad partnerships and collaborations to bring about innovative solutions to some of the world’s most pressing problems…[W]e identified those we can impact: increasing access and affordability of medicine; meeting the needs of emerging markets: furthering human rights; managing our supply chain; ecologically designing products, managing our environmental impacts; meeting global health needs…(Gorsky 2012).
National Imprints of Global CSR Being a responsible company is integral to our success and we are engaged on the issues that matter most to our customers, employees and communities…I’m proud of the impact we make each day through volunteering and philanthropy, the revitalization of our neighborhoods, and our involvement in so many important issues, including hunger relief, education, job training, the environment and support for our military and veterans (Moynihan 2012). [Our] sphere of influence does not end at the factory gates or in the salesrooms, but includes the interests of all stakeholders – of customers and employees, shareholders, business partners and other interest groups. That is why the BMW Group seeks dialogue with all stakeholders and constantly exchanges ideas with institutions, associations and nongovernmental organisations. For we have to talk to one another if we are to understand and shape the future together (Panke 2006).
Differential Engagement by Issue: Success of Environmental Sustainability It’s not just a matter of preserving an intact environment worth living in – it’s also a matter of sustainable economic development. The earlier and more systematically we reduce our emissions and improve our energy efficiency, the lower the price we’ll have to pay. And whoever is the first to recognize that and establish reliable conditions to work in will be rewarded with investment, growth and jobs (Diekmann, 2013).
Conclusions Firms have increasingly expanded : – the social issues for which they claim responsibility – stakeholders to whom they are responsible – accountability practices they engage in Some convergence across US and German TNCs but clear home country effect. – national traditions v. embeddedness in national markets Engagement with global CSR norms varies greatly by issue – Future research should examine why firms are willing to take responsibility for some social problems and not others.