The Palgrave Handbook of Corporate Social Responsibility [1st ed. 2021] 3030424669, 9783030424664

Table of contents :
Preface
Acknowledgment
Contents
About the Editors
Contributors
Part I: Introduction
Corporate Social Responsibility and the Future: Setting the Scene
1 The Resources of the World
2 The Development of Corporate Social Responsibility
3 Defining Sustainability
4 A Typology of CSR
5 The Relationship Between CSR and Business Financial Success
6 Expanding the Definitions
7 A Focus on Sustainability
8 Is Sustainability Sustainable?
9 Conclusion
References
Part II: General Theory
Definitions of Corporate Social Responsibility
1 Introduction
2 The History of CSR
3 The Modern Era of CSR
4 CSR and its Critics
5 CSR in Businesses
6 Studies of CSR in Businesses
7 CSR and Profitability
8 Stakeholders and CSR in the 1980s
9 The CSR Pyramid in the 1990s
10 The Triple Bottom Line
11 CSR and the Social Contract
12 CSR - The Global Perspective
13 CSR in the World of Global Business
14 CSR in Government and Non-Governmental Organizations
15 CSR - Towards Global Acceptance
16 Summary
17 Cross-References
References
Theoretical Developments in Corporate Social Responsibility
1 Introduction
2 Definitions
3 Dichotomies and Divisions
4 Philosophical Foundations
5 Sociological Perspectives
6 CSR and Capitalism
7 Stakeholders
8 CSR and Legitimacy
9 Ethics
10 Environmental Issues and Sustainability
11 Communication and Reporting
12 Supply Chain Management and Consumers
13 Disclosure and Reporting
14 Accountability and Compliance
15 Implementation
16 Research into CSR
16.1 Research and the Academy
16.2 Research Methods
16.3 Research Topics
16.4 Future Research
17 Developments in CSR
17.1 Broadened Remit for CSR
17.2 Neoliberal Influences
18 The Future
19 Summary
20 Cross-References
References
Triple Bottom Line
1 TBL: The Naissance of a New Concept for an Old Concern
1.1 TBL Concept
1.2 TBL Critics
2 Codes of Conducts as a Tool for TBL Reports: From Issuing Codes of Conduct to Reporting the TBL Performance
2.1 Limited Resources for a Growing World
2.2 The Environmentalist Movement in a Liberal Philosophy
2.3 Global World, Global Problems, and Lack of Global Solutions
3 TBL and the Business Model: The Need for a Stronger Cooperation Between Governments and Companies to Facilitate the Transiti...
4 Future Directions: Quo Vadis, Triple Bottom Line?
4.1 New Concepts, But New Content?
4.2 To a Changed System and a Changed Leadership
4.3 To a New Sustainable Business Model
4.4 The Covid-19 Pandemic: A Chance to Rebuild the World
5 Summary
References
Key Literature
Equity and Regulation
1 Introduction
2 Social Contract, Equity, and CSR
2.1 Corporate Power and Influence
2.2 Corporate Governance
2.3 Balancing Economic and Social Priorities
2.4 Intergenerational Equity
2.5 Institutional Voids and Contextual Equity
3 Regulating CSR to Promote Stakeholder Equity
3.1 Beyond Individualism and Business Case
3.2 Enhanced Stakeholder Disclosure
3.3 Stakeholder Participation
3.4 Accountability and Enforcement
4 Summary
References
Cases
Corporate Responsibility Reporting and Storytelling
1 Introduction
2 History of Corporate Reporting
3 Impressions Management and Corporate Reporting
4 Impressions Management and Rhetoric in Corporate Reporting
5 Storytelling and Impressions Management
6 The Case of JPM
7 Results
8 Discussion
9 Summary
10 Cross-References
References
Key References
Brundtland and After
1 Introduction
2 The Brundtland Commission: Sustainable Development Through Multilateralism
3 Multilateral Mindsets and Sustainable Development
4 Transitioning Aspirations into Multilateral Action
5 Progressing Sustainable Development Agendas Post-Brundtland
6 Global Forums Progressing Sustainable Development Outcomes
7 1992 Rio Earth Summit
8 2002 World Summit on Sustainable Development: Johannesburg
9 2012 United Nations Conference on Sustainable Development (Rio+20) and ``The Future We Want´´
10 The 2015 UN Sustainable Development Summit
11 Approaches and Activities of the HLPF
12 2019 SDG Summit: Accelerated Action Agenda
13 Conclusion
14 Cross-References
References
Human Rights
1 Introduction
2 The International Human Rights Structure
2.1 Charter-Based Bodies under the United Nations
2.2 Submission of Universal Periodic Review (UPR)
2.3 United Nations Human Rights Treaty Bodies
3 Bangladesh Practice
3.1 Constitution and International Human Rights Instruments in Bangladesh
3.2 International Law under the Constitution of Bangladesh
3.3 Provisions Relating to Customary International Law in the National Constitution
3.4 Constitutional Provision Concerning Treaties Adoption and Ratification
4 Role of Higher Judiciary in Enforcing International Human Rights Law at a National Level
5 Indian Practice
5.1 Constitutional Provisions for the Protection of Human Rights
5.2 Role of Judiciary to Protect Human Rights
5.3 Indian Position in International Human Rights Discourse
5.4 Institutional Mechanism for the Protection of Human Rights
5.4.1 The Protection of Human Rights Act 1993
5.4.2 National Human Rights Commission
5.4.3 State Human Rights Commission
5.4.4 Human Rights Courts
5.4.5 The Citizenship Amendment Act 2019 (CAA): New Trends for Violation of Human Rights in India
6 Concluding Remarks
References
Legislations
Treaties
Cases
Part III: Environmental Aspects
Climate Change
1 Key Arguments and Current Thoughts in the Field
2 Historical Development
3 Environmental Commitment and Disclosure of Organizations
4 Climate Change Communication
5 Summary
6 Cross-References
References
Water Resources
1 Introduction
2 State of the Art
2.1 The Water Cycle
2.2 Wastewater Treatment
2.3 Water Pollution
2.3.1 Combined Sewer Overflow
2.3.2 Infiltration of Chemicals and Nutrients
2.3.3 Industrial Wastewater Discharge
2.4 Waste as Water-Polluter: An Overlooked Issue
3 Global Issues Concerning Water Resource Management
3.1 OECD Water Governance Indicator Framework
3.2 Conflict over Water
3.3 Environmental and Social Damages from Overexploitation
3.4 Running Out of Water: Desalination?
4 Sustainable Water Resource Management
5 Summary
6 Cross-References
References
The Emergence and Role of Nongovernmental Organizations
1 Introduction: Emergence of the International NGO Sector
2 Definition and Typology of International NGOs
3 Ideological Foundation of Charity and Philanthropy
4 External and Internal Determinants of NGO Sector Growth
5 Country Report: Defining the NGO Sector in the USA
5.1 US Government-NGO Relations
5.2 Scope of the US NGO Sector
5.3 US NGO Financial Environment
5.4 US NGO Umbrella Organization
6 Country Report: Defining the NGO Sector in the UK
6.1 UK Government: NGO Relations
6.2 Scope of the UK NGO Sector
6.3 UK NGO Financial Environment
6.4 UK NGOs in the European Union Context
6.5 UK NGO Umbrella Organization
7 Country Report: Defining the NGO Sector in Japan
7.1 Japan Government-NGO Relations
7.2 Scope of the Japan NGO Sector
7.3 Japan NGO Financial Environment
7.4 Japan NGO Umbrella Organization
8 Summary
References
Recycling
1 Introduction
2 Theory
2.1 Unlocking
3 Plastic
3.1 Institutional Response
3.2 Firm Response
3.3 Social Response
3.4 Technology
3.5 Soft PVC
3.5.1 Waste Treatment of Soft PVC
3.5.2 Future Perspective on Soft PVC
4 Electronic Waste and Recycling
4.1 Technology System
4.1.1 Waste Picking
4.1.2 Take-Back Programs
4.1.3 Firm Response
4.1.4 Institutional Response
4.1.5 Social Response
5 Textile Recycling
5.1 Technology System
5.2 Firm Response
5.3 Institutional Response
5.4 Social Response
6 Alternatives
7 Conclusion
8 Cross-References
References
Wastewater Disposal Techniques
1 Introduction
2 Wastewater Treatment Outline
3 Requirement of Wastewater Treatment
4 Attributes of Wastewater
5 Wastewater Treatment Stages
6 Chlorination
7 Wastewater Treatment Activities, Processes, and Procedures
7.1 Different Forms of Wastewater
8 Natural Wastewater Disposal Techniques
9 Wastewater Treatment Methods
10 The Conventional Methods
10.1 Activated Sludge
10.2 Trickling Filter Methods
10.3 Rotating Biological Contactor Method
11 Bioreactor Membrane Method
12 Type of Nonconventional Methods
13 Waste Stabilization Ponds
14 Construction of Wetlands
15 Oxidation of Ditches Method
15.1 Upflow Anaerobic Sludge Blanket (UASB) Method
16 Soil Aquifer Treatment Method
17 Disposal of Fecal Sludge and Treatment
18 Wastewater Recycles in Agriculture
19 Industrial Wastewater Treatment Method
20 Modern Methods Used in Wastewater Treatment
21 Obstacles in Wastewater Management
22 Summary
23 Cross-References
References
Sustainable Plastic and Corporate Social Responsibility
1 Introduction
2 The Invention of Plastic
3 Corporate Social Responsibility and Plastic
4 Uses of Sustainable Polymers
5 Problems with Using Plastic
6 Microplastics in the Environment
7 The Circular Economy
8 Reusing and Recycling
9 Future Perspective and Outlooks
10 Alternatives Available
11 Corporate Social Responsibility Revisited
12 Conclusions
13 Summary
14 Cross-References
References
Technological Approaches to Sustainability
1 Introduction
2 A Brief Definition of Technology
3 What Makes a Technology Sustainable?
3.1 Electric Energy Sources
3.1.1 Non-sustainable Electric Energy
(i) Coal-Fired Power
(ii) Oil and Gas-Fired Power
(iii) Nuclear Power
3.1.2 Sustainable Electric Energy
(i) Solar Power
(ii) Wind Power
(iii) Biogas Power
(iv) Hydrogen Fuel Cells
3.2 Other Energy Sources
3.2.1 Non-sustainable Energy
(i) Lead-Acid Batteries
(ii) Gasoline
(iii) Ethanol
(iv) Biodiesel
3.2.2 Sustainable Energy
(i) Pumped Hydro
3.3 Energy Usage (Lighting, Heat, and Transportation)
3.3.1 Non-sustainable Energy Usage
(i) Incandescent Lights
(ii) Internal Combustion Car
(iii) Battery-Electric Vehicles
3.3.2 Sustainable Energy Usage
(i) LED Lights
(ii) Solar Water Heaters
3.4 Waste Management
3.4.1 Non-sustainable Waste Management
(i) Landfill Disposal
3.4.2 Sustainable Waste Management
(i) Recycling
(ii) Bioenergy with Carbon Capture and Storage
3.5 Sustainable Construction Technologies
4 The Economic Perspective on Technology for Sustainability
5 Sustainability Technology and Public Policy
6 Summary
7 Cross-References
References
Part IV: Social Aspects
Governance of Migration and Sustainability
1 Introduction
2 Conquering the World Through Mobility, Ingenuity, Destruction and Adaptation and The Need to Develop Sustainable Ways of Coe...
3 The Promise of Globalization
4 Concluding Reflection on Where to Go from Here?
References
Sustainable Development Goal 8: Achieving Decent Work - An Illusion
1 Background
2 SDG, What It Is and How Different It Is from MDG?
3 Goal 8 of SDG: Decent Work and Economic Growth
3.1 The Concept of Decent Work
4 Agenda 2030 for SDG 8
4.1 The Importance of SDG 8
4.2 Where the World Is Now?
5 What Is Informal Employment and Informal Sector
6 Does MSME Create Jobs?
7 What Kind of Jobs MSME Create?
8 What Is the Possibility of Job Creation by Large Firms?
9 Solutions Ahead
10 What Are the Possible Future Developments?
11 Summary
12 Cross-References
References
Work-Life Balance and Well-Being at Work
1 Introduction
2 Work-Life Balance and Work Life
3 Work-Life Conflict
4 Methodology
5 Results
5.1 Work-Family Conflicts that Affect Work-Life Balance
5.1.1 Long Working Hours
5.1.2 Poor Family Relationship
5.1.3 Lack of Time
6 Health and Well-Being Initiatives to Promote Work-Life Balance Satisfaction
6.1 Flexible Working Arrangements
6.2 Work-Life Balance and Well-Being Coordinator
6.3 Healthy Meals and Dietitian
6.4 EAP Program
6.5 Education and Training
6.6 Day Care Services
6.7 Fun at Work
6.8 Healthy Working Conditions
6.9 Company Group Health Plan
6.10 Gym Membership and Exercise Classes
6.11 Meditation Room
6.12 Water Cooler in Offices
6.13 Team Working
6.14 Reduction of Working Hours
6.15 Appreciation and Respect
6.16 Fairness at Work
6.17 Vacation Leave
7 Employer Implementation of Family-Friendly Practices to Promote a Psychologically Healthy Workplace
7.1 Fun and Family Activities
7.2 Time Management
7.3 Work-Life Conflict Counselling
7.4 Improved Trust and Confidentiality
7.5 After School Programs for Employees´ Children
7.6 Good Work Relationships
7.7 Peer Support
7.8 Quiet Break Time
7.9 Bring your Child to Work Day
7.10 Respect and Fairness at Work
7.11 Flexible Working Arrangements
8 Discussion and Conclusion
References
Social Capital, Community Engagement, and Corporate Social Responsibility
1 Extended Stakeholder Model, Community Engagement, and CSR
2 Community Embeddings of CSR
3 Constructive Synergy Networks with Social Capital and CSR
4 Community and Corporates: Win-Win for All
5 Summary
References
Employee Volunteering
1 Introduction
2 Employee Volunteering Definitions: Different Terminologies with Slightly Different Meanings
3 Global Trends in Employee Volunteering
4 Effective Implementation of Employee Volunteering
4.1 Employers´ and Employees´ Motives in Conducting Employee Volunteering
4.2 Managing Employee Volunteering Effectively
4.3 Types of Employee Volunteering Activities
4.4 Benefits of Employee Volunteering
5 A Snapshot of EV Implementation in Indonesia
5.1 Respondents´ Profile
5.2 Practices and Employers´ Investment on Employee Volunteering
5.3 Measuring Employee Volunteering Outputs, Outcomes, and Impacts
5.4 The Benefits of Employee Volunteering to Employers and Society
5.5 Challenges and Key Success Factors in Conducting Employee Volunteering
6 Discussions
7 Summary
8 Cross-References
References
Socially Responsible Retailing
1 Introduction
2 Development of CSR in the Retail Sector
3 Literature Review and Theoretical Perspectives in Retail Context
3.1 Legitimacy Theory
3.2 Carroll´s CSR Pyramid
3.3 Sustainable Development Model
3.4 Stakeholder Pressures in the Retail Sector
4 CSR Reporting in the Retailing
5 CSR Issues in the UK Retail Sector
5.1 Environmental Performance
5.2 Community Investment
5.3 Health and Safety and Workplace Disclosures in CSR Reports
5.4 Customer Expectations
5.5 Community Expectations
6 Summary
7 Cross-References
References
Key References
Gender and Corporate Social Responsibility
1 Introduction
2 Feminist Discourses and Women in Working Life
3 CSR and Women
4 Summary
References
Internet Sources
Developing Trends
1 Introduction
2 Corporate Social Responsibility and Neoliberal Economics
3 Institutional Arguments for Corporate Social Responsibility
4 Corporate Social Responsibility Between Ethics and Economics
5 Toward an Institutional Concept of Corporate Social Responsibility: Defining the ``Good Citizen Corporation´´
6 Developing Trends of Sustainability After the 2020 Corona Crisis: Extension of Corporate Social Responsibility to All Dimens...
7 Summary
8 Cross-References
References
The State of Social Media Research in CSR Communication
1 Introduction
2 The Importance of CSR Communication Through Social Media
3 Main Themes in CSR Communication Literature Through Social Media
3.1 Theme 1. Stakeholder Engagement and Interactivity on Social Media
3.2 Theme 2. Best Practices on Social Media Platforms: Facebook and Twitter
3.3 Theme 3. Tactics for CSR Message Effectiveness
3.4 Theme 4. Transparency, Reputation, and Privacy
4 Opportunities and Challenges for CSR Communication on Social Media
5 Summary
6 Cross-References
References
Sustainability and Accountability in Higher Education Institutions
1 Introduction
2 The Social Responsibility of Higher Education Institutions (HEIs)
3 Redesign HEIs for the Future in Support of Sustainable Development
4 Accountability in HEIs in Favor of Sustainability
5 Summary and Cross-references
References
Part V: Economic Aspects
Foreign Direct Investment and Development in Developing Host Economies
1 Introduction
2 Benefits and Costs of DTTs
3 DTTs and FDI
4 Network Effect of Tax Treaties
5 DTTs and Taxing Rights
6 The Impact of Double Tax Treaties on Welfare
7 DTTs, FDI, and Welfare Development
8 Summary
References
Social Business: A New Chapter of Hybrid Business Toward Sustainable Development
1 Introduction
1.1 Corporate Social Responsibility (CSR)
1.2 Bottom of the Pyramid (BOP)
1.3 Social Entrepreneurship (SE)
1.4 Inclusive Business
1.5 Impact Investing
1.6 Circular Economy
2 Social Business: Meaning and Definition
3 Inception of Social Business
4 Why Social Business?
5 Social Business in Action: Practical Lessons from Grameen Experiences
5.1 Grameen Danone
5.2 Grameen Veolia
6 Designing a Successful Social Business
6.1 Targeting the Focus Area to Serve
6.2 Developing a Successful Business Model
6.3 Constantly Learning and Adjusting
6.4 Building Well-Organized and Sustainable Procedures
6.5 Assessing and Supervising Impact
7 Social Business Across the World
7.1 Campo Vivo (Colombia)
7.2 Hope Development Initiative (Uganda)
7.3 Instituto Muda (Brazil)
7.4 NextGen (Tunisia)
7.5 Cashpor (India)
7.6 Rizona (Kosovo)
7.7 Green Bio Energy (Uganda)
7.8 St. George Organic Herb Farm (Albania)
7.9 Human Harbor Inc. (Japan)
7.10 Ashoka (Germany)
8 Opportunities and Strengths of Social Business
9 Drawbacks and Challenges of Social Business
10 Social Business and Sustainable Development
11 Conclusion
12 Summary
References
Key References
Modern Slavery Disclosures in a Voluntary Regime
1 Introduction
2 Firm´s Incentives to Disclose Modern Slavery Information
2.1 Economic Perspective of Modern Slavery Disclosure
2.2 The Political Costs of Modern Slavery Disclosure
2.3 Firm Size as Proxy for Political Cost in Modern Slavery Issues
2.4 Industry Type and Modern Slavery Disclosures
3 Research Design
3.1 Data Sources
3.2 Predictor Variables
3.3 Content Analysis and Modern Slavery Index
3.4 Software for Content Analysis of the Modern Slavery Disclosure Index
4 Results and Discussion
4.1 Correlations Among Variables
4.2 Regression Analysis
5 Conclusion
References
The Legal Basis of CSR
1 Introduction
2 Part 1
2.1 A. Ethics, Morality, and Corporate Obligation
2.2 Public Policy and Public Interest
2.3 Voluntary and Community Work and a Company
3 Part 2
3.1 A. The Protection Provided to Stakeholders by the Legal System of England
3.2 Liability and Responsibility
4 Summary
5 Cross-References
Appendix 1: Legislation Protecting Rights of a Customer/Consumer
Appendix 2: Legislation Protecting Rights of an Employee
Appendix 3: Legislation Protecting Right of a Local Community and Protecting Environment
Appendix 4: Legislation Protecting Rights of a Shareholders/Investors and Creditor
Appendix 5: Legislation Protecting Rights of the Government, Local Government, and Governing Body
References
Primary Source
A. Cases
B. ECHR Case Law
C. Statute
D. Regulations and Delegated Legislations
E. EU Laws
Secondary Sources
Hansard/Parliament Report
UN/EU/ Government Publications and Reports
Constitutions of Associations
Books
Journal Articles/Academic Papers/Gray Papers/Websites
Integrated Reporting
1 Introduction
2 What is an Integrated Report?
3 The Evolution of
4 Advantages of
4.1 Enhanced Accountability to and Engagement with Stakeholders
4.2 Clear Framing and Articulation of Value Creation Model and Sustainability Strategy
4.3 Development of Systems Thinking and Collaboration
4.4 Embedding Sustainability into Decision-Making
4.5 Aligning Strategy with Value Integrators and Value Creation: A Long-Term Perspective
5 Disadvantages of
5.1 Assurance Issues
5.2 Confidentiality of Information
5.3 Increased Costs: Redesign of Reporting Structures
5.4 Senior Executive Support
6 Integrated Reporting Adoption
6.1 External Determinants of Adoption
6.2 Internal Determinants of Adoption
6.3 Integrated Reporting in Higher Education
7 Current Thoughts and Future Directions
7.1 Integrated Thinking
7.2 Multitude of Standard Setters
7.3 Future Directions of
8 Summary
9 Reading Resources
10 Cross-References
Appendix 1
References
Corporate Social Responsibility (CSR) in Multinational Companies (MNCs), Small-to-Medium Enterprises (SMEs), and Small Busines...
1 Introduction
2 CSR in SMEs
2.1 Characteristics, Strengths, and Weaknesses of SMEs
2.2 Drivers of CSR in SMEs
2.3 Challenges of SMEs in CSR Implementation
3 CSR in MNCs
3.1 Characteristics, Strengths, and Weaknesses of MNCs
3.2 Drivers of CSR in MNCs
3.3 Challenges of MNCs in CSR Implementation
4 Relationships Between SMEs and MNCs
5 Theoretical Perspectives on CSR in Terms of SMEs and MNCs
5.1 Carroll´s (1979) CSR Pyramid
5.2 Wood´s (1991) Corporate Social Performance Model
5.3 Freeman´s (1984) Stakeholder Theory
5.4 Waddock et al. (2002) Total Responsibility Management Framework
5.5 Windsor´s (2006) CSR Model
5.6 Hemingway and Maclagan´s (2004) Framework for Analyzing CSR
6 Comparison of SMEs and MNCs in Terms of CSR Strategies
6.1 Environmental Management
6.2 Employment
6.3 Communication of CSR
6.4 Supply Chains
6.5 Community Volunteering
6.6 Local Community
7 Summary
8 Cross-References
References
Key References
Gold Standard: Socially Responsible Investment Analysis
1 Introduction
2 Gold: The Beginning Socially Responsible Investment Analysis
3 Gold: The Middle Socially Responsible Investment Analysis
4 Gold: The Ending Socially Responsible Investment Analysis
5 Summary
6 Cross-References
References
How to Reap the CSR Fruits: The Crucial Role Played by Customers
1 A New Paradigm for Doing Business: The CSR Era
2 The Increasing Relevance of a Consumer-Based Perspective
3 Early Research: Segmentation-Based Profiling of Consumers
4 Behavioral Models: Between Rationality and Habits
5 The Forefront of Research on Responsible Consumers
6 Summary
References
Part VI: Regions and Segments
The UN Global Compact: An Overview of the Promise and Pitfalls
1 Introduction
2 History and Overview of the Global Compact
3 The Promise: Why the Global Compact is Widely Acclaimed
4 The Pitfalls of the Global Compact
5 The Global Compact and the COVID-19 Pandemic
6 Summary
7 Cross-References
References
Regulation of CSR from International, European, and Spanish Viewpoints
1 Introduction
2 Global Compact Such an International Reference
3 Nature of CSR: From Discretionary to Mandatory
3.1 Governmental Context: Encouragement and Regulation
3.2 Social Context and CSR Implementation Process
3.3 International Context and the Ultimate Purpose of CSR
3.4 Political Context from the Local Versus International Viewpoints
4 CSR Regulation from an International Viewpoint
4.1 CSR Regulation from the EU Directives Viewpoint
4.2 CSR Regulation from the Viewpoint of Spanish Directives and Law
5 Summary
6 Cross-References
Annex
References
Legislation
The Evolution of Institutional Environments in the Development of Corporate Social Responsibility in Selected ASEAN Countries
1 Introduction
2 Development of CSR in Malaysia
3 Development of CSR in Indonesia
4 Development of CSR in Singapore
5 Development of CSR in Thailand
6 Conclusion
7 Cross-References
References
Regional Review: Developed Countries
1 Introduction
2 CSR and the Rise and Fall of Neoliberalism and Globalization
3 CSR in North America and Europe
4 Summary
5 Cross-References
References
Regional Review: Latin America
1 Introduction
2 Foundations
3 Reflexive Practices About CSR in LAC
4 Some of the Environmental Problems in LA
5 Priority Concerns in Latin America: Evidence from Bibliography Review
6 CSR in the Region: Environmental Issues
7 Can We Talk About a Common Agenda?
8 Cross-References
Appendix 1 Frequent words in the Spanish texts
Appendix 2 Frequency of words in the Portuguese texts
Appendix 3 Frequent words in the English texts
References
Regional Review: Africa
1 Introduction
2 Methods and Analysis
3 Evaluation of Definitions
4 Classic and New Debates About CSR in Africa
5 Managerial and Academic Perspectives of CSR in Africa
6 Highlights of CSR Policies and Programs of Selected Companies in Africa
7 Role of Civil Society in CSR Awareness and Advancement
8 Contextualizing CSR in Africa
9 Conclusions, Research Implications, and Suggestions for Further Research
10 Future CSR Agenda and Direction in Sub-Saharan Africa
References
Corporate Social Responsibility in China
1 Introduction
2 Overview of CSR Development in China
3 Four Stages of CSR Development in China
3.1 Starting Stage (2001-2004)
3.2 Hovering Stage (2005-2007)
3.3 Spurting Stage (2008-2012)
3.4 Improving Stage (2013-2018)
3.4.1 Rabies Vaccine Incident
3.4.2 Jack Ma´s International Leadership
3.4.3 Guide 3.0 and Six Roles of CSR
4 Contributions of Nonprofit Organizations
4.1 Institute of Public and Environmental Affairs (IPE)
4.2 Alashan SEE Ecological Association
4.3 China Social Responsibility 100 Forum
5 Overseas Fulfillment of Social Responsibilities of Chinese Enterprises
6 Summary
7 Cross-References
References
Corporate Social Responsibility in India
1 Introduction
2 Applicability of CSR
3 Allowable Expenditures Toward CSR
4 Implementing of CSR Activities
5 CSR: Indian Corporates Overview
6 Why Does It Matter?
7 Indian Corporate Adopting CSR
7.1 Corporate Philanthropy
7.2 CSR: Global Overview
8 Governance of CSR in India
8.1 The Relevance of Section 135 Companies Act 2013
8.2 Recent Amendments to Section 135 of Companies Act 2013 (The Companies (Amendment) Act 2019)
8.3 Calculation of ``Net Profits´´ Under Section 198
8.4 Companies (CSR Policy) Rules 2014
9 CSR: A Boon for Society or a Burden for Corporate
9.1 CSR in India: The Way Forward
10 Conclusion
References
CSR in the USA and UK Versus CSR in Europe and Asia
1 Introduction
2 Qualifications
3 Growth Versus Sustainability
4 Growth
5 Sustainability
6 The Importance of History
7 Two Narratives, Two Agendas
8 Narratives or Ideology?
9 Legal Systems
10 Summary
11 Cross-References
References
Part VII: Sustainability
Resource Depletion
1 Introduction
2 Depleting Resources
3 Geopolitical Considerations
4 Extent of Remaining Resources
5 Reacting to Resource Depletion
6 Manufacturing Firms and Resource Depletion
7 Strategies for Dealing with Resource Depletion
8 Stockpiling
9 Technological Solutions
10 The Market and Its Inefficiencies
11 A Prognosis
12 Summary
References
Key References
Geopolitics of Natural Resources
1 Introduction
2 What Is Geopolitics?
3 The Chapter´s Approach
4 The Drive Towards Adventures
5 Power Relations and Rivalry
6 The Quest for Global Resources
7 Globalization - The New Imperialism?
8 Globalization and the Search for Natural Resources
9 Natural Resources and Conflicts
10 The Role of Corporate Social Responsibility
11 Addressing the Issues of Geopolitics
12 Summary
13 Cross-References
References
Artificial Intelligence and Social Responsibility
1 Overview
1.1 Basic Issues
1.2 Important Concepts and Their Relations
1.3 A Note on Literature Review
2 Major Historical and Contemporary Issues Surrounding the Relation of AI and SR
2.1 AI and Its Fundamental SR
2.2 AI and General Principle of SR
2.3 AI and Particular Types of SR
2.4 A Note on Social Implications of Introducing AI
3 Summary
4 Cross-References
References
Key References
Sustainability and Consumer Behaviour: Towards a Cohered Emergent Theory
1 Introduction
2 Corporate Sustainability, Performance and Consumers´ Reaction
3 Consumer Attitudes Towards Consumption
4 Challenges of Sustainable Development
5 Cohered Corporate Sustainability Development
5.1 CAS Module
5.2 Planned Learning Module
5.3 Emergent Learning Module
5.4 Deferred Learning Module
6 Conclusion
References
Tobacco CSR, Sustainability Reporting, and the Marketing Paradox
1 Introduction
2 CSR and Sustainability Reporting Frameworks
3 Tobacco Industry and Regulation
3.1 The Framework Convention on Tobacco Control
3.2 Regulations in Emerging Markets
4 Self-Reported Tobacco Industry CSR and Sustainability Performance
4.1 Developed Versus Emerging Markets
5 Critical Evaluation of the Tobacco Industry´s CSR and Sustainability Initiatives
6 E-Cigarettes, HTPs (Heated Tobacco Products), and the Tobacco End Game
6.1 Corporate Image Rebranding and Repositioning
6.2 Access to Advertising Channels, the Youth Market and Cross-Selling Opportunities
7 Tobacco Marketing in Emerging Markets
7.1 Product
7.2 Place
7.3 Price
7.4 Advertising and Promotion
8 Tobacco Marketing in Developed Markets
8.1 Product
8.2 Place
8.3 Price
8.4 Advertising and Promotion
9 Summary
9.1 Implications for Other Harmful Products
10 Cross-References
References
The Sustainable Development Agenda
1 Introduction
2 The Role of Sustainable Tourism and Sustainable Economic Development
3 ``Overtourism´´: Blessing or Disaster for Sustainability?
4 The Role of Local Community as Key Players in Sustainable Tourism
5 Stakeholder Interaction and Special Attention for Indigenous People
6 Governance and Manpower
7 Sustaining Tourism While Sustaining Mother Earth
8 Virtual Tourism: The Helping Instruments
9 Summary
10 Cross-References
References
Innovation and Sustainability
1 Introduction
2 (Traditional) Innovation
2.1 Multiple-Disciplinary Perspectives
2.1.1 Economic and Business Perspectives
2.1.2 Organizational Perspective
2.2 Origin of (Traditional) Innovation
2.3 Innovation Diffusion
3 Eco-innovation
4 Social Innovation
5 Sustainable Innovation
6 Summary and Concluding Remarks
7 Cross-References
References
Sustainable Marketing
1 Overview
2 The Evolution of the Concept
3 The Notion of Sustainability Marketing: Conceptualization and Definition
4 Different Facets of Sustainable Marketing
4.1 Environmental Dimension
4.2 Social Dimension
4.3 Economic Dimension
5 Synthesizing the Existing Knowledge
5.1 Lack of Studies that Focused on All Facets
5.2 Theory Used
5.3 Profiling the Green Consumers
5.4 Innovation in Sustainable Marketing
5.5 Focus Toward Quality of Life (QOL)
5.6 Dominance of Psychological Variables in Shaping Sustainable Consumer Behavior
5.7 Sustainability Marketing - Is It a Panacea?
6 Problems and Prospects of Sustainability Marketing
7 Conclusion
References
Key References
Corporate Human Rights Responsibility in Times of Increasing Socio-cultural and Political Isolationism
1 Introduction
2 Multinationals in the Context of Increasing Globalization and Socio-cultural and Political Isolationism
3 The Theoretical Framework for Corporate Human Rights Responsibility
4 Moving Beyond Mono-culturalism: Cases of Successful Corporate Human Rights Responsibility Practices
5 Principles for Corporate Human Rights Responsibility
6 Summary
7 Conclusion
References
Key References
Corporate Social Responsibility Reporting: Evolution, Institutionalization, and Current State
1 Introduction
2 What Is CSR and CSR Reporting?
3 Origins of CSR Reporting
4 The Evolution and Institutionalization of CSR Reporting
4.1 Generally Accepted Accounting Principles (GAAP)
4.2 The OECD Guidelines for Multinational Enterprises
4.3 SA 8000 Social Accountability International Labor Standard
4.4 Copenhagen Charter
4.5 UN Global Compact
4.6 European Union CSR Reporting Initiatives and EMAS
4.7 Global Reporting Initiative (GRI)
4.8 The ISO 26000:2010 Guidance on Social Responsibility and ISO Standards
4.9 AA1000SES (AA1000 Stakeholder Engagement Standard)
5 CSR Reporting in Academia
6 Future Prospects
7 Summary
8 Cross-References
References
Index

Citation preview

David Crowther Shahla Seifi Editors

The Palgrave Handbook of Corporate Social Responsibility

The Palgrave Handbook of Corporate Social Responsibility

David Crowther • Shahla Seifi Editors

The Palgrave Handbook of Corporate Social Responsibility With 56 Figures and 85 Tables

Editors David Crowther De Montfort University Leicester, UK

Shahla Seifi Social Responsibility Research Network http://www.srrnet.org

ISBN 978-3-030-42464-0 ISBN 978-3-030-42465-7 (eBook) ISBN 978-3-030-42466-4 (print and electronic bundle) https://doi.org/10.1007/978-3-030-42465-7 © Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

Corporate social responsibility (CSR) continues to be an important topic within the business community and equally so within the research community. As all concerned will understand, this is a very broad topic covering a wide range of issues; moreover, these issues continue to change and develop over time, so the most important topics now are very different to those a very few years ago and will almost certainly be different and continue to develop and change in the future. Although CSR is a term which is well known, it is normally interpreted to be concerned with the management of a business. Indeed, everyone might think that they can talk knowledgeably about it, but many do not even believe that issues involved in CSR are far wider than just human rights and governance. Issues such as natural environment, energy production and consumption, water, sustainable consumption, artificial intelligence, and human and animal health are just a few examples of issues to be tackled within the field of social responsibility. Equally, governance continues to be an issue of relevance and concern. The concept of governance is widely discussed and often in relation to the governance of corporations – hence, the ubiquity of the term corporate governance – and other bodies. The term has now been in existence for a considerable period of time and many people have considered what this means, leading to much theoretical development of the concept. Current concerns with such things as corporate failures and corruption have added more urgency into the debate, which has entered the arena of public opinion just as much as within business. The concept has gradually become incorporated into all aspects of life, politics, and business to such an extent that everyone is familiar with the concept and has some view of the issues involved. Probably an issue which has the greatest prominence at present is that of sustainability and within that the issues of climate change and environmental degradation. The concept is regularly mentioned by politicians and by the media. The concepts of CSR, governance, and sustainability are however largely treated as separate and discrete, with focus being on one or other of them. This book starts from the premise that they are in fact inter-related and good governance is a precursor to sustainability and CSR encompasses both. These all, therefore, form a focus within this book. The book considers a wide range of theory in order to elucidate the reader. This is however coupled with what is actually happening in practice as a way of addressing v

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Preface

the problems. In practice, the areas of application and implementation have risen to prominence and it is argued that a concentration upon these features will enhance our understanding by looking at fresh perspective. The focus of this book therefore is upon the application of the principles through engagement. The international locations of the authors show both that the issues are global and that we can best arrive at solutions through a synthesis of these various international perspectives. The concepts of corporate social responsibility (CSR) and sustainability have now been in existence for a considerable period of time and have entered the popular lexicon. Indeed, some have argued that sustainability has become dominant over CSR. This can be seen from the issues that are of concern to people currently researching in the field, dominated by concerns such as climate change. These have added more urgency into the debate which has now become ubiquitous with the realms of politics and public opinion just as much as within business. Indeed, sustainability is probably the most talked about concept at present. The concept of sustainability has gradually become incorporated into all aspects of life, politics, and business to such an extent that everyone is familiar with the concept and has some view of the issues involved. The concepts are regularly mentioned by politicians and by the media. Normally, the issue of CSR, in particular, is seen to apply to business alone, whereas in reality, it is highly relevant to the public sector also. In this book, therefore, we specifically do not specialize in context but consider the whole range of social and economic activity, although individual chapters focus upon particular spheres. To date, it has been generally accepted that sustainability can be considered and therefore managed by focusing upon the triple bottom line which is taken from the Brundtland report on sustainable development. In other words the three pillars of economic, environmental, and social are all that matter and can largely be dealt with as separate issues, despite Brundtland asserting that they were equal and must be addressed equally. In the public sector, however, priorities are different and these do not necessarily apply. In this book, we naturally look at these three pillars but consider them within different contexts and not as independent. The views expressed in the individual chapters are of course those of the authors concerned and it will be apparent that some views are in conflict with those in other chapters. This is international and each author can be considered to be an expert within the area they are writing about. The conflicts which exist show the diversity within the field and show that there are, as yet, no views which have universal acceptance. As editors, we believe that disagreement and discussion broadens the discourse and this is how developments take place and how consensus is arrived at. This is the philosophy by which we operate and this is just as apparent in all our activities, including other publications and out annual conferences. This can be seen by referring to the Social Responsibility Research Network website (www.srrnet.org). This book, however, stands on its own merits and one of its strengths is that the online version will be continuously updated to present latest findings and opinions. November 18, 2020

David Crowther Shahla Seifi

Acknowledgment

The editors would like to thank all contributors to this volume for their contributions. They would especially like to thank the Social Responsibility Research Network (www.srrnet.org) as most contributions to the work were produced by members of the Network – colleagues and friends.

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Contents

Volume 1 Part I

.......................................

1

Corporate Social Responsibility and the Future: Setting the Scene . . . . David Crowther and Shahla Seifi

3

Part II

Introduction

General Theory

....................................

25

Definitions of Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . Lan Jiang

27

.......

47

Triple Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rodica Milena Zaharia and Razvan Zaharia

75

Equity and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Onyeka K. Osuji

103

Corporate Responsibility Reporting and Storytelling . . . . . . . . . . . . . . Merryn Paynter and Abdel K. Halabi

129

Brundtland and After . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dianne Bolton and Terry Landells

149

Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nour Mohammad and Syed Mohiuddin Hasan

177

Part III

199

Theoretical Developments in Corporate Social Responsibility Miriam Green

Environmental Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sibel Hoştut and Seçil Deren Van Het Hof

201

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Contents

Water Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Linne Marie Lauesen

225

The Emergence and Role of Nongovernmental Organizations . . . . . . . Lowell J. Gretebeck

249

Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Linne Marie Lauesen, Pia Duus Jensen, and Lene Ribens

275

Wastewater Disposal Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Izhar Alam and Azam Malik

299

Sustainable Plastic and Corporate Social Responsibility . . . . . . . . . . . . Armaghan Moghaddam and David Crowther

333

Technological Approaches to Sustainability . . . . . . . . . . . . . . . . . . . . . . Cuong Van Hoang, Thinh Gia Hoang, and Victor Kane

355

Part IV

381

Social Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Governance of Migration and Sustainability . . . . . . . . . . . . . . . . . . . . . Michael Gagern Sustainable Development Goal 8: Achieving Decent Work – An Illusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prabir Kumar Bandyopadhyay Work-Life Balance and Well-Being at Work . . . . . . . . . . . . . . . . . . . . . Nicole Cvenkel Social Capital, Community Engagement, and Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Roopinder Oberoi

383

413 429

453

Employee Volunteering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risa Bhinekawati, Wiwiek M. Daryanto, Amelia Naim Indradjaja, Chrysanti Hasibuan-Sedyono, and Yanti Triwadiantini

471

................................

499

Gender and Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . Ilke Oruc

525

Developing Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jacob Dahl Rendtorff

545

The State of Social Media Research in CSR Communication . . . . . . . . Lina M. Gomez

577

Socially Responsible Retailing Ghulam Sughra

Contents

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Sustainability and Accountability in Higher Education Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Verónica Ribeiro, Sónia Monteiro, and Kátia Lemos

599

Volume 2 Part V

Economic Aspects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

613

Foreign Direct Investment and Development in Developing Host Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hema Soondram, Martin Samy, and Bhavish Jugurnath

615

Social Business: A New Chapter of Hybrid Business Toward Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Arifur Rahman and Naznin Sultana

637

Modern Slavery Disclosures in a Voluntary Regime . . . . . . . . . . . . . . . Susi Sarumpaet and Hasan Fauzi

667

The Legal Basis of CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sharoj Sharma-Nepal and Leo Isce-Taylor

693

Integrated Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elaine Conway, Fiona Robertson, and Iwi Ugiagbe-Green

753

Corporate Social Responsibility (CSR) in Multinational Companies (MNCs), Small-to-Medium Enterprises (SMEs), and Small Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gizem Aras-Beger and F. Dilvin Taşkın Gold Standard: Socially Responsible Investment Analysis . . . . . . . . . . Rute Abreu and Carlos Pinho

791 817

How to Reap the CSR Fruits: The Crucial Role Played by Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pietro Lanzini and Antonio Tencati

843

Part VI

863

Regions and Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The UN Global Compact: An Overview of the Promise and Pitfalls . . . Nathan Andrews

865

Regulation of CSR from International, European, and Spanish Viewpoints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . David Robles-Elorza, Leire San-Jose, and Sara Urionabarrenetxea

887

The Evolution of Institutional Environments in the Development of Corporate Social Responsibility in Selected ASEAN Countries . . . . . . Corina Joseph and Roshima Said

911

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Contents

Regional Review: Developed Countries . . . . . . . . . . . . . . . . . . . . . . . . . Michael MacLeod

935

Regional Review: Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mariana Lima Bandeira, Genoveva Espinoza-Santeli, and Fernando López Parra

955

Regional Review: Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L. Raimi and A. S. Isiaka

991

Corporate Social Responsibility in China Hong Wang

. . . . . . . . . . . . . . . . . . . . . . . 1017

Corporate Social Responsibility in India . . . . . . . . . . . . . . . . . . . . . . . . 1041 Jagbir Singh Kadyan CSR in the USA and UK Versus CSR in Europe and Asia . . . . . . . . . . 1071 Nick Capaldi and Nadia E. Nedzel Part VII

Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1103

Resource Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1105 Shahla Seifi Geopolitics of Natural Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1131 Sam Sarpong Artificial Intelligence and Social Responsibility . . . . . . . . . . . . . . . . . . . 1153 Kristijan Krkač and Ivana Bračević Sustainability and Consumer Behaviour: Towards a Cohered Emergent Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1177 Frank Nyame-Asiamah and Peter Kawalek Tobacco CSR, Sustainability Reporting, and the Marketing Paradox . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1195 Steven Greenland, Karmen Lužar, and David Low The Sustainable Development Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . 1223 Kurnia Perdana, Silvy Sondari Gadzali, and Rita Laslubiati Puspawijaya Innovation and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1245 Cuong Van Hoang, Thinh Gia Hoang, Nam Hai Vu, and Dat Anh Le Sustainable Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1269 Farzana Quoquab, Nur Zulaikha Mohamed Sadom, and Jihad Mohammad

Contents

xiii

Corporate Human Rights Responsibility in Times of Increasing Socio-cultural and Political Isolationism . . . . . . . . . . . . . . . . . . . . . . . . 1293 Rafaela Costa Camoes Rabello, Katharina Ruckstuhl, and David Sundaram Corporate Social Responsibility Reporting: Evolution, Institutionalization, and Current State . . . . . . . . . . . . . . . . . . . . . . . . . . 1321 Ferhan Sengur Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1347

About the Editors

David Crowther B.A., M.B.A., M.Ed., Ph.D., PGCE, FCMA, CGMA, CPFA, MCMI Professor, University of Bedfordshire, UK; London School of Commerce, UK; Ansted University, Malaysia; Shanghai University, China www.davideacrowther.org; www.srrnet.org David Crowther is expert in business administration, a games theoretician, and a psychologist while also a qualified accountant who has worked as an accountant, systems specialist, and general manager in local government, industry, and commerce for 20 years. After a number of years in the financial services sector, including a spell as divisional managing director during which he set up and ran a credit card scheme, he decided to leave the business world and become an academic. In 1994, he joined Aston University and there obtained a Ph.D. in 1999 for research into corporate social performance. In 2001, he became the first professor of corporate social responsibility in the world. David has published more than 60 books and has also contributed several hundred articles to academic, business, and professional journals and to edited book collections. He has also spoken widely at conferences and seminars worldwide and acted as a consultant to a wide range of government, professional, and commercial organizations. In 2002, he established the Social Responsibility Research Network, an international body which now has 1000 members. He is listed in Who’s Who in the World and various other directories. His current research focuses on sustainability and governance in the modern environment.

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About the Editors

Shahla Seifi B.Sc., M.Sc., M.Eng., Ph.D. Secretary and Conferences Chair, Social Responsibility Research Network Visiting Professor, Shanghai University, China; Ansted University, Malaysia; and various universities around the world www.srrnet.org Shahla is an engineer by background and worked for over 20 years at the National Standards Institute of Iran. There, she was responsible for assessing products, developing national standards, and international affairs. After a spell in Malaysia, she relocated to the UK in 2013 where she is now based. A British and Iranian citizen, she continues to publish under her maiden name of Shahla Seifi. She currently researches, writes, and runs the Social Responsibility Research Network. Shahla has taught extensively – both students and managers – and translated much material into Farsi. As a qualified physical fitness trainer, she led courses in Tehran for a number of years. She edits or is a member of the editorial boards of several journals and book series around the world, and consults and speaks at various locations. Shahla has published more than 30 books (in either English or Farsi) and translated several into Farsi; she has published over 50 articles in English as well as numerous articles in Farsi. Her current research is concerned with extractive mineral depletion and sustainability.

Contributors

Rute Abreu Instituto Politécnico da Guarda/UDI-IPG/CICF-IPCA/CISeD-IPV, Guarda, Portugal Izhar Alam Department of Civil Engineering, Aligarh Muslim University, Aligarh, India Nathan Andrews University of Northern British Columbia, Prince George, BC, Canada Gizem Aras-Beger Faculty of Business, Yasar University, Izmir, Turkey Mariana Lima Bandeira Universidad Andina Simón Bolívar, Sede Ecuador and Universidad Estatal de Milagro, Quito, Pichincha, Ecuador Prabir Kumar Bandyopadhyay Symbiosis Institute of Business Management, Symbiosis International, Pune, India Risa Bhinekawati Business and Management, Sekolah Tinggi Manajemen IPMI, Jakarta Selatan, DKI Jakarta, Indonesia Dianne Bolton Swinburne University of Technology, Hawthorn, VIC, Australia Ivana Bračević Faculty of Humanities and Social Sciences, University of Zagreb, Zagreb, Croatia Nick Capaldi College of Business, Loyola University New Orleans, New Orleans, LA, USA Elaine Conway Derby Business School, University of Derby, Derby, UK David Crowther De Montfort University, Leicester, UK Nicole Cvenkel My Work & Well-Being Consulting Inc, Prince George, BC, Canada Wiwiek M. Daryanto Business and Management, Sekolah Tinggi Manajemen IPMI, Jakarta Selatan, DKI Jakarta, Indonesia

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Contributors

Genoveva Espinoza-Santeli Universidad Andina Simón Bolívar, Sede Ecuador, Quito, Pichincha, Ecuador Hasan Fauzi Faculty of Economics and Business, Sebelas Maret University, Surakarta, Indonesia Silvy Sondari Gadzali University of Subang, Subang, Indonesia Michael Gagern King Saud University, Riyadh, Saudi Arabia Lina M. Gomez The University of Tampa, Tampa, FL, USA Miriam Green Icon College of Technology and Management, London, UK Steven Greenland Asia Pacific College of Business and Law, Charles Darwin University, Darwin, NT, Australia Lowell J. Gretebeck Kyoritsu University, Tokyo, Japan Abdel K. Halabi Federation Business School, Federation University Australia, Churchill, VIC, Australia Syed Mohiuddin Hasan Casual Academic, Western Sydney University, Sydney, Australia Chrysanti Hasibuan-Sedyono Indonesia Business Links, Central Jakarta, Indonesia Thinh Gia Hoang School of Business and Management, RMIT International University, Ho Chi Minh City, Vietnam Centre for Applied Economics and Business Research, Hanoi, Vietnam Sibel Hoştut Faculty of Communication, Akdeniz University, Antalya, Turkey Amelia Naim Indradjaja Business and Management, Sekolah Tinggi Manajemen IPMI, Jakarta Selatan, DKI Jakarta, Indonesia Leo Isce-Taylor London, UK A. S. Isiaka Department of Accounting and Finance, American University of Nigeria, Yola, Nigeria Pia Duus Jensen Water and Waste Denmark, Vand og Affald, Svendborg, Denmark Lan Jiang London Metropolitan University, London, UK Corina Joseph Faculty of Accountancy, Universiti Teknologi MARA, Sarawak, Malaysia Bhavish Jugurnath University of Mauritius, Moka, Mauritius Jagbir Singh Kadyan Department of Commerce, Swami Shraddhanand College, University of Delhi, New Delhi, India

Contributors

xix

Victor Kane School of Business and Management, RMIT International University, Ho Chi Minh City, Vietnam Peter Kawalek School of Business and Economics, Loughborough University, Loughborough, UK Kristijan Krkač Zagreb School of Economics and Management, Zagreb, Croatia Terry Landells Swinburne University of Technology, Hawthorn, VIC, Australia Pietro Lanzini Department of Management, Ca’ Foscari University, Venezia, Italy Linne Marie Lauesen Water and Waste Denmark, Vand og Affald, Svendborg, Denmark Dat Anh Le Centre for Applied Economics and Business Research, Hanoi, Vietnam Kátia Lemos Research Centre on Accounting and Taxation, School of Management of the Polytechnic Institute of Cávado and Ave, Barcelos, Portugal David Low Asia Pacific College of Business and Law, Charles Darwin University, Darwin, NT, Australia Karmen Lužar Asia Pacific College of Business and Law, Charles Darwin University, Darwin, NT, Australia Michael MacLeod St Mary’s University, Calgary, AB, Canada Azam Malik Department of Human Resource Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Riyadh, Kingdom of Saudi Arabia Armaghan Moghaddam Iran Polymer and Petrochemical Institute, Tehran, Iran Nur Zulaikha Mohamed Sadom International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia Nour Mohammad Department of Law, Premier University, Chittagong, Bangladesh Western Sydney University, Sydney, Australia Jihad Mohammad Department of Management and Marketing, Qatar University, Doha, Qatar Sónia Monteiro Research Centre on Accounting and Taxation, School of Management of the Polytechnic Institute of Cávado and Ave, Barcelos, Portugal Nadia E. Nedzel Southern University Law Center, Baton Rouge, LA, USA Frank Nyame-Asiamah Leicester Castle Business School, De Montfort University, Leicester, UK

xx

Contributors

Roopinder Oberoi Department of Political Science, University of Delhi, Delhi, India Ilke Oruc Faculty of Economics and Administrative Sciences, Trakya University, Edirne, Turkey Onyeka K. Osuji School of Law, University of Essex, Colchester, UK Fernando López Parra Universidad Andina Simón Bolívar, Sede Ecuador and Instituto de Altos Estudios Nacionales, Quito, Pichincha, Ecuador Merryn Paynter Federation Business School, Federation University Australia, Churchill, VIC, Australia Kurnia Perdana Kelompok Studi Sustainability Lampung, Bandarlampung, Indonesia Carlos Pinho Universidade de Aveiro, GOVCOPP, Aveiro, Portugal Rita Laslubiati Puspawijaya Lampung Provincial Office of Tourism and Creative Economy, Lampung, Indonesia Farzana Quoquab International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia Rafaela Costa Camoes Rabello Commerce Division, Otago Business School, Te Kura Pakihi, University of Otago, Dunedin, New Zealand Arifur Rahman Latrobe Business School, La Trobe University, Kingsbury Drive, VIC, Australia L. Raimi Department of Entrepreneurship, American University of Nigeria, Yola, Nigeria Jacob Dahl Rendtorff Department of Social Sciences and Business, Roskilde University, Copenhagen, Denmark Verónica Ribeiro Research Centre on Accounting and Taxation, School of Management of the Polytechnic Institute of Cávado and Ave, Barcelos, Portugal Lene Ribens Water and Waste Denmark, Vand og Affald, Svendborg, Denmark Fiona Robertson Leeds Business School, Leeds Beckett University, Leeds, UK David Robles-Elorza ECRI Research Group, University of the Basque Country UPV/EHU, Bilbao, Spain Katharina Ruckstuhl Commerce Division, Otago Business School, Te Kura Pakihi, University of Otago, Dunedin, New Zealand Roshima Said Faculty of Accountancy, Universiti Teknologi MARA, Kedah, Malaysia Martin Samy Universite Des Mascareignes, Beau Bassin-Rose Hill, Mauritius

Contributors

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Leire San-Jose ECRI Research Group, University of the Basque Country UPV/ EHU, Bilbao, Spain Sam Sarpong School of Economics and Management, Xiamen University Malaysia, Sepang, Malaysia Susi Sarumpaet University of Lampung, Lampung, Indonesia Shahla Seifi Social Responsibility Research Network, http://www.srrnet.org Ferhan Sengur Aviation Management, Eskisehir Technical University, Eskisehir, Turkey Sharoj Sharma-Nepal Glasgow, UK Hema Soondram University of Mauritius, Moka, Mauritius Ghulam Sughra London School of Commerce, Cardiff Metropolitan University, London, UK Naznin Sultana Department of Marketing, Faculty of Business Studies, University of Dhaka, Dhaka, Bangladesh David Sundaram University of Auckland, Te Whare Wānanga o Tāmaki Makaurau, Auckland, New Zealand F. Dilvin Taşkın Faculty of Business, Yasar University, Izmir, Turkey Antonio Tencati Department of Economics and Management, University of Brescia, Brescia, Italy Yanti Triwadiantini Indonesia Business Links, Central Jakarta, Indonesia Iwi Ugiagbe-Green Leeds University Business School, The Maurice Keyworth Building, University of Leeds, Leeds, UK Sara Urionabarrenetxea ECRI Research Group, University of the Basque Country UPV/EHU, Bilbao, Spain Seçil Deren Van Het Hof Faculty of Communication, Akdeniz University, Antalya, Turkey Cuong Van Hoang National Economics University, Hanoi, Vietnam Nam Hai Vu Ho Chi Minh City University of Transport, Ho Chi Minh City, Vietnam Hong Wang School of Economics, Shanghai University, Shanghai, China Rodica Milena Zaharia Bucharest University of Economic Studies, Bucharest, Romania Razvan Zaharia Bucharest University of Economic Studies, Bucharest, Romania

Part I Introduction

Corporate Social Responsibility and the Future: Setting the Scene David Crowther and Shahla Seifi

Contents 1 The Resources of the World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Development of Corporate Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Defining Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A Typology of CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Relationship Between CSR and Business Financial Success . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Expanding the Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 A Focus on Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Is Sustainability Sustainable? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 6 8 9 13 15 17 18 20 21

Abstract

Although CSR is a very broad topic which is dealt with extensively in this book, there are a number of issues which are not dealt with in any depth. This chapter serves as an introduction to the volume and also highlights some of the major issues which need to be dealt with. One of these is the resources of the world and their use which must be considered in terms of the changing human population and the effect which this happens. So obviously if the population grows and each person lives longer, then more resources are needed. This therefore raises issues in terms of sustainability which also need to be addressed. Keywords

Resources · Sustainability · Population · Globalisation · Transparency · Development D. Crowther (*) De Montfort University, Leicester, UK S. Seifi Social Responsibility Research Network, http://www.srrnet.org © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_94

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There are many views about corporate social responsibility and what issues it deals with. Arguably, there is a rough consensus of the most significant issues, which are often intertwined with the issues of sustainability and of governance. In this volume, a wide variety of scholars from around the world have shared their expertise and expressed their views and approaches. They are deliberately different and sometimes conflicting and this is deliberate as it reflects the diversity of views and the way in which the discipline is evolving and changing. So, you will not agree with everything you read in the volume – we do not agree with everything either. This is deliberate as only by considering this diversity and forming our own opinions can we hope to develop the discourse – and it is developing, with or without our contributions. Moreover, we respect the Sapir-Whorf hypothesis and consider that broadening our views and understanding comes from appreciating differing perspectives.

1

The Resources of the World

It is generally assumed that the scarce resources of the world are the natural (i.e., biological) resources which can be reproduced through growth. Equally, however, we can be absolutely certain that all the resources of the planet are finite and must ultimately be a limiting factor to growth and development. The resources available to people are heavily used – and so Earth Overshoot Day gets earlier each year and clearly this is not sustainable. Although this refers to the biological resources of the planet, which are effectively renewable through growth from one year to the next, it is equally certain that the mineral resources of the world are finite in quantity and that these cannot be renewed. It is a statement of fact that once these mineral resources are used they are not available for future use and, despite the basis of economics assuming so, one resource can never completely substitute for another (Bretschger and Smulders 2012). Consider, for example, Easter Island: once the trees had been fully used then no resource was available as a substitute (Pakandam 2009) and such activities as sailing had to be terminated alongside the termination of the construction of the famous statues. The lack of sufficient resources of raw materials to maintain current production, let alone to provide for sustainable development as outlined by Brundtland (WCED 1987) has become known as resource depletion (West 2011) and is one of the problems which the inhabitants of the planet must currently face and address. The organization of the economic system which is currently operating within the world is determined by an assumption that development is both possible and desirable, and that markets and the pricing system acts as mediation for the acquisition of the additional resources required for that development. This is perfectly matched to the assumptions made by Brundtland (WCED 1987) and accepted unquestioningly ever since. Price has been accepted as the medium of exchange within the market system (Richardson 1995) and the free market has become dominant. As a consequence of this acceptance, the focus of governmental attention has been upon the operation of the pricing system with a desire to reduce transaction

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costs and agreeing and implementing the various rounds of GATT (General Agreement on Trade and Tariffs)/WTO (World Trade Organization – the successor to GATT) as the means for reducing the transaction costs of international trading. At the same time, environmentalists (e.g., Ciriacy-Wantrup and Bishop 1975; Monfreda et al. 2004) have been arguing that the resources of the world are overused and that this usage is not sustainable at this level; consequently, there is a general acceptance of the meaning of resource depletion (Prior et al. 2012). As far as the natural resources of the world are concerned, these are overused and Day on World Overshoot Day – the date in the year when humanity has exhausted the total natural resources of the planet for the year has been created. For the rest of the year, society operates in an effectively overdrawn mode and in ecological overshoot by making use of and depleting local resource stocks and accumulating carbon dioxide in the atmosphere. The concept was first introduced on December 29, 1970 showing that 50 years ago society was overusing the natural resources of the planet. Since then, the date has been observed earlier each year and the most recent years with corresponding dates are shown in Table 1. Thus, we can see that this day is observed earlier each year and the world is in trouble. We currently wait to see what effect the coronavirus pandemic will have upon this date and the future approach to environmental resources. It is equally known that the population of the world is continuing to increase over time (Table 2):

Table 1 World Overshoot Day

2014 2016 2016 2017 2018 2019

Table 2 World population

Year 2000 2005 2010 2015 2018 Projected 2020 2030 2050

24 August 13 August 8 August 2 August 1 August 29 July

Billions 6.15 6.54 6.96 7.38 7.63 7.80 8.55 9.77

Source: www.Worldometers.info (Worldometers is cited as a source in over 3500 published books, in more than 2000 professional journal articles, and in over 1000 Wikipedia pages)

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Table 3 Average life expectancy at birth

Year 1970 1990 2000 2005 2010 2015 2017

Life expectancy (years) 58.7 65.4 67.7 69.1 70.7 71.9 72.2

Source: The World bank https://data.worldbank.org/indicator/sp. dyn.le00.in

The rate of increase is running in excess of 1.0% p.a. although projections suggest this slowing to around 0.6% by 2050, at which point there is expected to be a population in the world approaching 10 billion. Inevitably, as population increases, economic activity increases, thereby increasing the demand for extractive resources. This will happen due to population increase even without any economic development which too will increase demand. At the same time, as population grows, the life expectancy also increases (Table 3). It can be considered that increased life expectancy indicates increasing economic prosperity and increased sophistication, as there is a relationship between these factors (Sen 1999; Cockerham et al. 2000).

2

The Development of Corporate Social Responsibility

There has been considerable debate about the relationship between corporate social responsibility (CSR) and corporate governance, but in recent years the term corporate social responsibility has gained prominence, both in business and in the press, to such an extent that it seems to have become ubiquitous. There are probably many reasons for the attention given to this phenomenon, not least of which is the corporate excesses witnessed in recent years. For many people, the various examples of this kind of behavior – ranging from BCCI to Enron to Lehman Brothers to the collapse of Arthur Andersen – will have left an indelible impression among people that all is not well with the corporate world and that there are problems which need to be addressed (Some would argue that these cases are related to corporate social responsibility failures, some to corporate governance failures, and some to both. Our view is that the two are too inter-related to separate.) (Crowther 2004a). One of the implications of this concern, however, is that this is a new phenomenon – one which has not been of concern previously. Issues of socially responsible behavior are not of course new and examples can be found from throughout the world and at least from the earliest days of the Industrial Revolution and the concomitant founding of large business entities (Crowther 2012) and the divorce between ownership and management – or the divorcing of risk from rewards

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(Crowther 2004b). Thus, for example, in the UK (where the Industrial Revolution started), Robert Owen (1816) demonstrated dissatisfaction with the assumption that only the internal effects of actions need be considered and the external environment was a free resource to be exploited at will. Furthermore, he put his beliefs into practice, through the inclusion within his sphere of industrial operations, the provision of housing for his workers at New Lanark, Scotland. Thus, there is evidence from throughout the history of modernity that the self-centered approach toward organizational activity was not universally acceptable and was unable to satisfactorily provide a basis for human activity. Since that time, there has been a concern for the socially responsible behavior of organizations which has gained prominence at certain times while being considered of minor importance at others. The economic view of accountability solely to owners has only recently been subject to debate to any considerable extent. (See Crowther (2000a) for a full discussion of these changes.) Indeed the desirability of considering the social performance of a business has not always, however, been accepted and has been the subject of extensive debate. CSR therefore involves a concern with the various stakeholders to a business, but there are several problems in identifying socially responsible behavior: • Research shows that the concern is primarily with those stakeholders who have power to influence the organization. Thus, organizations are most concerned with shareholders, less so with customers and employees, and very little with society and the environment. CSR would imply that they are all of equal importance. • The definitions imply that CSR is a voluntary activity rather than enforced through regulation whereas in actual fact it is an approach and the voluntary – regulated debate is irrelevant. Claiming a concern is of course very different to actually exhibiting that concern through actions taken (Crowther 2004b). Definitions of CSR abound but all can be seen as an attempt to explain and define the relationship between a corporation and its stakeholders, including its relationship with society as a whole. Many too are phrased in terms of the triple bottom line, in a way which we argue trivializes the concept. Because of the uncertainty surrounding the nature of CSR activity, it is difficult to evaluate any such activity. It is therefore imperative to be able to identify such activity, and Crowther (2007a) argues that there are three basic principles (See Crowther (2002a) and Schaltegger et al. (1996) for the development of these principles.) which together comprise all CSR activity. They are: • Sustainability • Accountability • Transparency For many years now, the concept of corporate social responsibility has gained prominence and has gained increasing attention around the world among business

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people, media people, and academics from a wide range of disciplines. Increasingly also the scope of the concept has expanded from just business to include also public bodies and NGOs. There are probably many reasons (see Crowther and OrtizMartinez 2006) for the attention given to this phenomenon, not least of which is the corporate excesses which continue to become manifest in various parts of the world. These have left an indelible impression among people that all is not well with the corporate world and that there are problems which need to be addressed. Such incidents are too common to recount but have left the financial markets in a state of uncertainty and have left ordinary people to wonder if such a thing as honesty exists any longer in business. More recently, the language used in business has mutated again and the concept of CSR is being replaced by the language of sustainability. Such language must be considered semiotically (Barthes 1973) as a way of creating the impression of actual sustainability. Using such analysis then the signification is about inclusion within the selected audience for the corporate reports on the assumption that those included understand the signification in a common way with the authors. This is based upon an assumed understanding of the code of signification used in describing corporate activity in this way. As Sapir (1949: 554) states: . . . we respond to gestures with an extreme alertness and, one might almost say, in accordance with an elaborate and secret code that is written nowhere, known by none and understood by all.

3

Defining Sustainability

Although it is widely accepted that the Brundtland’s definition of sustainable development (WCED 1987) applies equally to sustainability, most analysis of sustainability (e.g., Dyllick and Hockerts 2002) are only concerned with a two-dimensional approach of the environmental and the social. A few (e.g., Spangenberg 2004) recognize a third dimension which is related to organizational behavior. We argue that restricting analysis to such dimensions is deficient. One problem is the fact that the dominant assumption by researchers is based upon the incompatibility of optimizing, for a corporation, both financial performance and social/environmental performance. In other words, financial performance and social/ environmental performance are seen as being in conflict with each other through this dichotomization (see Crowther 2012). Consequently, most work in the area of corporate sustainability does not recognize the need for acknowledging the importance of financial performance as an essential aspect of sustainability and therefore fails to undertake financial analysis alongside – and integrated with – other forms of analysis for this research. (Of course, the fact that many researchers do not have the skills to undertake such detailed financial analysis even if they considered it to be important might be a significant reason for this.) We argue that this is an essential aspect of corporate sustainability and therefore adds a further dimension to the analysis of sustainability. Crowther (2007b) therefore argues that the third

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dimension, sometimes recognized as organizational behavior, needs to actually comprise a much broader concept of corporate culture. There are, therefore, four aspects of sustainability which need to be recognized and analyzed, namely: • Societal influence, which we define as a measure of the impact that society makes upon the corporation in terms of the social contract and stakeholder influence. • Environmental impact, which we define as the effect of the actions of the corporation upon its geophysical environment. • Organizational culture, which we define as the relationship between the corporation and its internal stakeholders, particularly employees, and all aspects of that relationship. • Finance, which we define in terms of an adequate return for the level of risk undertaken. These four must be considered as the key dimensions of sustainability, all of which are equally important. Moreover, we argue that these four aspects can be resolved into a two-dimensional matrix along the polarities of internal v external focus and short-term versus long-term focus, which together represent a complete representation of organizational performance. This works both in terms of financial performance and in terms of sustainable or environmental performance.

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A Typology of CSR

No matter whether the discourse is of corporate social responsibility or of sustainability, there exists a high degree of skepticism about the reality of corporate activity. Accusations of green washing – presenting a false picture – abound. We argue that this is a legacy of past behavior when such an accusation could reasonably be made about many organizations. Our argument is that CSR is a developmental process and changes as organizations mature in their behavior and attitude toward both their stakeholders and their ideas concerning social responsibility. Of course, we also acknowledge that there is a growing body of evidence to show that social responsibility behavior becomes reflected positively in the financial performance of a company, thereby providing a financial imperative for changing behavior. Moreover, we argue that there are stages of growth as far as CSR is concerned which become reflected in corporate behavior. These can be seen as increasing levels of maturity. In order to consider the implications for CSR, the typology developed by Crowther (2006) provides a useful vehicle. As he argues, it would be relatively easy to develop a typology of CSR activity based upon the treatment of the various stakeholders to an organization, but as Cooper et al. (2001) show, all corporations are concerned with their important stakeholders and make efforts to satisfy their expectations. Thus, a concern with employees and customers is apparent in all corporations, being merely a reflection of the power of those stakeholder groupings rather than any expression of social responsibility. Similarly, in some organizations a concern for the environment is less a representation of social responsibility and

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Table 4 Stages of maturity of CSR activity (From Crowther 2006) Stage of development 1

Dominant feature Window dressing

2

5

Cost containment Stakeholder engagement Measurement and reporting Sustainability

6

Transparency

7

Accountability

3 4

Typical activity Redesigning corporate reporting Re-engineering business processes Balanced scorecard development Sophisticated tailored measures Defining sustainability: Re-engineering processes Concern for the supply chain: Requiring CSR from suppliers Reconfiguration of the value chain

Examples Changed wording and sections to reflect CSR language (see Crowther 2004b) Energy efficiency programs Customer/employee satisfaction surveys (See Cooper et al. 2001) CSR reports Sustainability reporting Human rights enforcement: e.g., child labor Relocating high value added activity in developing countries

more a concern for avoiding legislation or possibly a reflection of customer concern. Such factors also apply to some expressions of concern for local communities and society at large. It is therefore inappropriate to base any typology of CSR activity upon the treatment of stakeholders as this is often based upon power relationships rather than a concern for social responsibility and it is not realistic to distinguish the motivations. A different typology was therefore proposed – one which is based upon the three principles of social responsibility outlined earlier. Moreover, it shows the way in which CSR develops in organizations as they become more experienced and more convinced of the benefits of a commitment to this form of corporate activity. The development of this typology is based upon research and interviews with CSR directors and concerned managers in a considerable number of large corporations, many of which are committed to increasing social responsibility. It demonstrates stages of increasing maturity (Table 4). This can be explained as stages of growth reflecting increased maturity. The stages can be elaborated as follows: Stage 1: Window Dressing The initial engagement with CSR was to change corporate reporting to indicate a concern for CSR without any actual change in corporate behavior. This is the stage which led to accusations of green washing. It is also the stage which most observers of corporate activity continue to see even though in reality probably every organization has progressed to a stage of greater maturity. Stage 2: Cost Containment Corporations are always of course looking at their processes and seeking to operate more efficiently, thereby reducing costs. Organizations have realized that some of these can be represented as CSR activity – with

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things like energy efficiency or water efficiency being obvious examples. So, there is a double imperative for this kind of activity – to improve financial performance and also improve the socially responsible image. Not surprisingly, therefore, corporations quickly moved from stage 1 to this stage – where action has been taken even though it is not necessarily motivated by a sense of social responsibility. Much of this kind of activity is easy to undertake and requires very little in the way of capital investment. Naturally this activity has been undertaken first. Activity requiring capital investment has a longer payback period and tends to be undertaken more cautiously, with the threat of regulation often being needed to encourage such activity. All organizations have progressed through this stage also, although it must be recognized that the possible actions under this stage will probably never be completed by most organizations. Such cost containment remains ongoing even when the easy targets have been addressed. Stage 3: Stakeholder Engagement As stated earlier, all corporations are concerned with their important stakeholders and make efforts to satisfy their expectations. Thus, a concern with employees and customers is apparent in all corporations, being merely a reflection of the power of those stakeholder groupings rather than any expression of social responsibility. Similarly, in some organizations, a concern for the environment is less a representation of social responsibility and more a concern for avoiding legislation or possibly a reflection of customer concern. Such factors also apply to some expressions of concern for local communities and society at large. For CSR, this concern has become formalized, often through the development of a balanced scorecard and such things as customer or employee satisfaction surveys. Most organizations have progressed through this stage also, with such activity being embedded into normal ongoing business practice. Gradually, the stakeholders involved expand so that it is normal for the supply chain also to be considered now. Stage 4: Measurement and Reporting Some companies have been practicing social and environmental reporting for 15 years, but for many it is more recent. Now most companies – certainly most large companies – provide this information in the form of a report. Over time, these reports have become more extensive and more detailed with a broader range of measures of social and environmental performance being included. So, most organizations have reached this stage of maturity also. The problem with this stage though is that at the moment there are no standards of what to report and so organizations tend to report different things, thereby hindering comparability. Organizations such as AccountAbility, with its AA1000 standard, and the Global Compact have sought to redress this through the introduction of a standard but none have gained universal acceptance. Consequently, it is probably true to state that this is the current stage of development for most organizations. Stage 5: Sustainability The discourse of sustainability has become as ubiquitous as the discourse of CSR and Crowther (2007b) report that every firm in the FTSE100, for example, mentions sustainability with 70% of them focusing upon this. Any

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analysis of these statements regarding sustainability, however, quickly reveals the uncertainty regarding what is meant by this sustainability. Clearly, the vast majority do not mean sustainability as defined by Crowther (2007c) or as defined by the Brundtland Report. Often it appears to mean little more than that the corporation will continue to exist in the future. A full understanding of sustainability would imply radical changes to business practice and a significant amount of process reengineering, and there is little evidence that this is happening. So, we argue that most companies are only starting to reach this stage of maturity and to grapple with the issues involved. Stage 6: Transparency One of the biggest issues of the moment – certainly in Europe – is the question of firms accepting responsibility for what happens further along their supply chain. This is something that has been brought about largely because of customer pressure and has come about because of the revelations made about such things as child labor, slavery, and other human rights abuses. So, it is no longer acceptable for a firm to say that what happens in a supplying firm – or even the supplier of a supplier – is not their responsibility. Popular opinion increasingly requires this transparency for companies and so we wait for some of them to become sufficiently mature to enter this stage that the firm is responsible for ensuring socially responsible behavior among their suppliers as well as in their own company. Thus, there have been examples of some very large companies – such as Gap or Nike – acknowledging responsibility and taking appropriate action to ensure change. This is an issue which is growing in importance and is being addressed by the more mature (in CSR terms) companies. Thus, it is claimed that some companies are at this stage in their maturing, but still a minority of companies. Stage 7: Accountability The final stage represents our wishes rather than actuality – at least so far! It is based upon the fact the multinationals can decide where to locate their operations and that all high value added operations are located in developed countries. For many, it would be relatively easy to transfer to less developed countries, and if that happened, then the company would be making a real contribution toward effecting change. And we argue that there is no real cost involved. Arguably much of the world has moved through these stages, but this is not true everywhere. Essentially, the argument has been made (see particularly Crowther 2007c) that CSR must be considered as a process of development for every organization – a process which is still taking place. Furthermore, every organization goes through the same stages in the same chronological order. Thus, the leading exponents of CSR are only now beginning to address stage 6 and possibly consider stage 7. Less developed corporations are at lower stages of development. What is significant about this, however, is that our argument is sustainability only starts to be recognized once a company has reached stage 5 of its development. More significantly, stages 6 and 7 are essential for true sustainability as it is only then that an organization

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recognizes – and acts upon the recognition – that it is an integral part of a value chain and that sustainability depends upon the actions of the complete value chain. In others words, an organization cannot be sustainable without its suppliers and customers. At the moment, it is doubtful if organizations recognize this and whether any organization is (yet) truly sustainable.

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The Relationship Between CSR and Business Financial Success

Often the more significant the power that multinational corporations and some groups of stakeholders in a firm have, the more is spoken about corporate social responsibility. Thus, a concept that was some kind of luxury some years ago, nowadays, has reached the top of the public opinion discussion. Some steps taken in the corporation’s development, in the environment and in the human values, can be the guilty causes of this CSR fashion. If in the beginning firms were small and there was no distinction between ownership and management, the economic development made that there was a necessity to join more capital to set up bigger enterprises. Thus, there were owners, who gave the funds, and experts in management, who managed the company and were paid by the owners. Agency Theory establishes this relationship between the principal, the shareholder, and the agent, the manager, bearing in mind that the goals of the shareholders must be got through the management of the agents. But, which are the shareholders’ objectives? Obviously to increase the enterprise value through the maximization of profits. But a company’s structure is nowadays more complex than before and there have appeared other people, not owners, directly or indirectly implied in the company’s operations – known as stakeholders. Multinational corporations have sometimes even more power than governments in their influence, and stakeholders have gained more power through the media and public opinion in order to require some kind of specific behavior from companies. Within this new environment, although explained in a very simply way, the primary objective of the company has become wider. Although generally speaking, the assumption may be that the first goal is to get financial performance in the company, after it the next step will be to comply with other socially responsible policies. That is because to pay attention to social objectives or to show an orientation to multiple stakeholder group could be considered a luxury, because it must have meant that the other basic company’s goal had been met. This argument is the basis of the first hypothesis about the relationship between CSR, linked to pay attention to stakeholders, and business success: “Better performance results in greater attention to multiple stakeholders” (Greenley and Foxall 1997, p. 264). While the other hypothesis about this relationship will run in the opposite direction: “that orientation to multiple stakeholder groups influences performance” (Greenley and Foxall 1997, p. 264), which means to “attend” to social policies in a better way. This double-side relationship increases the difficulty to try to empirically prove it. It seems that there is a clear relationship between CSR and business success, but

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although the measurement of business success may be easy, through different economic and financial tools such as ratios, the measurement of the degree of compliance of a company with social policies is much more difficult. We can have in mind some kind of indicators such as funds donated to charitable objectives, but a company can spend immeasurable quantities of money on charitable questions and have problems in the relationship with labour unions because of bad working conditions, or low wages, for example. In this sense there are, since a long time ago, some companies whose objectives include philanthropic aims. We can highlight in this point the Spanish example of the saving banks, which emerged with the peculiar distinction of including in charitable purposes in their aims. But finally, if they want to survive in the competitive market, they have to bear in mind the “traditional” objectives of profit maximization. It may be understood as the initial values are one, and then the market and the capitalism force the firm to change them in order to survive in this maelstrom. At the same time, a double-sided relationship operates, because socially concerned people bear in mind these basic aims, and the image of the saving banks is improved, which has got a direct relationship with the economic performance. This example may be only one speaking about the market inefficiencies (See Baumol and Batey Blackman 1993.) and the trend to acquire human values and ethics that must be forgotten when we are surrounded by this society and the market. In this attempt to satisfy the necessities of the stakeholders, there can appear other conflicts between the interests of the different groups included in the wider concept of stakeholders. Sometimes due to this conflict of interests and to the specific features of the company, it tries to establish different levels between the stakeholders, paying more attention to those that are more powerful, but it is questionable if there are some goals which are more socially responsible than others. In the end, the hierarchy will depend on the other goals of the company and will give an answer to those stakeholders that can threaten the performance of the economic goals. The difficulties in measuring the social performance of a company are also due to the ownership concept. This is because the concept of corporate social responsibility is really comprehensive. There are companies whose activities are really different but all of them have to bear in mind their social responsibility, and not only companies, but also people in whatever activity they do. From a politician to a teacher: ethics, code of conducts, human values, friendship with the environment, respect to the minorities (what not should be understood as a dictatorship of the minorities), and so on are values that have to be borne in mind and included in the social responsibility concept. The point of view of the concept can vary depending on the country or the region, because some important problems linked to basic human values are more evident in some countries than in other ones. These social problems cannot be isolated because they have got an important relationship with the degree of development of the country, so in the end it is the economy that pushes the world. Capitalism allows the differences between people, but what is not so fair is that these differences are not only due to your effort or work but are also due to have taken advantage of someone else’s effort.

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And this can be the case with multinational corporations, which sometimes abuse their power, closing factories in developed countries and moving them to developing countries because the wages are lower or, for example, because the security and health conditions are not so strict and so cheaper to maintain for the company. And then the same companies obtain big amounts of profits to spend them in philanthropic ways. Development conditions of regions can determine the relationship between CSR and business success, especially if, in some developing countries, damaging the environment is not allowed or there are no appropriate labor unions and so on. Because of lack of requirements or government’s attention, the global players use these facilities to obtain a better economic performance although they can be aware of their damaging policies. But not only the development degree has to do with CSR, countries or regions are deeply associated with human values through education and culture. The values are so deep inside us that even it is said that people from different regions of the world who have shared the same education, for example, ethics courses at the university, do not share the same human values, because they are marked by their origins. Perhaps it should be understood as the inclusion of ethics courses at the university degrees is useless because finally people will go on thinking what they thought at the beginning, depending on the values of their origin culture. But everything is not so simple, because there has been demonstrations of situations where different values have been imported from one culture to another and accepted as their own values without any problem: for example, the success of McDonalds food all over the world and even in the former communist countries – there is even a McDonalds restaurant in the Red Square, Moscow. So, it shows that the questions related to CSR are complicated and not so simple as they can seem at a first glance. This complexity can be argued as a disadvantage to take into account when speaking about the creation of global standards about companies’ socially responsible behavior: there are so many different cases that to establish a general regulation may be really difficult. But at the same time, this diversity can be argued to require this regulation, because there have been different initiatives, most of them private, and they have added diversity to the previous one and the subject requires a common effort to try to tackle the problem of its standards and principles. The latest financial scandals have shown yet again that it is not sufficient for internal codes of conduct or human values and that it is necessary to reach an agreement to establish an external regulation, at least at the level of global players and multinational corporations that play globally.

6

Expanding the Definitions

There is considerable evidence that the field of social responsibility is changing and maturing and the contents of this book reflect this continuing development. This can be seen from the issues which are of concern to people currently researching in the field. The concept of CSR has gradually spilled over to the

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other fields of inquiry so much so that today we can speak about the inclusion of social responsibility in any type of human activity (business, politics, justice, etc.). Increasingly, the terms social responsibility, corporate responsibility, sustainability, and governance have become intertwined and are often treated as synonymous. Recent years have seen a wide variety of misbehaviors from corporations and their leaders. Many would, however, consider that these corporations have however behaved no differently to most others and have merely been found out. Nevertheless, the distancing of the rogues from the rest has led to a tremendous resurgence of interest in behavior which has been classified as Corporate Social Responsibility (CSR). With that in mind, corporations have been busy repackaging their behavior as CSR although there is evidence that little has changed in corporate behavior except for this repackaging – the power of the semiotic (Crowther 2012) being far more potent in the modern world than the power of actual action and also obviating the need for such action. More recently terms such as corporate sustainability have become more fashionable, despite the core concepts remaining unchanged. Crowther and RaymanBacchus (2004) have argued that the corporate excesses, which have been disclosed and which have affected large numbers of people, have raised an awareness of the social behaviors of corporations. This is one reason why the issue of corporate social responsibility has become a much more prominent feature of the corporate landscape. There are other factors which have helped raise this issue to prominence, and Topal and Crowther (2004) maintain that a concern with the effects of bioengineering and genetic modifications of nature is also an issue which is arising general concern. At a different level of analysis, Crowther (2000b, 2002a, 2002b) has argued that the availability of the World Wide Web has facilitated the dissemination of information and has enabled more pressure to be brought upon corporations by their various stakeholders. But, Wheeler and Elkington (2001) talk about the end of corporate environmental report due to the fact that historically this report has not engaged stakeholders and it appears to have been an attempt at communication using the internet and social media as the vehicle. Another point of view, about the diffusion of information and its impact, was presented by Crowther and Seifi (2018a, 2018b). They explain the difficulties in identifying all stakeholders that are affected by a corporation’s activity. All these perspectives, therefore, raise the question as to what exactly is CSR and how it can be made manifest and to what extent it can be considered to be corporate social responsibility. According to the EU (2001: 8): . . .CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

From these various writings about CSR we can infer that the social enterprise is not a new definition and has resonance with earlier ideas such as those of Dahl (1972: 18), who stated: . . ..every large corporation should be thought of as a social enterprise; that is an entity whose existence and decisions can be justified insofar as they serve public or social purposes.

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Shaw (2004: 196) explains that the principal characteristics of a social enterprise are: (i) The orientation, “. . .directly involved in producing goods and providing services to the market, making an operating surplus. . ..” (ii) The aim, “. . .explicit social aims (job creation, training or provision local services), strong social values and mission (commitment to local capacity building), accountable to their members and wider community for their social, environmental and economic impact. (An empirical study concerning the operational reporting of corporate natural assets (i.e., habitats, fauna and flora) can be seen in Jones (2003).) The profits are to their stakeholders or for benefit of the community.” (iii) And the ownership, “. . .autonomous organizations with loose governance and participation of stakeholders in the ownership structure.” All definitions – and there are many – seem to have a commonality, in that they are based upon a concern with more than profitability and returns to shareholders. Indeed, involving other stakeholders, and considering them in decision-making is a central platform of CSR. The broadest definition of corporate social responsibility is concerned with what is – or should be – the relationship between the global corporation, governments of countries, and individual citizens. For example, the OECD has studied investment in weak governance zones. More locally, the concept of CSR is concerned with the relationship between a corporation and the local community in which it resides or operates. One aspect of CSR is concerned with the relationship between a corporation and its stakeholders. In this situation, activity could be focused on employees (see Parker 1977). The corporation develops its codes of conduct that could make some progress in improving labor rules and process, but the scope is limited and it is unclear if they can make a significant impact without the help of Governments with law-enforcement. These efforts are likely to benefit only a small segment of the target workforce. (See for example Scherrer and Greven (2001).) For corporations, however, within the broad concept of CSR, there are three real issues which focus their attention at the moment: sustainability, corporate governance, and the relationship with stakeholders. All are issues which are global in their impact; we will look at each in turn, although it will become apparent that they are all interrelated within the broader concept of corporate social responsibility.

7

A Focus on Sustainability

Over recent years, there has been a change in focus of corporate activity from a concern with the concept of corporate social responsibility (CSR) to one of sustainability. Indeed, many corporations which 20 years ago produced environmental reports and renamed them CSR reports have changed to now produce sustainability reports. One of the effects of persuading of the sustainability of corporate activity is that the cost of capital for the firm is reduced as investors are led into thinking that the level of risk involved in their investment is lower than it actually is. This is

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perhaps as significant as a reputation for good governance which also has a demonstrable link to the reduction in cost of capital. Sustainability implies considering the long term as more important than the short term and it implies a concern for the widest stakeholder community. These in turn imply that some changes in corporate behavior will be manifested rather than merely being a cynical following of fashion. The contributions in the book will help you form your own opinion about this. The globalization debate which has been taking place recently and still continues can be viewed dialectically as an opposition between the proponents of an unregulated market and the opponents of such unchecked capitalism. Few would dispute that in the present the proponents of an unregulated world – carefully packaged in the pejorative term of the free market – have the ascendancy. Thus, the dominant ideology of the modern western world is that of the free market which its supporters argue, if unregulated, maximizes economic wealth and optimizes its distribution. Consequently, there is increasing pressure upon governments around the world to reduce, and even eliminate, regulation so that we may all benefit from the prosperity which ensues from the free market. To support this assertion the idea of “trickle down theory” (Aghion and Bolton 1997) was invented by the Chicago School of Economics and widely accepted without the existence of any evidence whatsoever. Absent (whether by ignorance or by design) from the discourse of ideological pressure is the fact that a completely unregulated free market only operates effectively in a situation of perfect competition – in other words never! The opponents of an unregulated world are more difficult to be categorized as they represent a diverse collection of people and interests without a great deal of commonality except for their opposition to the dismantling of regulation and the ascendancy of global capitalism. Discourse between the two groups tends to be confrontational and often violent; indeed, it is problematic to describe it as a discourse as most of both sides are not particularly interested in discourse, preferring instead to seek dominance for their view. On the face of it, therefore, it would seem problematic to describe these differing views as dialectical as there seems little scope for any synthesis to emerge. One aspect of the synthesis which has developed however is encapsulated in the concept of corporate social responsibility. Following the argument of Sapir (1949) as developed by Crowther (2012), it is comfortable to assume a shared signification based upon a shared understanding of the language used; this shared signification may, however, be fictitious. An alternative – arguably more sinister interpretation would be to view the language of the statements concerning sustainability to be made in the Orwellian (Orwell 1970) sense of being used as a device for corrupting thought by being used as an instrument to prevent thought about the various alternative realities of the organization’s activity. How one views these interpretations is to a large extent dependent on one’s views of sustainability.

8

Is Sustainability Sustainable?

A growing number of writers over the last few decades have recognized that the activities of an organization impact upon the external environment and have suggested that such an organization should therefore be accountable to a wider

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audience than simply its shareholders. Such a suggestion probably first arose in the 1970s (Although philosophers such as Robert Owen were expounding those views more than a century earlier.) and a concern with a wider view of company performance is taken by some writers who evince concern with the social performance of a business, as a member of society at large. This concern was stated by Ackerman (1975) who argued that big business was recognizing the need to adapt to a new social climate of community accountability, but that the orientation of business to financial results was inhibiting social responsiveness. McDonald and Puxty (1979) on the other hand maintain that companies are no longer the instruments of shareholders alone but exist within society and so, therefore, have responsibilities to that society, and that there is therefore a shift toward the greater accountability of companies to all participants. Implicit in this concern with the effects of the actions of an organization on its external environment is the recognition that it is not just the owners of the organization who have a concern with the activities of that organization. Additionally, there are a wide variety of other stakeholders who justifiably have a concern with those activities, and are affected by those activities. Those other stakeholders have not just an interest in the activities of the firm but also a degree of influence over the shaping of those activities. This influence is so significant that it can be argued that the power and influence of these stakeholders is such that it amounts to quasi-ownership of the organization. Indeed Gray et al. (1987) challenge the traditional role of accounting in reporting results and consider that, rather than an ownership approach to accountability, a stakeholder approach, recognizing the wide stakeholder community, is needed. (The benefits of incorporating stakeholders into a model of performance measurement and accountability have however been extensively criticised. See for example Freedman and Reed (1983), Sternberg (1997, 1998) and Hutton (1997) for details of this discourse.) Moreover Rubenstein (1992) goes further and argues that there is a need for a new social contract between a business and its stakeholders. Central to this social contract is a concern for the future which has become manifest through the term sustainability. The term sustainability has become ubiquitous both within the discourse of globalization and within the discourse of corporate performance. Sustainability is of course a controversial issue and there are many definitions of what is meant by the term. At the broadest definition sustainability is concerned with the effect which action taken in the present has upon the options available in the future (Crowther 2012). If resources are utilized in the present, then they are no longer available for use in the future, and this is of particular concern if the resources are finite in quantity. Thus, raw materials of an extractive nature, such as coal, iron, or oil, are finite in quantity and once used are not available for future use. At some point in the future, therefore, alternatives will be needed to fulfill the functions currently provided by these resources. This may be at some point in the relatively distant future, but of more immediate concern is the fact that as resources become depleted, the cost of acquiring the remaining resources tends to increase and hence the operational costs of organizations tend to increase. (Similarly, once an animal or plant species becomes extinct then the benefits of that species to the environment can no longer be accrued. In view of the fact that many

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pharmaceuticals are currently being developed from plant species still being discovered this may be significant for the future.) Sustainability therefore implies that society must use no more of a resource than can be regenerated. This can be defined in terms of the carrying capacity of the ecosystem (Hawken 1993). Viewing an organization as part of a wider social and economic system implies that the effects both internally and externally must be taken into account, not just for the measurement of costs and value created in the present but also for the future of the business itself. Such concerns are pertinent at a macrolevel of society as a whole or at the level of the nation state but are equally relevant at the microlevel of the corporation. At this level, measures of sustainability would consider the rate at which resources are consumed by the organization in relation to the rate at which resources can be regenerated. Unsustainable operations can be accommodated for either by developing sustainable operations or by planning for a future lacking in resources currently required. In practice, organizations mostly tend to aim toward less unsustainability by increasing efficiency in the way in which resources are utilized. An example would be an energy efficiency program. Sustainability is a controversial topic because it means different things to different people (Aras and Crowther 2009) and it is uncertain as to whether it can be delivered by MNCs in the easy manner as they promise (Schmidheiny 1992). The starting point must be taken as the Brundtland Report (WCED 1987) because there is an explicit agreement with that report and because the definition of sustainability in there is pertinent and widely accepted. Equally, the Brundtland Report is part of a policy landscape being explicitly fought over by the United Nations, Nation States, and big business through the vehicles of the WBCSD and ICC (see for example, Beder 1997; Mayhew 1997; Gray and Bebbington 2001). Recently, however, Crowther and Seifi (2016) have criticized this as a starting point, arguing that the debate has become stagnant and that these concepts are no longer relevant in the achievement of sustainability. There is a further confusion surrounding the concept of sustainability: for the purist sustainability implies nothing more than stasis – the ability to continue in an unchanged manner – but often it is taken to imply development in a sustainable manner (Marsden 2000; Hart and Milstein 2003) and the terms sustainability and sustainable development are for many viewed as synonymous. Ever since the Bruntland Report was produced by the World Commission on Environment and Development in 1987, there has been continual discussion concerning development (Chambers 1994; Pretty 1995) and this has added to the confusion between sustainability and sustainable development.

9

Conclusion

Although there are many diverse opinions that have been expressed in this volume and it seems that there is no consensus, we argue that this is healthy debate which both broadens and develops the discourse. In doing so, it helps to make the arguments more robust and they can lead to a strengthening of understanding and

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theory. One thing that is certain, however, is that as the discussions have developed the scope, those discussions have continued to extend to cover all aspects of society and it operations. Indeed, it is not just society but also the environment which is a cause of concern and arguably climate change is one of the most significant topics at present. Although these aims are desirable, we must also state that we expect that the focus of concern will continue to change in the future and this should be encouraged. In this book, we have sought to set out a range of views about the most significant topics. Deliberately, we have not sought to restrict views to express one line of argument – rather the reverse. In doing so, we hope to spark debate and encourage development and innovations.

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Crowther D (2007c) Corporate sustainability reporting: a study in disingenuity? J Bus Ethics 87 (supp 1):279–288 Crowther D (2012) A social critique of corporate reporting. Gower, Aldershot Crowther D, Ortiz-Martinez E (2006) The abdication of responsibility: corporate social responsibility, public administration and the globalising agenda; in D Crowther & K T Caliyurt. In: Globalisation and social responsibility. Cambridge Scholars press, Newcastle, pp 253–275 Crowther D, Rayman-Bacchus L (2004) Perspectives on corporate social responsibility. In: Crowther D, Rayman-Bacchus L (eds) Perspectives on corporate social responsibility. Ashgate, Aldershot, pp 1–17 Crowther D, Seifi S (2016) The flawed logic of sustainable development. In: Caliyurt K, Yuksel U (eds) Sustainability and management: an international perspective. Routledge, London, pp 11–27 Crowther D, Seifi S (2018a) The need to reconsider corporate social responsibility. In: Seifi S, Crowther D (eds) Redefining corporate social responsibility. Bingley, Emerald, pp 1–11 Crowther D, Seifi S (2018b) The life and death of corporate social responsibility. In: Seifi S, Crowther D (eds) Redefining corporate social responsibility. Emerald, Bingley, pp 87–100 Dahl R (1972) A prelude to corporate reform. Bus Soc Rev Spring:17–23 Dyllick T, Hockerts K (2002) Beyond the business case for corporate sustainability. Bus Strategy Environ 11:130–141 European Commission (EU) (2001) Green paper – Promoting a European framework for Corporate Social Responsibility. COM (2001) 366 final. Brussels: Official publications of the European Commission, July 18 Freedman RE, Reed DL (1983) Stockholders and stakeholders: a new perspective on corporate governance. Calif Manag Rev XXV(3):88–106 Gray RH, Bebbington KJ (2001) Accounting for the environment. Sage, London Gray R, Owen D, Maunders K (1987) Corporate social reporting: accounting and accountability. Prentice-Hall, London Greenley GE, Foxall GR (1997) Multiple stakeholders orientation in UK companies and the implications for company performance. J Manag Stud 34(2):259–284 Hart SL, Milstein MB (2003) Creating sustainable value. Acad Manag Exec 17(2):56–67 Hawken P (1993) The ecology of commerce. Weidenfeld & Nicholson, London Hutton W (1997) Stakeholding and its critics. IEA Health and Welfare Unit, London Jones M (2003) Accounting for biodiversity: operationalising environmental accounting. Account Audit Account J 16(5):762–789 Marsden C (2000) The new corporate citizenship of big business: part of the solution to sustainability. Bus Soc Rev 105(1):9–25 Mayhew N (1997) Fading to Grey: the use and abuse of corporate executives’ ‘representational power. In: Welford R (ed) Hijacking environmentalism: corporate response to sustainable development. Earthscan, London, pp 63–95 McDonald D, Puxty AG (1979) An inducement – contribution approach to corporate financial reporting. Acc Organ Soc 4(1/2):53–65 Monfreda C, Wackernagel M, Deumling D (2004) Establishing natural capital accounts based on detailed ecological footprints and biological capacity assessments. Land Use Policy 21(3):231– 246 Orwell G (1970) Collected essays, journalism and letters, vol 4. Penguin, Harmondsworth Owen, R. (1816, 1991) A New View of Society and other writings. Penguin, London Pakandam B (2009) Why Easter island collapsed: an answer for an enduring question; Economic History Working Papers 117/09; London School of Economics, UK Parker L (1977) The accounting responsibility towards corporate financial reporting to employees. Acc Educ 17(2):62–83 Shaw E (2004) Marketing in the social enterprise context. Qual Mark Res Int J 7(3):194–205 Pretty JN (1995) Participatory learning for sustainable agriculture. World Dev 23(8):1247–1263 Prior T, Giurco D, Mudd G, Mason L, Behrisch J (2012) Resource depletion, peak minerals and the implications for sustainable resource management. Global Environ Chang 22(3):577–587

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Richardson GB (1995) The theory of the market. Revue Economique 46(6):1487–1496 Rubenstein DB (1992) Bridging the gap between green accounting and black ink. Acc Organ Soc 17(5):501–508 Sapir E (1949) The unconscious patterning of behaviour in society. In: Mendelbaum DG (ed) Selected writings of Edward Sapir. University of California Press, Berkley Schaltegger S, Muller K, Hindrichsen H (1996) Corporate environmental accounting. John Wiley & Sons, Chichester Scherrer C, Greven T (2001) Global rules for trade: codes of conduct, social labelling, workers’ rights clauses. Verlag Westfälisches Dampfboot, Münster Schmidheiny S (1992) Changing course. MIT Press, New York Sen A (1999) Economics and health. Lancet 354 Spangenberg JH (2004) Reconciling sustainability and growth: criteria, indicators, policy. Sustain Dev 12:76–84 Sternberg E (1997) The defects of stakeholder theory. Corp Gov 6(3):151–163 Sternberg E (1998) Corporate governance: accountability in the marketplace. IEA, London Topal R, Crowther D (2004) Bioengineering and corporate social responsibility. In: Crowther D, Rayman-Bacchus L (eds) Perspectives on corporate social responsibility. Ashgate, Aldershot, pp 186–201 WCED (World Commission on Environment and Development) (1987) Our Common Future (the Brundtland report). Oxford University Press, Oxford West J (2011) Decreasing metal ore grades: are they really being driven by the depletion of highgrade deposits? J Ind Ecol 15(2):165–168 Wheeler D, Elkington J (2001) The end of the corporate environmental report? Or the advent of cybernetic sustainability reporting and communication. Bus Strateg Environ 10(1):1–14

Part II General Theory

Definitions of Corporate Social Responsibility Lan Jiang

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The History of CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Modern Era of CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 CSR and its Critics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 CSR in Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Studies of CSR in Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 CSR and Profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Stakeholders and CSR in the 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The CSR Pyramid in the 1990s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The Triple Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 CSR and the Social Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 CSR – The Global Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 CSR in the World of Global Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 CSR in Government and Non-Governmental Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 CSR – Towards Global Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28 28 29 30 31 32 33 35 36 37 38 39 41 42 42 43 44 44

Abstract

This chapter introduces the history of Corporate Social Responsibility (CSR) starting from early debates about the relative legal obligations of corporate managers towards shareholders and the community, to modern concepts such as corporate sustainability. During this period, many different conceptual models of CSR have been developed, and the subject has grown to encompass ideas such as stakeholdership, business ethics, and social contract theory. The development and relationships between these ideas are outlined, together with references to the relevant literature. L. Jiang (*) London Metropolitan University, London, UK © Crown 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_1

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In the nearly 90 years since the Berle-Dodd debate first introduced the notion of what became Corporate Social Responsibility into the public realm, the subject has changed significantly in many ways. Although the basic idea of CSR still goes back to the question of the extent to which businesses can and should concern themselves in areas outside the strictly limited area of shareholder profitability, the field has grown to include a broader range of areas in which CSR is seen to have a role. These are the government sector, the not-for-profit sector, charities, and nongovernmental organizations. In terms of how CSR is understood, many different terms have been used to define it, and it has gone under different names including stakeholder theory, social contract theory, business ethics. There has been much speculation on the future of CSR – it may cease to be regarded as a separate “add-on” to business operations and become fully integrated into all aspects of a company’s work. Recent trends suggest that there will be increasing partnerships between businesses, NGOs, and other NFP organizations – implemented globally. Keywords

CSR Definitions · CSR Studies and Development · CSR Globalisation

1

Introduction

This chapter introduces the history of Corporate Social Responsibility (CSR) starting from early debates about the relative legal obligations of corporate managers towards shareholders and the community, to modern concepts such as corporate sustainability. During this period many different conceptual models of CSR have been developed and the subject has grown to encompass ideas such as stakeholdership, business ethics and social contract theory. The development and relationships between these ideas are outlined, together with references to the relevant literature. The initial development of CSR as an important aspect of business practice started in the USA but has become commonplace worldwide and has been endorsed by international organizations. The different approaches to CSR in different countries and cultural contexts are also discussed.

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The History of CSR

The extent to which a corporate entity should have social responsibilities apart from its basic obligations to pursue profits for the benefit of its shareholders has been the subject of debate since the beginning of the twentieth century. A convenient and well-documented starting point could be taken as the debate between Adolf Berle, a US lawyer and diplomat, and author of author of a book on corporate governance (Berle and Means 1932) and E Merrick Dodd, a Harvard Law professor who

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authored a paper entitled “For whom are corporate managers trustees” (Dodd 1932). In this article Dodd states that “there is in fact a growing feeling not only that business has responsibilities to the community but that our corporate managers who control business should voluntarily and without waiting for legal compulsion manage it in such a way as to fulfil those responsibilities.” This belief contrasts with Berle’s view that “. . .corporations were simply vehicles for advancing and protecting shareholders’ interests and that corporate law should be interpreted to reflect this principle” (Berle and Means 1932, p 1049). This so-called Berle-Dodd debate of 1932 leads directly to modern debates about the nature and scope of what is now referred to as Corporate Social Responsibility (CSR).

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The Modern Era of CSR

The next significant event in the history of CSR came in the post WW2 period with Howard Bowen whose work provides a convenient marker for the beginning of the modern debate on CSR. Howard Bowen was an American academic economist who went on to become president of Grinnell College. In 1953, he published a book “The Social Responsibilities of Businessmen” (Bowen 1953) and is now widely regarded as the “father of CSR” (Carroll 1999). Bowen asked a basic question about “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Bowen 1953, p 6). In the years that followed other academic scholars continued to investigate this issue. Indeed, Adolf Berle himself eventually conceded, in contrast to his previously held views, that corporations were not constrained to simply follow their shareholders’ interests. In his 1954 book “The 20th Century Capitalist Revolution” he stated that “. . .the argument has been settled (at least for the time being) squarely in favour of Professor Dodd’s contention.” (Berle 1954). It is now generally considered that the 1950s was the period which marked the beginning of the modern era of CSR. During the 1950s there was an increasing awareness that corporate managers and board directors existed within the context of a society and they have some obligation towards that society. Literature during this period discussed about the obligations of the businesses towards to achieving the desired objectives, values and policies for the society. According to Heald (1957) the prevailing view of CSR was a recognition on the part of management of an obligation to the society it serves not only for maximum economic performance but for humane and constructive social policies as well. In the 1960s the concept of CSR underwent further elaboration and development, prompted by societal changes. It was the decade in which environmentalist movements were growing and there were increasing concerns about the Earth’s ecosystem and pollution levels, at least in the western world. In this period a major scholar and contributor to the field, William Frederick, wrote in an article: “businessmen should oversee the operation of an economic system that fulfils the expectations of the public. And this means in turn that the economy’s means of production should be

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employed in such a way that production and distribution should enhance total socioeconomic welfare. Social responsibility in the final analysis implies a public posture toward society’s economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms (Frederick 1960, p 60). Frederick went on to develop his concept of CSR and these will be addressed below. Closely following Frederick, Clarence Walton, in his landmark book “Corporate Social Responsibilities” addresses many facets of CSR in the context of the 1960s business environment. He presents a number of different varieties, or models, of social responsibility, including his fundamental definition of social responsibility: “. . .the new concept of social responsibility recognizes the intimacy of the relationships between the corporation and society and realizes that such relationships must be kept in mind by top managers as the corporation and the related groups pursue their respective goals” (Walton 1967, p 18). Keith Davis, another prominent writer of the time considered social responsibility as referring to “businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest” (Davis 1960). He became well known in this period for his views on the relation between social responsibility and business power and set stated his “Iron Law of Responsibility,” which is that “social responsibilities of businessmen need to be commensurate with their social power” Davis went on to develop a five-point model of CSR, described below, but his views are summarized in his statement that “[firms] responsibilities begin where the law ends” (Davis 1973).

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CSR and its Critics

It is important to point out that the concept of CSR attracted criticism starting from the early 1960s. These criticisms had their origins in the views put forward by Adolf Berle during the Berle-Dodd debate. The most prominent critic was Milton Friedman, later to win the 1976 Nobel prize for Economics. In 1962 in his book “Capitalism and Freedom” he wrote “Few trends would so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their shareholders as they possibly can.” (Friedman 1962). He reinforced this view in later articles, stating “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman 1970). But, on the other hand, Paul Samuelson, another distinguished economist who also went on to win a Nobel prize, argued that “a large corporation these days not only may engage in social responsibility, it had damn well better try to do so” (Samuelson 1971). In Friedman’s view, the only function of a business is to provide goods and services and to return a profit for its shareholders while acting within the law and paying taxes – this may be referred to as the “shareholder approach” to CSR. These

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criticisms of CSR were acknowledged by various scholars, including Walton (1967) but he nevertheless maintained that there was evidence, as he put it, that in large enterprises there was a “. . . willingness to support not only higher education and the arts but slum-clearance projects, reduction of air and water pollution, civil rights, job training for the unskilled, and the like. In most cases, the justification is enlightened self-interest — a principle cherished in the orthodox business creed and hallowed over centuries by slow accretions in the common law.” In Walton’s view corporations of the time were showing evidence of actively pursuing CSR objectives. Despite criticism the idea of CSR continued to attract interest, mainly is academia, and by the 1970s many definitions of it had been developed. By this time CSR as a general concept had started to be defined in more precise terms and various themes had started to be identified. The study of CSR in the 1970s began with Harold Johnson’s “Business in Contemporary Society: Framework and Issues” (Johnson 1971). Several definitions of CSR were given and discussed. Johnson summarized the prevailing view of CSR as coming from a firm which “is one whose managerial staff balances a multiplicity of interests. Instead of striving only for larger profits for its stockholders, a responsible enterprise also takes into account employees, suppliers, dealers, local communities, and the nation.” His “multiplicity of interests” is what would later be referred to as “stakeholders.” Furthermore “social responsibility in business is the pursuit of socioeconomic goals through the elaboration of social norms in prescribed business roles; or, to put it more simply, business takes place within a socio-cultural system that outlines through norms and business roles particular ways of responding to particular situations and sets out in some detail the prescribed ways of conducting business affairs.” Johnson acknowledged the central importance of profitability in a business “Social responsibility states that businesses carry out social programs to add profits to their organization.” Therefore, social responsibility is perceived by Johnson as long-run profit maximization. Another way to look at CSR in a business is to maximize “utility” – in this sense a business may have multiple objectives, not just to increase profits. A socially responsible entrepreneur or manager is interested not only in his own well-being but also in that of the other members of the enterprise and that of his fellow citizens. In practice, once a firm has attained its profit target, it may further act as if social responsibility were an important goal.

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CSR in Businesses

It was in the early 1970s that businesses themselves began to articulate an awareness of the importance of CSR. The Committee for Economic Development (CED) in the USA was founded in 1942 by a group of business leaders to promote policies designed to foster economic growth and development to benefit all Americans. In 1971 it published “Social Responsibilities of Business Corporations” in which it was stated that “business functions by public consent and its basic purpose is to serve constructively the needs of society. . ...business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human

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values. Business enterprises, in effect, are being asked to contribute more to the quality of American life than just supplying quantities of goods and services. Inasmuch as business exists to serve society, its future will depend on the quality of management’s response to the changing expectations of the public” (CED 1971). The CED also articulated its own conception of CSR – there is an inner core responsibility for a business to efficiently execute its core functions: products, jobs and growth. Outside of this, businesses must have a sensitive awareness of changing social values and priorities: for example, with respect to the environment; policies on recruitment and employee relations, human rights, health and safety etc. Finally, businesses should assume a role in newly emerging and still amorphous areas that actively improve the social environment. With this publication CSR is moving beyond the academic realm into mainstream business practice. During the 1970s more attention is now being given to the issue of how CSR can be implemented in practice; exactly what should businesses be doing (or not doing) in a CSR aware business environment. In 1973 Eilbert and Parket suggested the concept of “good neighbourliness” as a starting point (Eilbert and Parket 1973) – “The concept involves two phases. On one hand, it means not doing things that spoil the neighbourhood. On the other, it may be expressed as the voluntary assumption of the obligation to help solve neighbourhood problems. Those who find neighbourliness an awkward or coy concept may substitute the idea that social responsibility means the commitment of a business or Business, in general, to an active role in the solution of broad social problems, such as racial discrimination, pollution, transportation, or urban decay.” In this period the key question of what type of expenditure actually constituted an expenditure on the grounds of CSR was addressed, since it was understood that there was not necessarily a clear distinction between expenditures made on purely profit seeking grounds, and those motivated by socially beneficial or charitable objectives. A debate over the meaning of CSR took place in 1972, sponsored by the American Enterprise Institute, which addressed this issue. The debate was summarized in the book “The Modern Corporation and Social Responsibility” (Manne and Wallich 1972). From this debate came the following definition of CSR: “To qualify as socially responsible corporate action, a business expenditure or activity must be one for which the marginal returns to the corporation are less than the returns available from some alternative expenditure, must be purely voluntary, and must be an actual corporate expenditure rather than a conduit for individual largesse.”

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Studies of CSR in Businesses

Although the number of definitions of CSR was increasing in the 1970s, there was also more effort being put into the issue of exactly how the actions of a business could be made explicit and quantified. Some progress came as a result of work by Jules Backman (1975) who argued that CSR, like social accounting and social indicators, covers different facets of social performance. After noting that these terms are general rather than precise at this time, he defined social responsibility:

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“Social responsibility usually refers to the objectives or motives that should be given weight by business in addition to those dealing with economic performance,” examples of social indicators include the following: the employment of minority groups, reduction in pollution, greater participation in community programs, improved medical care, improved industrial health and safety – these and other programs designed to improve the quality of life are covered by the broad umbrella of social responsibility. Some insight into the issue of the extent to which the ideals of CSR were being taken up and implemented in businesses, and into the question of whether businesses agreed with the principals of CSR at all. And into the key question of whether CSR activities “worked” in the purely business sense or increasing profits. A study into the degree of acceptance of CSR at the conceptual level was conducted by Sandra Holmes (1976). In this study executives were presented with a set of statements about CSR and were asked whether they agreed with them or not. The executives were not given any definition of CSR, they were simply presented with a list of possible actions which their business might undertake based on issues that were generally felt to be what CSR was all about at the time. Executive opinions were sought on businesses’ responsibilities for making a profit, abiding by regulations, helping to solve social problems, and the short-run and long-run impacts on profits of such activities. Holmes further added to the body of knowledge about CSR by identifying the outcomes that executives expected from their firms’ social involvement and the factors executives used in selecting areas of social involvement. In another similarly “empirical” study, carried out by Bowman and Haire (1975) the extent to which companies were actually engaging in activities relating to CSR was studied. As in the Holmes study, described above, no explicit definition was given, the researchers chose to determine from the annual reports of a number of companies how much attention was given to CSR issues (taken from the academic studies of the time) relative to traditional business issues. However, what was not clear from these studies was the actual motivations behind these CSR activities which could have been more concerned with the pursuit of purely business opportunities, i.e., companies were looking for profit opportunities among the social issues within CSR. This possibility was later recognized by the well-known management theorist Peter Drucker who wrote on the idea that “the proper ‘social responsibility’ of business is to tame the dragon, that is to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth” (Drucker 1984).

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CSR and Profitability

Apart from the Holmes and Bowman studies there were other attempts to address the issue of the relationship between CSR and profitability during the 1970s. Several of these studies are detailed in Aupperle et al. (1985). Some of the results can be summarized as follows: Moskowitz (1972) concluded that high CSR firms outperform the Dow-Jones Industrials; Bragdon and Marlin (1972) that the better

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the pollution index, the higher the ROI; Vance (1975) found a negative correlation between CSR and stock price whereas Heinz (1976) found that CSR positively correlates with ROE. Alexander and Buchholz (1978) determined that CSR has no effect on stock performance. In general, all the quoted studies used fairly small sample sizes with data taken over periods of 2–10 years with differing criteria to define the various aspects of CSR. A different way to look at CSR in the same period was provided by S Prakash Sethi (1975). His approach was to look at CSR in terms of the extent to which different aspects of CSR were geared towards the immediate interests of shareholders. The three stages are referred to as Social Obligation, Social Responsibility, and Social Responsiveness. The first relates to a firm’s straightforward obligation to obey legal constraints; the second stage refers to compliance with prevailing social norms, beyond what is strictly required by law. The third stage is significantly more anticipatory and proactive – a long-term strategy is developed to communicate with and be responsible to all interested parties who are key to the decision-making process and participate in dialogue with these organizations; it is not just a consultation. At this, “Responsiveness” stage there is special emphasis on accountability and the role of such organizations within a dynamic social system. Companies need to be socially responsible for the well-being of the community. The year 1975 also saw the development by Davis of the model that incorporates the reasons why businesses should embrace CSR – this is referred to as the “five propositions model” which describe how and why businesses should adhere to the obligation to take action that protects and improves the welfare of society as well as of the organization (Davis 1975). These propositions are: (1) That social responsibility comes from social power – since businesses have power over various key issues such as environment, employment rights, etc., then society should hold businesses responsible for them; (2) Businesses should adopt a two-way relationship with society in terms of information flows and transparency; (3) Thorough costbenefit analysis – the technical feasibility and economic profitability and the short and long-term consequences of all business activities should be considered before undertaking them; (4) Social costs should be passed on to the customer – business cannot be expected to completely finance activities that may be socially advantageous but economically disadvantageous. The costs of maintaining socially desirable activities within business should be passed on to consumers through higher prices for the goods or services related to these activities; (5) Participation in society – if a business possesses the expertise to solve a social problem with which it may not be directly associated, it should be held responsible for helping society solve that problem. In short, since the business eventually will reap an increased profit from a generally improved society, they have the responsibility to generally improve society. Along with the increasing number of definitions and descriptions of CSR during the 1970s, there was also continuing criticism of it. It was suggested that the use of the work “social” was itself problematic and should be replaced by “public” (Preston 1975). This was because the word “social” was rather vague, too subjective, and lacked any real link to the internal processes within a business. It means different

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things to different people. On the other hand, the word “public” directly links the activities and decisions made by the business to external public policy processes. This change would “. . .stress the importance of the public policy process, rather than individual opinion and conscience, as the source of goals and appraisal criteria.” What they had in mind was that business decisions, perhaps motivated by CSR considerations, would have to be linked to public policies for implementation. However, the change never caught on. At the start of the 1980s another prominent academic, Thomas Jones entered the CSR discussion with his own definition of CSR, and note the explicit inclusion of workers and union participation: “Corporate Social Responsibility is the notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law and union contract. Two facets of this definition are critical. First, the obligation must be voluntarily adopted; behaviour influenced by the coercive forces of law or union contract is not voluntary. Second, the obligation is a broad, extending beyond the traditional duty to shareholders to other societal groups such as customers, employees, suppliers, and neighbouring communities” (Jones 1980). This decade also saw the increasing adoption in the field CSR of term which has since become very widespread – the “Stakeholder.”

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Stakeholders and CSR in the 1980s

In 1984, R Edward Freeman, a professor at the Wharton Business school, published “Strategic Management: A Stakeholder Approach” (Freeman 1984). The term “stakeholder” was not new – in its business context it dates back to work done at Stanford University in the early 1960s and had also been used by Mitroff in his analysis of organizational structures (Mitroff 1983) – however, Freeman is generally considered to be the principle name in the stakeholder approach to CSR. Broadly speaking a stakeholder is “any person or group that can affect or is affected by a business organization” (Freeman 1984). Stakeholder theory deals with the analysis of the relative responsibilities a business has towards its stakeholders and its shareholders, and how to fulfil these responsibilities. Managers who wish their organization to achieve its fullest potential will take the interests of the stakeholders into account and studies on how this can be done form the basis of the stakeholder approach to CSR. In practice, the list of stakeholders includes the media, the government, political groups, trade associations and trade unions because all of these are linked to business organizations and can affect and are affected by them in turn. It even includes competitors. The firm has a responsibility to consider the interests and activities of all the above actors as well, and not just the monetary interests of the owners of the firm. Interest is assessing the extent to which CSR ideas were being adopted in practice by businesses continued. As described above, the studies by Holmes and Bowman in the 1970s had attempted to determine empirically whether CSR was having any impact on business decisions, but without any underlying theoretical definition of CSR. There was also a lack of knowledge of the relationship (if any) between a

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business’s degree of CSR and its profitability. In the words of Abbott and Monsen (1979) “the empirical study of corporate social involvement is in an underdeveloped state.” An attempt to remedy this situation was made in 1985 in a study by Aupperle et al. (1985) entitled “An empirical investigation of the relationship between corporate social responsibility and profitability.” In contrast to the studies mentioned above, it used a model of CSR and assessed business’s performance against this. The model used was a four-part definition of CSR developed by Carroll (1979). One significant advantage of this study is that it used factor analysis to partition the large number of questions regarding CSR into the four components of the Carroll model. The Aupperle study confirmed the priorities of the four components in this sequence: economic, legal, ethical, and discretionary. The four definitional components were separated into the “economic,” which was “concern for economic performance” and “legal, ethical, and discretionary,” which was labelled “concern for society” (as perceived by the firm). This acknowledges that not everyone sees the economic responsibility as a part of social responsibility but rather considers it something business firms do for themselves. It was assumed that “the social orientation of an organization can be appropriately assessed through the importance it places on the weight given to the three non-economic components compared to the economic.” The basic result of the study was the strong negative correlation between the Economic component and the other three components.

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The CSR Pyramid in the 1990s

In 1991, Archie Carroll refined his conception of CSR which had been used in the Aupperle study into a model which became known as the “pyramid of social responsibility” (Carroll 1991). Drawing on his earlier conception of CSR as a four-component construct – Economic, Ethical, Philanthropic (formerly Discretionary), and Legal, the CSR pyramid emphasizes the hierarchical dependencies between the four components: The base level is Economic – organizations are operating to generate profits and are required to find the ways for generating the profit which can be morally, ethically, and legally allowed and accepted. Next, we have the Legal level – businesses are required to obey the law of the host country and follow all relevant rules and regulations. The Ethical level rests upon the Legal level. Businesses are obliged to do what is right and just and act ethically towards the community and general public. The top level is Philanthropic – firms should contribute resources to the community to improve the quality of the life of the people connecting to them and act as good corporate citizens. Carroll’s Pyramid, as his four-component model came to be called, became a popular concept for understanding CSR, but still attracted criticism just like previous models going back to the 1950s. The general criticisms center on the absence of any explanation of how the four different components interact and influence each other (Geva 2008). Apart from that even his terminology was subject to criticisms – his “components” were quite different things: social responsibility should be thought of as a set of principles, social responsiveness is really a process, and social issues

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management is in the realm of policy (Wartick and Cochran 1985). And then there is the philanthropic component – just as with other efforts to develop a CSR model it is too subjective and difficult to define and quantify.

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The Triple Bottom Line

The decade of the 1990s saw further changes in how the relationship between businesses and society should be perceived with the concept of the “Triple Bottom Line” (3BL). Introduced by John Elkington (1997), it was prompted by an increasing awareness in, and concern for, “green” issues, sustainability, pollution and the Earth’s environment. This can be highlighted by the fact that the best-selling management book “In Search of Excellence” by Peters and Waterman, published in 1982 made no mention of the environment, but by 1988 “The Green Consumer Guide” (Elkington 1988) sold over a million copies. The 3BL model is a concept that encourages the assessment of overall business performance based on three important areas: Profit, People and Planet; the intersection of these is the domain of sustainability. The addition of concern for the planet added a new dimension. A consideration with profitability was traditional in business, the addition of people mirrored previously developed concepts in CSR but the explicit introduction of concern for the Earth’s resources significantly broadened the idea of what was meant by CSR. In 1994 the proliferation of differing definitions of CSR and an apparent lack of a unified understanding of it prompted William Frederick to study its conceptual development in order to understand how it had changes in time since its beginnings in the modern era in the 1950s. He concluded that CSR had evolved through various stages. Initially he defined them as CSR1 and CSR2 (Frederick 1994). In the definitions of CSR given above, which date from the 1950s, is that businesses have an obligation to act responsibly for social betterment. It may affect the company’s profits either positively or negatively and the company’s actions are generally supposed to have been voluntary. This form of CSR Frederick refers to as CSR1. Starting in about 1970 the element of “responsiveness” starts to supplant “responsibility.” Frederick calls this the start of the second phase, CSR2. Whereas the debates over CSR1 had been abstract and theoretical, with significant doubts from some scholars about whether there was any role for CSR at all, in CSR2 it was already assumed that there was. With CSR2, practitioners are already seeking opportunities for implementation. The world of CSR2, as pointed out by Frederick, takes the “moral heat” off businesses – “with the appearance of the CSR2 viewpoint, one can now reasonably hope that less attention will be paid to the moral standing of a company and more to its tangible activities as a socially responsible entity.” By the end of the 1990s not only had many different definitions of CSR been proposed, but other concepts had been developed which in many ways overlapped with CSR and had started to draw more attention from academic researchers. These included stakeholder theory, corporate citizenship and business ethics, concepts that encompassed similar ideals to CSR, and in some cases were synonyms for it.

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A clearer understanding of the fundamentally different ways in which scholars have approached CSR is gained by classifying the different approaches as descriptive, normative and instrumental (Donaldson and Preston 1995). Descriptive refers to an attempt to provide an “objective” description of CSR as phenomenon by focusing on behavior. Normative approaches aim to advise companies what should be done (this is sometimes referred to as business ethics). The instrumental, or strategic, CSR investigates relationships between organizational actions and outcomes, generating and testing hypothesis – it is a “managerial” approach to CSR. With this understanding, it can be seen that the early work on CSR, going back to Berle and Bowen, was highly normative, but that later on, with the work of Aupperle and Holmes, CSR studies had become more descriptive and managerial. In order to understand the commonalities between these concepts, Dahlsrud (2008) carried out a study of the content of journal articles and web pages based on 37 different definitions of CSR from the period 1980 to 2003. It was found that despite the many different definitions of CSR, it is fundamentally defined along five dimensions: environmental, social, economic, stakeholder, and voluntariness. All these dimensions are required for a definition of CSR and it is not possible, on the basis of the content of the articles, to separate them into different schools of thought. However, it is important at this point to discuss the concepts of business ethics and corporate citizenship and their role in CSR. These concepts, as noted above, were becoming increasingly used in the 1990s, either as parts of CSR or as synonyms for it. In most of the CSR models discussed above, starting from Berle, there is a significant normative component, i.e., businesses must behave “ethically.” At this point it is necessary to introduce another concept which started in the 1990s to become more relevant – the theory of “social contracts” (Gray et al. 1996).

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CSR and the Social Contract

The social contract is defined as the multitude of implicit and explicit expectations that society has about how an organization should conduct its operations (Deegan 2002). It has its origins in classical contracts theory which goes back to Thomas Hobbs and John Locke who used the contract model to specify the principles for the legitimate exercise of power by the state (Wempe 2007). In the context of CSR, a business acts ethically not because it is in its commercial interest (i.e., according to “shareholder theory”), but because it is part of how society naturally expects business to operate under the terms of the social contract. These expectations between businesses and communities are referred to “micro-social contracts” although they are not contracts according to the usual, legal meaning of the term. This view of how businesses make ethical decisions leads to the Integrated Social Contracts Theory (ISCT) of CSR (Donaldson and Dunfee 1999) – Stakeholder Theory identifies the partners to a business’s “social contract” and ISCT determines how they are treated.

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CSR – The Global Perspective

Entering the new millennium, 50 years had passed since the work of Howard Bowen had started the modern era of CSR and in the intervening period many different conceptions of CSR had been developed and definitions proposed. However, almost all the work done originated in the USA. As explained by Andrew Crane et al. (2008), “It was in the US where the language and practice of CSR first emerged. . .. The main reason for this lies in the specific characteristics of the US business system. . .. American society is characterized by fairly unregulated markets for labour and capital, low levels of welfare state provision, and a high appreciation of individual freedom and responsibility. Consequently, many social issues, such as education, healthcare, or community investment have traditionally been at the core of CSR. Philanthropy is high on the agenda with, for instance, corporate community contributions by US companies being something like than ten times higher than those of their British counterparts.” It is therefore a pertinent question to ask to what extent can these models be applied globally, and to consider what changing forces might be acting in the rest of the world to affect them. How transferrable are these models to other countries, particularly with quite different cultures and levels of economic development? This issue has become of greater importance in the twenty-first century due to the increasing degree of globalization in the world’s economy and attracted the attention of scholars active in the CSR field. Can CSR be internationalized? One good starting point from which to address these questions is the work of Wayne Visser who has used the Pyramid model developed by Carroll (1991) and adapted it to an African perspective (Visser 2006). This has not only enlarged the arena in which CSR is applicable, but also serves as a way of gaining further insight into Carroll’s pyramid itself. Why it is necessary to try to develop a CSR model that will work for developing countries – Visser gives four reasons (Visser 2008): Firstly, developing countries are growing fast in economies and this is, therefore, the productive market for business. Secondly, in developing countries, social and environmental crises are usually the more severe than in developed countries. Thirdly, due to globalization, economic growth, investment, and business activities, social and environmental impacts can have a significant effect on developing countries; and fourthly, there is a particular set of CSR programs for developing countries which are generally completely different from those in the developed countries. That is why CSR practices are important to the developing countries as is in developed countries, especially in contributing toward their socioeconomic and environmental development. In the case of Africa, studies suggest that the biggest difference between Carroll’s Pyramid and one more relevant to Africa is in the relative ordering of the four components. As Visser states “In Africa, economic responsibilities still get the most emphasis. However, philanthropy is given second highest priority, followed by legal and then ethical responsibilities” (Visser 2006). In other words, the Economic level is still the base layer, but more emphasis is given to Philanthropy than to Legal, and least of all to Ethical. A possible explanation for this is that in countries with less developed

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legal systems, or poorly developed legal infrastructure, more emphasis is placed on the Philanthropic component. The conclusion is that in developing countries less emphasis must be placed on legal compliance and more on philanthropy. The European case has also been studied and even in this case, in a socio-economic context which superficially resembles the USA, significant differences from the US case can be expected. As noted by Crane et al. (2008) “In other parts of the world, most notably Europe, the Far East, and Australasia, however, there has always been a stronger tendency to address social issues through governmental policies and collective action. Many issues that US companies would typically boast about as CSR on their websites, such as the provision of healthcare or fighting climate change, have not appeared until recently on the screens of continental European companies. The reason for this is that these issues have traditionally been considered a task for governments or, in other words, the corporate responsibility for social issues has been the object of codified and mandatory regulation.” The implied inclusion of Japan, Taiwan, and South Korea in this statement is interesting in terms of the institutional context for CSR since they are characterized by high bank and public ownership, patriarchal and long-term employment, and coordination and control systems based on long-term relations and partnerships rather than markets. Note, for example, the Japanese “Keiretsu” and the Korean “Chaebol,” these are characterized by life-long employment and include benefits, social services, and healthcare – not so much as a result of voluntary corporate policies, but more a response to the regulatory and institutional environment of business in those countries. In all the definitions of CSR, there is an ethical or philanthropic component; businesses must act for the “public good” and there have been debates and disagreements about what exactly constitutes this. In considering the fundamental motivations behind the need to “do good” and act ethically, it is clear that to a greater or lesser extent religion influences people’s habits, values, and attitudes which translates into influencing how people conduct business transactions and how they behave. This was recognized by Frederick (1986) and referred to by him as “CSR3” (Corporate Social Rectitude) the source of which must be based in core religious values. Religious beliefs can have a strong influence on the actions of businesses. As an example, the concept of CSR can be considered from an Islamic perspective (Dusuki and Abdullah 2007). According to which an Islamic perspective on CSR would draw from the principal of “Maslalah” (The Public Good) leading to an adaptation of Carroll’s Pyramid to what is called iCSR (islamic CSR) (Darus et al. 2013). Such a model would be particularly relevant to businesses in the Middle East. Apart from CSR in the USA, Europe, Africa, and Middle Eastern countries there are the interesting and important cases of countries that may be referred to as “in transition.” Two examples being Russia and China. Russia (together with other former Eastern European countries) has transitioned from a centrally planned economy in which state and private enterprises have coexisted in a context of weak government institutions. In China, there is much stronger control from the state. Studies of CSR in various countries including the UK, Italy, Poland, Turkey, the USA, the Middle East, Australia, Japan, and Korea are presented in the book “Corporate Social Responsibility – A Case Study Approach” ed. Mallin (2009).

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CSR in the World of Global Business

Despite the large number of definitions of CSR formulated since the 1950s, the difficulties of understanding its practical applicability, and questions over its meaning in different business contexts, CSR has now become a part of the business world. This is shown by the increasing adoption of CSR concepts as an integral part of many large corporations, many of which have adopted their own conceptions of CSR. For example, at Microsoft Corp. CSR is heavily geared towards the concept of Sustainable Development, and in advancing an agenda that furthers the UN’s Sustainable Development Goals program (Microsoft CSR report 2019). Other examples from individual companies in the area of CSR are as follows: Johnson and Johnson – “the company’s responsibilities to be fair and honest, trustworthy and respectful, in dealing with all our constituents (Johnson and Johnson 2000); Volkswagen (2000) adopt a position which builds both shareholder value and worker value in order to deliver ‘sustainable growth for the future.” They define CSR as “the ability of a company to incorporate its responsibility to society to develop solutions for economic and social problems.” Shell: “We all need to assess the impact our business makes on society and ensure that we balance the economic, environmental and social aspects of everything we do” (Responsible Business 1999). These companies, and others, are clearly showing an awareness of CSR however it is evident from the descriptions of their programs that they have not settled on any one of the specific models listed above. Rather, their implementations of CSR are simply the lists of generally desirable objectives connected with the environment, employee empowerment, and sustainability. As far as the motivations for the adoption of CSR practices in the world of globalized businesses are concerned, a key competitive advantage can be gained by the capability of a company to establish close relationships with its strategic partners, for example, in the supply chain. As an example, there is the case of the Swedish firm IKEA, which is heavily dependent upon suppliers to produce the bulk of its product range. IKEA’s conception of CSR has seen the company shift towards fewer suppliers and a more cooperative relationship in which the company works with suppliers on quality as well as environmental and social issues with a view to bringing suppliers to higher levels of performance in cooperation with the company (Andersen and Skjoett-Larsen 2009). In recent years a major driving force behind the increasing involvement of companies in the supply side has been the degree of public scrutiny they are now subjected to as a result of the internet, social networking and the globalized media. Many pressure and advocacy groups are focused on working and environmental conditions in the countries which predominantly serve as suppliers to large global corporations and are able to mobilize interest in their causes in countries where there are the major consumer markets. To see the kind of problems and adverse publicity that can afflict a company as a result of the practices of its suppliers consider as an example the recent case of Apple and its supplier Foxconn. In the age of increasing awareness of the need for CSR, companies are no longer considered by the public to be completely isolated from their business partners.

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CSR in Government and Non-Governmental Organizations

Apart from adoption at the corporate level, CSR has been widely adopted by many governmental, non-governmental (NGO), not-for-profit (NFP) organizations and charities. For example, in the UK the Department for Business, Energy and Industrial Strategy started its CSR strategy in 2014 under four headings: Environment, People, Procurement, and Community. The EU defines its CSR program (equivalently referred to as “responsible business conduct”) as the expectation that “companies understand their positive and negative impacts on society and the environment, and prevent, manage and mitigate any negative impacts that they may cause, including in their global supply chains” EU Commission (2019). A particularly interesting context in which to discuss CSR is that of NFP organizations and charities. Hitherto, all the discussions of CSR have centered on a key question of how the profitability requirements of a business can be reconciled with its social obligations (if any). This “economic” (or profit) requirement is an integral part of all the models described above. It might be thought that an NFP organization or a charity must necessarily be socially responsible since many are founded to deal with societal concerns and there’s no profit motive. However, if NFPs are viewed in the light of 3BL or Stakeholder Theory, for example, then service provision replaces the profit motive. The issue of CSR as applied to NFP organizations is discussed in detail in Crowther and Aras (2008).

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CSR – Towards Global Acceptance

As noted above, there are important issues regarding the extent to which CSR can be defined and implemented globally across different cultures and business environments. At a global level the World Business Council for Sustainable Development has introduced its CSR definition “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” (WBCSD 2008). In the UN system UNIDO defines CSR as “a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line-Approach”), while at the same time addressing the expectations of shareholders and stakeholders.” According to UNIDO the key CSR elements are “environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures” (note the use of Elkington’s 3BL concept of CSR and the inclusion of anti-corruption measures as an important part of CSR). UNIDO implements CSR in Small and Medium Enterprises (SMEs) through its REAP (Responsible Entrepreneurs Achievement Programme). REAP is a

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CSR-based management and reporting tool developed by UNIDO to assist SMEs in their efforts to implement CSR-based management in a way consistent with 3BL. The International Organization for Standardization (ISO) has also published guidance for the implementation of CSR concepts in an organization. As the world’s largest developer of voluntary international standards its support for CSR is significant but it does not provide requirements and is not certifiable. The ISO2600 (2010) “Guidance on Social Responsibility” is founded on seven core principles: accountability, transparency, ethical behavior, respect for stakeholder interests, respect for the rule of law, respect for international norms of behavior, and respect for human rights. Training is provided which is designed to work in all organizational settings anywhere in the world, however allowance is made for training programs to be modified and extended to suit different countries.

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Summary

In the nearly 90 years since the Berle-Dodd debate first introduced the notion of what became Corporate Social Responsibility into the public realm, the subject has changed significantly in many ways. Although the basic idea of CSR still goes back to the question of the extent to which businesses can and should concern themselves in areas outside the strictly limited area of shareholder profitability, the field has grown to include a broader range of areas in which CSR is seen to have a role. These are the government sector, the not-for-profit sector, charities, and nongovernmental organizations. In terms of how CSR is understood, many different terms have been used to define it, and it has gone under different names including stakeholder theory, social contract theory, business ethics, etc. A key question concerns the reason why the conception of what CSR means, and what it encompasses, has changed over the years. What factors have been driving CSR’s evolution? The period starting in the 1960s saw significant changes in the concept of CSR which reflected changing concerns in society, and because much of the theoretical development of CSR took place in the Western world, and specifically the USA, many of the events having the greatest impact on CSR took place there. The 1960s saw an increasing concern for environmental issues, an awareness of the potential risks of the world’s increasing population, resource depletion and pollution. These concerns were brought to a head by the Bhopal disaster of 1984 (Varma 2005). The Enron scandal of 2001 (Cruver 2003) also led to an upsurge of attention being paid to the concept of business ethics. More recently, there have been concerns over the social consequences of globalization and outsourcing on deindustrialization and unemployment (Van Neuss 2018). There has been much speculation on the future of CSR – it may cease to be regarded as a separate “add-on” to business operations and become fully integrated into all aspects of a company’s work. Recent trends suggest that there will be increasing partnerships between businesses, NGOs and other NFP organizations – implemented globally.

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As millennials come to dominate the workforce in the next 10–20 years it will be their attitudes towards social issues and business practices that will determine the future of CSR.

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Cross-References

▶ Corporate Human Rights Responsibility in Times of Increasing Socio-cultural and Political Isolationism ▶ Corporate Social Responsibility (CSR) in Multinational Companies (MNCs), Small-to-Medium Enterprises (SMEs), and Small Businesses ▶ CSR in the USA and UK Versus CSR in Europe and Asia ▶ Foreign Direct Investment and Development in Developing Host Economies ▶ Governance of Migration and Sustainability ▶ Triple Bottom Line

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Theoretical Developments in Corporate Social Responsibility Miriam Green

Contents 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dichotomies and Divisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philosophical Foundations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sociological Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CSR and Capitalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CSR and Legitimacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Issues and Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Communication and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply Chain Management and Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Disclosure and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accountability and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Research into CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.1 Research and the Academy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 Research Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 Research Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.4 Future Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Developments in CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.1 Broadened Remit for CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.2 Neoliberal Influences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 The Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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M. Green (*) Icon College of Technology and Management, London, UK e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_78

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Abstract

Corporate Social Responsibility (CSR) is a complex subject, as are theoretical developments within it. It is multidisciplinary, as are many disciplines in the social sciences. Perhaps because CSR is a relatively new area within the field of business and management (Crowther and Lauesen 2017), dealing, as will be seen, with a variety of issues and approaches, it spans many fields, theoretical perspectives, and research methodologies. One of the dialectics in writings on CSR has been between a “functionalist” approach, often seeing CSR policies as one among other corporation policies, and effective to a greater or lesser extent. A radical approach on the other hand regards corporations as being always mindful of the bottom line. CSR policies would then be tools to achieve that goal, be it with effective socially responsible outcomes or possibly as simply branding exercises to gain legitimacy and consumer support. With recent global developments, there are again different views as to the directions CSR will take. With the corona virus pandemic and the climate change crisis, broader questions have been brought into focus regarding the roles of the state and of international institutions, and their future relationships with corporations. The hitherto neoliberal ideology and practices which had weakened many governments in favor of private companies, including their taking over public services, is now under challenge. Environmental disasters and Covid-19 have exposed the need for strong governmental action both nationally and also through global cooperation. This raises questions about the future roles of corporations and other private organizations, and therefore of CSR, the ways in which it will develop, and the possible effects on societies world over. Keywords

CSR dichotomies · Sociological perspectives · Capitalism · Stakeholders · Legitimacy · Ethics · Environment · Reporting · Research · The future

1

Introduction

Corporate Social Responsibility (CSR) is a complex subject, as are theoretical developments within it. It is a multidisciplinary subject as rightly are many disciplines in the social sciences. Some scholars specializing in other subjects might deny this for their own specialism, claiming it to be a pure and indeed superior subject whose approaches and methods should also be followed by scholars in other disciplines. Some classical economists have done exactly that (Ferraro, Pfeffer, and Sutton 2005). Perhaps because CSR is a relatively new area within the relatively new field of business and management (Crowther and Lauesen 2017), dealing, as will be seen, with a variety of issues and including many approaches, it spans many fields, theoretical perspectives, and research methodologies. CSR draws on different disciplines and shares common philosophical and sociological underpinnings with other fields in the social sciences. Conversely different

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disciplines encompass questions concerning CSR within their own ambits. CSR has been described as a “multifaceted, interdisciplinary, systematic and dynamic reality” (Ospina and Ospina 2017: 96). Retrospective as against prospective analyses are two further ways of conceptualizing and analyzing CSR. A retrospective analysis would look at what has/has not been done by corporations, allowing responsibility or blame to be attributed to the corporation(s) for the current state of affairs; a prospective one would be to suggest what corporations should do to effect CSR policies. Initially it was the former that was done, but after the second world war, reporting became much more forward-looking (Crowther 2018). Further complications, also applicable to many social sciences are the immense uncertainties regarding the future, particularly in the light of the current health pandemic which has wrought huge changes in societies the world over. How this will affect the future at the moment remains speculative as do questions as to how this might affect CSR. This chapter will attempt to navigate through what constitutes CSR scholarship and developments within it.

2

Definitions

Definitions are often problematic. They tend to reflect authors’ preoccupations, assumptions, interests and values. This is as true of CSR as of any other concept or practice. According to Aras and Crowther (2012) there are no agreed definitions. It has been shown that the meanings of CSR, particularly in terms of the obligations companies should have to society, are unclear and contested, as are the expected outcomes (Iatridis and Kesidou 2013). A given by Frynas and Yamahaki (2016) is that CSR involves companies taking responsibility for the effects on broader society as well as on the natural environment, their responsibilities being beyond what is required by the law. Seifi and Crowther (2018) have offered several definitions, such as the relationship between global corporations, governments, local communities, other stakeholders and individual citizens. They argue that the focus should now be on sustainability, corporate governance and the relationships with supply chains and with stakeholders. Other definitions have focused on more specifically social and psychological matters such as bioengineering effects on diversity; the consequences of corporate behavior on economic wealth as against social well-being; the consequences on networked societies and the relationship between corporations and individual behavior (Crowther 2017). There has recently been an expansion to include political issues in the broader context of international development strategies (Frynas and Stephens 2014). Given the current global crisis regarding Covid-19, definitions and the boundaries of the subject could now well include the effects of corporate, governmental and more local bodies on public health in their own societies and also in other parts of the world, particularly on the relationships between the richer “north” and the poorer “south.”

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Dichotomies and Divisions

As well as divisions in subject matter, scholarship produced about CSR includes attitudes based on different philosophical traditions, sociological paradigms, political views, types of knowledge produced, the way they are framed and the values underpinning them. There are also differences as to what constitutes theory. Frynas and Yamahaki (2016), for example, argue that topics within CSR such as sustainable development have been confused with theory. They conceptualize theory as ideas that have actually been applied through CSR, such as agency theory and stakeholder theory. Another way of looking at theoretical underpinnings is to look more broadly at different sociological approaches outlined below, arguably underpinning some of the theories and practices applied in CSR strategies.

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Philosophical Foundations

The philosophical foundations of CSR are based on ideas of liberty, consent to be governed and equality before the law, including human rights, limited government intervention, and the idea of a social contract, concepts based on Locke’s, Hobbes’, Rousseau’s, and Kant’s writings. Some of these concepts were later developed by Friedman (1970) into the maximization of shareholder returns, pointing to one of the interpretations of CSR (Crowther 2017, 2018). On the other hand, Utilitarianism, the idea that the interests of all must be considered equally is supported by Hobbes’ (1651) Social Contract Theory and Rousseau’s (1762) ideas, and later implemented through centrally planned economies and welfare economics. For some there is a role for government in mediating between individual interests and the communal good. The importance of a contractual approach is based on Hobbes’ concerns to guarantee physical safety for all members of society; Rousseau’s wish to make good the loss of citizens’ social ties and legislative power; Locke’s wish to ensure equality for all in the law, and the right to retain private property against corporate predators; and Kant’s wish to uphold morality, especially in the area of economics (Filek 2015). These ideas have encouraged or obligated firms consider their responsibilities to wider non-owner as well as to owner interests (Haigh and Jones 2006). Related to this are concerns by corporations that their activities should be seen as legitimate, also in terms of outside state policy and regulation, and is linked with legitimacy theory – the assumption that companies must gain the approval of the wider community in order to legitimate their right to exist (Frynas and Stephens 2014). The idea that corporations should act outside state directives is countered by the Habermasian idea of “deliberative democracy,” in which concerns are raised about CSR being used by companies outside the compass of the state. Deliberative democracy requires the state to oversee and regulate CSR and other political powers of corporations, making them accountable by democratic means (Frynas and Stephens 2014). This is a dialectic that has been in play over recent decades,

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particularly after the advent of neoliberal practices and the privatizations encouraged by governments in the UK and in other countries since the 1980s, reducing the role of the state in areas previously regarded as being the state’s responsibility rather than being allowed to be opened up to market forces (Green 2016).

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Sociological Perspectives

One of the major divisions, mirrored in basic sociological paradigms such as those constructed by Burrell and Morgan (2016) are those between a “functionalist” approach and a radical one. In terms of CSR this would entail a difference in the way corporations are constructed: on the one hand, from a managerialist viewpoint – as organizations which to a greater or lesser extent, through good will and sincerity or the lack of these, through greater or lesser effectiveness, preach and practice CSR policies. Companies might be practising CSR from “the heart” – voluntarily with ethical, social, and environmental concerns; to gain social acceptance and legitimacy; or from a transactional perspective, as in transactional cost economics where an economic exchange is decided upon, underwritten by an agreement to ensure compliance (Frynas and Yamahaki 2016). On the other hand, a radical approach would be on the lookout for corporations being political players, always mindful primarily if not solely, of the “bottom line.” This could include their engagement with dishonest and corrupt practices, carelessness with health and safety issues both internally and regarding the wider community, and overriding workers’ rights through suspect employment policies. In this scenario, CSR would merely be one of the tools used to further the organization’s interests, the most obvious being to use its contribution to CSR (which might be insignificant as a proportion of its wealth, power and influence) as an advertising and branding exercise to gain social legitimacy rather than practising polices which would make actual differences to local and wider communities – what Iatridis and Kesidou (2013) have called “symbolic” as opposed to “moral” or “comprehensive” CSR. This would reflect a utilitarian perspective, with the company using a “costbenefit” analysis to calculate the most advantage it could gain for the minimal cost (Iatridis and Kesidou 2013). This dichotomy can be played out at various geographical levels: at a local community level, a national level, and a multinational, global level. This brings in another related, relatively new discipline – that of cross-cultural management. This too has been regarded in different ways. The functionalist view would investigate how management across different cultures was achieved by the multinational corporation in combination with the host nation and/or company, and what the difficulties were. A more critical or radical approach would see the situation as more exploitative – as a type of cultural and economic imperialism, with the aim of working out how to achieve “the bottom line” at minimal cost, rather than as a genuine attempt to meet and include the cultures of the emerging or frontier economies in which the multinational corporation is operating.

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If one includes corporate governance, employment policies and workers’ rights are likely to be considered as well. CSR policies and corporate governance in industries in Third World countries have their own difficulties. Governments may have different or minimal regulations and may be unwilling to address these further, and international standards may not be complied with (Seifi and Crowther 2014). This can raise problems regarding labor protection, complicated further by the existence of supply chains.

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CSR and Capitalism

The issues raised by some authors highlight assumptions about commonalities of interest between corporate social responsibility practices by large corporations with the welfare of communities from local to wider society, extending to the global arena. In terms of CSR’s relationship to capitalism, which some might see as crucial to answering questions about such commonalities, it has, on the one hand, been suggested that far from constraining business, or being harmful to society, it had positive effects (Hanlon 2007). Examples given by Hanlon include the previously hostile relationship between green pressure groups and the Ford motor company changing, as Ford saw “greening” cars as an opportunity for innovation. This was true also of relations between oil companies and previously hostile NGOs, combining to produce cleaner fuels (Hanlon 2007). A far more critical, approach is outlined by Shaw (2017b: 388): Considering the broad configuration of the global capitalist system, corporate social responsibility is too often a perfunctory gesture, providing yet another reason for business as usual; justifying the deeper extension of market forces into an already imploding social body.

Researchers who have examined the construction of the concept of CSR critically, have called for new conceptualizations of CSR, to allow for better understanding of CSR from humanistic and emancipatory perspectives (Ospina and Ospina 2017).

7

Stakeholders

One question governing the issues raised above concerns who the stakeholders are. In agency theory, it is only the owners/shareholders to whom the managers of an organization are beholden (Crowther and Lauesen 2017). Therefore, in accounting terminology, the value created in the organization would be relevant only to the value created for shareholders. This would define CSR very differently from many of the definitions above, as according to this theory the interests of all sections of society apart from the corporations’ shareholders would be excluded. This has been seen as egoism versus the altruism depicting the corporation as a moral agent with a fiduciary duty of care to society (Crowther 2017).

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In stakeholder theory, on the other hand, there are various stakeholders, each entitled to have their interests and wishes met. If it is accepted that there are more stakeholders than only shareholders, questions arise as to who they are, and importantly whether they would have convergent or divergent interests with shareholders, and with the corporations themselves (Aras and Crowther 2012). This raises further questions about accountability, and to which stakeholders corporations are or should be accountable, leading to an important dichotomy in conceptions of CSR mentioned earlier – should matters of social responsibility be under the aegis of independent corporations or does the government have any responsibility for this, and should corporations be accountable to governments too? The situation is more complicated. There are different interests and goals among the various groups who might be regarded as stakeholders according to stakeholder theory, leading to potential conflict among groups. Within groups there are individual differences because of conflicts of interest leading to obfuscation as to the common purpose of a particular group (Aras and Crowther 2009). Aras and Williams (2017) also make the point that a single, universally accepted method of sharing out returns between stakeholders does not exist. However, it has been argued by many (e.g., Freeman 1984 cited in Frynas and Yamahaki 2016) that the stakeholders who really count are those with the most power and influence, as it is they who are able to exert pressure, for example, through government lobbying.

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CSR and Legitimacy

Another thorny question regards the criteria for success. Could they be the same for all stakeholders, assuming that they are recognized as being more than exclusively shareholders? And how can one evaluate corporations’ performance in order to see whether the criteria have been met? Lauesen has pointed out the “fake backdrops of corporate promises of being both financially and socially responsible,” which she has called “Corporate Social Potemkinity” (Lauesen 2015: 29). (This is after a myth about Potemkin, a government minister in the Eighteenth Century ordering a fake backdrop to be constructed aimed at beautifying the Dneiper River waterfront to impress the reigning Russian empress, Catherine II (Lauesen 2015: 29).) An even more radical discussion would be to raise questions about the legitimacy of these corporations at all, as intimated above by Shaw (2017b). Such questions might be further stimulated by problems of proven or suspected linkages between corporate actions and perceived undesirable social and ecological outcomes by certain groups of stakeholders; by the extent to which corporate self-interest was helping or harming long-term economic and social development; and the degree to which corporate behavior was altruistic (Crowther and Lauesen 2016). Lauesen (2016) has described problems experienced by stakeholders with corporations as “stakeholder dissonance.” Stakeholder dissonance resulted from a lack of trust by various stakeholder groups in the different types of organization stakeholders depended on. This could lead to a vicious cycle where the lack of trust in organizations resulted in there being a lack of incentives for organizations to fulfil

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their obligations in accord with the expectations of the broader society. This could then increase stakeholders’ dissatisfaction with the behavior of organizations and organizational outcomes. It could also lead to bigger questions such as putting large corporations in the frame for overall responsibility for societal economic, political and social inequalities and for the tensions between global social structures and processes and the different world economic and political systems (Said et al. 2014). The question of the relationship between an organization’s commitment to uphold and execute CSR values and its financial success is a related issue frequently raised and researched. Said et al. (2014) found that a corporation was attractive to investors where there was good governance. It could have positive effects for business, the environment, and people. Aras and Ingley (2017) have pointed to risks companies faced in having their reputations damaged, and their shareholder and stakeholder value diminished by unethical behavior. Conversely, they stood to gain social and economic value through commendable corporate action. However, this cannot always be the case. Aras and Crowther (2012) have argued that where corporations have claimed sustainability as a ploy, this could mislead investors into underestimating the risks actually present. Positive relationships between these, as many researchers have found, are complicated by evidence of many corporations’ poor CSR performance. This is so particularly in the light of frequent company practices of using CSR as a means to self-publicity rather than as a genuine effort to implement socially responsible change.

9

Ethics

Ethics has played an important role in investigations regarding CSR, particularly from the 1980s onwards. Ethics is another problematic concept, as what is ethical or unethical can be dependent on the current values espoused by the various relevant actors. There is also the issue of deontological (the normative ethical theory that the morality of an action should be based on absolute standards – whether that action itself is right or wrong under a series of rules), as opposed to teleological ethics (the consequences or outcome of the action). Then there is the question of ethical relativism – the idea that moral principles are not universal. They are regarded either as being culturally determined and driven, or as a matter of subjective, individual choice (Crowther 2017). Ethics concerns organizations at various levels – global bodies such as the World Trade Organization (Klein 2014), political institutions, transnational and national organizations, and their particular accountabilities. On a political, environmental, community and employee level, there are questions about corporations upholding human and environmental rights. Counter-examples include the Nigerian state execution in 1995 of Ken Saro Wiwa, a nonviolent activist against the environmental degradation in his home territory of Ogoniland caused by multinational companies, particularly by the Royal Dutch Shell Company; the lack of employee and community protection in the Union Carbide disaster in India in 1984 which killed or

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disabled more than half a million people; the undermining of women breast-feeding their babies in several Third World countries through Nestle’s marketing of unnecessary alternatives to breast milk; and more recently the garment factory fire in Dhaka, Bangladesh, 2012, which killed over one hundred employees because of the company’s negligence regarding health and safety. Now in 2020 responsibility for public health because of the Covid-19 pandemic is a dominant, pressing and consequential question, alongside endemic and increasing inequality and poverty. This links in with other, longstanding issues concerning government ideology, policy and discourse; the effects of neoliberal policies in the western democracies in terms of inequalities, the downgrading of public institutions including health care, inadequate support for the vulnerable in this crisis, the ability or otherwise of people at the “sharp end” to be able to deal with this crisis, and the knock-on effects on their lives and on those of others in materially more comfortable situations. The possible roles of CSR in this are discussed below.

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Environmental Issues and Sustainability

Environmental issues, now at the forefront of CSR, cover a wide range of issues, among them environmental protection, waste management, consumption patterns, carbon footprints, responsible manufacturing, and the use of ecomaterials. Perhaps less frequently researched subjects include questions around food and food deserts. Shaw (2017a) has examined the relationships between socioeconomic status and diet, health and obesity. He has done research on “food deserts” or areas where there is poor access to healthy food for economic and geographical reasons. Sustainability has become a field in itself, and as with CSR also has different definitions, theoretical approaches, types of research, and its own stakeholders in the development of knowledge in this field. As with many other terms, it is “neither clearly understood nor consistently applied” (Wells and Ingley 2017: 70). With this also come practical problems similar to those regarding the implementation of CSR more generally. For example, company policies regarding the environment, their ecological footprints, and their policies regarding the resources of the planet, such as water. Issues of sustainability and sustainable development, terms often used interchangeably (Seifi and Crowther 2014), are closely linked with questions of socially responsible behavior. If one regards sustainable development as one of the bedrocks of CSR, it must be regarded as important as maintaining the financial health of organizations and ultimately of the economy (Crowther and Lauesen 2017). Seifi has used what may be a novel approach to questions of sustainability through her analysis of strategic decision-making by companies in terms of games theory. Companies, in the global capitalist system currently in operation, are naturally in competition with each other, gaining or losing market share in relation to other firms. Risk factors are therefore central to the decision-making processes in companies, which game theory, a branch of mathematics, is well equipped to analyze (Seifi 2017).

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Communication and Reporting

Communication is a vital part of CSR. It is useful not only as a provider of information from the company to the public about its CSR policies, but can also be used to harness public support and cooperation. The extent and range of reporting required has, as already mentioned, moved away from purely financial reporting to include environmental and social reporting – indicating the desirability of altruistic over egotistic values. This is an indication of the change and broadening of who the stakeholders are considered to be, and the increasing seriousness with which communication is regarded. All communication has to be evaluated in terms of whether it is providing valid and comprehensive information as against mainly branding exercises to improve the company’s image, also termed moral hypocrisy or a version of impression management (Morf et al. 2013). A new type of reporting has been developed to encompass social, environmental, and other changes – integrative reporting – which aims to go beyond financial questions. Instead of looking only at financial performance of the business, integrative reporting includes consideration of how various business functions, including, for example, human resources and sustainability, affect both the corporation and society in the future as well as what has happened in the past (Robertson 2015). Nonfinancial values created by organizations, such as the human, social and intellectual forms of capital set out by Bourdieu (1998), as well as the environmental and sustainable ones are included. This is increasingly practised and is regarded as providing more balance in monitoring and measuring company performance (Ingley and Aras 2017).

12

Supply Chain Management and Consumers

The field of Supply Chain Management (SCM) in relation to CSR has developed particularly over the last two decades because of increasing globalization, initially covering environmental and economic issues and extending to social matters such as socially responsible sourcing, ethical concerns and those of sustainability (Feng et al. 2017). There have been demands made of multinational companies by their various stakeholders to protect and improve human rights, and rectify breaches of international guidance on health and safety issues in the workplaces of their suppliers in developing and emerging economies. This has resulted in companies rethinking their procurement policies, sometimes using more innovative and socially conscious approaches (Broomes 2016). This is another instance of the widening of CSR accountability from being solely to shareholders to a wider constituency, including suppliers, consumers, as well as employees and communities. It has also led companies addressing their concerns to wider issues in the whole supply chain, including purchasing and logistics in relation to CSR; cooperation, commitment, and trust in SCM; risks and production processes; sustainable development; environmental analysis; labor migration; and the social issues mentioned above (Feng et al. 2017).

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There are difficulties, of course, with the implementation of CSR policies particularly with supply chain processes. The difficulties of enforcement in developing countries has been mentioned elsewhere, and many of the CSR codes are only voluntary. Compliance is a problem, and there is still widespread malpractice, regarding, for example, child labor, freedom of association, and collective bargaining. And employees are often unwilling to complain for fear of losing their jobs and of threats of retaliation (Broomes 2016). Increasingly interest has shifted from the companies themselves to their suppliers in developing countries, and from a focus on metropolitan countries and how they manage their supply chains to suppliers in developing countries, the pressures they face from their customers and how they manage these. There are issues of trust between suppliers and their customers. In situations where suppliers in developing countries are successful in producing ethically sourced products, their international company customer might have other priorities such as uniform strategies with a desire for global integration rather than customized approaches to each host country or supplier. This could well put additional pressures on the suppliers (Feng et al. 2017). Then, as mentioned earlier, there are differences between multinational corporations’ cultures and those of their host countries, which can make for misunderstandings in addition to the likelihood of there being different ethical principles, norms, and type and extent of regulation. The priorities of multinationals may also be very different from those of the consumers at the end of the chain in the metropolitan countries. Consumer preferences have been increasingly concerned with CSR issues. Environmental and consumer pressure groups have taken action regarding retail companies over, for example, the working conditions of workers, usually in Third World countries. Clothing stores including Primark, Zara, Marks and Spencer and Gap have come under scrutiny for the way garment workers have been treated, and are put in the position of having to defend their companies often on grounds of ignorance. There has also been concerted action and increased awareness regarding results of harmful environmental actions by well-known corporations, such as the BP oil spillage in the Gulf of Mexico in 2010, and most recently the gas leak in Visakhapatnam, Andhra Pradesh, India, in May 2020, where the company had been operating illegally without environmental clearance from the government.

13

Disclosure and Reporting

The ethical scandals of the 1980s and 1990s involving savings and loan failures; the Enron and other corporate failures and the failure of the financial system in 2008 have all led to the perceived need for honest and truthful reporting about corporations¸ particularly regarding corporate governance (Aras and Williams 2017). According to Crowther (2018: 1) “the purpose of corporate reporting has changed from one primarily of stewardship and accountability to shareholders to a more outward looking and forward looking perspective.” One of the important ways of securing accountability by corporations in terms of their social responsibilities is the

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extent to which they are prepared to or indeed encouraged by the state to disclose the true state of their policies and practices regarding CSR, including shortcomings as well as successes. Issues arising include the need for transparency by corporations, which involves imparting knowledge about companies’ activities, through reporting and other forms of communication such as the media the extent of their responsibilities and accountabilities; how their reporting is carried out – for example, whether it is aimed at internal or external users of the information or both, and the type and range of information disclosed (Crowther and Lauesen 2017). Would it be obvious, for example, whether the information was accurate, whether it was honest so that it was clear to what extent CSR policies were practised, their reach and effects, and what actual or potential conflicts of interest there might be. In fact, companies have used disclosure to establish their legitimacy, with environmental reporting for example. Legitimacy theory has focused on corporate social disclosure as one of the ways in which to assess whether the expectations of society are being met by CSR practices (Frynas and Yamahaki 2016). To the extent that corporations adopt CSR policies outside governmental regulatory frameworks, and to the extent that they are vulnerable to public pressures, the subjects of what is disclosed will vary according to the social pressures of the moment, it has been argued. Companies could be genuinely honest and comprehensive or only symbolically compliant. This could lead to weaknesses such that the disclosures might be about impression management, focusing in the interests of legitimation, on the positive aspects of the company’s performance, and ignoring those which might be received unfavourably (Morf et al. 2013). Crowther (2018: 12) has argued that the change in focus of corporate reporting has led to reports being less about actual company results and more about “image creation mechanisms.” This practice is of course more widespread, being the case also with governmental policy statements and briefings (see, e.g., Green 2020).

14

Accountability and Compliance

This is an interesting question. One might expect most companies to comply with government legislation or regulation at least minimally. Of course, it raises difficulties to do with definitions and evaluations of what counts as compliance – the range or extent necessary, allowance for difficulties in full compliance, the time scale allowed. These questions are discussed further under “implementation.” There have been several codes of corporate governance following on from weak oversight and corporate failure such as the Bank of Credit and Commerce International (Nordberg and McNulty 2013; Green et al. 2008), and financial scandals regarding audit failures and alleged fraudulent behavior on the part both of managers and large shareholders in companies such as Coloroll, Polly Peck, and those owned by Maxwell (Nordberg and McNulty 2013). There was an updated code in 2009 following the financial crisis of 2007–2009 However, as Nordberg and McNulty (2013) point out, compliance can be

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compromised if the wording is not as strong as it might be. They show the differences between three corporate governance codes. In terms of “social practice,” the Cadbury Report and Code (1992) wanted institutional change to “restore legitimacy” after crises in UK companies; the Higgs-inspired Combined Code (2003) wanted institutional change to “reinforce legitimacy” and the 2010 UK Corporate Governance Code did not mention legitimacy at all. Instead it wanted institutional change to “enhance” boardroom “effectiveness” (Nordberg and McNulty 2013: 354). This seems a step away from accountability. Similarly, these authors point out that the Cadbury code stipulated “effective accountability” (Para 1.1), public accountability (Para 1.5), and open disclosure (Paras. 5.1–2, 5.9). Little direct mention was made of accountability in the 2003 code, but it was recommended that the major shareholders were given more access to a greater number of board members (Principle D.1). The 2010 code reduced the power of shareholders by stipulating that they should “pay due regard” to the company’s circumstances and be supportive of the company (Section Comply or Explain, Para.4) (Nordberg and McNulty 2013: 354–358). This reinforces the claim that accountability has been weakened. The concept of compliance too has been eroded in these codes over time. The Cadbury code required companies “to state whether they are complying with the Code and to give reasons for any areas of non-compliance” (Cadbury 1992, Paragraph 1.3, cited in Nordberg and McNulty 2013: 362). The 2003 code put the issue less forcefully through the use of the passive voice, which can obfuscate who the actors are and details of their activities (Green 2019). In this case, the phrase was “it is expected that . . . companies will comply with the Code’s provisions most of the time” (Financial Reporting Council, “Combined Code on Corporate Governance,” 1., cited in Nordberg and McNulty 2013: 362). This does not give details of the authority to whom companies are responsible, and the last phrase confirms that compliance is not always required. The 2010 code weakens the notion of compliance still further, stating that the code was not a “rigid set of rules” (“Comply or Explain,” Paragraphs 1–2, cited in Nordberg and McNulty 2013: 363). The conclusion of these authors was that codes of corporate governance were limited. The degree of effectiveness in achieving such goals was ultimately a “local matter” (Nordberg and McNulty 2013: 367). Chambers has described the phrase “comply and explain” as meaning that “UK corporate governance is so light touch as to have hardly any grip at all” and that “influential groups would like to keep it that way” (Chambers 2012: 33).

15

Implementation

Reliance on assertions and declarations by corporations or smaller companies is insufficient both to have knowledge about what the companies are actually doing and also to be able to hold them to account for their actual CSR record. A gap between declarations and undertakings by companies and their carrying out CSR policies has been acknowledged by many, e.g., Iatridis and Kesidou (2013).

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Evaluations of CSR implementation brings to the fore many of the difficulties raised above: the problems of definition of what counts as CSR; the relationship of theory to practice (Crowther 2018), arising not only from company policy but also from broader values held outside the corporations. The philosophical and sociological approaches by researchers as well as by politicians, the press and the general public as to what counts as CSR also raise problems regarding evaluation. In addition, the company’s motives would determine the extent to which practice has followed assertion: corporation executives who were interested in engaging with CSR policies in more than a symbolic way were more likely to narrow the gap between the discourse of CSR and its realization in actual policies (Iatridis and Kesidou 2013). Lauesen (2015), in her international study of governance in water industries in Denmark, the UK, the USA, and South Africa has shown that even before the above points are considered, the discourse used also serves as a method for evaluating implementation. Discourse analysis serves to “capture the institutional framing and contrasting of different meanings of sustainable governance in the water sector” (Lauesen 2015: 163). This would of course apply to CSR more generally. It might make the task easier in some respects as it could provide a “handle” on evaluating the initial concept of CSR as framed by corporations, and then be used for comparisons with other discourses in those companies, and with their actual implementation of CSR policies. Lauesen highlights the discourses by the water companies and their regulators through qualitative research based on interviews and participant-observation in Denmark.

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Research into CSR

16.1

Research and the Academy

As with other areas of research in the social sciences, including in the organization and management fields generally, there are a number of caveats that must be pointed out regarding the type and quality of information provided. There are issues mentioned earlier regarding the inescapability of the type of knowledge produced through the particular values, paradigms, approaches, and methodologies used, and also through the external pressures on researchers by their institutions, funding bodies, and the organizations they are researching (Green 2019). It has been shown that in the management and management accounting fields, the type of knowledge and approaches favored the most in the academy and therefore constituting mainstream research is functionalist scholarship, where the focus is on managers in terms of their assumed prerogative and power to determine and implement policies, their goals, and as sources of information about their companies (Green 2019). This has been accepted mainstream research strategy regardless of the weaknesses in the range and quality of information available to senior managers in large companies. They cannot know what is happening throughout their organizations, particularly at levels below theirs (Dermer and Lucas 1986). There is also

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the potential problem of unverified self-reporting by the same people who are responsible for the policies under review (Van der Stede et al. 2005). Research funding can also present problems. In scientific research it is almost a truism that such research can risk being compromised by its funders if the latter have anything to gain or lose from the results. This issue has certainly been raised regarding management scholarship in the United States, and from there influencing academic work in the Anglo-Saxon world more generally. There were pressures, for example, from the Ford Foundation, which after the Soviet success in launching Sputnik in 1957, influenced business schools to change their curricula to include more statistics and quantitative methods – an approach, though valuable in itself, risks leaving out qualitative data essential to the understanding of organizational processes, and to successful and failed organizational outcomes (Green 2019). Companies allowing researchers access may, perhaps not unreasonably, require the researcher to undertake investigations more relevant to the company than to the researcher’s own academic goals and the knowledge sought (Crowther 2017).

16.2

Research Methods

Research methods have varied between positivist, objectivist, deductive schools of thought, using methodologies which test theories often through empirical observation of subjects that are considered not to be prey to human subjectivity, with surveys generally employed as means of data collection, analyzed statistically. Though used largely, but not solely in the natural sciences (Kuhn 1970; Feyerabend 1993), there are certain problems with this approach in the social sciences, such as the problem of measurement (Crowther and Lauesen 2017). Inductive research is very different. It is usually qualitative, hermeneutic, focused on the meanings people give to their own experiences. It has been regarded as particularly apposite for research into human behavior and therefore CSR, because of its flexibility, and the possibility of building an understanding and theories about an issue, allowing it to be studied in various ways using different approaches with a greater variety of research designs (Crowther and Lauesen 2017). There have been arguments by eminent social theorists such as Bourdieu for the inclusion of both objectivist (normally quantitative) and subjectivist (normally qualitative) approaches. This would take into account structural issues and also hermeneutic approaches where the actors’ attitudes and agency might be equally, if not more important in some instances, in understanding societal processes and outcomes. Reliance on objectivist scholarship alone was invalid, dangerous, and politically supportive of dominant social and political structures (Bourdieu 1990). Regarding CSR, purely objectivist scholarship could deny the input to knowledge of people affected by CSR policies at different, including local community levels. Claims have been made that the future of CSR will increasingly turn to qualitative, phenomenological research methods, as mainstream positivist, quantitative research

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is “too shallow” to address the complexities of CSR theory and practice (Samy and Robertson 2017). Interestingly, CSR research has been mostly qualitative. A similar criticism to that made about quantitative surveys, directed only at the CEO or senior managers, has been levelled at qualitative research in CSR: that it is self-referring and therefore highly subjective (Iatridis and Kesidou 2013). Another criticism made against qualitative research by these authors is that such scholarship has often ignored actual action, instead focusing on the rhetoric about CSR in companies (Iatridis and Kesidou 2013). The same criticisms have been made by scholars about objectivist, quantitative scholarship. In the management area, the focus there has been on abstract concepts such as structure, and research concerned with senior managers’ perceptions of their organizations’ systems. There has been an absence of research into actual practice, into the results of the implementation of management strategies and consequent organizational outcomes (Green 2019). Panozzo (1997: 459) wrote about “abstract models postulating the existence of idealized worlds and excluding involvements in field research . . . [which were] hardly justifiable in the social sciences.” A common criticism of qualitative research made by Iatridis and Kesidou (2013) is that the research was company-specific and could not be used to gain information about companies in general. This is certainly one of the big advantages of, for example, survey research which can reach a large number of respondents. (For further discussion about the merits and demerits of objectivist and subjectivist scholarship in the social sciences, and particularly in management see Green 2017a, b, 2019). Advantages for CSR studies claimed by various researchers using qualitative methodologies include analytic autoethnography, where the researcher’s own experience is taken into account alongside that of the participants being studied. It is posited that this enables a deeper understanding of the research. The example given involved the researcher’s unease with the information and the informants in the company she was researching, and led to her questioning the authenticity of the information, whether an “act” was being put on, and whether the information was being controlled by allowing only selected respondents to participate in the research (Duarte 2017). In order to combat the potential inauthenticity of CSR reports, Yekini (2017) has proposed a method of textual analysis, which it is claimed can better judge their content and quality. She uses a linguistic-based framework – semiotics – which she and others claim enables awareness of the role played by human agency in constructing their representations of reality (Yekini 2017). Lauesen (2017) points out that ethnographic methods, not used much before the 1990s for CSR research, highlight the meanings people give to their lives. The main methods cover a wide range: participant observation, interviews, textual and visual analyses. This methodology was particularly suited to in-depth studies of particular organizations and was good at getting “under the skin” of corporations and their CSR practices (Lauesen 2017: 277).

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Research Topics

Given what has been shown about the nature and complexity of what falls under the heading of CSR, it is to be expected that the number and type of research topics would be many and varied as are the research methodologies used. The range and focus of the subject is broad, from multinational corporations to small and mediumsized companies; from shareholders to a broad range of stakeholders. The following are some of the topics that have been researched under the rubric of CSR: perspectives and fashions; ethical issues such as human rights, employee conditions of work, confidentiality, actual performance, the managerial process; sustainability; supply chain management; consumer behavior; marketing; communication, including different types of reporting from annual reports through to integrative reporting; compliance; environmental issues including carbon footprints, responsible manufacturing, eco materials, and waste management; and a critique of the type of research already done and the methodologies used.

16.4

Future Research

It has been argued that further research is needed in the following areas: management/consultancy, organizing/implementing/documenting CSR, CSR practices, and how CSR is communicated. These are mainly to do with investigating actual practice – what is happening on the ground – potentially very different, as has been suggested, from what is represented and communicated through the multitude of media available (see, e.g., Frynas and Yamahaki 2016). As well as demands to broaden the subject matter of CSR and deepen analysis through looking at actual practice, another suggestion has been to pay more attention to issues of power, control and criminal activity. It has been suggested that investigations be made regarding the use of CSR as a political strategy by companies, replacing services in the recent neoliberal environment previously carried out by the state, and where both national governments and global bodies had failed to provide guidance and legislation such as in health and education. At the same time, corporations are continuing to act politically as pressure and lobby groups on governments to achieve their goals with regard to social and environmental regulation, along with other activities designed to increase their influence, such as “strategic philanthropy.” Conversely, governments are taking active roles with corporations, for example, by partnering their CSR activities (Frynas and Stephens 2014). There is the need for a more comprehensive analysis of CSR, combining environmental and social aspects with political issues and individual actors, and more extensive integration across the macro and meso levels at which CSR is played out, linking domestic with international, global CSR issues. At the individual level of analysis, there is also a place for future research on corporate crime, investigating the influence and responsibilities for this by senior executives and management teams (Frynas and Stephens 2014).

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17

Developments in CSR

17.1

Broadened Remit for CSR

As has been seen, one of the important developments in CSR ideology, societal expectations, and company policy has, particularly from the 1990s, been the broadening of the CSR remit. Because of social pressures, policy makers, from framing CSR as primarily financial, and beholden to their company’s shareholders, have now extended its degree of accountability to social and environmental matters, with increased transparency and standardization. Stakeholders now include more categories such as consumers and local communities, as evidenced through the extension of the reporting to include them (Morf et al. 2013). Financial and corporate scandals such as at Enron in 2002, resulting in a breakdown in corporate governance, have led to increasing pressure for businesses to assume wider responsibilities than solely to shareholders, and with more transparency (Morf et al.). This has manifested in several ways: there has been an increasing interest in corporate governance and sustainability at various levels – from the local to the societal. From a limited perspective of how firms conduct annual meetings and deal with auditors, there is now a much more general concern with how companies deal with and have an impact on all stakeholders including on the environment and ecosystem. This has encouraged the development of social and environmental reporting, and more recently, integrative reporting focused on the whole of society. And, in addition to the economic, environmental and social, concerns for human rights have also been added to CSR’s portfolio (Aras and Crowther 2012). Despite continuing cynicism, this has led to growing acceptance of the benefits of CSR by business, governments and the public. It has also led to further demands on corporations, for example, to ensure socially responsible behavior on the part of their suppliers throughout the supply chain (Crowther and Lauesen 2016). All this is reinforced by more information being made more available to the public through the internet. According to Crowther and Lauesen, the focus of CSR studies has also moved from an interest in large, multinational corporations to smaller, nationally based, single-site organizations, but companies with highly developed technologies, organizational performance, and reporting systems and social communication programs (Crowther and Lauesen 2017). Predictions have been made that in their continuing pursuit of legitimacy in society, there is likely to be an inevitable expansion of accountability that corporations will have with regard to CSR in ever increasing areas in line with new stakeholder demands, with more attention given to the avoidance of policies and practices deemed socially unacceptable. Evidence offered for this is the increasing number of CSR reports being produced by corporations about the environment and sustainability This is also leading to more transparency and disclosure. In the USA, the term Corporate Accountability has become preferable to some stakeholders such as activists and those in nonprofit organizations, as this signifies a shift in power from corporations to stakeholders (Morf et al. 2013).

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Rendtorff (2017) supports these arguments. He takes the concept of responsibility in CSR further, by suggesting that future research is likely to focus on ethical concerns rather than on strategic responsibility and profit, beyond any legal definitions of the concept. He argues that the concept of responsibility is bound up with accountability and with ethical principles for all levels of society in this period of globalization and technological advances. It has particular relevance now as a bulwark against harm to humanity and as a means to combine social, economic, and environmental issues so as to achieve sustainable development and the survival of humanity worldwide (Rendtorff 2017). These developments are, of course, tempered by the fact that different stakeholders have different degrees of power and therefore can exert influence only to varying degrees (Morf et al. 2013). The most effective pressure is always likely to come from those stakeholders and pressure groups with the most power and clout, particularly where CSR is not subject to regulation.

17.2

Neoliberal Influences

On the other hand, values, practices, and at the very least regulations regarding the CSR policies must be influenced by the current political, ideological, social, and ethical climate. Since the advent of the conservative Thatcher government in 1979, there has increasingly been an ethos of neoliberalism, perhaps reaching its peak during the austerity program introduced by the Conservative-Liberal Democratic government in 2010, allegedly to cope with the economic crisis of 2008. Thus, it has also been argued that the concept of accountability has shifted in the opposite direction, and that powerful organizations are no longer being held to account by the general public for the wider good. Privatization and the weakening of bureaucratic structures have reduced accountability within organizations under the guise of “empowerment” and changed the ethos, for example, of the privatized utilities from that of service to customers to profits for shareholders (Green et al. 2008). This shift in accountability and potential weakening of CSR has been intensified by the ideology and practices of neoliberalism. Neoliberalism, in a nutshell, has promoted values of economic efficiency and the “financialization” of many aspects of society hitherto governed largely by different values (Green 2016). With neoliberalism, values such as care and support for the vulnerable, kindness, the value of all things other than those financially calculable have been superseded by market values. These values have extended into areas of life previously regarded as immune from such values, such as politics, ethics, social welfare, education, and social norms (Brown 2005). In fact, market values have become seen as “an ethic in itself, capable of acting as a guide to all human action, and substituting for all previously held ethical beliefs” (Harvey 2005: 3). This ideology and practice have been rolled out in conjunction with a drawing back of the state from responsibilities for its citizens. The state would still be powerful, but would now act to facilitate market values, competition and rational

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economic values. Citizens would now have to take responsibility for themselves without being able to rely on the state for services and for financial and other help in times of need. As predicted as early as the beginning of the twentieth century by Max Weber (1978, cited in Brown 2005), this has led to a redistribution of wealth and power and to a substantial increase in economic inequality and in poverty and insecurity for many (Green 2016). As Brown (2005: 46) has explicitly put it, what is the case in the USA (applicable also to the UK and other countries) is “the ghastliness of life explicitly ordered by the market and measured by market values,” without the underpinning of moral or political principles (Green 2016). This has impacted on the role of other powerful institutions such as corporations. They are powerful players in this new regime where the market is supreme, and also as, with the privatization of so many services, the state is increasingly dependent on them to carry out services previously under the remit of the government, and as in so many instances, not with great success and not in the best public interest. The current health crisis has highlighted this situation. One example is Deloitte, a global multination, in conjunction with other private companies being contracted to set up networks of virus testing center and laboratory processing centers in various parts of the country. The result as reported in the Guardian by Lawrence et al. (2020) was “chaos at some sites, with results going astray, dangerously leaking swab samples arriving at labs, queues of more than three hours, and symptomatic people being unable to book a test or told to make round trips of more than 100 miles to test centres. Many still report results taking seven to 10 days to arrive – too long to be useful for quarantine purposes . . .”. The relegation by the state of other issues such as poverty alleviation to private companies is equally problematic. The handing out of benefits to claimants can constitute a conflict of interest with the private company in charge of the process. As Jones (2014: 181) has pointed out, control over the distribution of benefits has become “a mere funding stream for private companies” whose goals are to make money rather than to serve the needs of people. This has implications for CSR. If so much is now becoming the responsibility of private companies, what becomes defined and accepted as CSR could be very differently framed. If neoliberal principles and practices are maintained, what is regarded as acceptable and even desirable could focus much more on what is regarded as “making sense” financially. This would have implications for public services including health issues, for poverty alleviation and for the environment. It would be in contrast to the different ways in which working for the good of the community, the nation, society and the world might have been previously constructed. This potentially provides a serious caveat to the integrity of CSR practices. If these arguments are tenable, more comprehensive reporting may turn out in practice to be merely the trappings of CSR. However, this need not necessarily be the outcome. Arguments are given below for the possibility of a different strain of CSR, even with so much power and responsibility in the hands of private companies.

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The Future

It will be interesting to see whether the current public health crisis, which is engendering different values, incorporating more pre-neoliberal sentiments about the public good, will lead to permanent changes. Now the discourse is about “heroes” working in the health services tirelessly and endangering their own lives; there is anger at the lack of protection for “front line” staff or “key workers,” including social care workers, often at the bottom of the ladder in terms of pay and working conditions; and gratitude is expressed to those working to supply essentials such as medicine and food and to those doing deliveries – the “precariat” – often working under gig economy conditions and subject to exploitative working conditions with no job security, holiday or sick pay, and no pension contributions. The environment is, of course, also a critical issue. Thunberg has pointed out that greenhouse gas emissions rather than being reversed following the Paris Agreement had by 2018 continued to increase, and that 200 species were becoming extinct daily. According to the IPCC there needed to be a reduction of CO2 emissions by at least 50% by about the year 2030 in order to avoid a catastrophic, irreversible climate breakdown beyond human control (Thunberg 2019). A crisis brought on, many would argue, by capitalism. According to Werner at the American Geophysical Union (2012), “global capitalism has made the depletion of resources so rapid, convenient, and barrier-free that ‘earth-human systems’ are becoming dangerously unstable in response” (Klein 2014: 450). Could the Covid-19 crisis stop “everyone . . . talking about money” (Thunberg 2019: 22), and concentrate the minds of the powerful – in the private sector, in government, and in international institutions – to avert the climate crisis? Will capitalist institutions par excellence, multinational corporations and international bodies such as the World Bank and the IMF, be able to take coordinated action against a situation created by their own systems, and from which they are still currently benefitting? Ben-Ami, historian and former diplomat, has a different view. He predicts a retreat from globalization, but, he argues, unlike previous epidemics where there were significant changes in society, this pandemic will increase preexisting trends in current societies – those of deglobalization, unilateralism, and authoritarian surveillance capitalism. The evidence he cites are the failure of the EU to adopt a common strategy; the USA’s decision to withdraw support from the World Health Organization and the opportunities being seized by many authoritarian regimes to curb civil liberties (Ben-Ami 2020). Similar arguments are being put forward by others. The economist, Richard Blundell, has pointed to decreasing international cooperation, citing Brexit and the China-US trade wars. With increasing populism in many countries, there were huge issues regarding democratic accountability (Blundell 2020). Gordon Brown, former Prime Minister of the UK, has pointed out that most recently, the G20, the self-styled “world’s premier international forum for economic cooperation” has reneged on its promises in March 2020 to support countries in need as a result of Covid-19. This has impacted on the adequacy of support from the IMF and the World Bank to poorer countries (Brown 2020).

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And yet there is an urgent need for international coordination. Yuval Noah Harari, the historian, has stated unequivocally that “We need a universal, governmentsponsored healthcare system because the free market system can’t prepare and can’t deal with these epidemics” (Harari 2020). Gosh (2020) has argued that although such change looks impossible, the enormity of the current Covid-19 crisis might lead to an international economic collapse, the extent of which might lead to societal change. Thunberg (2019: 36) has pleaded for “a whole new way of thinking.” Instead of a political system based on competition, what is needed is cooperation, working together to share and protect the planet’s resources fairly. Mazzucato (2020) has put forward similar arguments. What was now needed was more shared knowledge rather than competition and a stronger global health system. Capitalism per se was not the problem. It was the kind of growth that mattered. For example, a Green Deal agenda, with changes in how procurement was structured, with public/private partnerships driven by government subsidies based on requirements for reductions in the carbon footprint could result in positive outcomes. Governments needed to have the confidence to override large corporations, and could do so through political coalitions. But much more was needed, such as reinvestment policies underpinned by legal structures. One needed other mechanisms such as a Climate Bank to provide finance for long-term environmentally protective innovation. For this, central leadership able to take new, strong directions was necessary (Mazzucato 2020). In addition, there was a need to remove the ease with which money could be made that was not productive. But the current system, unfortunately, was deeply embedded, extensive, and difficult to change, as it was tied to the structures already created. One had to target areas for change carefully (Pistor 2020). Positive signs were coming from more grassroots activity. Covid-19 has produced levels of humanity and cooperation greater than previously – for example, by state governors in the USA and by the mayors of various cities in Germany (Pistor 2020). Mazzucato has pointed to local initiatives in London, for example, by Camden Council, where the leader of the council has started from the problem rather than from the budget, leading to outcome-based budgeting. It is also worth speculating as to whether grassroots support for and anger in the UK at the situation of front-line workers in the current health crisis and widespread global outrage at the racist murder of George Floyd in the USA might lead to more permanent, grassroots action able to effect significant change. Where all this leaves CSR is unclear. The possibility for a more environmentally healthy and sustainable world, with greater social, political, and economic equality and more emancipatory possibilities through effective CSR policies, remains an open question at present.

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Summary

This chapter highlights the complexities of theoretical and other developments in Corporate Social Responsibility (CSR). The basis of this chapter is to show there are dialectical oppositions underpinning research into this subject. One major dialectic is

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between a functionalist view which would examine the outcomes and strengths and weaknesses of CSR strategies, and a radical view which would see corporations using CSR as one of their strategies to further their fundamental goals and interests in this advanced capitalist world system. Another dialectic in the development of CSR scholarship is regarding the future: will corporations become more important as state governments weaken, or, given crises such as the current virus pandemic, will governments regain control and be strengthened through working with other states and international organisations? The future of CSR and the way it develops is dependent on which of these or possibly other scenarios are realized – an outcome not easy to predict at the present moment. The chapter begins with definitions of CSR and then highlights the complexities of the subject by looking at its different philosophical and sociological foundations. Many of the various topics related to the ideology, processes, practices, and outcomes of CSR are then discussed: CSR and capitalism; stakeholders; CSR and legitimacy; ethics; environmental issues and sustainability; communication and reporting; supply chain management and consumers; disclosure and reporting; accountability and compliance; and the implementation of CSR policies. Scholarship into CSR is then considered in terms of the influence of the academy on the type of scholarship produced and its inherent pressures and problems. The research methods used in CSR research are discussed and are linked to epistemological and political underpinnings – the main differences being between deductive, objectivist, generally quantitative and inductive, subjectivist, usually qualitative scholarship. Future research in terms of increasing the range of topics; broadening analysis through linking the subject more closely with other factors such as environmental, social, and political issues; giving more emphasis on practice and using more critical perspectives have all been suggested in the CSR literature. Finally, future developments in CSR are considered. Arguments for the likelihood of there being a broader remit for CSR are presented. On the other hand, the presence and possible expansion of neoliberal influences with the increasing power of corporations and the weakening of national governments has been suggested as a counterinfluence on CSR and a potential decrease in its importance. Some have rejected this because of the current health crisis and the inadequacy displayed in this situation both by weakened governments and by inefficient private corporations. These authors argue that the need for strong governments working together and in more direct control of partnership with corporations is the only rational solution to this and future problems, such as the looming environmental crisis. Where each of these outcomes would leave CSR is at present unclear.

20

Cross-References

▶ Corporate Human Rights Responsibility in Times of Increasing Socio-cultural and Political Isolationism

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▶ Corporate Social Responsibility Reporting: Evolution, Institutionalization, and Current State ▶ Definitions of Corporate Social Responsibility ▶ Integrated Reporting ▶ Sustainability and Consumer Behaviour: Towards a Cohered Emergent Theory

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Triple Bottom Line Rodica Milena Zaharia and Razvan Zaharia

Contents 1 TBL: The Naissance of a New Concept for an Old Concern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 TBL Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 TBL Critics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Codes of Conducts as a Tool for TBL Reports: From Issuing Codes of Conduct to Reporting the TBL Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Limited Resources for a Growing World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 The Environmentalist Movement in a Liberal Philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Global World, Global Problems, and Lack of Global Solutions . . . . . . . . . . . . . . . . . . . . . . 3 TBL and the Business Model: The Need for a Stronger Cooperation Between Governments and Companies to Facilitate the Transition Toward Sustainable Development (see also Part 5, “Economic Aspects”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Future Directions: Quo Vadis, Triple Bottom Line? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 New Concepts, But New Content? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 To a Changed System and a Changed Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 To a New Sustainable Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 The Covid-19 Pandemic: A Chance to Rebuild the World . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The triple bottom line (TBL or 3BL) is one of the most used concepts when it comes to discuss about sustainability. It was coined by John Elkington in 1994 and from that moment it grabs the attention of all of those interested to provide analysis about sustainability, at macro- and microlevel, or for those concerned about the challenges towards the way the world is developing or is governing. This chapter provides a navigation on the literature that deals with the TBL, pointing out the context of the historic development of the concept and the relationship with the concept of sustainability with which is considered synonym. R. M. Zaharia (*) · R. Zaharia Bucharest University of Economic Studies, Bucharest, Romania © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_2

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Also, the limits of the concept are presented. The second aspect discussed is the relationship between TBL and the codes of conducts. As TBL was defined by its creator as “a sustainability framework that examines a company’s social, environment, and economic impact,” codes of conduct are still the most important documents through which companies expose their commitment towards sustainability. A brief history of codes of conduct evolution, which is, in a way, a reflection of the TBL evolution, is provided. The reporting function of the codes of conduct and limits of the reporting activity are provided throughout this part. TBL as a sustainable business model is ending this navigation through the literature devoted to this generous topic. The literature written on this topic is huge and impossible to be covered in only one body of work. The expansion of the TBL concept is exponential. Some of the future developments of the TBL are presented in the end. The chapter ends with some key literature that reflects the issues discussed. Keywords

Codes of Conduct · Sustainability · Sustainable Businesses Model · Triple Bottom Line

1

TBL: The Naissance of a New Concept for an Old Concern

1.1

TBL Concept

Triple bottom line (TBL or 3BL or 3P – People, Profit, Planet) is one of the most used concepts, not only in management but also in economics, environmental studies, or governance. On Google search for “triple bottom line” gives over 227 million results in less than 0.8 s! This proves the incorporation of the concept in the ordinary as well as in the business vocabulary on a very large scale. The naissance of the concept came on a wave of a growing impugnment against the old paradigm, an axiom of the classical political economy, according to which the purpose of an enterprise is to produce profit for its shareholders and the performance of an economic activity should be given only by its financial result. The growing concerns about critical issues like environmental protection, labor standards, increase poverty, or corruption mobilize the large community to stand by and to act towards finding solution for these problems. Among these endeavors, SustainAbility, a consultancy agency and a think-thank founded by activists John Elkington and Julia Hailes in 1987, in the same year that the Brundtland Commission published Our Common Future (a manifesto considered coining sustainability concept), started an offensive to increase the awareness about the need to be proactive in including environmental and social issues on business agenda (see also chapter ▶ “Brundtland and After,” see also Part 3, “Environmental Aspects”). SustainAbility is very much the crucible of the triple bottom line concept. In 1994, the concept of the “triple bottom line” is coined by John Elkington in 1994s Cannibals with Forks.

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Elkington defines TBL, in his book, Cannibals with Forks: The Triple Bottom Line of twenty-first Century Business, using a parabola from the success in the French film industry (Elkington 1997, p. XI). He identifies the first bottom line as the financial one (economic dimension). The second is the environmental agenda and he associates the figure of the famous French actress Brigitte Bardot as symbolizing the two-bottom line French film industry success. Elkington, then, argues why these two dimensions were not enough in order to satisfy the demands of the public and to further preserve the success of Brigitte Bardot (the twobottom line). It is about the missing dimension, the social justice that is required by the society. Therefore, to satisfy the requirements of the sustainable development, triple bottom line approach is required. In 2018, at the anniversary of the TBL concept, Elkington (2018) restated the dimensions that defines TBL: “the triple bottom line is a sustainability framework that examines a company’s social, environment, and economic impact.” Elkington further considers that the new paradigm imposed by the TBL approach started these seven revolutions (Table 1). The idea of the TBL was not a new one. Even its creator mentioned that “when the three words finally come to me, I was totally convinced that someone must have used them before” (Elkington 2004). The idea that the purpose of a business should not be exclusively for profit, but also for taking into account social and/or environmental aspects was not new. Other scholars mentioned well before 1990s the fact that a company should have to take into consideration not only the shareholders’ interests (meaning profit) but also stakeholders’ benefits. Even before the launch of the stakeholder theory (coined by Edward R. Freeman in his work Strategic Management: A Stakeholder Approach), Howard R. Bowen mentioned in his seminal book Social Responsibility of the Businessman (1953, p. 3):

Table 1 The seven revolutions for a sustainable future Old paradigm Compliance Hard

Revolution 1 2

Focus Markets Values

3 4 5

Transparency Lifecycle technology Partnerships

Subversion

6

Time

Wider

7

Corporate governance

Exclusive

Closed Product

Sources: Adapted after Elkington (1997)

New paradigm Competition (going for the triple win) Soft (concern for future generations, wealth creation needs values) Open (no hiding place) Function (from conception to resurrection) Symbiosis (stakeholders want to be treated as partners, sustainability can be a 2 + 2 ¼ 5 (or even 50) game) Longer (building the infrastructure of a sustainable economy will take unusually longterm thinking, planning, and funding) Inclusive (from PR to competitive advantage and corporate governance, from factory fence to boardroom)

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TBL is often considered synonym with sustainability. In some cases, sustainability is defined through the same three elements (e.g., Ozanne et al. 2016) as the TBL. Glavas and Mish (2015, p. 625) defines TBL as “the practice of the sustainability.” Hammer and Pivo (2017, p. 27) related TBL with sustainability: “TBL means programs, policies and activities designed to create or retain jobs and wealth in ways that contribute to environmental, social, and economic well-being over time.” Even the United Nations (UN) induced the idea of similarity between TBL and sustainability. From the initial concept of sustainable development in the vision of the Brundtland Commission: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations 1987, p. 37), 15 years later, UN adopts the TBL philosophy in defining sustainable development, marking the very strong association between these two concepts: “the integration of the three components of sustainable development - economic development, social development and environmental protection as interdependent and mutually reinforcing pillars” (United Nations 2002, p. 2).

1.2

TBL Critics

The beauty of the concept was not enough for applying it into practice. One of the critics brought to the TBL concept is the vagueness of it. “The triple bottom line is a sustainability framework that examines a company’s social, environment, and economic impact” (Elkington 2018) and “aims to measure the financial, social and environmental performance of the corporation over a period of time” (The Economist 2009). In this way, TBL is a descriptive concept. There are no mentions about the weight of the three pillars: are they equal? Should they be treated equal? The Elkington definition do not provide an explicit mention on this, leaving the idea that the three dimensions are equally balanced (as it is suggested also by the Brundtland Commission when sustainable development was defined). Hussain et al. (2018, p. 411) support this balanced view: “this approach gives equal weight to economic, environmental, and social dimensions.” Similarly, Alhaddi (2015, p. 7) says that “TBL places an equal amount of emphasis on each of the three lines, which brings more balance and coherence into the construct,” citing another five studies with the same conclusion. However, a balance between the three pillars is almost impossible to find in the real-life behavior. Even Elkington (1998, p. 40) says that “in the world of business, environmental performance is increasingly seen as a competitive and strategic issue for companies,” and Glavas and Mish (2015, p. 625) talk about “caring for the well-

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being of others and the environment in such a way that value is created for the business.” This induce the idea that this balance is not always possible, and the transition from the classical view (only profit matters) to the TBL (all three matter, in an equal part) it involves either assuming a decrease in profit or the hope that the spending on environment or social issues will be compensated by the increasing of sales as a consequences of customers recognition. Some studies (Welford et al. 2007; Weber 2010; Venkatraman and Nayak 2015) concluded that the managers are not necessary and convinced that the increase in sale or customer recognition will compensate the efforts made by companies in tackling environment or social aspects and that their commitment towards a TBL approach is rather determined by personal believes than economic reasons. There are limited empirical evidences on how companies balanced the tensions between the demands coming from the TBL dimensions and how do they respond to the pressures coming from internal and external critiques to harmonize the three pillars of the TBL approach. Another discussion on the TBL is about the must of seeing the elements of TBL together. And seeing together means an integration of them. Tullberg (2012, p. 318) “The bottom-line thinking is not only about a specific project ex post, but is even more important for an ex ante choice between alternatives.” According to Coffman and Umemoto (2010, p. 609), “if a triple-bottom-line (environment – economy – society) frame is adopted, the various goals should be integrated rather than juxtaposed.” Despite the fact that you may have three different reports (one on financial aspects, another on environmental issue, and another one on social justice) in order to have a general and comprehensive view on the sustainability of your company, the three aspects have to be approached together, in an integrative way, to generate synergy. TBL do not provide a systemic approach because of the lack of interdependence between the three dimensions, mentioning that TBL focus mostly on their coexistence (Sridhar and Jones 2013). Or, as Norman and MacDonald (2004) mention, the beauty of the concept lays on the promise of the integrative approach. With the lack of this integrative method, some consider that the TBL vision is only a concession for the public image, mimicry, trendy thing to do (Sridhar and Jones 2013), a sort of green washing (“the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service” (Young and Dhanda 2013, p. 327)). Coffman and Umemoto (2010, p. 608) consider that “in the frame of ecological sustainability, the carrying capacity of the natural system is the ultimate .” One of the most discussed critique to the TBL concept is about the measurement capacity, as well as the novelty it brings. Norman and MacDonald (2004, p. 243) mention that “what is sound about the idea of a Triple Bottom Line is not novel, and what is novel about the idea is not sound” and that “on both conceptual and practical grounds the Triple Bottom Line is an unhelpful addition to current discussions of corporate social responsibility.” In their argument, Norman and MacDonald (2004, p. 249) point that the novelty of the TBL is “the aggregation claim,” meaning the possibility to calculate “a social bottom line,” based on the registered indicator. But exactly this aspect didn’t happen and is almost impossible to happen, because: “is good reason to think that it would be impossible to formulate a sound and relatively

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uncontroversial methodology to calculate a social bottom line” (Norman and MacDonald 2004, p. 249). In their vision, this transforms TBL to a simple, correct rhetoric, lacking in a practical utility. The impossibility to measure the “net social profit/loss” came from the fact that it is impossible to put in figures, in quantitative measures the aspirations and humans feelings as well as some social activities: “because of its inherent emptiness and vagueness, the TBL paradigm make it as easy as possible for a cynical firm to appear to be committed to social responsibility and ecological sustainability” (Norman and MacDonald 2004, pp. 256–257). Sridhar and Jones (2013) also address to the limits of the TBL in the area of measurement, systemic visions, and compliance. In terms of TBL measurements, the authors underline as the most difficulty to measure social aspects, which are more a qualitative aspect and require a specific approach: “the social impact through TBL requires a more interpretivist approach or a more qualitative approach in measurement” (Sridhar and Jones 2013, p. 96). Data aggregation is also an impediment in measuring TBL, as no methodology is proposed to harmonize data inside each component of the TBL as well as among the three pillars. Despite the fact that in the last years preoccupations in finding quantitative methods to evaluate social sustainability increased (e.g., Popovic et al. 2018; Kumar and Anbanandam 2019; D’Eusanio et al. 2019; Venkatesh et al. 2020), this limit addressed to TBL is still one of the strongest. Other critics bring into discussion the cost generated by the TBL approach. Jackson et al. (2011) identify several disadvantages. First, they address the costs involved by resources necessary to monitor and to report additional information regarding social and environmental issues, as well as implementing new activities corresponding to the TBL philosophy. Second, TBL may be a competitive advantage against other companies, but this may function only on short term, if this advantage is lost. Third, Jackson et al. (2011, p. 57) observe that for a fully implementation of the TBL, “the corporate environment has to be eradicated and rebuild,” which is almost impossible for any company. Finally, disclosing some less pleasant aspects of social and environmental company’s activity open the gate for critics and opponents, and may deteriorate he company’s public image. Implementing TBL at the level of a company is similar to implementing sustainable development, which, in the vision of Gray and Milne (2004, p. 74) “it seems profoundly implausible that an individual company could be sustainable (or responsible) in an unsustainable (or irresponsible) system.” This is in the same line with the critics brought by Jackson et al. (2011), regarding the need of a profound change at the level of the entire global economy. Who, how, and why somebody would make this change? As a (partial) response, Jacob (1994, p. 248) sustain that a successful implementation of the sustainable development would have as a premises a fundamental change of the life style: “such reform will require further commitment in the political sphere to lead the populations of both the First and the Third World away from consumption-oriented lifestyles and expectations.” This kind of change is still very far away, as long as economic growth is still the most pursued goal on the government agenda and the majority of companies are still in the era of profit maximization.

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The observation made by Steven Schilizzi almost 20 years ago remain valid until today and is probably the weakest point of the TBL: “Technically, only financial performance is measured in a clearly regulated and quantitative way. Environmental accounts do exist, but they are not (yet?) regulated and are not easily comparable across sectors or companies, or between countries. And social accounting is still in its infancy. Most importantly, there is no accepted framework to bring all three dimensions consistently together” (Schilizzi 2002, p. 25).

2

Codes of Conducts as a Tool for TBL Reports: From Issuing Codes of Conduct to Reporting the TBL Performance

As Dwyer (2005, p. 79) mentioned, “TBL is a planning and reporting mechanism and decision-making framework used to achieve sustainable development in both private and public sector organizations—an internal management tool as well as an external reporting framework.” Therefore, TBL is analyzed in the literature in strong correlation to codes of conduct, as instruments for assessing the dimensions of the triple bottom line (Painter-Morland 2006; Skouloudis et al. 2009; Milne and Gray 2013). (Codes of conduct, codes of ethics, code of business standards, code of business principles, code of values or code of behaviors are used here as synonyms, as the purpose of this chapter does not look for semantic differences between concepts (https://www.iasplus.com/en/binary/ifac/0611conduct.pdf, p. 5).) Codes of conduct “are broader sets of principles that are designed to inform specific laws or government actions” (Gilman 2005, p. 4), as well as ways of reporting not only financial but mostly environmental and social dimensions of their practices (Carroll 2018). It was a constant increase in the number, form, and complexity of the codes of conducts. As a number, more and more entities (companies, agencies, etc.) acknowledge the necessity of publishing their commitments towards other aspects than economic profits and financial performances. As forms, there are several types of codes of conduct. Jackson (2013, p. 2) identified three main categories: (1) externally generated codes of conduct, developed by governments or international organizations, (2) corporate codes of conduct, expressing individual companies’ ethical standards, and (3) industry-specific codes. UN uses four categories: (1) intergovernmental organization standards derived from universal principles; (2) multi-stakeholder initiative standards; (3) industry association codes; and (4) individual company codes (United Nation cited in Jackson 2013, p. 2). Ray Jenkins and Unies (2001), p. 20) classifies codes of conduct in five types: company codes (adopted individually by companies as a statement of the principles of doing business), trade association codes (agreed by a group of firms in a particular industry), multi-stakeholder codes (representing negotiations between several stakeholders, including companies, NGOs, or even governments), model codes (a sort of benchmark of what a particular organization regards as good practice in terms of codes of conduct), and intergovernmental codes (negotiated at an international level and are agreed to by national governments). Some scholars discuss also about global codes of conduct (Painter-

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Morland 2006; Carroll 2018). These codes look to various stakeholders’ interests and serve as guidance in daily operations as well as in long-term strategic management (Mark-Herbert et al. 2010, p. 3). In terms of complexity, codes of conducts evolved from simple principles “to follow” by business into a multistakeholder world (at the level of a company or an industry) to a complex of indicators aiming to measure and compare nonfinancial performance of companies or industries. The process of issuing codes of conduct emerged well before launching the concept of the TBL. Although codes of conduct were established starting with the beginning of the XX century, it was mostly after 1960s when the codes of conduct flourished in number, forms, and complexity. The development of codes is the result of a complex environment: the political response to companies’ behavior in a multipart and global environment (political emancipation of the new independent countries, the desire to control the benefits and the costs of the companies’ international activity, etc.), a reactions of companies (mostly multinationals) to internal and international pressure coming from a growing categories of stakeholders (employees, NGOs, international agencies, etc.), a diversification of the instruments used by companies to increase their competitiveness. All these aspects are connected to the TBL philosophy. Several reasons determined the flourish in number, forms, and complexity of codes of conduct, and the same reasons shaped the context that favor the emergence of the TBL concept. The change in the economic role of governments and their attitude towards multinationals and foreign investments, the growing concerns for environmental protection, human rights, minorities groups emancipation movements, and the increase of the awareness about the finite physical capacity of our planet have determined the diversity of attempts to translate these challenges into codes of conducts. The growing number of states as a result of gaining sovereignty changed the political landscape of the world. New states pursued for strengthening political and economic independence through securing economic gains from the explosive growth of the international capital flows. Also, as the internationalization process of the firm became more and more complex (from the reasons for which companies started to go internationally, to the new types of relationships developed with the host and home countries), the footprint corporations started to leave around the world became multifaced. Profitability for the shareholders as the most important goal of any business started to be questioned. Codes of conducts have been evolved following the waves of public pressure on environmental and social issues. As Elkington mentioned (2013), three waves market the response of companies, governments: the “limits,” “green,” and “globalization.” For the first wave (1960s to the end of 1980s), the response was mostly reactive and the behavior of companies was focused rather to compliance. The second wave (from the end of the 1980s to the end of 1990s) “green” characterizes the development in business process and products for sustainability, bringing a competitive response. The third one (beginning of the twenty-first century) “globalization” challenged the mode of business, leading to “market creation” (Elkington 2013, p. 7).

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83

Limited Resources for a Growing World

1960s and 1970s were turbulent years for multinationals. ITT was accused of interfering in altering elections in Chile, Nestle was criticized for discouraging breastfeeding of babies in favor of a baby formula (Moran 2009; Sauvant 2015). In the 1970s, before coining of the TBL concept, national governments (mostly from developing countries) tried to regulate multinational companies’ activity and started to bring the discussion about the rights and obligations of national governments versus rights and obligations of multinational companies at the international level. The background of the international debate about codes of conduct was not only related to the lack of responsible conduct of multinationals regarding environment protection, bribery, or labor standards, frequently in developing countries, but mostly related to the desire of the South (developing countries) to increase the gains associated to international investment (Jenkins and Unies 2001, p. 2), coming mostly from the industrialized North. Some studies mention that 22 developing countries passed legislation controlling MNEs in the period 1967–1980 (Murray 1998, p. 6). Developed countries, also, introduced laws and regulations targeting multinational corporations’ activity. Numerous aspects covered by the codes of conduct were responses to allegations faced by multinational corporations. For example, in a research conducted on 174 codes in 1978 found that more than half of them covered questionable payments as a result of the bribery and corruption accusations brought to multinationals (Jenkins and Unies 2001, p. 5). Many codes have emerged at the initiative of international agencies and organizations as well as at the initiatives of governments. For example, International Chamber of Commerce (ICC) promoted Guidelines for International Investment in 1972, International Codes of Practice in Marketing in 1973, and Recommendation to Combat Extorsion and Bribery in Business Transactions in 1977. (Guidelines for International Investment promoted by the ICC is a follow-up of the ICC International Code of Fair Treatment for Foreign Investments in 1949 (ICC 2020, https://iccwbo.org/globalissues-trends/trade-investment/investment/).) These were designed to facilitate consultation between investors and governments, in order “to create a climate of mutual confidence conducive to an increased, and mutually satisfactory flow of international investment” and “to be helpful to the United Nations and other intergovernmental organizations in their efforts to promote constructive discussions” on the subject of codes of conduct (OECD 1998). These codes were legally nonbinding, the Chamber itself, as a private entity representing business community interests, recommending strongly that these guidelines not be considered rigid codes of conduct (Reinalda 2009, p. 495). In the vision of ICC, rather individual companies should establish for their own those principles and standards of responsible conduct. This reflects the strong preference of business for non-centralized, voluntary regulation, which persists even today (Murray 1998). OECD issued also a basic statement on foreign investment, The Declaration on International Investment and Multinational Enterprises, originally adopted by the Governments of 23 OECD Member countries in 1976. This was a “voluntary and not

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legally enforceable” (OECD 1998), general statement of policy regarding the rights and responsibilities of foreign investors. The Guidelines covered various aspects, from noninterference in political affairs of the host countries, abstention from corrupt practices, disclosure of information, competition, taxation, employment and labor relations, to environmental and consumer protection and transfer of technology (OECD 1998). Companies referred their reporting activity to these guidelines. The International Labor Organization (ILO), in 1977, adopted the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. The ILO Declaration was narrower in scope, focusing on the social aspects of TNC activities (Jenkins and Unies 2001, p. 4): it is addressed to governments, employers, and workers organizations, and sets out principles only in the field of employment, training, conditions work, and industrial relations which governments, employers, and workers (OECD 1998). One of the most ambitious attempts in terms of issuing a legally binding international instrument of rules to govern the activities of TNCs was launched in 1974. In 1974, United Nations founded the United Nation Centre on Transnational Corporations (UNCTC) an agency that supposed to issue an international, widely recognized set of principles for the conduct of multinational corporations, an effort to bargain national interest and sovereignty concern of countries towards international investments (mostly coming from developing countries) with business interests. (United Nations Centre on Transnational Corporations (UNCTC) served as a focal point for all matters related to transnational corporations. Became ‘United Nations Transnational Corporations and Management Division’, part of Department for Economic Affairs and Social Development in 1992 and ceased to exist in Jul 1993, when activities were integrated into the work Programme of E-XE3381 – UNCTAD (https://uia.org/s/or/en/1100024712).) Related to the social dimension, the Code should have to regulate the power of multinational companies in order to ensure the global protection of workers (Murray 1998). UNCTC aimed: further understanding of the nature of transnational corporations, and of their political, legal, economic and social effects on home and host countries and in international relations, particularly between developed and developing countries; secure effective international arrangements to enhance the contribution of transnational corporations to national development goals and world economic growth, while controlling and eliminating their negative effects; strengthen the negotiating capacity of host countries, in particular the developing countries, in their dealings with transnational corporations.

Despite the ambitious scope, the UN Code of Conduct for Transnational Corporations was never delivered in the form the initiative was launched, as the interest of countries were too diverse, and the attitude towards foreign direct investments of different countries changed over time. Not only the aspects related to the three dimensions of the TBL were difficult to negotiate, but rather the political interests and ideologies (communist countries versus capitalist nations) made the negotiations very difficult. Even if the Code of Conduct on Transnational Corporations was not crowned as it was minted to be, the extensive discussions on corporate behavior and government responsibilities, the critics addressed to multinationals about the

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inappropriate business conduct in some countries increased the accountability of companies towards their practices and behavior and transformed corporations into better citizens, with interests not only of the economic part of their activity but towards other aspects, as social and environment. Some governments, as the USA, issued recommendations to American corporations acting outside American border. For instance, in 1977, the United States adopted the Sullivan Principles and the Foreign Corrupt Practices Act (FCPA). The Sullivan Principles were issued initially as a set of standards for firms to follow to pressure on the apartheid government of South Africa to improve the living conditions of black workers, their families, and their communities (Murray 1998; Jackson 2013). FCPA was signed into law by President Jimmy Carter on December 19, 1977. Canadian Government’s issued some Guiding Principles of Good Corporate Behavior for Subsidiaries in Canada of Foreign Companies (1967), and in Japan, the Code of Behavior for Japanese Investors Overseas (1973) was passing on (Murray 1998). The pressure exerted by the international community determined some large corporations to issue private codes of conduct. Whether these codes of conduct targeted to improve organizational climate, to enforce companies’ values and culture, to restore company’s reputation, or to ensure the stakeholders that the company is committed to ethical practices, firms became more interested in issuing their private, specific codes of conduct and in reporting about their commitment to what society considered to be critical issues. Some private codes of conduct go backs to the beginning of the twentieth century. JC Penney Company issued its code in 1913, Johnson & Johnson, in 1940s. In the 1950s, between 15% and 40% of large companies reporting ethics codes (Adams et al. 2001, p. 199). In an analysis realized by OCDE in 1998 (OECD 1998, p. 17), almost all codes issued by enterprises prohibited the use of child or forced labor, some recommended the respect of private life (freedom of religion, sexual orientation, marital status, etc.) and the prohibition of every kind of harassment (physical, sexual, psychological, or verbal). However, some scholars considered that most of the corporate codes of conduct were externally directed, responsive to social critics, government, and the media pressure, lacked in specificity and credibility, focused on internal company behavior and, therefore, didn’t respond adequate to the diverse cross-cultural demands of the international market (Murray 1998). The 1980s brought a change in governments’ attitude towards foreign investments and multinational companies, from the purpose to regulate foreign capital to a more market-oriented vision. Interest in working on international code of conduct as well as in the attempts to regulate the investments inflows decreased, as foreign investments started to be considered beneficial. Even communist countries promulgated new laws for attracting foreign capital. Also, governments of developing countries become more experienced in dealing with foreign companies, having a better administrative infrastructure. Mostly, economic necessity turned countries to a positive attitude towards investments (Wallace 1990, p. 4). Oil shocks as well as external debt services crisis that brought high rates of unemployment and inflation motivated governments to limit the pressure on international agencies to promote

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international external code of conducts for controlling multinational activities. Profit dimension was in force, again! In terms of international codes of conduct, only the OECD Guidelines and the ILO Declaration kept their influence (Jenkins and Unies 2001). Despite a decline in the interest of issuing international regulations for companies’ behavior, political pressure from NGOs, individuals, even political parties created a large demand for responsibility, not only in relation to labor standards or corrupted practices but also in relation to the environmental issues. There was a concrete need for a concept capable to reconciliate economic development with environmental protection. The mains aspects that concerned international community were related to: which is the source of local environmental problems (local development or a consequences of global economic system)? Is the environment destruction a result of the model of development centered on economic growth or a result of poverty and underdevelopment? Are the solutions to environmental problems technology based or social and policies based? The 1980 World Conservation Strategy of the International Union for the Conservation of Nature was the first report that included a very brief chapter on a concept called “sustainable development.” It focused on global structural changes but did not reached a large audience. The UN initiated an independent commission in 1983, which was asked to provide an analysis of existing problems and ideas for their solution. This new organization was the Brundtland Commission, or more formally, the World Commission on Environment and Development (WCED). At the end of 1980s (1987), Brundtland Commission came with the first volume of “Our Common Future,” the organization’s main report, one of the strongest international manifestos towards sustainable development. Individual companies responded to the concerns related to environmental and social problems by issuing private codes of conduct. In 1980 continued the proliferation of individual corporate codes of conduct and an increased interest in being “good corporate citizenship” by a growing number of MNEs. In a research conducted by the Centre of Business Ethics in 1984 among Fortune 500 list of industrial companies and Fortune 500 list of services companies (279 companies have responded), almost 80% of them stated that they “took some steps to incorporate ethical values and concerns into their daily operations,” with more than 90% of them through codes of conduct. The most important specific goals pursued by the companies’ codes were, in order, “being a socially responsible corporation” (34.1%), “provide guidelines for employee’s behavior” (27.8%), “to improve management,” and “to comply with local, state and federal guidelines” with 15.7% (Centre for Business Ethics 1986, p. 86).

2.2

The Environmentalist Movement in a Liberal Philosophy

If the 1980s have been dominated by the employee’s issues and anti-corruption practices, the 1990s started the era of environmental concerns. A 1989 analysis of the content of 150 corporate codes of ethics found that many contained elements concerning: provisions about corporate treatment of employees, guidance for inter-

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employee relationships, treatment of “whistle-blowers,” definition and prevention of bribery and conflicts of interest, and regulations for employees’ political action and contributions (Arthur W. Page center 2020). The analysis found, however, that, despite the fact that the codes refers to these aspects, they rarely regulated elements such as a corporation’s impact on the environment or compliance with anti-trust laws. In 1990s, the increase in liberalization pushed forward the facilitation of foreign investments. Governments refined their policies to remove barriers against foreign capital, technologies, skills, developed incentives for investments, improved the conditions for doing business in their countries, and looked to foreign investments as a way to improve the access to other markets (Jenkins and Unies 2001, p. 3). A race for the most attractive business environment started. The political change in the Eastern Europe, developments in information technology change the attitude towards investments, and the ideology promoting liberalization and privatization was the leading approach. After almost 20 years of negotiations, UN failed in its attempt to issue a legally binding code of conduct for translational corporation, delivering a draft of recommendations for multinational enterprises. From some perspectives, this can be considered a failure and a recognition of powerful corporations over governments. From other points of view, it was a natural result of the exceptional development of the FDI and of the dynamism of the firm internationalization process, which were far most rapid than the capacity of governments to fully understand it (Moran 2009). However, with the same force as the globalization speeded around the world, the movements towards environmentalism and antipoverty grabbed the global attention. Starting with the 1990s the interest in assessing other aspects than profit for the corporations became more acute. A more stakeholder-based view has gradually come to prevail, as the firm is seen as having responsibilities to a wider set of groups than simply shareholders (employees and their representatives, customers, suppliers, governments, industry bodies, local communities, and so forth) (Hubbard 2009, p. 178). Environmental aspects and labor issues became the most addressed issues in the private codes adopted by corporations, and an increasing concern about the possible impact of multinationals operations on the environment characterized the decade. OECD Guidelines added in 1991 of a new Section (Section 8) to give prominence to environmental factors. A wide range of voluntary codes of conduct in the field of the environment have emerged in 1990s, the majority arisen around the 1992 UN Conference on Environment and Development (Earth Summit) (UNCED) and the 1995 Rio Summit. These codes range from intergovernmental, to international and national business declarations, to industry-based codes to individual corporate policy statements (OECD 1998, p. 18). Agenda 21 is particularly important, since it was prepared with both NGO and business input. It dedicates a chapter to business and addresses other recommendations throughout the document to enterprises. The full text of Agenda 21 was made public at the UNCED, held in Rio de Janeiro on 13 June 1992, where 178 governments voted to adopt the program. Other two leading international business codes of environmental conduct were developed: The Business Charter for Sustainable Development of the International Chamber of Commerce and the CERES principles.

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The World Business Council for Sustainable Development (WBCSD) was created in 1995 as a merger of the Business Council for Sustainable Development (BCSD) and the World Industry Council for the Environment. (It is a CEO-led organization of over 200 international companies, from all business sectors and all major economies, representing a combined revenue of more than USD $8.5 trillion and 19 million employees. The Council is also connected to 60 national and regional business councils and partner organizations (WBCSD 2020).) In 1991, the eco-efficiency term has been coined by the BCSD, and in 1992, the founder of the BCSD published the book “Changing Course,” “a practical introduction to new and necessary methods of running businesses so that the realities of business and the marketplace support the realities of the environment and the needs of human development” (WBCSD 2020). Companies became more and more aware about the acute necessity to focus their attention towards environment and to develop codes reflecting their conduct. Centre of Business Ethics conducted a follow-up research in 1990 on Fortune 1000 list of industrial and service corporations. This time, over 90% of the responded companies (244 companies) “took some stapes to incorporate ethical values and concern into their daily operations.” Quite similar to the previous research, the most important specific goals pursued by the companies’ codes were, in order, “being a socially responsible corporation” (95%), “provide guidelines for conduct” (94%), and “to ensure compliance to the law” with 79% (Centre for Business Ethics 1992, p. 86). In 1990s, a question raised up stronger than before: how sustainability can be measured? The codes of conduct became more elaborated, but little has been done in introducing a framework of analysis capable to assess the concrete implementation of those codes and the effects generated. As scholars appreciated, the international codes of conduct lack of consistency, of legally binding, of creating international rules and in proving symmetrical interests (for companies and governments) (Murray 1998). Private codes of conducts, despite the fact that they are an important tool in improving ethical performance for the company, they do not necessary work as they should have. As Lee (2003, p. 74) stated, “in particular, practical experience suggests that codes of ethics are flawed in these ways: offering a false sense of authority, reifying ethical concepts and issues, avoiding issues of appropriateness to the time and place, presenting ethical issues through single set of lenses, and considering the role of individuals and emotions.” Others consider codes rather a strategy of symbolic communications on sensitive issues, without substantially addressing those issues with concreate and measurable actions (Walker and Wan 2012). In this context, at the end of 1990s, John Elkington argues that social justice, economic prosperity and environmental quality, the three key elements of the new concept he coined, the triple bottom line, will be the yardsticks against which corporate performance have to be measured. TBL underlined, thus, the importance of reporting versus the importance of issuing codes of conduct. TBL continued the debate about the codes capacity to be translated into measures, as well as about the preoccupation of finding methods for measuring the social and environmental components of the TBL. The end of the 1990s marked, also, the naissance of some indices mint to be benchmarking for reporting. Thus, in September 1999, it was launched the Dow Jones Sustainability Indexes, “the longest-running global sustainability

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benchmarks worldwide, a key reference point in Sustainability Investing for investors and companies alike. The indexes also provide a systematic engagement platform to move sustainability up the corporate agenda” (Dow Jones Sustainability Indexe 2010).

2.3

Global World, Global Problems, and Lack of Global Solutions

The beginning of the new century increased the focus on reporting instead on issuing codes of conduct. Also, new challenges to report TBL components have been added. To the classical aspects (as anti-corruption practices, labor standards, workers’ rights, environment protection), new concerns have been added, emerged from the explosive development of Information Technology and Communication (as data protection) or from the pressures exerted by the environment degradation (climate change or sanitary crises). The two decades in the twenty-first century brought more complexity and more challenges to the reporting activity. Reporting has become a common expectation placed on companies targeting to be viewed as socially responsible. Climate change, biodiversity loss, and water scarcity are the three sustainability issues of most concern for global experts, with poverty and inequality considered the most urgent social challenges of those put forward (The GlobeScan-SustainAbility Survey 2019, p. 7). The weaknesses of the TBL reporting did not vanished: TBL remained very difficult to measure, sustainability still lack of consensus on what it entails, and a unified set of indicators capable to offer a direct, clear, and quantifiable value of the TBL dimensions was not achieved. Most of the indicators proposed to assess the TBL performance includes indicators well established, others that are not directly measured, but estimated, and others rough estimated based on some assumption, which are also estimated. Under these circumstances, it is not surprising that codes remained mainly an instrument of communication about the commitment of the organization towards sustainability. Commitment towards reporting TBL marked a sharp increase. The first decades of the new millennium show a movement from a voluntary to a mandatory highly standardized practice in reporting environmental and social dimensions of the TBL (Bedenik and Barišić 2019). In 2007, the survey conducted by The Economist among 1254 executive managers showed that only 22% of executives say their firms have formal TBL reporting, and that the biggest long-term benefit of the nonfinancial reporting is in the area of communication to investors and stakeholders about their organizations’ performance on sustainability (The Economist 2008). 2017 KPMG Surveys mentions that the rate of sustainability reporting for the world’s 250 largest companies (G250) is 93% and for a worldwide sample of 4900 companies (N100) is 75% (KPMG 2019). The majority of companies surveyed by KPMG uses some frameworks for their reporting. The Global Reporting Initiatives (GRI) framework is the most commonly used, with 63% of N100 reports and 75% of G250 reports applying it (KPMG 2019). Among other used frames for reporting are UN Global Compact Guidelines and UN Sustainable Development Goals. Numerous sustainability indicators and frameworks initiatives have been created since the Agenda 21 emphasized that “indicators of sustainable development need to

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be developed to provide solid bases for decision-making at all levels and to contribute to a self-regulating sustainability of integrated environment and development systems” (UNCED 1992). According to the International Institute for Sustainable Development (IISD), in November 2009, there were 842 sustainability indicators initiatives worldwide (Fonseca 2010). Global Reporting Initiative (GRI) is probably the best known independent international organization that launched sustainability reporting since 1997. GRI has its roots in the Coalition for Environmentally Responsible Economies (CERES) and the Tellus Institute. The GRI Standards represent global best practice for reporting publicly on a range of economic, environmental and social impacts. Sustainability reporting based on the Standards provides information about an organization’s positive or negative contributions to sustainable development. The principles that should underpin triple bottom line reporting under GRI Standards are: transparency, inclusiveness, auditability, completeness, relevance, accuracy, neutrality, comparability, clarity, and timeliness (PainterMorland 2006, p. 362). The 100 series of the GRI Standards includes three universal Standards applicable for every organization preparing a sustainability report. They guide reporters in using the Standards, reporting an organization’s relevant contextual information, and reporting how its material topics are managed (GRI 101, 102, 103). The 200 series of the GRI Standards include topic-specific Standards used to report information on an organization’s material impacts related to economic topics (201–2017). The 300 series of the GRI Standards include topic-specific Standards used to report information on an organization’s material impacts related to environmental topics (301–308). The 400 series of the GRI Standards include topic-specific Standards used to report information on an organization’s material impacts related to social topics (401–419) (GRI 2020). Unlike TBL, the GRI system proposes only a large number of minimum standards that corporations must meet, but without aggregating these standards and without attempting to rate or prioritize companies. If in 2000, there were 50 organizations that published reports according to the methodology proposed by CERES (2010), in August 2020 the CERES database comprises 14,885 organizations and 63,245 reports, and 93% of the world’s largest 250 corporations report on their sustainability performance (GRI 2020). There are some critiques to GRI, launched both by academia and managers. It is very difficult to navigate through all these standards and preparing a sustainable Report according to GRI Standards. Assessing and reporting according to GRI Standards is too costly, it requires a lot of work, specialized personnel, on some aspects there are no data or too “big data” and some of these data are not always reliable and lack in integrated indicators (which supposed to be the essence of the novelty of the TBL). GRI, in the eyes of critics, focused too much on internal performance, risking to serve rather as a PR exercise then a way to promote sustainability. GRI Standards need to focus more on depth and materiality and to endorse the interactive effects of organizations with the external environment. Markets need condensed indicators, adequate metrics and measures to assess and compare the impact of the organization in the society, in order to understand the sustainable reports (Fonseca 2010; Dyllick and Muff 2016, p. 15).

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UN Global Compact Guidelines aims to mobilize a global movement of sustainable companies and stakeholders to supports companies to do business responsibly by aligning their strategies and operations with Ten Principles on human rights, labor, environment, and anti-corruption, and to take strategic actions to advance broader societal goals, such as the UN Sustainable Development Goals, with an emphasis on collaboration and innovation (UN Global Compact 2010). On 1 January 2016, the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development, adopted by world leaders in September 2015 at the UN Summit, officially came into force. (The Sustainable Development Goals (SDGs) are a collection of 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all.” The SDGs goals are: (1) End poverty in all its forms everywhere; (2) Zero hunger; (3) Ensure healthy lives and promote well-being for all at all ages; (4) Quality education; (5) Achieve gender equality and empower all women and girls; (6) Ensure access to water and sanitation for all; (7) Affordable and clean energy; (8) Decent work and economic growth; (9) Industry, innovation, and infrastructure; (10) Reducing inequality; (11) Sustainable cities and communities; (12) Responsible consumption and production; (13) Climate action; (14) Life below water; (15) Life on land; (16) Peace, justice, and strong institutions; and (17) Partnerships for the goals.) With more than 10,000 companies and 3000 nonbusiness signatories based in over 160 countries, and more than 60 local networks, Global Compact is the largest corporate sustainability initiative in the world (UN Global Compact 2020) (see also the chapter ▶ “The UN Global Compact: An Overview of the Promise and Pitfalls”). UN Global Compact Management Model follows six steps: commit (leadership commitment to mainstream the Global Compact principles into strategies and operations and to take action in support of broader UN goals, in a transparent way), assess (assess risks, opportunities, and impacts across Global Compact issue areas), define (define goals, strategies, and policies), implement (implement strategies and policies through the company and across the company’s value chain), measure (measure and monitor impacts and progress toward goals), and communicate (communicate progress and strategies and engage with stakeholders for continuous improvement) (UN Global Compact 2020). In order to align policies and operations with the Global Compact, companies have to follow governance (a continuous effort to ensure the company behaves in shareholders’ and increasingly stakeholders’ best interests) and transparency (a continuous effort to operate as openly as possible in the eyes of shareholders and other stakeholders alike). Specific considerations include documenting and communicating key economic, human rights, labor, environmental, and/or anti-corruption risks, opportunities, impacts, progress, and forward-looking plans, and engagement (engagement with stakeholders, both internally and externally, and a dialogue with governments, local communities, trade unions, and nongovernmental organizations), at every step of the Model (UN Global Compact 2010). The UN Global Compact 20th-Anniversary Progress Report: Uniting Business in the Decade of Action reveals that (UN Global Compact 2020):

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The movement towards more legally binding reporting is on the way. At the EU level, an European Directive has been adopted and companies with more than 500 employees need to report information about their business model, policies (and outcomes), risks, and nonfinancial key performance indicators in the following categories: environmental matters, social and employee aspects, respect for human rights, anti-corruption and bribery issues, and diversity on board of directors. The Directive offers considerable flexibility about what is reported and how (according to the EU Directive on the disclosure of non-financial and diversity information 2014/95/EU). Despite the increase concerns in reporting nonfinancial aspects related to business operations, and regardless the fact that more and more entities (companies and nonbusiness actors) publish on their activity, the effects of this endeavor are difficult to assess and to measure. Without any doubts, the awareness about the importance of the nonfinancial aspects that companies and other entities have to take care is on an increasing scale. The guidelines proposed by the benchmarks like GRI or United Nation Global Compact, or even the EU or Dow Jones family indexes are still “unaffordable” for small and medium-sized companies (SMEs), and the limits of the TBL or sustainability reporting remained the same: without a unified methodology for measuring social and environmental aspects, the companies code may be only a statement of good intentons.

3

TBL and the Business Model: The Need for a Stronger Cooperation Between Governments and Companies to Facilitate the Transition Toward Sustainable Development (see also Part 5, “Economic Aspects”)

In a general way, a business model is “a description of an organization and how that organization functions in achieving its goals (e.g., profitability, growth, social impact, . . .)” (Massa et al. 2017, p. 73). The most comprehensive approach to achieve sustainable operations (i.e., to integrate economic, environmental, and social thinking into core business activities) is the TBL approach (Dwyer 2005, p. 879). In fact, TBL demand business to grab the existing opportunities to design business models able to realign organizations’ search for profits with innovations that also

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benefit the environment and society, including initiatives in contexts of deep poverty and low-income markets (Massa et al. 2017, p. 74). The TBL concept suggests that firms not only need to engage in socially and environmentally responsible behavior, but, that they can achieve positive gains from this. Some authors define sustainable business models as those that “incorporate a triple bottom line approach and consider a wide range of stakeholder interests, including environment and society” (Bocken et al. 2014, cited in Massa et al. 2017, Table 1, p. 77). In an extensive research on business models literature, Massa, Tucci, and Afuah identified three major interpretations of the concept: (1) business models as attributes of real firms having a direct real impact on business operations, (2) business models as cognitive/linguistic schema, and (3) business models as formal conceptual representations/descriptions of how an organization functions (Massa, Tucci and Afuah, p. 76). The TBL framework may be involved in all these ways of interpretation. Attributes of real firms may involve activities to create and/or capture value, and outcomes that may be expected to result from these activities. The analysis performed by Massa et al. (2017, Table 1, p. 77) showed that all three dimensions of the TBL may be reflected in a business model, in a more concrete or in a more declarative manner. Focus on economic dimension of the TBL “How a company makes money” (Birkinshaw and Goddard 2009, cited in Massa, Tucci and Afuah (Massa et al. 2017, Table 1, p. 77)

Integrating TBL as a unitary concept “Sustainable business models incorporate a triple bottom line approach and consider a wide range of stakeholder interests, including environment and society” (Bocken et al. 2014, cited in Massa et al. 2017, Table 1, p. 77).

Business model as cognitive/linguistic schema refers to how business models are interpreted by organizational members, and their role and manifestation in social (inter)action, including organization-level sensemaking, environmental scanning and sensing opportunities, and the cognitive antecedents of business model design and innovation (Massa, Tucci and Afuah, p. 80). Again, the three dimensions of the TBL may be found in this interpretation, in an explicit manner (usually, when it comes about the economic dimension) or in a more inclusive way (when it refers to value creation, for example). Focus on economic dimension “it spells out how company makes money by specifying where it is positioned in the value chain” (Chesbrough & Rosenbloom, 2002, cited in Massa et al. 2017, Table 2, p. 81) “It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost?” (Magretta 2002, cited in Massa et al. 2017, Table 2, p. 81)

Integrating TBL as a unitary concept “We view the. . .business model as the business unit managers’ perceived logic of how the unit in question functions and creates value, in connection with both its market environment, and within the corporation (i.e., with its other business units)” (Aspara et al. 2013, cited in Massa et al. 2017, Table 2, p. 81).

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Business models as formal conceptual representations/descriptions of how an organization function range from a clear emphasize on the profit dimension to a diffuse reflection of the TBL philosophy. Focus on economic dimension “A business model is composed of two elements, a business system and a profit model” (Itami and Nishino 2001, cited in Massa et al. 2017, Table 3, p. 83).

Integrating TBL as a unitary concept “A business model for sustainability helps describing, analyzing, managing and communicating (i) a company’s sustainable value proposition to its customers, and all other stakeholders, (ii) how it creates and delivers this value, (iii) and how it captures economic value while maintaining or regenerating natural, social, and economic capital beyond its organizational boundaries” (Schaltegger, Hansen and Ludeke-Freund 2016, cited in Massa et al. 2017, Table 3, p. 83)

This variety of TBL reflections on what sustainable business models mean mirrors not only the ambiguity and the vagueness of the TBL concept but also the need for ongoing changes in order to reach a functional sustainable business, based on TBL approach. Some of these proposed changes are radical and challenge the essence of the economic activity. Others emphasize the role of cooperation between business and governments, stressing the idea that the boundary between business and governments became very fluid. A third vison looks to the company itself and proposed changes that each company should make in order to became sustainable. The changes to the very essence of what economic development should be is proposed by the “New Left” movement, that denounced the focus on economic growth, which stress for a growing production and an increase of profits. In his manifesto, “Degrowth,” Kallis (2011) consider that as faster we produce and consume goods, the more we will harm the environment. If humanity does not want to destroy the life support systems of the planet, the global economy should slow down. Similarly, Tim Jackson in his book “Prosperity without Growth. Economics for a Finite Planet” (Jackson 2009, p. 1) proposes a change from the focus on economic output indicators (as growth and profit) to indicators that reflect more the other two dimensions of the TBL: elimination of injustice, of insecurity, of abandonment. The second view focused on the need for a partnership between companies and governments in order to promote TBL as a way of doing business. In this respect, Elkington (2013, p. 10) consider that the present way of “wealth creation” will generate “worsening environmental and social problems” and it is necessary a cooperation between governments and companies to build the transition towards sustainable development. In the view of Elkington, there are four types of companies, with four business models, and governments should encourage those that promote sustainable business paths and discourage those that harm the balance between humans and environment. Locusts and caterpillar companies are those considered by Elkington as relying on an unsustainable mode of business: these

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companies destroy “natural, human, social and economic capital,” on a smaller or larger scale, have the incapacity to foreseen the negative effects on the system on a long term, do not have the willingness to take care of warning and do not have the desire to learn from mistakes, “show single minded dedication to the business task at hand.” Some of these companies (the caterpillars) operate in fields where sustainable innovations took already place. Therefore, for these companies, governments should provide proper conditions to evolve towards a more sustainable mode of business (Elkington 2013, p. 11). But there are butterflies and honeybees’ companies with a strong commitment towards corporate social responsibility and sustainable development, regenerative, capable for co-creating a world of “increasing returns” (Elkington 2002, p. 5). These companies have to be promoted and supported and governments have to build strong, lasting partnership with them. The third view considers the individual business behavior and companies’ responses towards the social and environmental constrains. Some studies revealed that, when “pressed to choose between financial goals and societal goals, firms will normally favor their financial goals” (Van der Byl and Slawinski, 2015, cited in Wright and Nyberg 2017, p. 1635). Other studies denounced the fact that corporate initiatives such as greener supply chains or “carbon neutrality” are, in fact, motivated by business goals of cost reduction, productivity improvement, and market expansion, and not necessary by a change in the business model (Wright and Nyberg 2017, p. 1636). However, many companies address social and environmental issues on varying degrees, because this is what society expects from them. But the impact of these actions is rarely evaluated, many times remains vague, because clear metrics to assess and measure the social and environmental dimensions of the TBL are missing. As Dyllick and Muff (2016, p. 14) sustain, transparency and metrics are two essential condition in order to assess the truly sustainable business.

4

Future Directions: Quo Vadis, Triple Bottom Line?

It is clear that the humanity needs to be sustainable. The crises that affected world economy in the last two decades are a proof that despite beautiful concepts (as TBL), remarkable technological achievements and increased stewardship towards environment and social issues, we, as humanity, have done little and, in many cases, we failed to be sustainable. The current pandemic is one of the best examples of a failure, but, in the same time, can be an opportunity for an awake moment.

4.1

New Concepts, But New Content?

The extension of the concept is one of the directions towards TBL is going to. There are a lot of concepts proposed to continue the philosophy of the TBL and to enlarge its coverage (Elkington 2018). Quadruple bottom line (QBL) is one of them, with a fourth dimension as “spirituality,” “culture” or, largely, “well-being” or “purpose,”

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in order to move from the 3P to 4P. Another one proposes the extension to other component as “governance,” “compassion,” or “aesthetic.” “Carbon productivity,” the “sharing and circular economies,” “biomimicry,” “green economy and green business,” “zero-waste economy” are new perspectives on the path to sustainable business with new requirements toward companies and governments (Elkington 2018; Bedenik and Barišić 2019). These endeavors stream from the worsening of the problems the world confronts on. Coining new terms is not enough for making them to work or for improving the situation. If the direction is to enrich the concepts emerged from the TBL or sustainability, the direction should be, also, to address the limits these concepts demonstrated they have. Make them work seems to be the imperative the research should focus on.

4.2

To a Changed System and a Changed Leadership

Elkington (2018) looked back to the concept he coined 25 years ago and considers that TBL is more actual than ever, and its limits should strengthen the concept and solutions for the shortcomings have to be identified. “Change the system” and change the leadership proposes Elkington, and he recall that this was, in fact, the essence of the message of sustainability itself. His call for a profound change in the economy is supported by many others, in a more radical way. In “Good Economics for Hard Times: Better Answers to Our Biggest Problems,” two 2019 Nobel Prize winners for economics, Abhijit Banerjee and Esther Duflo, point out the importance of social justice and how the gains in the economic terms (larger GDP, larger profits) do not necessarily mean an increase in human well-being, if it is not distributed equitably. Targeting economic growth or higher profits can sometimes be counterproductive (Elkington 2018; Cassidy 2020). “Fundamentally, we have a hard-wired cultural problem in business, finance and markets. Whereas CEOs, CFOs, and other corporate leaders move heaven and earth to ensure that they hit their profit targets, the same is very rarely true of their people and planet targets” (Elkington 2018).

4.3

To a New Sustainable Business Model

Some scholars consider that the TBL is an intermediary stage for achieving sustainable business models. Dyllick and Muff (2016, pp. 9–11) identify three level of business sustainability (BST), from the concentration on economic dimension (BST1.0) to a dedication to environmental and social issues (BTS 3.0): “BST 2.0 is well captured by the definition used by the Network for Business Sustainability (2012): Business sustainability is often defined as managing the triple bottom line—a process by which firms manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as people, planet and profits. . . A BST 3.0 firm translates sustainability challenges into business opportunities making ‘business sense’ of societal and environmental issues.”

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The Covid-19 Pandemic: A Chance to Rebuild the World

The economic consequences of the Covid-19 pandemic seem to be disastrous. It is expected a contraction of the world economy to 5.2% in 2020 (World Bank 2020), but it can be larger, if things will go for bad. In this context, the “rebuild” term is quite appropriate. How will the world rebuild is the question. Some expect new paradigms to lead to more social justice and more environmental protection (A TBL economy!). This may involve a reconsideration of the development model, solving the equation of how can be given equal importance to the three pillars, or, why not, to reduce the importance of the economic dimension and to increase the weight of social justice and environment protection. But, will we have the power to abandon old habits? Robert J. Shiller, a professor of economics at Yale University, and winner of the 2013 Nobel Memorial Prize in economics affirms: “[. . .] the pandemic has created a wartime atmosphere in which fundamental changes suddenly seem possible. [. . .] There is also reason to hope that the pandemic has opened a window to creating new ways and institutions to deal with the suffering, including more effective measures to stop the trend toward greater inequality” (Foreign Policy 2020). However, the majority of personalities interviewed by Foreign Policy (2020) are rather skeptics in believing that the post-pandemic world will be different. On contrary, it seems that the autarchy and isolation are the preferred behaviors. This is a threat to sustainability, which requires a global and holistic approach, because “sustainability is primarily a global concept” (Gray and Milne 2004, p. 78).

5

Summary

This chapter provided a navigation on the literature that deals with the Triple Bottom Line concept (TBL), pointing out the context of its historic development and the relationship with the concept of sustainability with which it is considered synonym. There is an exponential increase of the literature dealing with TBL, and a unanimous recognition of the importance to have a TBL approach, both at macro- as at the microeconomic levels. Despite this, the theoretical and practical shortcomings of the concept are still in place and shape the behavior of the supporters and detractors of the TBL. The chapter brings into attention, also, the relationship between TBL and the codes of conducts. As TBL represents “a sustainability framework that examines a company’s social, environment, and economic impact,” codes of conduct are still the most important documents through which companies expose their commitment towards sustainability. A brief history of codes of conduct evolution, which is, in a way, a reflection of the TBL evolution, is provided. The reporting function of the codes of conduct and limits of the reporting activity are provided throughout this chapter. TBL as a sustainable business model is ending this navigation through the literature devoted to this generous topic. The chapter ends with some reflections on the future developments of the TBL, both in terms of concept expansions and of changes needed for a sustainable society.

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Ozanne LK, Phipps M, Weaver T, Carrington M, Luchs M, Callin J, Gupta S, Santos NJC, Scott K, Williams J (2016) Managing the tensions at the intersection of the triple bottom line: a paradox theory approach to sustainability management. J Public Policy Mark 35(2):249–261 Painter-Morland M (2006) Triple bottom-line reporting as social grammar: integrating corporate social responsibility and corporate codes of conduct. Busi Ethics: Eur Rev 15(4):352–364 Popovic T, Barbosa-Póvoa A, Kraslawski A, Carvalho A (2018) Quantitative indicators for social sustainability assessment of supply chains. J Clean Prod 180:748–768 Reinalda B (2009) Routledge history of international organizations: from 1815 to the present day. Routledge, London Sauvant KP (2015) The negotiations of the United Nations code of conduct on transnational corporations: experience and lessons learned. J World Invest Trade 16(1):11–87 Schilizzi S (2002) Triple bottom line accounting: how serious is it? Connections – Farm Food Resour Issues 3:24–27 Skouloudis A, Evangelinos K, Kourmousis F (2009) Development of an evaluation methodology for triple bottom line reports using international standards on reporting. Environ Manag 44: 298–311. https://doi.org/10.1007/s00267-009-9305-9 Sridhar K, Jones G (2013) The three fundamental criticisms of the triple bottom line approach: an empirical study to link sustainability reports in companies based in the Asia-Pacific region and TBL shortcomings. Asian J Bus Ethics 2:91–111 Stenzel PL (2010) Sustainability, the triple bottom line, and the global reporting initiative. Global EDGE Bus Rev 4(6):1–2 The Economist (2008) Doing good business and the sustainability challenge. Economist Intelligent Unit. Available at https://graphics.eiu.com/upload/Sustainability_allsponsors.pdf. Accessed 1 Mar 2020 The Economist (2009) Triple bottom line. It consists of three Ps: profit, people and planet. Available at: https://www.economist.com/news/2009/11/17/triple-bottom-line. Accessed 1 Mar 2020 The GlobeScan-SustainAbility Survey (2019) The 2019 sustainability leaders. Available at: https:// globescan.com/wp-content/uploads/2019/07/GlobeScan-SustainAbility-Leaders-Survey-2019Report.pdf. Accessed 1 Mar 2020 Tullberg J (2012) Triple bottom line – a vaulting ambition? Bus Ethics: Eur Rev 21(3):310–324 UNCED (1992) Agenda 21. Available at: https://sustainabledevelopment.un.org/content/documents/Agenda21.pdf. Accessed 1 March 2020 UN Global Compact (2010) UN Global Compact Management Model. Available at: https:// d306pr3pise04h.cloudfront.net/docs/news_events%2F9.1_news_archives%2F2010_06_17% 2FUN_Global_Compact_Management_Model.pdf. Accessed 1 July 2020 UN Global Compact (2020) Companies need to set more ambitious targets to achieve Sustainable Development Goals by 2030, United Nations Global Compact report shows. Available at: https://www.unglobalcompact.org/news/4577-06-15-2020. Accessed 1 July 2020 United Nations (1987) Report of the World Commission on Environment and Development: our common future. Available at: https://www.are.admin.ch/are/en/home/sustainable-development/ international-cooperation/2030agenda/un-_-milestones-in-sustainable-development/1987%2D %2Dbrundtland-report.html. Accessed 29 July 2020 United Nations (2002) Plan of implementation of the world summit on sustainable development – Johannesburg, South Africa, 2–4 September 2002. Available at: https://www.un.org/esa/ sustdev/documents/WSSD_POI_PD/English/WSSD_PlanImpl.pdf. Accessed 29 July 2020 Venkatesh VG, Kang K, Wang B, Zhong RY, Zhang A (2020) System architecture for blockchain based transparency of supply chain social sustainability. Robot Comput Integr Manuf 63:Article 101896 Venkatraman S, Nayak RR (2015) Corporate sustainability: an IS approach for integrating triple bottom line elements. Soc Responsib J 11(3):482–501 Walker K, Wan F (2012) The harm of symbolic actions and green-washing: corporate actions and communications on environmental performance and their financial implications. J Bus Ethics 109(2):227–242

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Wallace CD (ed) (1990) Foreign direct investment in the 1990s [nineteen hundred and nineties]: a new climate in the Third World. Martinus Nijhoff Publishers, Dordrecht WBCSD (2020) About us. Available at: https://www.wbcsd.org/Overview/About-us Weber J (2010) Assessing the “tone at the top”: the moral reasoning of CEOs in the automobile industry. J Bus Ethics 92(2):167–182 Welford R, Chan C, Man M (2007) Priorities for corporate social responsibility: a survey of businesses and their stakeholders. Corp Soc Responsib Environ Manag 15(1):52–62 World Bank (2020) The global economic outlook during the COVID-19 pandemic: a changed world. Available at: https://www.worldbank.org/en/news/feature/2020/06/08/the-global-eco nomic-outlook-during-the-covid-19-pandemic-a-changed-world. Accessed 29 July 2020 Wright C, Nyberg D (2017) An inconvenient truth: how organizations translate climate change into business as usual. Acad Manag J 60(5):1633–1661 Young ST, Dhanda KK (2013) Sustainability. Essential for Business CA Sage

Key Literature A critical analysis of the TBL concept provided by Norman, W. and MacDonald, C. (2004) has a strong argumentation A huge body of literature analyze the topic of TBL reporting. A smallpart of this literature was used for this article. Among outstanding works on this aspect may be mentioned Bedenik, N. O., & Barišić, P. (2019), Carroll, A. (2018), Milne, M. J., & Gray, R. (2013), Sridhar, K., and Jones, G. (2013), Jackson J.K. (2013), Painter-Morland, M. (2006), Jenkins, R., & Unies, N. (2001). Many others may be mentioned. Also, the websites of OECD, GRI, UN Global Compact or United Nation, just to mention few, offer useful and interesting information For a comprehensive analysis of the sustainability of business and the TBL, the articles of Wright, C., & Nyberg, D. (2017) and Massa, L., Tucci, C. L., & Afuah, A. (2017) and Elkington, J. (2002) will definitely provide a comprehensive view. On what is after TBL in sustainable business an interesting read is Dyllick, T., & Muff, K. (2016) There is a vast literature concerning TBL, impossible to cover. From the literature surveyed for this chapter, few will be mentioned here, the rest being on equal importance for the reader. On the TBL concept, the book of Elkington (1997), Partnerships from cannibals with forks: The triple bottom line of 21st-century business is a must read. The relation between TBL and sustainability is largely explained in the work of Hammer, J. and Pivo, G. (2017), Ozanne et al. (2016), Glavas, A. and Mish, J. (2015)

Equity and Regulation Onyeka K. Osuji

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Social Contract, Equity, and CSR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Corporate Power and Influence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Balancing Economic and Social Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Intergenerational Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 Institutional Voids and Contextual Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Regulating CSR to Promote Stakeholder Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Beyond Individualism and Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Enhanced Stakeholder Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Stakeholder Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Accountability and Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

This chapter considers the role of equity and regulation in corporate social responsibility (CSR). In particular, the chapter addresses the question of how regulation can ensure that CSR practices reflect and promote stakeholder equity as underlined by the social contract theory and the stakeholder model which have had a major influence on the conception of CSR. In demonstrating that equity is a fundamental goal of CSR due to those theoretical models, the chapter shows that regulation is not antithetical to CSR despite the prevalence of the voluntarist and neoliberal orientations in practice and scholarly definitions. It highlights certain circumstances that may trigger the need for addressing stakeholder equity issues in the conception and practice of CSR which a regulatory framework needs to take into consideration. These include corporate power and influence, corporate O. K. Osuji (*) School of Law, University of Essex, Colchester, UK e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_6

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governance, clash between economic and social goals and matters of intergenerational equity, institutions voids, contextualism, and operations of multinational enterprises. The chapter shows that neoliberal orientations that promote individualism and self-regulation are unsuitable for stakeholder equity. Drawing on the institutional and stakeholder theoretic models, the chapter further identifies opportunities for integrating and promoting stakeholder equity while providing regulatory arrangements for CSR. Keywords

Corporate social responsibility · Equity · Institutions · Neoliberalism · Regulation · Stakeholder model · Social contract · Sustainable development

1

Introduction

This chapter considers the role of equity and regulation in corporate social responsibility (CSR). This is important since, on the one hand, the social contract theory demonstrates the importance of fairness for mutual existence in society. For this reason, the stakeholder foundation of CSR suggests the need for acknowledging and addressing the interests of different stakeholders. How stakeholders are treated is implicit in the definition of “stakeholder” as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman 1984: vi, 46) or as “groups of people who have a stake, a claim, or an interest in the operations and decisions of the firm” (Carroll 1991). Consequently, CSR can be described as “a set of related mechanisms for aligning corporate behavior with wider social and environmental goals, in which managerial, financial and regulatory aspects are combined in a mutually reinforcing way [as] a mechanism for stimulating organizational change” (Deakin and Hobbs 2007: 69–71). On the other hand, the notion of equity connotes fairness and fair treatment of competing interests and persons. Put differently, equity is about ensuring “social justice” (O’Faircheallaigh 2015: 92) for segments of society. The fair treatment element of equity is highlighted by Plato’s definition of justice as a “set and constant purpose to give every man his due” (Bloom 1968). Likewise, Rawls (1993: 5–6) suggested that justice requires “an equal claim to a fully adequate scheme of equal basic rights and liberties” for members of society. The linkage between equity and justice explains why Lord Denning (1981: 174) described the latter as “the solution that the majority of right-minded people would consider fair.” Nonetheless, equity remains an ideal for CSR prompting questions regarding how to ensure that it is implemented in corporate practices. This relates to the fundamental issue of the role of regulation in CSR. As Newell and Frynas (2007: 672) stressed, a key question in the conception and practice of CSR is whether its “role can be performed through business-as-usual practices, voluntarily and through the market, or does it need to be guided, regulated and driven by broader state-led developmental priorities?”

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Regulatory mechanisms can assist in ensuring that corporate actors promote and emphasize equity in CSR. The need for appropriate arrangements for promoting equity is acknowledged by the institutional theory which has been described as offering “a powerful explanation of both individual and organizational actions and processes” (Li et al. 2008: 328). In confirming that actions and behaviors of corporations and other social actors are determined or influenced by the institutional environment (Misangyi et al. 2008), the institutional theory projects the concept of “institutions” which are the “rules, norms, and beliefs that describe reality for the organization, explaining what is and is not, what can be acted upon and what cannot” (Hoffman 1999: 351). Institutions have also been defined as the “formal and informal procedures, routines, norms and conventions embedded in the organizational structure of the polity or political economy” (Hall and Taylor 1996: 940) and as “systems of established and prevalent social rules that structure social interactions” (Hodgson 2006: 2). Institutions can therefore be regarded as “the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction” (North 1990: 3). In other words, institutions are explicit and implicit rules and norms (Powell and DiMaggio 1991) that guide and provide standards for, and impose constraints on, the behavior of actors within society. Within the concept of institutions are regulatory institutions which refer to formal laws, rules, and regulations and the mechanisms for their coercive enforcement (Scott 2001, 2008). CSR is traditionally regarded as a voluntary method of regulation corporations undertake, although this could be due to pressures from stakeholders. Nonetheless, it is also increasingly acknowledged that CSR can be utilized by governments and other regulatory institutions for regulating corporations and controlling their behavior (Osuji 2015; Osuji and Obibuaku 2016). The regulated version of CSR can be determined directly by the regulatory institutions or through the technique of coregulation involving the regulatory institutions and corporations. In either case, a regulated form of CSR can be used to articulate and promote stakeholder equity. As the Policy and Operations Evaluation Department of the Ministry of Foreign Affairs, The Netherlands, once pointed out, “CSR is no longer the sole domain of business” and the policies of regulatory institutions may be “particularly important in facilitating ‘beyond-compliance’ behavior” (IOB 2013: 12, 17, 32–33, 67–69). The exponential popularity of the concept of CSR can be traced to the stakeholder equity issues arising from the activities and operations of corporations. CSR is therefore seen as a method of realigning corporations for the realization of the need for promoting stakeholder equity and addressing the issues it may raise. In this way, CSR is a form of regulation considering that regulation can refer to methods of social control or ways of influencing the behavior of social actors (Osuji 2015) such as corporations. Regulatory interventions to advance CSR objectives will therefore need to promote equity and fair treatment of stakeholders as an integral component of CSR if they are to be properly aligned to the stakeholder model (Freeman et al. 2010; Bondy and Charles 2020) basis of CSR. The rest of this chapter is organized as follows. The next part shows how CSR is influenced by the social contract theory and the stakeholder model to emphasize

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equity and outlines different circumstances stakeholder equity issues may arise in the conception and practice of CSR. This is then followed by a discussion of how the regulation of CSR can be undertaken to promote equity with indications of various opportunities for doing that. The final part is the summary.

2

Social Contract, Equity, and CSR

The social contract theory is arguably a bedrock of CSR and may provide justifications for its regulation. The World Bank (2019: 124) suggests that the social contract theory can serve “as a policy package that aims to contribute to a fairer society.” According to the French philosopher, Rousseau (1895), social contract refers to the need for the co-existence and mutuality of rights and obligations of members with equity, equality, and freedom as the underlying principles. The social contract theory therefore argues against unfettered freedom, focusing on self-interest or giving special status to a group of social actors to the detriment of others. These ideas have influenced the central tenets of CSR, beginning with the underpinning stakeholder framework. The dynamic nature of the concept of stakeholder (Miles 2017) shows its adaptability to different contexts of corporate decision-making and operations where issues of equity may exist. Equity is therefore arguably embedded in CSR with its emphasis on the fair treatment of stakeholders by corporations. This goes to show that CSR is about striking the right balance between the interests of different stakeholders that may even potentially clash. This may explain why Waterman (1994: 26) pointed out that “companies have to operate within a complex [structure] of social and economic relationships, and that the most successful companies attempt to get each of these rights in what is often a difficult balancing act.” This is an implicit reference to the crucial role of equity in managing the interests of diverse stakeholders within the corporate governance framework as formulated under CSR. At the core of the integration of the concept of stakeholder in CSR is therefore the notion of equity in the governance and operations of corporations. In the extractive sector, for example, equity issues may affect various stakeholders (Sawyer and Gomez 2012; Dougherty and Olsen 2013). On the one hand, the mining corporations and their investors may benefit economically, and their tax payments contribute to the revenues of their host and home governments (O’Faircheallaigh 2015). On the other hand, mining operations may have adverse economic, social, and cultural impacts on the local communities where they are undertaken. These communities may suffer from environmental degradation and may lose access to aesthetic environments, artifacts and cultural heritage, and farmlands, fishing, and other economic resources. Residents of the host communities and employees of the corporations involved may suffer from disease and other conditions. Even future generations may be at a disadvantage by being denied the opportunity of sharing in the economic benefits from mining and suffering from environmental degradation.

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This example shows that there are several dimensions of stakeholder equity in the conception and practice of CSR. These are outlined below.

2.1

Corporate Power and Influence

A major component of the definitions of CSR is the role of corporations in promoting equity in the treatment of stakeholders. This arises from the view that the corporations’ access to resources is unmatched and unrivalled by other stakeholders or segments of society. In comparison to stakeholders like consumers and host communities, for example, corporations can determine whether production methods and processes are properly aligned with the ideals of CSR. Information asymmetry may also exist between corporations and stakeholders to the disadvantage of the latter. Corporations are therefore more likely than consumers and host communities to have access to up-to-date scientific knowledge, technology, and other resources for ensuring a more harmonious and sustainable existence between different stakeholders or segments of society. As “the primary instrument for wealth generation in contemporary economies” (Clarke et al. 2019), corporations are in a prime position to advance stakeholder equity in their multifaceted societal role epitomized by CSR. This is one of the justifications for the integrative and political models of CSR. Even in their interactions with governments and political institutions of states, corporations may not be “passive and powerless” (Anabtawi and Stout 2008: 1275) and this is manifested in several ways. While “companies today operate across the globe through a complex web of subsidiaries and affiliate concerns” (Deva 2012: 4), the evidence suggests that international law has a “modest role in holding corporations to account” (van Dam 2011: 225). Nonbinding initiatives at the international level such as the UN Global Compact and OECD Guidelines for Multinational Enterprises (OECD 2011) have done little to assuage the clamor for corporations to be socially responsible. Being that regulatory powers are normally territorial as confirmed by the cases of British Property in Spanish Morocco (1925: 641–642) and Trail Smelter (1941: [1165]), the governments of the locations and operations of corporations should, in theory, regulate them. Nevertheless, due to the globalization of business and other factors, it is increasingly clear that national “governments are seen to have become weaker as governors of business conduct” (Kourula et al. 2019). The governments’ desire to attract investments shows that the prevailing order is inter-state competition in business regulation and enforcement (Hackett and Moffett 2016) which has elevated corporations to a position of power that can trigger stakeholder equity issues. For example, while a corporation with “multinational capital [can seek] to limit state discretion to regulate in any way that would disadvantage it” (Smythe 2000: 77), this may entail negative consequences for stakeholders. Some corporations have more resources than states and, as such, are expected to assist in addressing social issues, including stakeholder equity related one. Moreover, being that corporations are often implicated in some of the social and equity issues in society, there is the need “to acknowledge that the responsibility associated

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with innovation necessarily is responsibility for the future it helps to create” (Grinbaum and Groves 2013). Of particular note is the political CSR approach (Scherer and Palazzo 2011) which reflects the point that “the CSR phenomenon illustrates, and provides evidence for corporate political power” (Wilks 2013: 197). As the concept of corporate citizenship suggests, corporations may need to be located “within a network of mutual responsibilities and obligations in their social environment. . . and in a political context within the wider debate on the role of business in society” (Matten and Moon 2013). Under the political CSR approach, corporations are expected to avoid “regulatory capture” by refraining from interfering with the rule making processes. This is due to the fact that when “regulatory capture” exists, rules may be weak and may not be enforced by the regulatory and administrative authorities. Another aspect of political CSR is that corporations should maintain socially responsible standards and not exploit weak substantive rules and inadequate rule enforcement irrespective of the regulatory framework where corporate operations are undertaken. While the first two aspects of political CSR are negatively framed, the third one refers to positive obligations. This is the idea that corporations should contribute positively to good governance. In other words, corporations are expected to actively use their knowledge, power, and influence to promote issues of equity in society. This may extend to undertaking activities traditionally regarded as the functions of the government (Osuji 2015; Osuji and Obibuaku 2016).

2.2

Corporate Governance

Stakeholder equity arguably provides the linkage between CSR and corporate governance. To undertake stakeholder equity roles in society, corporations need to apply CSR principles in their operations and governance structures. In the context of corporate governance, James Wolfensohn, a former president of the World Bank, reiterated that the “proper governance of companies will become as crucial to the world economy as the proper governing of countries” (The Economist, 1999: 32). In a foreword for Global Corporate Governance Forum, Sir Adrian Cadbury stressed that the aim of corporate governance “is to align as nearly as possible the interests of individuals, corporations and societies” (World Bank 2003). The need for stakeholder equity may explain the definition of corporate governance as “the system of checks and balances, both internal and external to companies, which ensures that companies discharge their accountability to all their stakeholders and act in a socially responsible way in all areas of their business activity” (Solomon 2007: 14). The need for inter-stakeholder equity is also implicit from the description of corporate governance as “the determination of the broad uses to which organisational resources will be deployed and the resolution of conflicts among the myriad participants in organizations” (Daily et al. 2003: 371). Three approaches have been proposed for dealing with the equity-related issues in the governance and operations of corporations: shareholder primacy, enlightened shareholder value, and stakeholder model. The way stakeholder equity issues are

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treated differ in these approaches and this is manifested in the kind of CSR practices they encourage. Furthermore, stakeholder equity is more likely to be prominent in corporate practice if a “corporate conscience” exists. A corporate conscience ensures that “[s]elf-interest is moderated and redirected, [although] not forgotten or extinguished” (Selznick 2002: 101). As Selznick (2002: 101) pointed out, a “corporate conscience is created when values that transcend narrow self-interest are built into the practice and structure of the enterprise [to become] an ‘organizational culture’, a framework within which the main goals of the enterprise are pursued.” For shareholder primacy, equity is focused on the shareholder class to the exclusion of other potential stakeholders. The shareholder primacy model of corporate governance prioritizes the interests of shareholders over and above the interests of other corporate constituencies. As such, corporate governance structures are either composed of shareholders (members in general meeting) or designed to represent the interests of shareholders (the board of directors). Complemented by the agency theory, shareholder primacy aims at ensuring that corporate structures and procedures advance the interests of shareholders. Consequently, the agency theory attempts to introduce measures for aligning the interests of corporate directors and managers as “agents” to those of the shareholders as their “principals” (see Jensen and Meckling 1976; Armour et al. 2017; Enriques et al. 2017a). When a corporation is solvent, stakeholders that are not shareholders are regarded by the shareholder primacy model as “outsiders” (Roe 2000; Keay 2010; Enriques et al. 2017b) and incapable of having their interests articulated in the governance processes and procedures. In the shareholder-centered approach of English company law (Nolan 2006), a long-standing line of cases including Percival v Wright (1902) and Caparo v Dickman (1990) confirms the preeminent position of shareholders and their interest in corporate governance. In Multinational Gas and Petrochemical Co. Ltd v Multinational Gas and Petrochemical Services Ltd (1983: 585), Dillon LJ pointed out that the implication is that “so long as the company is solvent the shareholders are in substance the company.” Moreover, shareholder primacy regards profit as the sole motivation for shareholders and consequently emphasizes profit maximization as a fundamental duty of corporate directors and managers. It is reasoned that this is to enable the evaluation of the responsibility and performance of the board of directors and corporate managers (Berle 1932). Profit maximization is notoriously supported by the case of Dodge v Ford Motor Co (1919: 684) where a US court stated that “a business corporation is organized and carried on primarily for the profit of the shareholders. . .and the powers of the directors are to be employed for that end.” Due to its twin focus on shareholder interests and profit maximization, the shareholder primacy approach is unlikely to promote stakeholder equity as facilitated by CSR. A popular proponent of shareholder primacy, Milton Friedman, once argued that “there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman 1970). This statement confirms that the shareholder primacy model is unlikely to promote stakeholder equity issues in CSR.

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While the enlightened shareholder value model (Keay 2007; Tsagas 2018) is a variant of shareholder primacy, it differs by allowing the consideration of the interests of non-shareholders. Nonetheless, its impact on the promotion of stakeholder equity is equally limited. While it does not prioritize profit maximization in the short term, the enlightened shareholder value model links CSR to the longer-term financial interest of shareholders. In other words, the focus of corporate governance remains shareholders and stakeholders may be considered only to the extent they may potentially affect the interest of shareholders. At best, the enlightened shareholder value model promotes an economic cost-benefit analysis approach to CSR (Villiers 2008: 97–98) with little room for consideration of stakeholder equity. The limited impact of enlightened shareholder value is evident in the statement of directors’ duties in section 172 of the UK Companies Act 2006 where “damage to non-shareholder interests will not in itself be indicative of breach” (Parkinson 2002: 55). Comparatively speaking, the stakeholder model seems in a better position to address equity issues in corporate decision-making processes and operations through the opportunities for the representation of stakeholder interests. Ways of representing stakeholder interests can include provisions for voting rights, veto rights, membership of and nomination to the board of directors, incorporation of stakeholder interests in the directors’ duties, accountability of directors, consultation rights, and disclosure requirements. By providing justifications for consideration of wider stakeholder interests, the stakeholder model appears to be “the most viable alternative to the competitive individualism which has left many casualties in society, and arguably damaged the quality of life for everyone” (Hamilton and Clarke 1996: 39). For example, in Lyonnais Bank v Pathe Communications (1991), a US court stressed the existence of a corporate “obligation to the community of interests that sustained the corporation, to exercise judgment in an informed, good faith effort to maximize the corporation’s long-term wealth creating capacity.” This is an implicit nod to the stakeholder model and confirms the wider stakeholder context of corporations, the need for recognizing the interests of diverse stakeholders and for balancing economic and social objectives.

2.3

Balancing Economic and Social Priorities

Within the equity conception of CSR is the expectation that profit, especially in the short term, should not be the sole consideration for corporate decisions and activities. In CSR, there is therefore very little room for self-centeredness, exclusive pursuit of profit and lack of consideration of stakeholder equity issues in corporate governance. Sir Adrian Cadbury likewise suggested that corporate governance “is concerned with holding the balance between economic and social goals and between individual and communal goals” (World Bank 2003). The need for balancing economic objectives and social issues is acknowledged in sustainable development which is often discussed in relation to CSR. The

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background to the Brundtland Report (WCED 1987) indicates that its conception of sustainable development reflects this need (Rajamani, 2003). In declaring that economic, social, and environmental factors are “interdependent and mutually reinforcing pillars of sustainable development” (United Nations 2002: Resolution 1, para.5), the 2002 Johannesburg World Summit on Sustainable Development similarly reiterated the need for social actors, including corporations, to balance economic factors with priorities of societies. A South African court in BP Southern Africa (Pty) Ltd v MEC for Agriculture, Conservation and Land Affairs BP (2004) therefore insisted that “[p]ure economic principles will no longer determine, in an unbridled fashion, whether a development is acceptable.” In other words, profit maximization has lower priority in comparison to stakeholder equity.

2.4

Intergenerational Equity

Following on from the need to balance economic and social priorities is the intergenerational equity factor that requires the consideration of the interests of future generations of stakeholders as part of CSR. Intergenerational equity is why corporations are expected to promote sustainable development in their operations and relationships. It flows from the Brundtland Report’s definition of sustainable development as the “development that meets the need of the present without compromising the ability of future generations to meet their own need” (WCED 1987). The anthropocentric language reflected in the Brundtland Report’s (WCED 1987) assertion that “every human being has the right to a clean and safe environment conducive to their health and well-being” and pioneered in Principle 1 of the 1972 Stockholm Declaration on the Human Environment (United Nations 1973a) is not limited to living generations of human beings. The Brundtland Report therefore emphasized the need to “ensure that the environment and natural resources are conserved and used for the benefit of present and future generations” (WCED 1987: 43). For similar reasons, article 49 of the United Nations Guidelines for Consumer Protection provides that sustainable consumption “includes meeting the needs of present and future generations for goods and services in ways that are economically, socially and environmentally sustainable” (United Nations 2016). While a South African court in BP Southern Africa v MEC for Agriculture (2004) referred to “the principle of intergenerational equity” as one of the bases for sustainable development, it is equally one of the reasons the environment is considered a critical stakeholder in CSR. As the International Court of Justice noted in Legality of Threat or Use of Nuclear Arms (2006: [28]), the environment “is not an abstraction but represents the living space, the quality of life and the very health of human beings, including generations unborn.” An emergent line of cases, including Urgenda Foundation v The Netherlands (Ministry of Infrastructure and Environment) (2015), Juliana v United States of America (2016), Greenpeace Nordic Association v Norway Ministry of Petroleum and Energy [2016], points to the need for the promotion of intergenerational equity by social actors like corporations.

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Institutional Voids and Contextual Equity

The promotion of stakeholder equity may be particularly problematic in “institutional voids” (Husted 2015) which exist where rules are weak or inadequately enforced. This can be due to when institutions, particularly governmental agencies, lack the capacity, resources, or willingness to effectively initiate, implement, and enforce provisions that promote stakeholder equity. In places of institutional voids, multinational enterprises and other corporations may be able to avoid international best standards in the treatment of vulnerable stakeholders such as employees, consumers, and residents of host communities and in their interaction with political and administrative institutions. If stakeholder equity is not an integral component of CSR, such corporations can easily escape responsibility by referencing relatively weak rules and standards. A related issue for stakeholder equity is when corporations operate in different jurisdictions and may be expected to acknowledge localized values, sensitivities, and needs as captured within the notion of “glocalization.” On the one hand, the notion of institutional voids highlights the need for universalization of standards for the promotion of stakeholder equity. On the other hand, the CSR discourse now accepts a contextual analysis of stakeholder equity matters since a one-size-fits-all approach of universalism may sometimes be unsuitable, particularly for countries at different stages of development (Osuji and Obibuaku 2016). It is for this reason that CSR can be “informed [by] each country’s political, economic, and cultural context, as well as by existing relationships between business, government, and civil society” (Ho 2013: 388). The disparity between countries is one of the reasons for challenges to the neoliberal orientations of the international economic law and international investment law. These areas of law, largely designed and dominated by the more developed countries (Chimni 2012, 2017; Miles 2013; Linarelli et al. 2018), are heavily influenced by neoliberal ideas such as free trade and liberalization championed by the World Trade Organization, the International Monetary Fund, and the World Bank (Babb and Kentikelenis 2018). They appear to provide for a system of “winners and losers” through “rules [that] determine who will benefit, who will lose and, perhaps more importantly, who will adapt to whom so as to render the policy goals of trade and investment rules most efficacious” (Perrone and Schneiderman 2019: 446). Juxtaposed with the Capability Approach (Sen 1999, 2004) and its emphasis on access to opportunities and resources and ability to make informed choices and achieve valued objectives, a neoliberal international economic system is clearly problematic for stakeholder equity. Consequently, objections to the international economic and investment laws expressed within the auspices of the United Nations include the General Assembly Resolution 3171 (United Nations 1973b), the Declaration on the New International Economic Order (United Nations 1974a), the Charter of Economic Rights and Duties of States (United Nations 1974b), and the Declaration on the Right to Development (United Nations 1986). Likewise, the Third World Approaches to International Law (Chimni 2006; Natarajan et al. 2016) and critical international

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political economy (Perrone and Schneiderman 2019) are scholarly attempts to challenge the neoliberal foundations of the international economic and investment laws and their roles in creating and sustaining disparities and inequalities, including between the Global North and the Global South. Against the backdrop of the calls for “real justice” (Hickel 2017) in the global economy, the rules of international economic and investment laws may not provide a defense to expectations on corporations to tackle stakeholder equity issues wherever they operate, particularly in institutional voids. This may explain why corporations are increasingly expected to exercise their power and influence to ensure that their corporate group members, supply and purchasing chains, affiliates, and other business partners adhere to equity standards in their dealings with stakeholders such as employees, consumers, host communities, and governments (Amaeshi et al. 2008). A line of cases, including Lovenheim v Iroquois Brands (1985), Nike v Kasky (2002), Lidl lawsuit (2010), and Auchan litigation (2015), originated from perceptions that the relevant corporations failed to address stakeholder equity issues. The fact that the twin company law concepts of corporate personality and limited liability would normally insulate the corporations from responsibility was largely irrelevant in the stakeholder demands. In other words, there are expectations that corporations should exercise a leverage-based responsibility that “arises from an organization’s ability to influence the actions of other actors through its relationships, regardless of whether the impacts of those other actors’ actions can be traced to the organization” (Wood 2012: 64). This CSR approach is gaining traction even in regulation going by the transparency provisions in the California Transparency in Supply Chains Act of 2010, the UK Modern Slavery Act 2015, and Australia’s Modern Slavery Act 2018. Since the universalization of rules may not be an excuse for lack of stakeholder equity, a globalization versus localization debate exists. Robertson (1995) observed the “tendency to cast the idea of globalization as inevitably in tension with the idea of localization.” Equity can be promoted when glocalization is applied to provide for the protection of both local values and ways of life and the “planetary common good” (Goffman 2020: 48–49). This may explain why the Brundtland Report (WCED 1987) recognized the need for balancing the global concern for environment protection with the need for sensitivity to local needs and priorities such as poverty alleviation in some developing countries. More recently, the Declaration of the Sustainable Development Goals 2015 emphasizes the importance of appropriate glocalization that promotes equity. While paragraph 1 of the Declaration proclaims its objective of global standards, paragraph 22 stresses that “[e]ach country faces specific challenges in its pursuit of sustainable development” and paragraph 63 suggests that “each country has primary responsibility for its own economic and social development.” Furthermore, paragraph 56 of the Declaration refers to the need for recognizing “different national realities, capacities and levels of development and respecting national policies and realities” while paragraph 59 acknowledges that “different approaches, visions, models and tools available to each country, in accordance with its national circumstances and priorities.”

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•Multiple stakeholder framework •Recognition of competing stakeholder interests •Non-exclusivity of shareholder interest •Balancing of interests •Lower priority for proit maximization •Fair treatment of stakeholders

•Social contract •Fair treatment •Social justice •Society and public interest •Little room for selfinterest •Protection of the vulnerable •Fairness Stakeholder Model

Equity

CSR Approaches

Regulation

•Ethical •Political •Integrative

•Beyond neoliberalism •Beyond voluntarism •Beyond self-regulation •Institutional theory •Co-regulation •Beyond business case •Enhanced disclosure •Stakeholder participation •Accountability •Enforcement

Fig. 1 Equity and Regulation

An equity-based approach may involve glocalization which requires that the existence of global standards and principles should not unnecessarily displace local needs and interests. Likewise, Sadurski (2004: 154) suggested the need for universalism that can “create a template which can be applied only if we infuse them with the factual circumstances of a given society[and] of its own patterns of disadvantage.” (Fig. 1).

3

Regulating CSR to Promote Stakeholder Equity

As discussed in the Introduction above, the institutional theory shows that institutions, including regulatory institutions, determine or influence the behavior of corporations and other social actors. It then suggests that the regulatory framework is crucial in determining the extent to which corporations may be willing to promote equity in their interactions with stakeholders in the wider responsibility approach of

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CSR. A suitable regulatory framework is necessary since, as the conflict theory suggests, corporate managers may be opportunistic and selfish (Gautier and Pache 2015; Osemeke and Adegbite 2016), particularly when stakeholders compete against one another for resources of corporations (Ford and Hess 2011). One of the findings of the agency problem by the agency theory studies is that the interests of corporate “insiders” like managers, directors, and shareholders may be different and possibly conflict with those of other stakeholders (Roe 2000; Enriques et al. 2017b). Being that the corporate insiders control the decisions and activities of the corporations, they may choose to ignore other stakeholders and may act contrary to the interests of those “corporate outsiders.” The question then is how regulation can ensure that CSR practices promote stakeholder equity as underlined by the social contract theory and the stakeholder theoretical model. CSR is traditionally influenced by voluntarism (CEC 2001, 2011; Wettstein 2012; Osuji 2015), including the proposition that CSR relates to “actions [which] basically are voluntary, that is they go beyond what is legally required” (Dam and Scholtens 2012). Voluntarism has, in turn, inspired the “voluntary by definition” (van Marrewijk 2003: 102) approach to CSR projected in definitions such as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (CEC 2001) and “a discretionary allocation of corporate resources toward improving social welfare that serves as a means of enhancing relationships with key stakeholders” (Barnett 2007: 807). Similar definitions of CSR include a “voluntary corporate commitment to exceed the explicit and implicit obligations imposed on a company by society’s expectations of conventional corporate behavior” (Falck and Heblich 2007: 247) and “a firm’s voluntary actions to mitigate and remedy social and environmental consequences of its operation” (Fransen 2013: 213). Nonetheless, a challenge to the effectiveness of voluntarist CSR in addressing stakeholder equity is its reliance on pure self-regulation. The political and economic ideology of neoliberalism is implicit in the voluntarist approach being that it signposts self-regulation of CSR by corporations and other market forces. For example, in defining CSR as “the voluntary action businesses take over and above legal requirements to manage and enhance economic, environmental and societal impacts” (DBIS 2014: 3), the UK Department for Business Innovation and Skills prioritized corporate self-regulation. While neoliberalism seems polysemic, its main elements are free market capitalism and minimal governmental interference in business affairs (von Hayek 1948, 1973; Doherty 2007). In neoliberalism, the “motion of rights is to push away from – against others, against the state, against incursions, limitations, or encroachments upon our autonomy” (Brown 1995: 158). The emphasis on individualism and autonomy in its laissez-faire economic theory puts neoliberalism in conflict with the social contract theory and its proposition of fairness and fair treatment of segments of society, including stakeholders. While there may be some socioeconomic benefits associated with neoliberalism (see Fukuyama 1992), inequalities and unfair treatment of vulnerable sections of society are major concerns (Deneen 2018; Dallmayr 2019). Neoliberalism is implicated in a “global governance that can and do sustain and perpetuate global

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economic and geopolitical asymmetries and social hierarchies” (Tan 2019: 299). A good illustration is the case of Lochner v New York (1905) where the US Supreme Court invalidated regulations aimed at protecting the health and safety of workers and the public. Stakeholder equity concerns prompted latter cases such as Nebbia v New York (1934) and West Coast Hotel Co. v Parrish (1937) to overrule Lochner and its neoliberal foundations. At best, equity therefore receives a modest consideration in neoliberalism. It is not a coincidence that one of the well-known CSR objectors, Milton Friedman, is often cited in connection with neoliberalism (see Friedman 1962; Friedman and Friedman 1980). While challenging the analytical basis for “social responsibilities of business” Friedman (1970) described CSR as a “fundamentally subversive doctrine” and a “collectivist doctrine” that preaches “pure and unadulterated socialism.” Posner (2007: 422), another CSR critic, submitted that “in competitive markets, a sustained commitment to any goal other than profitability will result in the firm’s shrinking, quite possibly to nothing.” The emergent alternative to voluntarism regards CSR as a governance and regulatory mechanism while locating it within the concept of institutions as propositioned by the institutional theory. Brammer et al. (2012: 7) accordingly submitted that “[r]ather than seeing CSR purely as a realm of voluntary action, institutional theory suggests seeking to place CSR explicitly within a wider field of economic governance characterized by different modes including the market, state regulation and beyond.” The European Commission equally noted that “[c]ertain regulatory measures create an environment more conducive to enterprises voluntarily meeting their social responsibility” (CEC 2011: 3). In confirming a shift away from pure voluntarism, the Commission revised its definition to “the responsibility of enterprises for their impacts on society” (CEC 2011: 6). Consequently, CSR can undertake governance roles and be applied as a regulatory tool to address stakeholder equity issues (Osuji 2015). The backdrop is that the capacity to regulate is not exclusive to government and regulation can refer to the formal and informal rules of public and private institutions (Aßländer and Curbach 2014; Saurwein 2011). It is noteworthy that the G20/OECD Principles of Corporate Governance stress the importance a mixed method approach involving “legislation, regulation, self-regulatory arrangements, voluntary commitments and business practices that are the result of a country’s specific circumstances, history and tradition” (OECD 2015: 13). This suggests that CSR should not be left to pure self-regulation by corporations. There is a growing realization that “the question of the state’s role in advancing CSR is not whether governments will address this new policy arena but why, how, and with what effect” (Ho 2013: 375–376, 428). As acknowledged in the concept of orchestration (Schleifer 2013), regulations by governments and public agencies (Fox et al. 2002; Vogel 2005; McBarnet 2007; Albareda et al. 2008; Ward 2008; Ho 2013; IOB 2013) can assist in setting out CSR priorities and agendas and shaping and guiding corporate practices for the advancement of stakeholder equity. In other words, this approach to CSR involves co-regulation, which is a combination of regulatory intervention by public agencies and self-regulation by corporations and

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other private actors. Co-regulation is encapsulated in the concept of “relational state” (Gunningham 2008: 118; Ho 2013: 393–395). Co-regulation enables CSR to act as the “formal and informal ways in which business makes a contribution to improving to improving governance, social, ethical, labor and environmental conditions” (Visser 2008). It promotes the idea of a shared responsibility for equity for corporations, stakeholders, and sections of society. As Albareda et al. (2008, 35–36) observed, “only if responsibilities are shared in areas of common interest, assuming the active collaboration of all social actors, society itself and enterprise, in collaboration with the state, can today’s social and environmental challenges be met.” This is vital, particularly in institutional voids where legal rules and public enforcement are inadequate for addressing stakeholder equity issues (Johnston 2011; Johnston et al. 2019). In addition to the need for reflecting the stakeholder model, the following are illustrations of how equity can be integrated in a regulatory framework for CSR.

3.1

Beyond Individualism and Business Case

Pure self-regulation in furtherance of a neoliberal approach to regulation does not sit well with the stakeholder equity orientations of CSR. While it is important “to connect the internal capacities for corporate self-regulation with internal commitment to self-regulate” (Parker 2002: 246), the prioritization of stakeholder equity may be difficult in the absence of a regulatory framework since it is clear that “[b] eing lawful is not a choice we make or reject simply on our own [and y]ou can volunteer to avoid acting ethically, or to avoid even thinking about the topic” (Preston 2010: 259–2660). Consequently, “regulatory and other systems need to be designed to provide evidence of business commitment to ethical behavior, on which trust can be based” (Hodges 2016: 3). Stakeholder equity is more likely to be promoted if an instrumental or business case approach to CSR is avoided (Osuji 2011; Poruthiyil 2013). Due to the emphasis on an economic cost-benefit analysis in that approach to CSR, stakeholder equity can only be considered if it will have an impact on corporations’ financial performance, including in the longer term. If no such impact is evident, stakeholder equity issues can be ignored notwithstanding their significance and consequences for society and stakeholders. Unlike the individualism and self-interest orientations of the business case CSR, the alternative ethical, political, and integrative approaches to CSR (Osuji 2011; Schaltegger and Burritt 2018; Johnston et al. 2019) may assist in ensuring that “cultural values will shift away from short-term materialism toward a more socially beneficent ethic” (Goffman 2020: 48). The ethical CSR approach, for example, transcends corporate self-interest and references certain values, including the greater good of society and its present and future members. The political CSR encourages corporations to undertake public governance functions, including those that address stakeholder equity issues. The integrative approach justifies CSR on the basis that corporations are an integral part of society and, as such, should selflessly contribute

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to the good of society and its segments. Implicit in the notion of the tragedy of the commons is the issue of equity (Goffman 2020: 49) and the need for selfless contributions of corporations and other components of society for it to function well.

3.2

Enhanced Stakeholder Disclosure

Requirements for enhanced disclosure are necessary for improving the observance and promotion of equity in the conception and practice of CSR. A regulatory framework can encourage disclosure by making it compulsory, by attaching incentives to making disclosures, or imposing penalties for not engaging in it. While it enables corporations to generate, analyze, disseminate, and act on relevant data, enhanced CSR disclosure can play a few roles that can assist in promoting stakeholder equity. The first is the communicative role which is to report on corporate policies and activities and how they respond to stakeholder equity issues. This communicative role is highlighted in the 2011 OECD Guidelines where CSR disclosure is described as “value statements or statements of business conduct intended for public disclosure including, depending on its relevance for the enterprise’s activities, information on the enterprise’s policies relating to [human rights, employment and industrial relation, environment, combating bribery, bribe solicitation and extortion, consumer interests, science and technology, competition and taxation]; policies and other codes of conduct to which the enterprise subscribes, their date of adoption and the countries and entities to which such statements apply; its performance in relation to these statements and codes; information on internal audit, risk management and legal compliance systems; [and] information on relationships with workers and other stakeholders” (OECD 2011: 26[3]). The second role of enhanced disclosure is to facilitate the use of CSR as a regulation method. This arises from the impact of corporate reputation on stakeholders like consumers who may be interested in the equity goals of CSR. It has been noted, for example, that consumers now purchase “not only products, but also shares of responsibility in the moral and ecological economy that produces them” (Kysar 2005: 641). In the first instance, corporate reputation can be regarded as “a collective representation of a company’s past actions and future prospects and describes how key resource providers interpret a company’s initiatives and assess its ability to deliver valued outcomes” (Fombrun 2001: 294). Consequently, the International Organization for Standardization observed that the “perception and reality of an organization’s performance on social responsibility can influence, among other things: its competitive advantage; its reputation; its ability to attract and retain certain workers or members, customers, clients or users; the maintenance of employees’ morale, commitment and productivity; the view of investors, owners, donors, sponsors and the financial community; and its relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates” (ISO 2010: vi).

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A corporation’s reputation can therefore relate to its policies and activities on stakeholder equity. Nonetheless, if there are no regulatory provisions for disclosure, corporations may not be willing to disclose certain matters. Generally, corporations, like everyone else, can remain silent whenever there are no legal provisions to compel them, especially when they consider disclosures as potentially damaging or embarrassing to their reputation. In Hamilton v Allied Domecq Plc (2007: [20]), a UK court pointed out that “a failure. . . to speak might be regarded as morally questionable [but] that is different from. . . a legal duty to speak.” Conversely, corporations may be incentivized to promote stakeholder equity and avoid being seen as socially irresponsible if they are required to disclose what they are doing in that regard. The fact is that “[k]nowledge that such [socially irresponsible] conduct will be quickly exposed to the glare of publicity. . . makes it less likely to occur in the first place” (Hargovan 2009: 106). The need for positive CSR reputation is particularly crucial in competitive markets such as those for rival consumer goods where it can be critical to the survival, growth, and success of corporations. It flows this linkage to corporate reputation that enhanced disclosure can play an accountability role. As Bouten et al. (2011: 189) argued, the disclosure of CSR matters “is primarily driven by a desire for accountability.” Disclosure requirements can encourage corporations to promote stakeholder equity and to refrain from socially irresponsible practices (Osuji 2012). This is due to the fact that “the prospect of disclosure will deter reputation-conscious corporate managers from conduct that is likely to attract negative publicity when it is disclosed” (Ferran 2003: 497). It is therefore important to provide for an “effective disclosure system [that] will often be a significant inhibition on questionable corporate conduct” (Hargovan 2009: 106). Disclosure requirements can be a middle-ground approach to regulation of CSR, including the promotion of related equity issues. In contrast to a prescriptive approach, a disclosure-based regulation can be indirect and positively received by some as a more legitimate and less controversial regulatory intervention. The attractiveness is that “rather than the state banning the conduct – a step that could well be highly contentious – all that regulatory intervention in the form of disclosure requirements does is to force managers to make choices about the reputational risks they are prepared to take” (Ferran 2003: 497).

3.3

Stakeholder Participation

To promote equity, it is important that there are provisions for enabling and encouraging stakeholder participation in the CSR processes and procedures. The stakeholder participation in CSR-related matters such as environment protection is highlighted by principle 23 of the World Charter for Nature adopted in the General Assembly Resolution n.37/7 of 28 October 1982. Likewise, principle 10 of the Rio Declaration (United Nations 1992) provides that: Environmental issues are best handled with the participation of all concerned citizens, at the relevant level. At the national level, each individual shall have appropriate access to

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information concerning the environment that is held by public authorities, including information on hazardous materials and activities in their communities, and the opportunity to participate in decision-making processes.

Nonetheless, providing for stakeholder participation in the regulatory framework will leave little room for the shareholder primacy corporate governance model. As noted above, the shareholder primacy model recognizes only the interests of shareholders as worthy of consideration, especially when a corporation is solvent, and, as such, excludes other stakeholders from the corporate governance structures and procedures. Stakeholder participation can improve regulatory outcomes and assist in addressing equity issues for segments of society. For example, a comparative study traced the relatively advanced social welfare systems of Western Europe and Latin America to regulatory provisions for programmatic participation of community stakeholder groups through monitoring and policymaking (Falletti and Cunial 2018).

3.4

Accountability and Enforcement

To promote equity, it may be necessary to include stakeholder enforcement powers in accountability provisions. These provisions can include a range of substantive and enforcement rights such as monitoring, inspection and verification, complaints to administrative agencies, statutory torts, and access to judicial redress and remedies (Osuji 2015). Of particular note in promoting stakeholder equity is the linkage between justice and access to judicial redress. It is instructive that one of the goals of the Sustainable Development Goal as stipulated in Principle 16 is to “promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable institutions at all levels.” Provisions for litigation and private remedies can control the behavior (Funk 2011) of social actors, including corporations, and are thereby potentially capable of enabling stakeholders to undertake regulatory roles with the objective of promoting equity. In the case of CSR disclosures, for instance, accountability provisions are critical for ensuring the relevance and promotion of stakeholder equity. The role of accountability is twofold in this regard. On the one hand, there is the need for legally enforceable measures to ensure that corporations undertake CSR disclosures and report on stakeholder equity issues. On the other hand, provisions may be required to encourage accurate CSR reporting by corporations and to dissuade them from defective disclosures by specifying the consequences for noncompliance. A purely voluntary approach to regulation of CSR is unlikely to work along this line due to the prevalence of selective, exaggerated, and even factually misleading disclosures that have no bearing to the relevant corporate policies, activities, and performance. This has triggered persistent allegations of “soft, unverifiable claims” (Clarkson et al. 2008: 309) “and bluewash” (Berliner and Prakash 2012: 151). The European Commission has also acknowledged that voluntary CSR disclosures can

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demonstrate “a gap between citizens’ expectations and what they perceive to be the reality of business behavior” (CEC 2011: 9). To ensure that disclosure is an effective regulatory strategy, it may be useful to provide for credible, and objective measures for evaluating CSR statements and performance (Osuji 2012, 2015). Provisions are also required to ensure that CSRrelated disclosures are visible to stakeholders and other interest groups in forms that are accessible to them. When disclosures are defective due to being inaccurate, incomplete, or misleading, it is important that there are legal consequences that clearly mark out the regulatory position (Osuji 2012). This will facilitate the deterrence, reputational, and regulatory roles of CSR disclosure by connecting corporate statements to what the corporations actually do. In fact, the combined insight from the institutional and stakeholder theoretical models is a potentially strong case for the diffusion of enforcement of regulatory provisions across public and private stakeholders and other segments of society (Osuji 2015). In contrast, a “mere busy body” (R v Inspectorate of Pollution, ex p Greenpeace (No. 2)) (1994) label is given to stakeholders that attempt to enforce rules and standards without references to enabling legal or regulatory provisions even if such are designed to protect the public interest or advance stakeholder equity. In addition to confirming that public and private actors are potentially within the class of “institutions” that can influence the behavior of corporations and other social actors, the institutional theory demonstrates that the nature of rules and their enforcement are equally important factors for such behavior. When enforcement powers are spread across different segments of society through the acknowledgment of the stakeholder model, private stakeholders are likely to be encouraged to act as institutional champions of equity in CSR. This can assist in plugging institutional voids where weak rules and enforcement have little impact on the behavior of corporations and other actors arising particularly when the formal public institutions are unwilling or unable to enforce regulatory provisions. The existence of institutional voids therefore suggests the need for a more expansive approach to enforcement to incorporate the application of the stakeholder model.

4

Summary

This chapter has considered the role of equity and regulation in CSR. The starting point is that the social contract theory is a significant influence on the conception of CSR and coupled with the latter’s stakeholder model foundations would constitute an implicit acknowledgment of equity. Stakeholder equity is particularly relevant in discussions of corporate power and influence, corporate governance, clash between economic and social goals, intergenerational equity, institutions voids, contextualism, and operations of multinational enterprises. While regulation is not antithetical to CSR, the prevalent voluntarist and neoliberal orientations in CSR practice and scholarly definitions encourage self-regulation. Self-regulation may, however, have limited effectiveness in promoting stakeholder

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equity and, as such, there is the need for direct regulation and co-regulation. The chapter draws on the institutional and stakeholder theoretic models to demonstrate different ways stakeholder equity can be integrated and promoted in regulatory arrangements for CSR.

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Corporate Responsibility Reporting and Storytelling Merryn Paynter and Abdel K. Halabi

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 History of Corporate Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Impressions Management and Corporate Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Impressions Management and Rhetoric in Corporate Reporting . . . . . . . . . . . . . . . . . . . . . . . . . 5 Storytelling and Impressions Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The Case of JPM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

130 131 132 133 134 137 139 139 143 145 145

Abstract

This chapter provides an account of corporate social responsibility (hereafter known as “CSR”), through storytelling. CSR reports are becoming more widespread and managers can use stories and narratives in communications about CSR to attempt to manage impressions. The theory related to storytelling is outlined, and this includes impressions management, rhetoric, and the different storytelling descriptions. The chapter applies a deconstructive storytelling approach to the Annual and CSR Report of JP Morgan Chase & Co (hereafter referred to as “JPM”). The narratives used by JPM are examined as an example of how storytelling research is used to study impressions management strategies. As there have been few studies of company reports that link storytelling to CSR practices, this paper makes a useful contribution to an expanding literature, particularly in emphasizing storytelling.

M. Paynter (*) · A. K. Halabi Federation Business School, Federation University Australia, Churchill, VIC, Australia e-mail: [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_63

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Keywords

CSR · Storytelling · Impressions Management · JP Morgan Chase & Co

1

Introduction

This chapter provides an account of corporate social responsibility (hereafter known as “CSR”), through storytelling. In recent decades, corporate reporting about CSR has become an institutionalized practice. A KPMG global survey found that 75% of the 4,900 “N100” companies and 93% of G250 companies issued CSR reports during 2017 (KPMG 2017, p. 4) (N100 companies are the top 100 companies by profit in each of the 49 countries and regions surveyed by KPMG and G250 refers to the world’s 250 largest companies based on revenue as ranked in the Fortune 500 (KPMG 2017)), representing a substantial increase from 1999 when only 24% of N100 and 33% of G250 companies produced these (KPMG 2017). Indeed today the general consensus, among academics and practitioners is that the impact of companies’ operations on society and the environment is a growing concern. Companies need to communicate about being accountable for their actions to retain social acceptance; and corporate reports are corporate accounts of the economic, environmental, and social impact of company operations (Jenkins and Yakovleva 2006). Some commentators claim the uptake of corporate reporting signals that companies have become more proficient at managing their economic, environmental, and social obligations (Hubbard 2009). Critics however argue that for the most part, reports about CSR are public relations tools that serve to manage company reputations (Milne and Gray 2013). CSR reports can also allow companies to obfuscate and greenwash the true nature of business activities (Aras and Crowther 2009). Furthermore, studies have found that the uptake of corporate reporting has not been uniform as some companies produced reports before others (Shabana et al. 2016). As further evidence, the KMPG’s survey, for instance, showed that 7% of G250 companies chose not to report about CSR at all (KPMG 2017). Consequently, there remains strong interest into companies’ motivations for CSR reporting, why they differ and determining the reasons whether the criticisms of CSR reports are justified (Wang et al. 2018). Substantial research have been conducted to understand corporate reporting both as a practice and as a social phenomenon, and these can be categorized according to whether reports are analyzed according to functional (or business case), the social, or the political perspectives. The functional perspective has focused on corporate motivations for the development and publication of reports. These include studying links between corporate reporting and the realization of business goals such as increasing shareholder returns, attraction and retention of talented employees, corporate advocacy, and shared values. The concept of shared values was coined by Porter and Kramer (2006) to describe instances when CSR strategies result in winwin scenarios that benefits both the environment and society and the business by creating wealth and competitive advantages.

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The social perspective has focused on understanding how social pressures have shaped corporate reports and, in particular, investigating the effects of institutional pressures, including pressures from stakeholders, competitors, and government regulators. The social perspective has been applied to understand why some companies commenced producing reporting before others and the measures taken to demonstrate accountability and transparency. These include external assurance certification, as well as the adoption of other third-party endorsements and standards such as the United Nations Global Compact, the Global Reporting Initiative (GRI), and, most recently, the United Nations Sustainable Development Goals (SDG). The political perspective focuses on understanding the different types power associated with corporate reporting. Based on Foucauldian notion that power is established through discourse, this examines how corporations use language to exert hegemonic power and prioritize business interests over environmental and social concerns (Clegg 1989; Spence 2007). Further, the political research perspective critically examines the underlying dominant ideologies in corporate reports through critical discourse analysis and the deconstruction methods, which involves analyzing the underlying meaning of language to understand how storytelling is used to convey meanings and manage impressions (Boje 1995). Interest in the political economy has gained traction in recent years, indicating that this area provides exciting opportunities for further research. The rest of this chapter is outlined in the following manner. Firstly a brief history of the practice of corporate reporting and CSR is presented. This is then followed by the links between impressions management, rhetoric, and the different storytelling descriptions. The case of JP Morgan Chase & Co (hereafter referred to as “JPM”) is introduced as an example of storytelling research, and an analysis is then made of this company’s 2018 Annual and CSR report. Narratives are provided as examples of JPM’s storytelling strategies used in the light of the political perspective focus. The summary then outlines the contribution of storytelling to the literature and also further research opportunities.

2

History of Corporate Reporting

Historically, the practice of corporate reporting on CSR evolved when companies began to produce narratives to accompany their annual financial statements at the start of the twentieth century (Crowther 2018). Prior to the twentieth century, the primary purpose of annual reports was to facilitate the relationship between managers and the owners of a business. From the early 1900s, companies started produce chairman’s statements, directors’ reports, and auditors’ reports to satisfy the demands of accounting regulators and investors (Crowther 2018). There are examples of companies publishing CSR-related disclosures during the early 1900s. Guthrie and Parker (1989), for instance, sourced CSR-related information from BHP’s annual reports dating from the company’s inception in 1885, and Maltby (2004) identified antecedents of CSR reporting in company reports published by

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Hadfields, British companies at the beginning of the twentieth century. Early annual reporting narratives chiefly reviewed business activities (Crowther 2018). From the 1970s, companies began to publish reports that were intended for widerexternal audience beyond its members or potential investors (Crowther 2018). These incorporated more environmental and socially related discourse and placed greater importance on the companies’ image (Crowther 2018). Compared to earlier annual reports, the orientation of annual reporting narratives became increasingly forward looking, while also becoming more disconnected from the annual financial statements (Crowther 2018). This change resulted in corporate reporting narratives becoming progressively more disconnected from the company’s actual performance results. From the 1990s, CSR disclosures were increasingly made in separate sustainability, or triple bottom line (TBL) reports (Beelde and Tuybens 2015). To understand the reasons why companies make disclosures about CSR, it is essential to understand the nature and purpose of CSR reporting and whether these alleviate stakeholder concerns about the impact of organisations on the environment and society. For the most part, companies are not formally obliged to make CSR disclosures (Nikolaeva and Bicho 2011). CSR reports are costly, requiring considerable time and organizational resources to produce (Wickert 2016), and yet CSR reporting has become an institutionalized practice by many of the world’s largest corporations (Higgins et al. 2015). Fundamental questions are asked about the function and company motivations for corporate reports about CSR (Beelde and Tuybens 2015), and in particular, what has motivated companies to commence reporting before others and whether CSR reporting has led to more accountability (Dienes et al. 2016). Companies have argued that CSR reporting serves to enhance reputation, meet investor demands, and fulfill commitments to demonstrate an ethical position to stakeholders (Dando and Swift 2003). Critics however express concerns that CSR reporting is disingenuous and only serves to obfuscate the real effect of corporate activity on the external environment (Aras and Crowther 2009). Milne and Gray (2013) contend that CSR reporting may lead to greater levels of unsustainability because they lack reliability or credibility. CSR disclosures have also been dismissed as virtue signaling, which refers to moralistic statements made by either individuals, governments, or companies for the sake of garnering approval and can be dismissed as a form of vanity (Shariatmadari 2016). Other criticisms arise from concerns that companies’ CSR reporting practices and CSR-related business strategies are driven by desires to pursue moral legitimacy, manage stakeholder perceptions and mask misconduct (Wang et al. 2018), and greenwash the company’s image (Seele and Gatti 2017; Siano et al. 2017).

3

Impressions Management and Corporate Reporting

Companies use disclosures about CSR to manage impressions in company reports (Sandberg and Holmlund 2015). Impressions management is concerned with how individuals and organisations “present themselves to be perceived favorably by

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others” (Hooghiemstra 2000, p. 60), and the function is to actively shape the stakeholders perceptions of company’s image (Bansal and Kistruck 2006). Goffman (1959) is credited for establishing impressions management as a sociological theory. Goffman (1959) viewed people as actors that engage in performances in various settings before audiences and actors select behaviors that will make the most desirable impression. Goffman’s dramaturgical perspective of social interactions has been used to analyze how impressions are formed. According to Goffman, the characteristics and behavior of the actor and the audience, combined with other stimuli such as physical settings and organizational culture, affect how impressions are formed (Gardner and Martinko 1988). For corporate reports, physical stimuli are derived from the visual appearance of reports, including the physical layout and structure, the appearance and placement of photographs, color palettes, charts, and font sizes (Hrasky 2008). When a company image is shaped in a way that is consistent with social values, the organization can build stronger stakeholder relationships and enhance corporate reputation (Bansal and Kistruck 2006). Corporate reputation is an intangible asset that adds value by enhancing customer satisfaction and loyalty, aiding in employee attraction and retention, and enhancing the firm’s bargaining power and ability to attract the best professional service providers, raise capital on equity markets, and assist with preserving legitimacy following a crisis (Dowling 2002). Thus, impressions management strategies involving CSR disclosures can improve the company’s overall image, not just its CSR reputation. Unsuccessful or deceptive efforts to boost corporate images can undermine corporate reputations and erode CSR legitimacy (Hooghiemstra 2000). Harmful impressions management strategies can manifest in many forms and result in CSR reports being dismissed as hollow self-presentation devices, in which disclosures are self-attributional, and as greenwash (Thummes 2018). Thus, attention toward impressions management and CSR has increased considerably in recent decades, with the majority of research focusing on rhetorical strategies and tactics, but some attention has been directed toward visual strategies and multimodal impressions management strategies and semiotics (Hossain et al. 2018).

4

Impressions Management and Rhetoric in Corporate Reporting

Rhetorical communications refers to the use of persuasive language to win over an audience. Studies into rhetoric draw upon political economy theories of CSR to enhance understanding of CSR disclosures and can be used to analyze how textual language is used to manipulate how others perceive company activities (Ihlen et al. 2011; Ellerup Nielsen and Thomsen 2007). Studies of rhetorical strategies have focused on how CSR discourse can be persuasive, but also hegemonic, and serve to maintain the ideological power of dominant groups within society (Spence 2007). Rhetorical language can appear in many forms, including vocabulary, grammar, and different argument types (Hossain

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et al. 2018). Rhetorical strategies in CSR discourse serve to present organisations in a favorable light, regardless of CSR practices, or past realities (González-González et al. 2019), and rhetorical theory can be used to explain how and why companies communicate about CSR in the way they do (Ihlen et al. 2011). CSR rhetoric is sometimes used to counter the negative impact of crises (Lindgreen et al. 2009). Until the early 2010s, the amount of literature on rhetoric and CSR was relatively scant (Ihlen et al. 2011). One of the few examples was a study by Neu et al. (1998) which reviewed environmental disclosures in the annual reports of 33 publicly traded Canadian corporations between 1982 and 1991. Studies of rhetorical language in CSR disclosures have mostly originated from Northern European countries, and in particular Denmark, Germany, and Norway (Morsing and Schultz 2006; Ellerup Nielsen and Thomsen 2007; Wehmeier and Schultz 2011; Ditlev-Simonsen and Wenstop 2011; Ihlen et al. 2011). In more recent times, the number of studies and investigations into the use of rhetoric in CSR communications has broadened into other organizational research disciplines (Vollero et al. 2018; GonzálezGonzález et al. 2019). It is important to understand the role of persuasion in the way that corporations address sustainability in company reports and the link between storytelling and impressions management.

5

Storytelling and Impressions Management

Managers use stories and narratives in communications about CSR to attempt to manage impressions through a practice known as organizational storytelling (Auvinen et al. 2013). Organizational storytelling is the “collective storytelling in which the performance of stories is a key part of members’ sensemaking and a means to allow them to supplement individual memories with institutional memory” (Boje 1991, p. 106). Sensemaking refers to the ongoing retrospective cognitive process where people give meaning and interpret new information, events, and actions (Weick 1995). Weick (1979, p. 5) summarized the power of organization storytelling as: Organisations are often reluctant to admit that a good deal of their activity consists of reconstructing plausible histories after-the-fact to explain where they are now, even though no such history got them precisely to this place

Weick (1979) draws attention to the power of organizational storytelling as a communications and public relations tool, and in particular, how storytelling can be used to reconstruct historical events to create favorable impressions about the company’s past and justify current corporate actions and strategies. Successful organizational storytelling allows companies to control how individual members and stakeholders make sense of new information to help them determine a course of action, or strategy.

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Stories are powerful communication tools because they can elicit emotional and personal responses from readers and may be delivered through a myriad of presentations and styles (Polkinghorne 1988). Companies use different types of media to convey stories including, but not limited to corporate annual reports, company websites, letters, advertising (i.e., print and other channels such as television, billboards, YouTube, etc.), social media pages on Twitter, Instagram, and Facebook, as well as testimonials and editorials in print media such as newspapers or business periodical magazines. Organizational storytelling has been applied to different areas of organizational research, not limited to strategy and leadership (Barry and Elmes 1997), knowledge and learning (Brown and Duguid 2000; Dalkir and Wiseman 2004), and organizational change (Boje 1991, 1995; Weick 1995; Rhodes and Brown 2005; Boje et al. 2016). However, organizational storytelling has not yet been applied as a theoretical lens for analyzing the CSR discourse in corporate reports. Storytelling theory provides a new avenue for corporate reporting and impressions management research. According to Rosile et al. (2013), there are six separate paradigms for storytelling research. Of these six, the most applicable paradigm to analyze corporate reporting of CSR and impressions management is the interpretivist paradigm. The interpretivist paradigm is social constructivist and “looks at patterns of deeper subjective, deconstructing narrative representations, looking for underlying semiotic structures, formalist functions” (Rosile et al. 2013, p. 561). Storytelling research allows for the analysis and evaluation of a range of impressions management strategies as many textual and visual types of organizational stories and storytelling strategies exist in corporate reports. Storytelling research also provides a means to understand how impressions are created in company reports about CSR through the deconstruction of stories that provides an opportunity to challenge the voice, ideas, types and styles, ideologies, and plots (Boje 2001). Unpacking these elements provides some indication of the extent that CSR has been integrated into company narratives but also provides an opportunity to discover how CSR discourse strategies respond to different circumstances. In particular, deconstructive storytelling research on the reporting of CSR can prove to be enlightening when details have been omitted from company reports. For example, the story told by a company that publishes a separate CSR report and yet omits CSR from the annual report is that CSR is has not been integrated in the business and is regarded as a peripheral activity independent from core activities (Yuan et al. 2011). Further, the way that companies report on CSR before or after a major event or a crisis situation can also raise a number of questions about corporate attitudes toward CSR. If the company reports on a series of new CSR initiatives introduced following a major reputational crisis, the implied story suggests that CSR is being used to manage public relations, rather than a genuine attempt to improve the company’s environmental and social accountability performance. Strategic narratives are those that describe the company’s goals and aspirations and the incorporation of CSR provides another indication of the integration of CSR into organizational storytelling (Yozgat and Karataş 2011). Theoretical explanations

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about strategic narrative storytelling were advanced by Barry and Elmes (1997) who explored how companies used language to influence stakeholders’ sensemaking about new strategies and persuade others toward to engage in actions. Strategic narratives may exist in corporate reports as mission statements, or value statements, but can also appear in Chair or CEO letters to shareholders, or as captions accompanying report headings and graphics. Barry and Elmes (1997) referred to three of Mintzberg’s ten strategic management schools: design, planning, and positioning schools, (Mintzberg’s 10 strategic management schools: design, planning, positioning, entrepreneurial, cognitive, learning, power, cultural, environmental, configuration (Mintzberg 1994)) and corporate strategic frameworks developed by Miles et al. (1978) (Miles et al. (1978) corporate strategy: organisations should position their strategies and processes within their markets as either defenders, prospectors, or analyzers, while avoiding becoming reactors.) and Porter’s (1980) five forces of competition (Porter’s five forces model: (1) bargaining power of suppliers, (2) bargaining power of buyers, (3) threat of substitutes, (4) threat of new entrants, (5) industry rivalry (Porter 1979) to explain company motivations for different types of strategic narrative storytelling strategies. Stories can be classified according to key characters, actions, motivations, and settings (Humphreys and Brown 2008), as well as story types (Boje 2008). For instance, stories often identify a protagonist who is either described as the leading character or as an advocate of a particular cause (Gabriel 2000). Gergen and Gergen (1987) classified stories according to the sort of change the protagonist undergoes in relation to a goal. Protagonists can also be passive, or be portrayed as an active agent. Protagonists’ predicaments can also be depicted as deserved, or fortuitous (Gabriel 2000). Aristotle outlined four types of stories; the comedy, tragedy, Greek romance, and the hero’s journey (Aristotle 2013; see also Gabriel 2000). Aristotle’s (2013) story types, sometimes referred to as poetic modes, are used to describe different story classifications, with each type employing different characteristics through which meanings are established from events. Once identified, story types can provide clues about the intended meanings being conveyed in corporate communications, including CSR reports (de Jong and van der Meer 2017). For instance, Chair/CEO’s letters occasionally referred to heroic deeds, describing how the company or their personal actions have “saved the day.” Meanwhile Greek romantic ideals such as misfortune overcome by love through philanthropic or social initiatives may be conveyed in a case study. A tragedy may describe undeserved misfortune, or trauma such as a workplace fatalities, environmental disasters, or company-/industry-wide crises. Finally, a comedy conveys a story about an unpredictable circumstance, misfortune, and deserved chastisement (Gabriel 2000). Another type of story type identified is the founding narrative. This refers to the company’s foundation or history and can sometimes be told using “journey” metaphors. For example, Boje (2008) discussed how Wal-Mart has periodically incorporated variations of this. Czarniawska (1998) described founding narratives as being examples of “petrified narratives” and referred to these as being like examples of historical artifacts that are preserved in the organization’s reality because they are continually being retold.

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Story type classifications have predominantly been used to analyze organizational change but not corporate reporting. For example, Boje (1991) studied story performance at an office-supply firm to determine how organizational participants made sense of change and gain political advantage. Another contribution by Boje (1995) examined Walt Disney as a storytelling organization to understand why some stories became dominant, while others about the darker side of Disney were marginalized and excluded. Boje and Rhodes (2006) examined the portrayal of McDonald’s clown, Ronald McDonald as a transformation leader. Boje et al. (2016) also used story types to study the microstoria of organizational change at Burger King. Storytelling research can also be useful for analyzing different stylistic strategy stories and visualization strategies in corporate reporting. Stylistic strategy stories convey meaning through representations and may incorporate “triple narratives” (Boje 2008, p. 105). The first narrative expresses the “facts,” the second uses photos, charts, and testimonials, while the third refers to the implied meanings from the reports, drawn from the thick empirics, or the deeper meanings from the text along with the superficial meanings. Boje (2008) illustrated how stylistic strategy storytelling theories can be applied to organizational research by relating them to a case study that described how the fast food restaurant chain McDonalds presented different images, such as how the stylistic appearance of McDonalds in France were different to other countries. Boje (2008) also explored the instrumentality of stylistic strategy stories and how companies’ misuse of these can lead to accusations from stakeholders that the company is being insincere. In summary, the different types of storytelling research can be used to conduct a multimodal analysis of corporate reports. A guide of the storytelling elements is provided in Table 1. This will be used to review JPM’s 2018 Annual Report and Sustainability Reports to illustrate how storytelling can be used to analyze corporate reporting.

6

The Case of JPM

JPM is the world’s largest bank by capitalization. In 2018, the bank earned a net income of $32,474 million (US); it held assets of $2.6 trillion (US) and had operations worldwide (JP Morgan Chase and Co 2018a). As the world’s largest bank, JPM has attracted considerable interest in CSR literature. Feldner and Berg (2014), for example, analyzed the rhetorical strategies in the company’s 2012 CSR report as part of a study of 15 US companies. Referring to Aristotle’s 3 types of arguments, pathos, logos, and ethos, Feldner and Berg (2014) found all 15 companies (including JPM) relied upon logos reasoning the most and provided concrete examples of the CSR performance. Lauesen (2013) was critical of JPM’s CSR performance history, noting the company had invented a way to reduce loan risks through trading of credit default swaps (CDS), a high-risk lending market, which triggered the Global Financial Crisis. Scholtens (2009) compared CSR between 30 international banks and found significant differences among companies, countries, and regions. Between 2000 and 2005 JPM’s CSR

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Table 1 Storytelling research guide Strategic narratives, narrative, and visual storytelling strategies Strategic narratives

Story types

Category Integration of CSR in strategic narratives

Hero-epic

Comedic

Tragedy

Romance

Foundation narratives

Foundation and petrified narratives

Metaphors and idioms

Visual storytelling

Photographic images

Color and font sizes Charts

Description Exclusively referred to business strategies without any reference to CSR. Exclusively referred to CSR strategies without references to business matters. CSR strategic objectives incorporated in strategic narratives but stated after business strategic goals. CSR and business-related goals are fully integrated Protagonist as the hero. Centers around battles won, disaster averted, missions accomplished, challenges met, and crises resolved through great acts of courage Protagonist as a deserving victim or fool. Stories describing misfortune, ridiculousness, or calamities that are designed to generate mirth and amusement. Used to describe the protagonist as the survivor, humorist, and for stories that describe organizational misfortunes as an absurd farce Protagonist as undeserving victim. Tragic stories discuss the unintended consequences of human actions. Tragedy generates feelings of compassion, anxiety, and pity. Victimhood where identities are constructed around the injustices done. Tragic-comic stories: The use of witticisms to make light of a predicament The subject as the love object. Sentimentality, nostalgia, gentle, and tender in tone. Plots of romantic stories revolve around tokens of love, giving and receiving of gifts, gratitude, and appreciation A narrative that refers to the company’s foundation, or history Analogies, clichés, or a group of commonly used words and phrases. Examples include references to journeys, games and sports, as well as warfare and battles Camera position: camera angle up or down, proximity of camera to subject (close or far), pose/ stance of individual in photograph. Usually in an environmental setting Brighter colors used for positive results/less eyecatching colors used for negative results Differences in the portrayal of positive compared against adverse results

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performance had significantly improved in relation to its codes of ethics, sustainability reporting, and environmental management systems; environmental management; responsible financial products; and social conduct (Scholtens 2009). This paper analyzed the JMP Annual Report and Corporate Responsibility report for 2018. These reports were obtained and downloaded from the JPM website at www.jpmorganchase.com. NVivo was used to code information according to themes or categories that help with the qualitative inquiry process (McGraw and Dabski 2010). This coding is regarded as the critical link between data collection and the explanation of meaning (Charmaz 2008). MS Excel was then used to analyze the narratives (Saldaña 2015) on the basis of storytelling themes and characteristics in the literature according to the themes outlined in Table 1.

7

Results

The first observations made from JPM’s Annual and CSR report were that the page lengths were considerably different. The Annual Report contained 300 pages, while the CSR report was 41. Of the 300 pages in the Annual Report, 68 included narrative content, while the remaining provided the financial reports and notes. The company’s corporate governance report is included within the financial report, along with a risk management report (being for enterprise risks, strategic risks, credit risks, market risks, country risks cybersecurity, fraud and insurance risks, staff conduct, legal risks, business continuity, and stress). A notable omission is the remuneration report, which typically provides details of monetary payments for board members and senior executives, including performance bonuses and criteria. This is interesting given that CSR-related performance bonuses can provide some indication of the degree to which CSR has been integrated into the business (Kolk and Perego 2014). Analysis was undertaken on the types of storytelling approaches used, and Table 2 provides a summary these under the headings of Strategic Narratives; Story types; Foundation Narratives; and Visual Storytelling. Narratives and examples of these are provided under the “Descriptions.”

8

Discussion

This deconstruction of JPM’s Annual and CSR report has revealed a number of storytelling strategies and attributes that provide some clues of the degree that CSR has been integrated into the business, and how storytelling about CSR is used to manage impressions. Table 2 shows seven principles and strategies are provided that focused on CSR matters. This indicates that CSR is well integrated into the businesses strategic narratives, with equal emphasis placed on both business and CSR matters. In particular strong emphasis was placed on servicing customer needs and less on

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Table 2 JP Morgan Chase Storytelling Strategic narratives, stories, and storytelling strategies Strategic narratives

Story types

Category Integration of CSR in strategic narratives

Hero-epic

Comedic Tragedy Romance

Description JPM provided principles and strategies in the following order: 1. First and foremost, we look at our business from the point of view of the customer 2. We endeavor to be the best at anything and everything we do 3. We will maintain a fortress balance sheet – and fortress financial principles 4. We lift up our communities 5. We take care of our employees 6. We always strive to learn more about management and leadership 7. We do not worry about some issues Extensively employed throughout the CEO letter and accompanying commentary from other senior executives in the Annual Report to describe the company’s accomplishments and resilience in the face of adversity The following provides an example of a hero-epic story type from JPM’s annual report that describes the company’s achievements despite experiencing challenges in delivering services to clients, communities, and countries: “As I look back on the last decade — a period of profound political and economic change — it is remarkable how much we have accomplished, not only in terms of financial performance but in our steadfast dedication to help clients, communities and countries all around the world.” (JP Morgan Chase and Co 2018a, p. 2) None None Although there is some evident in narratives about the company’s social welfare programs and philanthropic contributions, when describing the delivery of services to clients. For example the following from the annual report provides an example of a romantic story type: “The new branches will enable us to better serve our customers, offer more good jobs and deliver on expanded lending and philanthropic commitments in our communities.” (JP Morgan Chase and Co 2018a, p. 3) This is considered an example of a romantic story type because it describes giving and offering services and honoring commitments to communities However the majority of narratives are delivered using the more decisive language evocative of hero-epic story types to describe missions accomplished and goals achieved (continued)

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Table 2 (continued) Strategic narratives, stories, and storytelling strategies Foundation narratives

Category Foundation and petrified narratives

Metaphors and idioms

Visual storytelling

Photographic images

Color and font sizes

Charts

Description None, but he CEO letter provided an extended retrospective commentary that commemorated the 10year anniversary of the Global Financial Crisis, the collapse of subprime lending, and the collapse of large financial institutions, Barings Bank and Lehman Brothers. The commentary piece was used to reiterate the resilience and strength of JP Morgan Chase and Co in the face of significant challenges and adversity ‘Doubling down’ “Our model for impact has yielded real results so we are doubling down on our commitment to drive inclusive growth and expanding the number of people and places we reach. JPMorgan Chase launched AdvancingCities — our largest, most comprehensive corporate responsibility initiative to date to invest in solutions that bolster the world’s cities and the people within them.” (JP Morgan Chase and Co 2018b, p. 67) Doubling down is a gambling term that relates to the game of blackjack and taking a risk (Koller 2004) Photograph of Chair/CEO is a close up “head-shot” taken from a horizontal angle within an open-plan office setting. Other company executives are all male, except for one female, and are all wearing formal business attire. The majority of photographic images accompanying CSR narratives about social initiatives show people in workplace settings The company’s blue brand theme colors are evident throughout the annual report, but the cover of the CSR report features the images of mosaic mural art produced by a Maryland-based nonprofit mosaic studio (JP Morgan Chase and Co 2018b) Charts show only positive business performance trends. Tables and symbols are also used extensively to present performance results. The inside cover page of the annual report provides tabularized report of the bank’s financial highlights for the 2018, 2017, and 2016 financial years (JP Morgan Chase and Co 2018a). The second page of the annual report shows 12 simplified symbolic images accompanied by captions that draw the reader’s attention to different areas of business financial success and CSR achievements, including the financing of 20,000 affordable housing for low income families and $500 million for the AdvancingCities Initiatives

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generating profits (see Table 2 where it is stated that “First and foremost, we look at our business from the point of view of the customer”.) The majority of storytelling by the Chair/CEO is delivered using a hero-epic approach that is particularly evident in statements that emphasize the firm’s achievements and accomplishments. There were many examples evident in retrospective commentary that commemorated the tenth anniversary of the Global Financial Crisis in 2008.This commentary described heroic efforts to avert disaster, as provided in the section headed with the caption, “JPMorgan Chase did everything it possibly could do to help during this time” (JP Morgan Chase and Co 2018a, p. 27). Narratives described how JPM acquired assets from both Bear Stearns and Lehman Brothers that had failed as a result of the crisis and loaned billions of dollars to US state governments, municipalities, hospitals, and schools to minimize disruption to the US and global economy. These storytelling strategies served to draw attention to the company’s resilience and heroic actions that had allowed it to withstand the crisis and the nobleness of its endeavors, by rescuing others in need and averting a much greater disaster. JPM reports revealed no examples of tragic or comedic storytelling types and only a few of romantic storytelling. The romantic type was used to describe customer relations and philanthropic activities, as many social welfare initiatives were also delivered in a hero-epic storytelling style. Few idioms and metaphors were also observed. As the case provided only 1 year of reporting, it is difficult to analyze the petrification of narratives in JPM’s reports over time; however the retrospective comments about the Global Financial Crisis could be construed as an example of a foundation narrative and argue against the need for new prudential government regulations by the US Government. Numerous visual storytelling strategies were used throughout the reports and included photographic images, visual graphics, and charts to convey both business and CSR information. The Chair/CEO letter to shareholders is accompanied by a photograph of the CEO. The photographic image is a close-up “head shot” portrait photograph from the shoulders up. The camera angle is horizontal and direct, neither angled up nor down, and the CEO is seated in a relaxed position, smiling, and dressed in business-casual attire (suit, shirt with no tie). The setting is in an openplan office with the unfocused background image showing office employees sitting behind large computer monitors. This signals that the CEO is not remote from the operations of the company and is not cloistered in an executive office or boardroom. The same photographic image appears in the CSR report. A major difference between the visual storytelling in the annual and CSR report is the latter uses a much wider and brighter color palette range and more photographs of people, cities, and artwork. The color palette evident the annual report is generally limited to conservative blue colors and is more formal, while the CSR report features mosaic mural art produced by a Maryland-based nonprofit mosaic studio (JP Morgan Chase and Co 2018b). In addition, the CSR report also contains many short vignettes about people who have benefited from JPM’s social initiatives. The effect of these stylistic storytelling strategies is that the CSR report is easier to read. The readability of reports is another impressions management strategy sometimes used by companies to draw readers’ attention toward stories intended to

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enhance reputation. Meanwhile more formal visual storytelling as evident in the annual report is considered more appealing to investors and the business community. Wang et al. (2018) however argues that reports with a lower readability can more easily obfuscate information about the company’s CSR performance. Further observations were that the narrative of the annual report was dominated by the Chair/CEO’s letter to shareholders, which is 49 pages. The CEO’s letter commences with the salutation “Dear Shareholders,” which indicates that it is addressed to the investment community; however the letter includes numerous references to CSR as well as business performance matters. The narrative content of both the annual and CSR report is predominately retrospective and provides reviews of the firm’s past CSR and business and is interspersed with short vignettes and case studies about JPM’s CSR initiatives and performance results of individual business units within the company. The CEO letter also provided extended commentary about public policy and global matters such as the economic development of China, and the opiate-abuse health crisis being experienced in America (JP Morgan Chase and Co 2018b). CSR initiatives in both reports purely related to social and community welfare, with no reports made about the environmental impact. This was further demonstrated when a word search of both reports yielded zero results for phrases such as “climate change.” Words such as “carbon,” “emissions,” or “environment” were only used in the context of the social environment in the CSR report (JP Morgan Chase and Co 2018b). One example of the numerous social commentaries provided related details about CSR initiatives of the firm’s Advancing Black Pathways initiatives that seek to address the social and economic inequalities experienced by black Americans. These initiatives included the sponsorship of high school students in disadvantaged communities, the provision of microfinance to entrepreneurs in economic depressed communities, and procuring company supplies from poor communities (JP Morgan Chase and Co 2018b). In summary, it is also apparent that much of the organizational storytelling in JP Morgan Chase & Co’s reports serves to assert and reaffirm its position as a market leader in a rapidly changing industry (JP Morgan Chase and Co 2018b). By its own admission, the company had underestimated the disruptive effects of new technologies such as cloud banking for allowing new entrants to the market such as PayPal and Square (JP Morgan Chase and Co 2018b). This is evident in the strategic principle statement “We endeavor to be the best at anything and everything we do” (JP Morgan Chase and Co 2018a, p. 15a). However, despite its competitive power, JPM’s organizational storytelling in company reports continues to reaffirm its connection with its customers, by prioritizing customer service and making a positive impact on social welfare, and local communities at grassroots levels.

9

Summary

This chapter has provided an overview of corporate reporting in the context of CSR. Commencing with an overview of the historical development of corporate reporting, and function and purpose of the reports (Crowther 2018), the chapter then outlined

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the reasons why the practice has attracted criticism as being a public relations exercise that enables companies to engage in deceptive communication strategies and greenwashing. The chapter then described how understanding about the purpose and function of corporate reports vary between the functional/business-case perspective, the social perspective, and the political perspectives, and why the political perspective provides such rich and fertile ground for research (Boje 1995). The political perspective notes that power distribution between companies and stakeholders is not equal and that CSR reports are rhetorical, impressions management tools designed to assert hegemonic power over stakeholders. Following this, the different forms of impressions management strategies that are evident in corporate reports were noted, including visual and rhetorical impressions management tactics. Storytelling research is a new and unexplored tool for analyzing company reports that can be used to deconstruct the meaning of organizational storytelling about CSR. The storytelling research guide provided in Table 1 was demonstrated through an analysis of JPM’s 2018 annual and CSR report. Results were provided in Table 2 which showed how JPM’s narratives and visual storytelling methods can be analyzed. Further commentary elaborated on the results, but also highlighted how other details, including page length, and omissions from reports can also tell stories about companies’ impressions management strategies, and whether company claims about CSR performance are genuine. Results also showed that although CSR has been fully integrated in the company’s organizational storytelling in the annual report, business ideologies still govern the more formal appearance and format of business reports. The scope and complexity of storytelling theory research extends beyond the boundaries of this chapter, and the case study is provided as an illustrative example only. Obviously the scope and depth of this research could be greatly extended through a longitudinal study design, which would facilitate the study of story lines and plot developments over an extended period. Storytelling research in corporate reporting would also be further enhanced by interviewing company representatives and analyzing the content of corporate reports. The advantages of using storytelling research to analyze corporate reports are extensive. Storytelling provides a platform to understand how corporate reports convey multiple meanings about the organization and CSR. On one level, storytelling can be applied to analyze factual meanings conveyed about strategies and performance, but also used to investigate the implied meanings of linguistic choices and visual effects told through semiotics and the sub-contextual messages. It also explained how mismatches between implied meanings and factual meanings in corporate reports can erode corporate reputations and undermine attempts to create positive impressions. Further, storytelling can be used for a wide range of research applications, including the development of knowledge and organizational change and strategic management. Storytelling research can be analyzed from different academic fields, which range from marketing and advertising, to social psychology, semiotics, and linguistics. The disadvantages of storytelling arise as findings are often subject to the reader’s own understanding and interpretations. This can be partially mitigated through

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quantitative research methods, but these can be counterintuitive for analyzing the complexity of language. Another disadvantage from storytelling arises from the complexity of the language and semiotic theories that underpin this type of research, as highlighted by the lack of consensus academics about differences between the definitions of “narratives” and “stories.” Contributions by Boje (2008) and Rosile et al. (2013) have alleviated some of this confusion, but researchers need to exercise caution so the complexity of storytelling research does not detract from findings. Notwithstanding the limitations, storytelling research can help to uncover the underlying motivations and purpose of corporate reporting about CSR. Importantly the storytelling research guide provided in Table 1 provides future researchers with a tool to conduct their own storytelling in corporate reporting that can be applied to future research.

10

Cross-References

▶ Corporate Social Responsibility Reporting: Evolution, Institutionalization, and Current State ▶ Governance of Migration and Sustainability ▶ Integrated Reporting ▶ Sustainable Marketing ▶ Triple Bottom Line

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Dalkir K, Wiseman E (2004) Organizational storytelling and knowledge management: a survey. Storytelling Self Soc 1(1):57–73 Dando N, Swift T (2003) Transparency and assurance minding the credibility gap. J Bus Ethics 44(2–3):195–200 de Jong MD, van der Meer M (2017) How does it fit? Exploring the congruence between organizations and their corporate social responsibility (CSR) activities. J Bus Ethics 143(1):71–83 Dienes D, Sassen R, Fischer J (2016) What are the drivers of sustainability reporting? A systematic review. Sustain Account Manag Policy J 7(2):154–189 Ditlev-Simonsen CD, Wenstøp SH (2011) Companies ethical commitment: an analysis of the rhetoric in CSR reports. Issues in Social & Environmental Accounting 5(1/2):65–81 Dowling G (2002) Creating corporate reputation: identify, image, and performance. Oxford University Press, Oxford Ellerup Nielsen A, Thomsen C (2007) Reporting CSR–what and how to say it? Corp Commun Int J 12(1):25–40 Feldner SB, Berg KT (2014) How corporations manage industry and consumer expectations via the CSR report. Public Relat J 8(3):2 Gardner WL, Martinko MJ (1988) Impression management in organizations. J Manag 14(2):321–338 Gergen KJ, Gergen MM (1987) The self in temporal perspective. In: Life-span perspectives and social psychology. Lawrence Erlbaum, Hillsdale, pp 121–137 Goffman E (1959) The presentation of self in everyday life. Doubleday, Anchor, Garden City González-González JM, Bretones FD, González-Martínez R, Francés-Gómez P (2019) “The future of an illusion”: a paradoxes of CSR. J Organ Chang Manag 32(1):2–14 Guthrie J, Parker LD (1989) Corporate social reporting: a rebuttal of legitimacy theory. Account Bus Res 19(76):343–352 Higgins C, Milne MJ, van Gramberg B (2015) The uptake of sustainability reporting in Australia. J Bus Ethics 129(2):445–468 Hoogheimstra R (2000) Corporate communication and impression management – new perspectives why companies engage in corporate social reporting. J Bus Ethics 27:55–68 Hossain M, Islam MT, Momin MA, Nahar S, Alam MS (2018) Understanding communication of sustainability reporting: application of symbolic convergence theory (SCT). J Bus Ethics 1–24 Hrasky SL (2008) A multimodal Goffmanian analysis of impression management behaviour in the annual reports of listed Australian companies. Doctoral dissertation, University of Tasmania Hubbard G (2009) Measuring organizational performance: beyond the triple bottom line. Business Strategy and the Environment 18(3):177–191. https://doi.org/10.1002/bse.564 Humphreys M, Brown AD (2008) An analysis of corporate social responsibility at credit line: a narrative approach. J Bus Ethics 80:403–418 Ihlen Ø, Bartlett JL, May S (2011) Corporate social responsibility and communication. In: Ihlen Ø, Bartlett JL, May S (Eds) The handbook of communication and corporate social responsibility, pp 3–22, John Wiley & Sons, UK Jenkins H, Yakovleva N (2006) Corporate social responsibility in the mining industry: exploring trends in social and environmental disclosure. J Clean Prod 14:271–284 JP Morgan Chase & Co LLC (2018a) Annual Report. JP Morgan Chase & Co JP Morgan Chase & Co LLC (2018b) Corporate responsibility report. JP Morgan Chase & Co Kolk A, Perego P (2014) Sustainable bonuses: sign of corporate responsibility or window dressing? J Bus Ethics 119:1–15 Koller V (2004) Metaphor and gender in business media discourse: a critical cognitive study. Springer, New York KPMG (2017) The Road Ahead. The KMPG survey of Corporate Responsibility Reporting. KPMG International. https://assets.kpmg/content/dam/kpmg/xx/pdf/2017/10/kpmg-survey-of-corpo rate-responsibility-reporting-2017.pdf Lauesen LM (2013) CSR in the aftermath of the financial crisis. Soc Responsib J 9(4):641–663 Lindgreen A, Swaen V, Maon F (2009) Introduction: corporate social responsibility implementation. J Bus Ethics 85:251–256 Maltby J (2004) Hadfields Ltd: its annual general meetings 1903–1939 and their relevance for contemporary corporate social reporting. Br Account Rev 36(4):415–439

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McGraw P, Dabski S (2010) Corporate social responsibility reporting in Australia’s largest companies. Labour Ind 21(1):390–409. https://doi.org/10.1080/10301763.2010.10669411 Miles RE, Snow CC, Meyer AD, Coleman Jr HJ (1978) Organizational strategy, structure, and process. Academy of Management Review 3(3):546–562. https://doi.org/10.5465/ AMR.1978.4305755 Milne MJ, Gray R (2013) W(h)ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting. J Bus Ethics 118(1):13–29 Mintzberg H (1994) The fall and rise of strategic planning. Harvard Business Review 72(1):107–114 Neu D, Warsame H, Pedwell K (1998) Managing public impressions: environmental disclosures in annual reports. Acc Organ Soc 23(3):265–282 Nikolaeva R, Bicho M (2011) The role of institutional and reputational factors in the voluntary adoption of corporate social responsibility reporting standards. J Acad Mark Sci 39:136–157 Polkinghorne DA (1988) Narrative knowing and the human sciences. State University of New York Press, New York Porter ME (1979) The structure within industries and companies’ performance. The Review of Economics and Statistics 61(2):214–227. https://doi.org/10.2307/1924589 Porter ME (1980) Industry structure and competitive strategy: keys to profitability. Financ Anal J 36(4):30–41 Porter ME, Kramer MR (2006) Strategy & society. The link between competitive advantage and corporate social responsibility. Harv Bus Rev 84:78–92 Saldaña J (2015) The coding manual for qualitative researchers. Sage. London Sandberg M, Holmlund M (2015) Impression management tactics in sustainability reporting. Soc Responsib J 11(4):677–689 Scholtens B (2009) Corporate social responsibility in the international banking industry. J Bus Ethics 86(2):159–175 Shabana KM, Buchholtz AK, Carroll AB (2016) The institutionalisation of corporate social responsibility reporting. Business & Society 56(8):1–19 Shariatmadari D (2016) Virtue-signalling’– the putdown that has passed its sell-by date. The Guardian. 20/01/2016 Siano A, Vollero A, Conte F, Amabile S (2017) “More than words”: expanding the taxonomy of greenwashing after the Volkswagen scandal. J Bus Res 71:27–37 Spence C (2007) Social and environmental reporting and hegemonic discourse. Account Audit Account J 20(6):855–882 Vollero A, Palazzo M, Siano A, Sardanelli D (2018) Managing CSR communication: a study of legitimacy-seeking strategies adopted by service and product companies. TQM J 30(5):621–637 Wang Z, Hsieh TS, Sarkis J (2018) CSR performance and the readability of CSR reports: too good to be true? Corp Soc Responsib Environ Manag 25(1):66–79 Weick KE (1979) The social psychology of organizing, 2nd edn. Addison-Wesley, Reading Weick K (1995) Sensemaking in organisations. Sage, Thousand Oaks Wickert C (2016) “Political” corporate social responsibility in small-and medium-sized enterprises: a conceptual framework. Bus Soc 55(6):792–824 Yozgat U, Karataş N (2011) Going green of mission and vision statements: ethical, social, and environmental concerns across organizations. Procedia Soc Behav Sci 24:1359–1366 Yuan W, Bao Y, Verbeke A (2011) Integrating CSR initiatives in business: An organizing framework. Journal of Business Ethics 101(1):75–92. https://doi.org/10.1007/s10551-010-0710-z

Key References Auvinen T, Aaltio I, Blomquist K (2013) Constructing leadership by storytelling – the meaning of trust and narratives. Leadersh Org Dev J 34(6):496–514 Bansal P, Kistruck G (2006) Seeing is (not) believing: managing the impressions of the firm’s commitment to the natural environment. J Bus Ethics 67:165–180

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Barry D, Elmes M (1997) Strategy retold: toward a narrative view of strategic discourse. Acad Manag Rev 22(2):429–452 Boje DM (2008) Storytelling organisations. Sage, London Czarniawska B (1998) A narrative approach to organisation studies. Sage, Newbury Park Gabriel Y (2000) Storytelling in organisations. facts, fictions and fantasies. Oxford University Press, Oxford Morsing M, Schultz M (2006) Corporate social responsibility communication: stakeholder information, response and involvement strategies. Bus Ethics Eur Rev 15(4):323–338 Rhodes C, Brown AD (2005) Narrative, organisations and research. Int J Manag Rev 7(3):167–188 Rosile GA, Boje DM, Carlon DM, Downs A, Saylors R (2013) Storytelling diamond: an antenarrative integration of the six facets of storytelling in organisation research design. Organ Res Methods 16(4):557–580 Seele P, Gatti L (2017) Greenwashing revisited: in search of a typology and accusation based definition incorporating legitimacy strategies. Bus Strateg Environ 26(2):239–252 Thummes K (2018) In the twilight zone between veracity and lying: a survey on the perceived legitimacy of corporate deception in reaction to ethical dilemmas. Int J Strateg Commun 12(1):1–24 Wehmeier S, Schultz F (2011) Communication and corporate social responsibility: a storytelling perspective. In: The handbook of communication and corporate social responsibility. WileyBlackwell, Boston

Brundtland and After Through Commitment to Capability Dianne Bolton and Terry Landells

Contents 1 2 3 4 5 6 7 8 9

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Brundtland Commission: Sustainable Development Through Multilateralism . . . . . . Multilateral Mindsets and Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transitioning Aspirations into Multilateral Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Progressing Sustainable Development Agendas Post-Brundtland . . . . . . . . . . . . . . . . . . . . . . . . Global Forums Progressing Sustainable Development Outcomes . . . . . . . . . . . . . . . . . . . . . . . . 1992 Rio Earth Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002 World Summit on Sustainable Development: Johannesburg . . . . . . . . . . . . . . . . . . . . . . . 2012 United Nations Conference on Sustainable Development (Rio+20) and “The Future We Want” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The 2015 UN Sustainable Development Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Approaches and Activities of the HLPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2019 SDG Summit: Accelerated Action Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150 152 154 155 157 159 159 162 163 165 166 167 169 173 173

Abstract

The Brundtland Report responded to an urgent call by the United Nations General Assembly to frame a global agenda for change toward advancing sustainable development by the year 2000 and beyond. It would articulate ways in which concern for the environment could translate into action across developed and developing nations and demonstrate interlinkages between people, resources, environment, and development. This chapter suggests that post-Brundtland it is useful to conceptualize the progress of sustainable development agendas as a

D. Bolton (*) · T. Landells Swinburne University of Technology, Hawthorn, VIC, Australia e-mail: [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_9

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trajectory of increasing “commitment” to defined sustainable development goals and emergent “capability” to implement them. It traces a trajectory of progressing sustainable development agendas under the auspices of the General Assembly, the UN’s Economic and Social Council, the Commission on Sustainable Development, and the High-Level Political Forum. Specific attention is given to post-Brundtland summits that demonstrate the synergy between reaffirmation of commitments, the taking of considered action, and the development of capability through praxis. The Earth Summit in Rio de Janeiro in 1992, the 2002 Johannesburg World Summit on Sustainable Development, the 2012 Rio+20 UN Conference on Sustainable Development, the 2015 UN Sustainable Development Summit at which the Sustainable Development Goals were adopted, and the outcomes of the High-Level Political Forum subsequent to that summit are explored to this end. Reflections on these summits suggest changes over time to institutional structures, implementation of agendas, and capability building. Conclusions highlight the skills needed to progress agendas, arguing that Brundtland’s promotion of integrated thinking and knowledge generation multilaterally remains foundational to facilitating ongoing action. Keywords

Brundtland Commission · Sustainable development · Multilateralism · Collaboration · Stakeholder interactions · Praxis · Garbage can model of decision-making · Complexity

1

Introduction

Subsequent to the 1987 Brundtland Commission’s Report to the United Nations General Assembly (UNGA), it is useful to conceptualize the progress of sustainable development (SD) agendas as a trajectory of increasing “commitment” to defined SD goals and emergent “capability” to implement them. This trajectory of SD, under the auspices of the UNGA, the UN’s Economic and Social Council (ECOSOC), the Commission on Sustainable Development (CSD), and the High-Level Political Forum (HLPF), has generated political debate leading to various forms of action for over 30 years since the Report’s publication. By the time of the Brundtland Commission’s Report, “Our Common Future” (WCED 1987), there had been a long history of political and social concern around the characteristics of development and its broader impact. Waas et al. (2011) note how the focus of SD in the 1950s and 1960s was on increased growth and economic output. By the 1970s increasing poverty and inequality in developing nations were becoming identified as a feature of economic growth patterns, and in the 1980s, environmental protection was embraced in its definition. The Brundtland Report responded to an urgent call by the UNGA to frame a global agenda for change for achieving SD by the year 2000 and beyond. This

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agenda would articulate ways in which concern for the environment could translate into action across developed and developing nations and also demonstrate interlinkages between people, resources, environment, and development. Thus, the Commission faced two challenges: first, to demonstrate a comprehensive theory of SD that encompassed the dimensions identified by the UNGA, and, second, to suggest frameworks that could promote ongoing global cooperation across stakeholders at different levels of development and with different stakes – all under the aegis of a SD agenda. The Commission recognized the broad range of interconnected issues underpinning the diverse multilateral, multifaceted, multilayered, complex, and tension-ridden agendas of member states and other stakeholders. Hence the focus here is on the nature of the dynamic and interactive trajectory between commitment and capability to undertake multiple forms of action by member states within a framework of shared goals of achieving SD. The chapter commences with an outline of the Brundtland Commission’s perspectives on SD and its focus on multilateralism through shared values and collaborative action, across interconnected institutions, groups, and individuals in economic, social, environmental, and political arenas of human existence. Recognizing the complexity and tensions of interconnectedness and drawing on the theory of praxis (Freire 1970), the chapter explores the iterative cycles of action and reflection associated with the challenges of transitioning from aspirations to action, the core tenets of SD in such a complex and dynamic agenda, and the iterative and collaborative global practices reflecting the interpretation of these shared perspectives around SD and associated goals. In exploring how SD has been progressed though UN global forums, a 2017 adaptation of Cohen et al.’s (1972) garbage can model of decision-making is utilized as it deals with decision-making and action by stakeholders in complex environments. This model highlights how the flow of problems, solutions, participants, and choices are brought into a temporally ordered decision opportunity space, bounded by time and the availability, capability, and interactions of stakeholders. This is particularly relevant to UN forums progressing SD. The concept of praxis helps illustrate processes through which UN forums shape global commitment and action, and reflective and political evaluation and adaptation of UN agendas occur at a local level. Specific attention is given to post-Brundtland summits that demonstrate this synergy between the reaffirmation of commitments, the taking of considered action, and the development of capability through praxis. The Earth Summit in Rio de Janeiro in 1992, the 2002 Johannesburg World Summit on Sustainable Development, the 2012 Rio+20 UN Conference on Sustainable Development, the 2015 UN Sustainable Development Summit at which the Sustainable Development Goals (SDGs) were adopted, and the outcomes of the HLPF subsequent to that summit, are explored to this end. Reflections over the period of these summits suggest changes in approaches to institutional structure, implementation of agendas, and capability building. Concluding comments are offered on the skills needed to operate in an increasingly fragile, volatile, dynamic, and complex global environment in which the influence of Brundtland remains significant in promoting integrated thinking and knowledge

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generation multilaterally across all levels of global society, facilitating ongoing action to progress and innovate within a SD agenda.

2

The Brundtland Commission: Sustainable Development Through Multilateralism

The Brundtland Commission, or the World Commission on Environment and Development (WCED), was named after its Chairperson, Dr. Gro Harlem Brundtland, Prime Minister of Norway. Their Report defined “sustainable development” at a global level as being “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987, Ch. 2, para. 1). This definition reflected the Commission’s insight into the long-term common interests of nations, the impossibility of separating economic development issues from environmental issues, the high levels of interconnectivity between human and natural systems, and the realization that “. . . a new development path was required . . . for the entire planet into the distant future . . . [with] ‘sustainable development’ becom[ing] a goal not just for the ‘developing’ nations, but for industrial ones as well” (Overview, para. 10). Developing a committed movement toward high-order values as a basis for multilateral cooperation requires information exchange, education, and politicization to create awareness of and commitment to shared values at a national, regional, and global level. Subsequent stages of collaboration involve identifying goals and taking action. Taking action around multifaceted and contentious SD issues often requires nontraditional, expansive, and synergized thinking across interconnected institutions and actors in diverse economic, social, environmental, and political arenas, often characterized by ill-defined interlinkages. Historically, multilateral cooperation of this nature has occurred under conditions of intense pressure in which threats become visible and survival forces cooperation among multiple affected parties. Examples of such situations include world war, periods of global depression, the Global Financial Crisis of 2007–2008, and public health pandemics including HIV/ AIDS, SARS, and the current COVID-19 coronavirus. The Brundtland Report outlined the interlinkages between economic, social, political, and environmental drivers of development that perpetuate poverty and environmental damage and demand urgent response. It sought agreement between nations around this world view and their commitment to reverse negative externalities associated with contemporary patterns of growth. In so doing, it challenged centuries of philosophy underpinning the pursuit of competitive economic advantage, economic imperialism, and nation-state autonomy concerning economic, social, political, and ecological impacts of development and growth strategies. At certain points in history, irreconcilable tensions arise that challenge the continuity of these traditions. Such tensions have been highlighted in critiques of globalization. Goldin and Kutarna (2017) note the uncertainties surrounding attempts to develop regional and global solutions to emergent boundaryless problems by differentiating between “. . . the old gospel of globalization which

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transferred political power from the general public to elite technocrats . . . obscur [ing] many important political choices: about how to go about creating wealth, and about how to share the rewards and risks that follow” (p. 375). They contrast “globalization” as a gospel that obscures embedded political choices about the distribution of wealth created with “globalism,” the doctrine of becoming global. Such obscurity suppressed public political choice and fostered the backlash against the process of globalism. “The new, anti-globalization gospel deceives in the other direction. To those who are weary of being pushed around by unseen forces and processes beyond their control, it preaches the power of popular will to defy reality” (p. 376). Given this situation, they argue that “. . . our response is going to be patchwork and poor each time disaster strikes, and it is only going to strike more often” (p. 371). The current response of developed countries to the COVID-19 pandemic illustrates this point well as urgency and community demands appear to trump economic ideology in the short term. SD embraces these economic, social, political, environmental, and governance challenges systemically, each dimension inviting a refreshed mindset toward global and multilateral cooperation and collaboration. Goldin and Kutarna (2017) discuss the challenges of gaining consistent global cooperation over the short and long term to address climate change. They describe the 1997 Kyoto Protocol within the United Nations Framework Convention on Climate Change (UNFCCC), as a “flawed but best effort” (p. 371) framework resulting in a commitment of certain states to cut their own carbon pollution. They suggest that the Copenhagen conference of 2009 was different to Kyoto in that after 9/11 and the experience of the Global Financial Crisis the notion of globalization as an unquestionable approach to economic and social progress had been replaced by a realization that their constituencies would no longer provide popular support “. . . to make significant sacrifices for our common future” (p. 371). By way of contrast, the 2015 Paris Agreement within the UNFCCC took place against a background of increased evidence of extreme weather and rapidly increasing pollution, demonstrating to citizens globally the negative health impacts of a fossil fuel economy, particularly on newly industrializing countries. Thus, citizens were able to make judgments on the basis of their experience and scientific evidence. The leaders of the 197 countries who agreed to contain warming to less than 2
C had more confidence in taking these commitments back to their constituencies without major fear of political cost. Currently, however, 8 of the 197 countries are yet to ratify the agreement, and the USA has commenced its withdrawal (UNFCCC 2020). Goldin and Kutarna (2017, p. 372) conclude that many major global projects requiring global compacts are either on life support or stillborn. They suggest that the narrative of urgency is being dissipated by a new narrative “[w]e ought to be . . . but we’re not” (p. 373), leadership ignoring the needs of its citizenry to advance its own interests. They conclude that “. . . through too many successive crises, no leader has convincingly demonstrated how our present politics and economics can accomplish anything but to magnify the gains of the winners at the cost of the losers” (p. 366). However, the increased realization of the need for global solutions can be seen as challenging disassociation from global cooperation. Tension between leaders

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concerning measures to save lives or livelihoods in the current COVID-19 pandemic highlights further political divisions about the pre-eminence of economy over society. Politics of collaboration help citizens better appreciate challenges and risks to themselves and others through a more pluralist, holistic, and integrated lens. The theory of praxis, discussed below, demonstrates the essential constant and iterative dynamic between theory and practice for developing adaptive mindsets that can reject politically motivated solutions, often of a nativist and protectionist type.

3

Multilateral Mindsets and Sustainable Development

Dr. Brundtland identified the importance of multilateral thinking in her foreword to the Commission’s 1987 report, stating “[t]he challenge of finding sustainable development paths ought to provide the impetus – indeed the imperative – for a renewed search for multilateral solutions and a restructured international economic system of co-operation. These challenges cut across the divides of national sovereignty, of limited strategies for economic gain, and of separated disciplines of science.” By identifying systemic interlinkages between economic, social, and environmental drivers of SD, the Brundtland Commission asserted common global interests that required a paradigmatic rethink of the complex drivers of economic growth. The Report’s foreword stated that the Commission’s most urgent task was to persuade nations to return to multilateralism to address the downward spiral of linked ecological and economic decline, trapping the poorer nations, and ultimately affecting sustainable development paths globally. The Report sets out to demonstrate the multifaceted interlinkages between world poverty, disarmament, the north/south divide, environmental damage, basic education, and so on. Thus, the Commission’s perspective was radical in that it claimed to demonstrate common interests between nations to progress global economy and societal well-being, identifying major challenges that required multilateral cooperation. In effect, it openly challenged “the whole area of economic international relations” (WCED 1987, Chairman’s foreword). What was proposed was thus unashamedly aspirational. It presented an argument for political commitment to addressing interrelated complex global challenges, the core of which would require a new development path and associated economic order. Sneddon et al. (2006) have suggested that the Brundtland Commission’s Report helped initiate what is now regarded as three mutually reinforcing aims of SD, i.e., “the improvement in human well-being, more equitable distribution of resource use benefits across and within societies, and development that ensures ecological integrity over intergenerational timescales” (p. 256). They also recognized that the “three legged stool” characterization of this approach, with “three overlapping [and interdependent] spheres: economic security, ecological integrity, and social equity . . . [tended to discount]. . . the actual interrelations of those three ideals as complex and often contradictory in practice” (p. 256). They further identified fundamental contradictions between the necessity for economic growth in developing economies

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and improved ecological conservation, and a lack of attention to “power relations among the local-to-global actors and institutions supporting unsustainable development” (p. 254). Nevertheless, Sneddon et al. (2006) maintained that three major benefits arose from the Brundtland Commission. These were a renewed focus on the ethical tensions surrounding human-environment relationships and the ineffectiveness of institutions and lack of political will of both governments and citizens; the rise of a “new political discourse” embracing contested interests and a plurality of perspectives on sustainability; and the highlighting of more recent developments affecting sustainability not envisaged in 1987, i.e., decline in the legitimacy of authoritative science, new thinking to address failures in equating economic growth and development, and the rise of fundamentalist ideologies on the politics of significant nation-states such as the USA, Israel, and India. Goldin and Kutarna (2017) have identified the need for a “second renaissance” in human thinking and acting facilitated by “. . . a political technology called democracy” (p. 378), i.e., a democratic renaissance as a counter to what they perceived as the transfer of political power from citizenry to elite technocrats. Sanders (2017) and Chomsky (2020) have also raised the need for a new political order and discourse, further exploring the Brundtland Commission’s interlinkages between world poverty, disarmament, environmental damage, and human well-being, particularly as experienced in the north/ south divide. For example, as we write in May 2020, Chomsky has challenged US President Trump’s decision to freeze payments to the World Health Organization in the period of the COVID-19 pandemic, predicting it would lead to death in Yemen and across the African continent (Partington 2020). The aspirational narrative of SD foreshadowed such tensions. It suggested that to achieve the goals of SD would necessitate democratic process, whereby new political, economic, social, and ecological narratives could arise to address urgent global agendas through multilateral thinking and action, as an alternative to dominant and self-serving technocratic solutions presented as unchallengeable. The launch of the Progressive International, “a global initiative to unite, organize and mobilize progressive forces around the world” (Partington 2020), appears to be an example of uniting international and multilateral forces to promote a more progressive vision of the future to identify and address global threats including climate change. The complex and multilayered nature of pressures requiring such action was initially identified in Brundtland’s focus on the need for multilateral thinking in identifying and addressing global crises.

4

Transitioning Aspirations into Multilateral Action

The challenges of translating complex aspirations into urgent global projects associated with SD goals have been noted above. Over time, UNGA commentary concerning progress on implementing SD goals suggests that integrity of judgments and decision-making will be borne out by the ability to realize goals in practice. Subsequent to “Our Common Future,” there have been significant attempts to

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generate global action toward realizing its aspirations. However, increasing awareness of the urgency of the agenda can and will, through democratic processes, foster alternative discourse based on diverse interpretations, politics, self-interest, stages of development of members, etc. The rise of right wing politics in the aftermath of global crises including terrorism, person’s seeking refuge, financial collapses, and pandemic health threats has leveraged fears as populations seek certainty, often through supporting increasingly authoritarian government. Such an approach is in tension with the realities of demonstrated collaborative effort required to resolve complex challenges. Narrow, top-down decisions are rarely, if ever, capable of being fully implemented. Often, if not always, resolving complex challenges requires iterative cycles of goal setting, strategizing, taking action, evaluating outcomes, and revision drawing from perspectives of diverse stakeholders. This requires accepting overarching common interests to be actioned through “common but differentiated responsibilities and respective capabilities” (UN 1992a, para 3.1). Political attempts to shift responses to global challenges away from a global perspective to a national perspective are increasingly challenged by current complex global realities. For instance, Goldin and Kutarna (2017) decry US President Trump’s promise to put America first, “[w]e are tangled together. All our actions in every sphere defy the notion of borders. Neither open nor closed makes us safe. It is an absurd lens that simplifies away the very risks and complexities that we must start grappling with more seriously” (p. 381). Nevertheless, in the future, some leaders can be expected to obfuscate tough choices, denying legacies for future generations globally. Yet emergent global crises, such as COVID-19, are making increasingly transparent to the broader global community the costs of ignoring the interconnected consequences of global crises. Consequently, the implementation of Brundtland’s global aspirations warrants conceptualization as iterative, dynamic, and diverse global collaborative activity. Collaborative global activity can be fostered and coordinated; it cannot be controlled. While UN documentation increasingly acknowledges this dynamic and has designed structures and practices accordingly, public appraisal of outcomes, e.g., commentary on various climate summits, still often maintain expectations around linear progress by understating achievements in attaining collaborative mindset shifts and associated action. This is problematic from two perspectives: first it reinforces community expectations that such political shifts in mindsets and actions can be achieved in the short term; second it invalidates the learning process that will inevitably drive change. The theory of praxis, defined as the integration of theory and practice through iterative cycles of action and reflection (Freire 1970), appears to constitute a critical lens to appreciate the learning process underpinning the dynamic between commitment and capability development post-Brundtland. This includes the inculcation of SD into political agendas as well as skills and mindsets required to appreciate and act on them by the broader community. As noted earlier, this latter can be seen as including new and emergent capability for communicating increasingly rich and nuanced rationales for action (local and global), as well as personal attributes to

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maintain such goals in increasingly volatile, uncertain, complex, and ambiguous global environments. Thus, it is of value to critique the processes and outcomes of collaborative forums post-Brundtland, using, inter alia, the lenses of praxis and complexity to explore how key stakeholders have progressed the Brundtland agenda resulting in a broader and more nuanced perspective of the nature of progress and the capabilities that drive it.

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Progressing Sustainable Development Agendas PostBrundtland

Since “Our Common Future,” various global forums have been staged under the auspices of the UN to move from committing to the principles of SD to taking meaningful action. The focus here is on the complex dynamic that underpins “progress.” Progress can be conceptualized as an iterative process in which stakeholder nations prepare their contributions in the context of the political, economic, and social realities that they are experiencing. These UN global forums represent pressured environments in which national perspectives are voiced and multilateral accommodation and agreement are reached to the extent possible. The extent of agreement in forums and subsequent action will depend heavily on members anticipating and communicating their respective national economic, social, environmental, and political pressures. It has been noted similarly (Bolton and Landells 2017; Carter et al. 2011) that the culture and dynamics that operate in bounded global decision forums in sessions of the Conference of the Parties of the UNFCCC might be interpreted through the theoretical lens of the garbage can model (Cohen et al. 1972). This lens also appears relevant to review of post-Brundtland developments in SD. For example, in discussing the Copenhagen CoP, Carter et al. (2011) note that [p]roblems, policies and politics sometimes converge but more often than not attach themselves randomly and independently of each other . . . the summit was the garbage can into which the concerns around the issues of global warming and climate change were poured, there to attach themselves to the various solutions that the main protagonists – radicals, mainstreamers and skeptics – promulgated. (p. 684)

Bolton and Landells (2017) adapted the garbage can model to recognize the order generating force of dynamic stakeholder interactions within time-bounded decisionmaking opportunities, noting that outcomes emanating from the Copenhagen summit could be interpreted as iterative forms of progress in complex and volatile environments, rather than as “failures.” In the context of forums to promote SD, it is also valuable to acknowledge iterative and dynamic stakeholder-engaged decision-making both within and between global forums, nation-states, and regional blocs. Figure 1 below represents diagrammatically the dynamic interlinkages between UN forums (in which multiple stakeholders interact to reach agreement) and diverse national environments in which members reflect

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Fig. 1 Iterative and dynamic stakeholder-engaged decision-making between UN global forums and members

on existing UN agendas and prepare their statements on levels of commitment to UN agendas and action taken. In addition, the diagram demonstrates a further set of interactions between national decisions made and reported to forums and outcomes of forums communicated back to member states. This level of dynamism between forums and members reflecting on goals in the context of action taken synergizes the notion of praxis with the adapted garbage can model. The level of dynamism represented in the diagram embraces economic, social, and political drivers and shapers of action that can shift unpredictably and radically in complex and volatile environments. This level of dynamism was anticipated by Brundtland but did not dilute the breadth of the Report’s agenda and as such set the scene for response to contemporary global challenges and crises. For example, as this is being written, nation-states are responding locally to the COVID-19 coronavirus pandemic in ways that can deepen or diminish notions of political commitment to global crises. Freinacht (2017), in discussing the need for a “listening society,” regrets the lack of major political vision that cannot see past fragmented ideologies in identifying how society should evolve as globalized, digitalized, and post-industrial, i.e., reflecting “metamodern” politics that also embrace equality, freedom, and order as societal goals. Of relevance here is his focus on developing non-linear politics that allows the operation of paradox, experimentation, and vision and can accommodate leaps in action based on new levels of awareness. He suggests that a . . . foundational metamodern principle holds that you must continuously doubt your own ideological position. People are good at reconstructing their past, telling themselves that they always had this or that opinion or world view. In reality, people are a lot more flexible, adjusting as we go along in order to fit the norms . . . [we] all neatly and discreetly [change] our views when new social pressures [arise]. (p. 143)

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It is through this lens that a critique of the dynamics of progress of SD postBrundtland is undertaken. The focus here is to demonstrate dynamic and complex iterations of global agreement and national responses to better conceptualize the nature of a trajectory of progress.

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Global Forums Progressing Sustainable Development Outcomes

Global forums to progress the SD agenda have included the 1972 UN Conference on the Human Environment (Stockholm Conference); the first conference on international environmental issues; the 1983 UNGA that established a special commission (later called the World Commission on Environment and Development – or the Brundtland Commission) to report on “the environment and the global problematique to the year 2000 and beyond” (UN 2020a); the 1992 Rio Earth Summit where 178 countries adopted “Agenda 21” as a plan of action (UN 1992c); the 2002 Johannesburg World Summit of Sustainable Development and its “Plan of Implementation” (UN 2020b); the 2012 Rio+20 UN Conference on Sustainable Development at which the “The Future We Want” outcome set out to develop globally agreed SDGs (UN 2020c); and the 2015 UN Sustainable Development Summit, the outcome of which was “Transforming our World: The 2030 Agenda for Sustainable Development” in which the 17 high level SDGs were adopted by member states (UN 2020d). Agendas and outcomes from these forums recognized the challenges of taking action to implement a broad and complex SD agenda in which the linkages between economic, social, environmental, and institutional drivers were dynamic and took on diverse political priorities in different national settings. The shift from goal setting to the challenges of action and associated capability including global collaboration is reflected in the replacement of the Commission on Sustainable Development (CSD) by the HLPF on Sustainable Development at the Rio+20 Conference.

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1992 Rio Earth Summit

The 1992 United Nations Conference on Sustainable Development (the Earth Summit) created the CSD as the first UN body on SD, “sustainable development [being] a relatively new concept at that time” (UN 2013a). As a functional commission of the Economic and Social Council (ECOSOC), the intention was that the CSD would provide guidance on international institutional arrangements to support action, including the roles of the UNGA and the ECOSOC, the cornerstone of the UN’s intergovernmental framework for SD governance. The Earth Summit reaffirmed and built on the Stockholm Declaration of the UN Conference on the Human Environment (1972) as well as affirming goals of the Brundtland Commission to develop a common vision around the integrated and interdependent nature of the Earth. The outcome document clearly sought new and

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equitable global partnerships and agreements “. . . which respect the interests of all and protect the integrity of the global environmental and developmental system” (UN 1992b). It also committed member states to new levels of cooperation among them as well as between key sectors of their societies and people. The 178 member states at the Earth Summit also adopted Agenda 21, which identified the urgency of integrating environment and development concerns in order to fulfil “. . . basic needs, improved living standards for all, better protected and managed ecosystems, and a safer, more prosperous future” (UN 1992c, para. 1.1). This was to be achieved through global partnership to address contemporary and future global problems. Agenda 21’s major purpose was to engineer “. . . global consensus and political commitment at the highest level on development and environment cooperation” (UN 1992c, para. 1.3). Member states achieved a consensus that governments took primary responsibility for Agenda 21’s successful implementation, their efforts being supported and supplemented by international cooperation. Financial resources to support the role of developing nations and to strengthen the capacity of international institutions were identified by program area. Attention was drawn to the challenges of developing countries in their efforts to transform their economies while experiencing high levels of social and political tension. Of key significance, Agenda 21 acknowledged it was a dynamic program, with complex policy interlinkages to be interpreted and adapted across countries and regions at different stages of development, with different agendas and capabilities. Despite such challenges, the intention was that the overarching goal was to maintain “. . .full respect of all the principles contained in the Rio Declaration on Environment and Development” (UN 1992c, para 1.6). Accordingly, the document noted that member responses would evolve over time in light of changing needs and circumstances and that new forms of global partnership could potentially provide collaborative and targeted support to this end. The CSD’s mandate to monitor progress in the implementation of Agenda 21 included overviewing system-wide coordination and the integration of environmental and developmental goals through analysis and evaluation of reports from relevant organizations. It also considered information from governments, sometimes as national reports, regarding activities undertaken to implement Agenda 21 including problems faced such as financial resourcing and technology transfer. Agenda 21 elicited investigation of complex interlinkages globally and nationally and options for reconciling economic, social, environmental, and institutional objectives through more integrated political thinking, not unlike Freinacht’s (2017) metamodern politics described above. Chapter 40 recognized the need to develop sustainability indicators for assessing progress toward SD, for evaluating and communicating achievements and “. . . to contribute to a self-regulating sustainability of integrated environment and development systems” (para 40.3). Spangenberg (2002), from the Sustainable Europe Research Institute in Germany, noted that as a result of the CSD’s development of sustainability indicators, an additional institutional dimension to facilitate implementation was achieved. In 2004 he investigated sustainable development as integrated policy in Germany, focusing on four simultaneous problem areas detailed by the Brundtland Commission related to

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implementation. These included the environmental challenge, the increasingly unequal distribution of income and assets, the high number of people living in poverty, and the institutional challenge generated by flow-on effects that threatened peace and security. He concluded that such questioning of the untrammeled acceleration of a global deregulated free trade economy was foundational to understanding the concept of sustainability, as was an understanding of associated power structures. Spangenberg (2002, 2004) aimed to expand and test the CSD’s criteria for economic, social, environmental, and institutional sustainability, critiquing previous calls (e.g., World Bank 2000) that said little “. . . about the power structures behind the current development pattern and the need for change necessary to translate economic growth into a more equitable distribution of wealth and income” (2004, p. 76). Drawing from transdisciplinary research undertaken by Hans-BöcklerStiftung (2001), Spangenberg (2004) concluded that an integrated scenario across the four pillars of SD was the only scenario that addressed benchmarks concerning inequalities identified in discourse around SD to meet appropriate economic growth targets, as suggested by Brundtland. He concluded that such scenario analysis suggested that “. . . political initiatives towards integrated sustainability policies are possible and necessary if the current unsustainable trends are to be broken. This is a challenge, as for any innovative politics, but the reward is high: progress towards a socially, environmentally and economically sustainable society” (p. 84). Agenda 21 has engendered a range of critique and criticism over a significant period, particularly in the USA. The Guardian reported how certain southern states such as Arizona, Texas, and Missouri sought unsuccessfully to introduce legislation that prohibited action taken on Agenda 21 issues. Events in Alabama in 2012 demonstrate potential dangers of attempts to legislate against voluntary agreement to Agenda 21 in that “. . . one of the biggest dangers of anti-Agenda 21 bills lies in their often vague wording which can obscure their potential impacts. . . [e.g.] the Texas bill could . . . have barred non-profits that work with the UN from receiving any state or municipal funding” (Harman 2015). At a national level, the Southern Poverty Law Center in Montgomery Alabama noted that in the 22 years since the conclusion of the Earth Summit “. . . Agenda 21 has been transformed in much of the American public mind into a secret plot to impose a totalitarian world government . . . to crush freedom in the name of environmentalism” (2014, p. 5). It further suggests that this mindset goes further than extremists. In January 2012, the Republican National Committee denounced Agenda 21 as a “destructive and invidious scheme” oriented toward perpetrating a “socialist/communist redistribution of wealth” (2014, p. 5). Alternative concerns around the pace of implementation of Agenda 21 were raised at the UNGA’s 19th special session in 1997 concerning demonstrated capacity of the CSD to accelerate and strengthen action on “. . . the integration of economic, social and environmental objectives, sectors and issues and means of implementation.” Although it recognized that the CSD’s work had been catalytic in contributing to new actions, commitments, and deliberations on SD, it urged increased efforts to attract greater involvement of ministers and high-ranking bureaucrats, more

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interaction with international financial, development, and trade institutions and greater promotion of regional collaboration around projects and promotion of innovative practice. In 1998 the UNGA suggested that the CSD’s program for 1998–2002 might adopt a sectoral theme, starting with poverty, consumption, and production patterns. This approach allowed a greater focus around integrated policy to attract major sectoral and group interests. These interactions to exchange experience and best practice, often through voluntary communication and reports, implicitly brought together players with disparate forms of commitment and interpretations of a SD path. International financial, development, and trade institutions also brought their own political perspectives.

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2002 World Summit on Sustainable Development: Johannesburg

The World Summit on Sustainable Development in Johannesburg in 2002 further considered the challenges of implementing Agenda 21. The process of implementation relied on leveraging member reports, perspectives, and insights (particularly governmental) on developing integration across pillars of SD. Despite attempts to develop and share common indicators across themes to support comparable contributions, merging inputs around themes to achieve integrative thinking was a continuing challenge. Concerns were no less prevalent in relation to the CSD’s brief to take into account regional developments and facilitate exchange of perspectives in a manner that respected the mindsets, attitudes, and political agendas brought to these forums reflecting individual stakes in global cooperation. A major outcome at Johannesburg was its Plan of Implementation in which the respective roles of the UNGA, the ECOSOC, and the CSD in promoting SD were upgraded. The UNGA was asked to adopt SD as a key element of UN activities and give “overall political direction to the implementation of Agenda 21 and its review” (UN 2013a, para. 14). The ECOSOC was given a similarly challenging role to oversee system wide coordination “. . . and the balanced integration of the three dimensions of sustainable development.” In addition, it was to review the agenda of SD themes and their implementation and, in its substantive session “. . . take into account all relevant aspects of the work of the United Nations on sustainable development, promote greater coordination, complementarity, effectiveness and efficiency of activities of its functional commissions and other subsidiary bodies relevant to the implementation of Agenda 21” (UN 2013a, para. 14). The CSD was to place greater emphasis on implementation at “all levels” through promoting and facilitating partnerships. Given the perceived enormity of this task, it was suggested that cross-sectoral initiatives should be focused on specific sectoral issues, policy integration being achieved through the relevant ministers dealing with various dimensions of SD. Both themes and opportunities for negotiation were limited, the latter occurring every 2 years in sessions of the CSD.

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Thus, it might be argued that by the time the Johannesburg Conference occurred, tensions were arising from the enormity of the Agenda 21 brief and its related attempts to influence economic development and political agendas. Three tensions are highlighted. First, capability to implement Agenda 21 was underestimated in relation to both resources involved and the depth of skills required. Multi-stakeholder communication and sense-making skills of a high level were needed across individual actors working in networked institutional settings, governments, and bureaucracies, the private and NGO sectors, and academia and research. Second, it could be argued that the limited opportunities for forums and constrained resources encouraged a fragmented and possibly linear approach to SD at a national and international level. This approach potentially ignored the impact of political dynamism (associated with a global economy increasingly driven by technological innovation) on the responses and actions of member states. Third, as criticism of the CSD increased in terms of its capacity to achieve complex levels of implementation, solutions were increasingly sought to provide frameworks to enable more effective engagement of members and groups. Some member states complained that too many issues were clustered in each given year, thus obviating in-depth discussion; also, the review year supported a focus on progress, challenges, and exchange of experience but did not allow for lengthy negotiations. Thus, the 2-year cycle review and negotiation were not resulting in appropriate action (UN 2013a, para. 43). Likewise, decisions on thematic issues were often grouped with little chance of agreement on multiple complex issues (UN 2013a, para. 44). Some member states regretted the lack of opportunity for a more rigorous science-policy interface (para. 47). Also, a 1-week intergovernmental preparatory meeting every second year was rushed, and often lowest common denominator outcomes emerged with little attention to challenges and constraints arising in the review year. This resulted in prolonged negotiations in the policy year (paras. 49 & 50). Perhaps the most critical issue was that the CSD had become a forum for environmental ministries with occasional input from interested ministries, e.g. agriculture. However, ministries responsible for integrated planning such as finance or development were often not represented, so decisions made tended to lack legitimacy (UN 2013a, para. 52). Multi-stakeholder dialogues were seen as valuable for member states seeking multi-stakeholder partnerships in implementing SD policies. Partnership fairs were held for each session of the CSD, but time available hindered a review of their contributions and resource constraints limited the development of a partnership data base. These were seen as valuable educative forums that needed further development (para. 60).

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2012 United Nations Conference on Sustainable Development (Rio+20) and “The Future We Want”

At the UN Conference on Sustainable Development (Rio+20) in June 2012, the outcome document “The Future We Want” recognized the uneven progress since 1992 in SD and poverty eradication, acknowledging the impact of multiple financial,

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economic, health, food, and energy crises and anticipating their future frequency, “climate change [being] a cross-cutting and persistent crisis” (UN 2012, para. 22). Rio+20 also recognized that the Millennium Development Goals (MDGs) were providing a broad framework and focus for “. . . national priority-setting and for mobilization of stakeholders and resources towards common goals” (2012, para. 245) and re-committed to their achievement. In that context, the Conference recognized the importance of establishing sustainable development goals that built upon the MDGs, encapsulated Agenda 21 and the Johannesburg Plan of Implementation, and respected the 1992 Rio Principles. This focus on establishing SDGs acknowledged that it was necessary, in the interests of accelerated action, to identify a limited number of global goals that could be easily communicated but which took into account different national political, economic, social, and environmental realities as well as levels of development and associated capability. More concise representations of development goals were to be developed by “. . . an inclusive and transparent intergovernmental process . . . open to all stakeholders” (2012, para. 248), and the process coordinated with the post-2015 development agenda. Regional Economic Commissions would collect and analyze national data to inform this global initiative, assistance being given to developing counties to achieve the requisite capacity building. Rio+20 also mandated the establishment of a universal, intergovernmental High-Level Political Forum on Sustainable Development (HLPF) to replace the CSD and provide political leadership, guidance, and recommendations for SD. In 2013, the UNGA adopted a resolution on the format and organization of the HLPF which identified it as voluntary, state-led, and involving ministerial and other relevant high-level participants. In an effort to encourage an action-oriented approach, the states were to “. . . ensure that their participation . . .. reflect[s] the balanced integration of the social, economic and environmental dimensions of sustainable development from their national perspectives” (UN 2013b, para. 12). This upgraded level of participation was intended to constitute a dynamic platform that could better pursue an action-oriented agenda in response to new and emerging SD challenges (UN 2012, para. 85). The intention appears to address previous tendencies of the CSD for a potentially more prescriptive appraisal of national challenges. The report to the 67th session of the UNGA by the Secretary General on lessons learned from the CSD (UN 2013a) noted that the CSD had been largely successful in fulfilling its role as the cornerstone of the UN’s intergovernmental framework for SD governance. However, it was also noted by member states and the UN’s system organizations and major groups that the CSD over time “. . . had progressively lost its luster and effectiveness . . . including its lack of impact on the implementation of sustainable development policies; the ineffectiveness of its role in integrating economic, social and environmental dimensions of sustainable development in the work of the UN’s system; and its cumbersome decision-making processes and unclear outcomes” (2013a, para.3). Nevertheless, the importance of the CSD’s work “. . . in launching initiatives and introducing new topics into governmental debates . . .” (2013a, para. 3) concerning SD was also noted.

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The 2015 UN Sustainable Development Summit

In 2013 an Open Working Group of the UNGA scoped the SDGs which were presented at the 69th session of the UNGA. The resulting 17 SDGs were core to the outcome document of the UN Sustainable Development Summit in September 2015 entitled “Transforming our World: The 2030 Agenda for Sustainable Development” (UN 2015a) which outlined the post-2015 development agenda. The UN’s “Informal Summary” of the Summit suggests that the new format and organization of the HLPF successfully attracted a large number of heads of state and government as well as high-level leaders from business and civil society who “. . .welcomed the 2030 Agenda and emphasized its transformative, universal and inclusive nature, its applicability to all countries and stakeholders and its motto of leaving no one behind. Its linkages with peace, security, human rights and good governance were also lauded.” Eradicating poverty, including extreme poverty often incurred by crises (such as the current COVID-19 pandemic), was seen as the greatest global challenge and as essential for progressing SD. The 17 SDGs and 169 targets demonstrated a vision described as “supremely ambitious and transformational” (UN 2015b, para. 7). They would drive action over the next 15 years, addressing ambitions for determining that poverty is ended and that healthy people can fulfil potential with dignity and equality; the planet is protected from degradation; all people can enjoy fulfilling lives with prosperity in harmony with nature; peace is fostered to support just and inclusive societies free from fear; and partnership is mobilized to implement this agenda. The Brundtland Commission’s vision for SD as meeting the needs of the present without compromising the ability of future generations to meet their own needs had recognized “in essence, sustainable development is a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations” (WCED 1987, para. 15). The scope of the 2030 Agenda could be seen as more ambitious than Brundtland and no less ambitious than Agenda 21, in that it detailed means of achieving these high-level goals, e.g., concerning finance, technology, capacity building, trade, and systemic issues such as policy and institutional coherence, multisector partnerships, and key deadlines for data collection, monitoring, and accountability. The resolution adopted by the UNGA stated: . . . the framework we are announcing today goes far beyond the Millennium Development Goals . . . [n]ever before have world leaders pledged common action and endeavor across such a broad and universal policy agenda. We are setting out together on the path towards sustainable development, devoting ourselves collectively to the pursuit of global development and of “win-win” cooperation which can bring huge gains to all countries and all parts of the world. (UN 2015c, para. 18)

2015 was seen as a landmark year for multilateralism, a core tenet of Brundtland’s program. Implementation of the ambitious new agenda of the 2015 Summit was seen as relying upon new, enhanced, and dynamic global partnerships, embracing policies

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and actions suggested in the Addis Ababa Action Agenda on Financing for Development. 2015 also witnessed multilateral collaboration associated with the Paris Agreement’s response to climate change. Nevertheless, it was made clear at the 2015 Summit that each country had primary responsibility for economic and social development, emphasizing the role of national policies and development strategies. This premise is of particular significance in analyzing state responses to national, regional, and global crisis. Bolton and Landells (2017) argue that the Paris Conference in that same year also demonstrated a new form of transparency and “. . . agile infrastructure for multiple and dynamic actions to renegotiate and reshape global goals . . . includ[ing] an EU back down on legally binding emission cuts, US acceptance of clauses around ‘loss and damage’ and China’s and India’s agreement to an aspirational target of 1.5
warming” (2017, p. 87).

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Approaches and Activities of the HLPF

The annual meetings of the HLPF now serve as the central UN platform for the follow-up and review of the SDGs. The CSD had been criticized for the timing of its meetings and the lack of opportunity to review and facilitate interstate cooperation and cross-linkages in addressing emergent crisis as well as appropriately sponsoring global partnerships. The HLPF approach allows for more regular and deeper consideration of themed topics on an annual basis. This was to be achieved through review of state-led Voluntary National Reviews (VNRs) from both developed and developing countries. This themed annual approach was also seen as conducive to revitalized global partnerships, leveraging interlinkages across governments, bureaucracies, business, and civil society. However, concern was also expressed about the potential of the new and broader agenda to result in dispersion of resources with associated dilution of outcomes. In developing the program of themes, it appears that the High-level Segment of ECOSOC offered insights from National Voluntary Presentations concerning the need to ensure that MDG agendas were prioritized and followed through, particularly those concerned with poverty eradication. Consequently, in 2016, at the HLPF’s first meeting under the auspices of the ECOSOC, the theme adopted was that of “Ensuring that no one is left behind.” Of key significance here was the focus on institutional reform at the local level. The President’s summary of the High-Level Segment of ECOSOC and the HLPF noted the need for new national bodies to strategize, plan, coordinate, and review implementation around this theme. It was also recognized that “[h]uman resource capacities would be needed to ensure that government agencies effectively engage and manage complex, multilayered partnerships with other stakeholders, including the private sector and civil society, in ways that build trust and accountability for results” (UN 2015d, p.10). Governments were to lead such capability building which would require building statistical and broader analytical capacity to review progress, measure outcomes, and evaluate approaches (2015d, pp. 10 and 11).

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For the next three meetings in 2017, 2018, and 2019, the themes adopted were, respectively, “Eradicating poverty and promoting prosperity in a changing world,” “Transformation towards sustainable and resilient societies,” and “Empowering people and ensuring inclusiveness and equality.” Each of these meetings reviewed progress against a group of SDGs related to the theme as well the review of nationstate VNRs. At the 2019 meeting of the HLPF under the auspices of the UNGA, i.e., the SDG Summit 2019, progress against all of the SDGs was comprehensively reviewed, with the conclusion that progress on implementation of all SDGs was less than anticipated. This resulted in a renewed call to action to prepare for a decade of enhanced delivery for sustainable development. The HLPF for 2020 adopted the theme of “Accelerated action and transformation pathways; realizing the decade of action and delivery for sustainable development.” At the time of writing, the annual forum in July 2020 (during the COVID-19 pandemic) had recently taken place at which it was noted that the pandemic was having impact on progress across all 17 SDGs (listed below), the poorest, and most vulnerable people suffering disproportionately, “. . . what began as a health crisis has quickly become a human and socioeconomic crisis. Whilst the crisis is imperiling progress towards the SDGs, it also makes their achievement all the more urgent . . . A transformative recovery from COVID-19 should be pursued, one that addresses the crisis, reduces risks from future potential crises and relaunched the implementation efforts to deliver the 2030 agenda. . .” (HLPF 2020, p.1).

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2019 SDG Summit: Accelerated Action Agenda

The HLPF at the SDG Summit in September 2019 adopted a political declaration entitled “Gearing up for a decade of action and delivery for sustainable development.” In the Report of the Secretary-General on SDG Progress 2019, global efforts to implement the 2030 Agenda in the last 4 years were acknowledged but concern was expressed around: SDG1: The pace of poverty reduction SDG2: An increase to 821 million people undernourished in 2017 SDG3: The ongoing prevalence of major diseases such as malaria and tuberculosis SDG4: 262 million children and youth aged 6–17 being still out of school and half of children and adolescents not meeting minimum proficiency standards SDG5: Insufficient progress on gender equality SDG6: Billions of people still lacking safe water, sanitation, and hand-washing facilities SDG7: 800 million people being without electricity and having limited access to clean cooking fuels and technologies SDG8: The limited increase in employment opportunities, particularly for young people, over 50% employed in non-agriculture sectors being in informal employment

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SDG9: Least developed countries still facing serious challenges in doubling manufacturing industry share of GDP by 2030 SDG10: Income inequality continuing to rise, even as the bottom 40% of the population in many countries has experienced positive growth rates SDG11: More than 1 billion people continuing to live in urban slums SDG12: Worldwide material consumption increasing to 92.1 billion tons (an increase of 254% from 1970) SDG13: Climate change occurring at rates faster than anticipated and strengthened capacities for least developed countries needing to be scaled up much faster SDG14: Responsible use of ocean resources still being insufficient SDG15: Land degradation continuing and biodiversity loss increasing SDG16: Violence still depriving millions of their security and undermining public services and broader economic development SDG17: Overseas development aid declining, private investment flows often not aligning with SDGs, the digital divide continuing, and trade tensions ongoing The Report also provides insights into how the development of the VNRs has influenced or challenged planning documents and SD policies. In some instances, the 2030 agenda served as a blueprint for new plans and strategies, other members mapped the SDGs against existing documents. In some countries, the 2030 agenda has influenced or been integrated into visions for policy frameworks, national development plans, and on occasions regional agreements. In some countries, measures to increase the sustainability of economies have seen a decoupling of economic growth from natural resources, when low carbon economies are being pursued. A major challenge appears to have been incorporating SDGs into national financial structures and budget processes, specifically around financing plans for implementing SDGs. Not surprisingly, another area of challenge identified in VNRs appears to be that of developing integrated policies. Some countries have developed institutions to support coherent and integrated stakeholder involvement across sectors, e.g., inter-ministerial commissions. It is noted that in some countries including Bangladesh and Nigeria, an office to lead implementation of SDGs is located in the Office of the President or Prime Minister, thus allowing central access across government. In other countries, parliaments are involved in implementation and review of the SDGs as are high-level audit institutions. At the HLPF, policy coherence across government and from national to regional levels has been identified as another key challenge. In many countries, local governments have become more engaged in the implementation of SDGs than national governments. Another concern was the need to increase awareness-raising activities to promote long-term behavior change, particularly with younger generations. The integration of SDGs into educational curriculum was also suggested. It was noted that the engagement of civil society and the private sector had occurred in many forms, e.g., in the preparation of planning documents and their implementation: through multi-stakeholder institutions, meetings, forums, public consultations, etc. Since 2015, civil society has lobbied government to meet the

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SDG agenda and has also helped reach marginalized and vulnerable groups. A perceived weakness with the potential to exclude key constituencies was the reliance on larger NGOs rather than smaller community-based organizations. Academic and scientific communities have been involved in dialogue with policy makers, developing sustainable solutions and technologies, as well as instilling SDGs in graduate and post-graduate programs to influence attitudes and skillsets in the labor market. The engagement of the private sector is identified as essential in terms of long-term partnership to foster innovation and technology in driving solutions to meet SDGs. The UN has also redesigned its development system to better support the 2030 agenda and SDGs. Country teams are being built with more autonomous powers for resident coordinators, the latter providing strategic guidance through transparent and accountable processes. More resources are being allocated to these development activities.

13

Conclusion

The title of this chapter suggests it is useful to trace the trajectory of SD since the Brundtland Report through initial commitment to the goals of SD toward shaping emergent capability to facilitate action. Information and analysis presented here suggest that the approach to implementing SD has witnessed a constant reaffirmation of its foundational principles. The breadth of the agenda demonstrates the complex and dynamic interlinkages that need to be considered in identifying development challenges. Its agenda constituted a political nemesis to narrow politico-economic doctrines that failed to understand global crises from a more complex, holistic, and equitable perspective. These complexities and tensions have accumulated since the time of its writing when the Commission noted “[t]he present decade has been marked by a retreat from social concerns. Scientists bring to our attention urgent but complex problems bearing on our very survival . . . We respond by demanding more details and by assigning the problems to institutions ill-equipped to deal with them” (WCED 1987, Chairman’s foreword). A core feature of the Brundtland Commission’s Report was its emphasis on multilateral involvement in determining problem sets and taking action. Since the Brundtland Commission, the UN and its associated bodies have wrestled with complex policy interlinkages and facilitating appropriate multilateral engagement to support action at all levels, from global to local. In other words, it is proving particularly challenging to develop structures and capability to facilitate an integration of economic, social, environmental, and governance agendas to support achievement of SDGs in an action-oriented environment. Thus, an understanding of progress cannot rely on linear thinking. There is no clear trajectory from commitment to capability building in implementing Brundtland’s agenda. Rather, progress post-Brundtland has relied on constant commitment and reinforcement of its principles, their relevance often being highlighted during emergent global crises. Commitment to achievement of goals emerging from these principles, in the form of SDGs and their associated targets, is thus an ongoing

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and dynamic process reinforced and informed by stakeholder interactions around implementation. Action is guided by SDGs but constitutes “cohesive, nationally owned sustainable development strategies, supported by integrated national financing frameworks” (UN 2015c, para. 63). So how might “commitment” and “capability” be conceptualized in the context of Brundtland and beyond? As demonstrated in Fig. 1, commitment has been reinforced by dynamic interaction and iteration within and between stakeholders in UN forums and in nation-state environments, the latter articulating responses to outcomes agreed at the forums and converting commitment into local action. PostRio+20 the notion of commitment was seen as more highly dependent on the success of stakeholder nations to take action. The HLPF became a resource for developing a more peer-based and transparent level of political action by nations. The adoption of an annual thematic approach also represented an attempt to reduce burdens associated with the broader SDG agenda and allow a deeper examination of interlinkages and integrated policy concerns, the challenges of which became clearer over time. Capability to take action has been identified repeatedly as a fundamental requisite over this period. However, experience has suggested that limited capability cannot be seen simply as a “blocker” to action. As noted in Fig. 1, the dynamic nature of stakeholder interactions in local contexts demonstrates a praxis, whereby “theory” encapsulated in agreement around philosophy, aspirations, and the SD agenda is interpreted and modified iteratively through practice and reflection. This appears to be a key premise of the Brundtland Report which acknowledges the critical need for human resource development “. . . not only to build up technical knowledge and capabilities, but also to create new values to help individuals and nations cope with rapidly changing social, environmental, and development realities” (WCED 1987, para, 45). In this context, the Brundtland Commission also identified challenges to achieving collaborative decision-making that can inform but not instruct process, also emphasized here as a core capability. The Chair of the Commission suggested that implementing SD plans required a regeneration of multilateral thinking and activity to cross the boundaries of national sovereignty, narrow economic thinking and dogma, and the silo-based disciplines of science. She concluded that “In the final analysis, this is what it amounts to: furthering the common understanding and common spirit of responsibility so clearly needed in a divided world.” The Commission noted that the members of the World Commission on Environment and Development came from 21 very different nations and disagreed often on details and priorities. Yet “. . .despite our widely differing backgrounds and varying national and international responsibilities, we were able to agree to the lines along which change must be drawn” (WCED 1987, para. 108). Similar experiences have been reported consistently by UN bodies and members in the post-Brundtland era, efforts being made to improve and capture capability to operate in these complex decision-making environments. Over time attempts to achieve better balance between guidance from UN bodies and from state-based reflections on experience have been facilitated and given a higher priority in the UN forums. Thus, the UN process for achieving SDGs can be

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characterized as providing a framework that is itself regularly reviewed from the perspective of its capacity to facilitate action through eliciting, from members, a greater awareness of the intrinsic value of emergent and collaborative capability to deliver outcomes. This has demonstrated conceptual and practical interlinkages between the notions of commitment and capability, envisaged here as a form of praxis. Requisite skills and capabilities of individuals and groups in this environment can be identified as essential to this process. In an increasingly crisis-ridden global environment, it is becoming apparent that decision-makers and citizens need to be aware of the risks associated with simple “here and now” solutions, often proffered as unilateral panaceas to maintain political advantage and stability. Thus, an appreciation is required of complex, systemic, and pluralist thinking concerning problem identification and solution generation as a basis for conceptualizing and responding to urgent global challenges more holistically. From a skills perspective, there is the need for capability to think critically in multilateral forums that is collaborative, evidence-based, reflects upon context, purpose, and outcomes, and is “humble” (Etzioni 2014) in that it does not shirk from undertaking iterative cycles of learning to accommodate stakeholder concerns. Reflecting these skill and capability requirements, Bolton and Landells (2017, p. 75), in discussing forms of decision-making appropriate to promoting sustainability agendas, note that “[t]hese agendas confront leadership and decision-makers by embodying persistent dynamism and associated ambiguity through challenging rational decision-making processes and associated power relations, introducing multi-stakeholder interests in transient key decision-choices, and requiring relevant and emergent knowledge from stakeholder insights for more holistic decisionmaking.” Their argument further suggests that the power of praxis will be exercised across all levels of power and hierarchy. Stakeholders at all levels will have to make sense of patterns of knowledge as a basis for judgment when dealing with real issues and draw upon other stakeholders to achieve appropriate outcomes. This will most likely occur in an iterative manner, because no one can determine or implement a comprehensive plan without input and adjustment. The need for these principles and skill sets was anticipated in the Brundtland Report and has been clearly demonstrated in progressing SD agendas in the post-Brundtland era. Tawney (1964) argued that too often and inappropriately, “[p]ower is identified with political power and political power is treated as a category by itself. It is regarded as possessed by individuals and members of a state or exercised by a state on behalf of its members.” Alternatively, Jennett and Stewart (1987) argued that power is lodged in civil society. Shifts in attitudes in civil society are unpredictable and can, in turn, shift the direction of political discourse and action, particularly in a networked world. For example, the current COVID-19 pandemic is challenging base principles of ideologically driven political leadership, particularly in relation to integrative thinking around economy, society, environment, and governance. Taleb (2014, p. 384) noted that “. . . globalization brings fragilities, causes more extreme events as a side effect, and requires a great deal of redundancies to operate

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properly.” He suggests that in complex global systems, consequences are highly unpredictable and so unilateral perspectives without engagement of other salient stakeholders can be identified as “epistemologically irresponsible,” i.e., an irresponsible use of limited data having significant unpredictable impact. The Brundtland Commission made great strides in identifying the need to integrate thinking and knowledge around SD multilaterally across all levels of society and globally, including addressing looming global crises that threaten sustainable futures. UN forums post-Brundtland have often expressed frustration with progress, but Chomsky (2020, p.1) reminds us that looming catastrophes cannot displace the day-to-day efforts toward addressing social justice agendas as “. . . such awareness and understanding presupposes a much broader sensitivity towards the tribulations and injustices that plague the world – a deeper consciousness that can inspire activism and dedication, deeper insight into their roots and linkages.” He adds that the urgency of looming crises cannot be addressed immediately “. . . readiness has to be created by patient work . . . frustrating or not, these preliminary stages cannot be skipped.” Education plays a significant role in consciousness-raising, intrinsic to effective political action. The post-Brundtland era has witnessed such constancy of activity in eliciting a growing consensus around commitment to its aspirational agenda. However, the convergence of agendas such as climate change, the COVID-19 pandemic and the different political priorities and capabilities of nations to deal with it, and the impact of increasing levels of wealth inequality all challenge the effectiveness of both national and global solutions that ignore multilateral agendas. However, the experience of this convergence of crises also creates the potential for a shift in global consciousness concerning the limits of neo-liberal thinking as illustrated by national political responses to the global financial crisis of 2007–8 and its aftermath and the impact of COVID-19. This situation validates Brundtland’s plea for multilateral thinking in identifying and responding to convergent global pressures that threaten sustainable futures. Often populist narratives in response to contemporary global crises, frequently promulgated for political advantage, attempt to jettison multilateral agreements and mindsets concerning sustainable development. As demonstrated above, the UN has been an essential platform for giving voice to developed and developing nations to identify and promote collaborative multilateral agendas to address interrelated global challenges, the role of the HLPF now attempting to facilitate this objective. Detractors of the UN are seeking to starve it of resources needed to enable the voices of developed and developing nations negotiate forms of intervention and accountability in achieving its agendas, including SDGs. It has been demonstrated here and in Fig. 1 that pressures brought to the UN will be influenced by politics within nations. In this vein, it is of interest to witness a range of political initiatives and global movements attempting to lend greater political status and commitment to new economic order, often aligned with the Brundtland agenda. Although Brundtland’s goals were seen as aspirational, they now appear to be increasingly represented in global political agendas that highlight the inadequacy of neoliberalism and right wing populism in responding to complex global crises.

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Chomsky (2020) suggests the urgent need for humanity to internationalize or become extinct in the face of a new order of global challenges. Demonstrating common interests between nations to progress global economy and societal wellbeing is being strengthened by the fact that national and international communities are directly experiencing, simultaneously, a range of negative externalities associated with climate change, increased discrepancy between wealth and community benefit, and often a lack of credible government intervention to support citizen wellbeing in periods of global threat. This environment provides an opportunity for increasing the transparency of politics of globalization, including the disparate accrual of wealth by a small elite at the expense of resource availability for other stakeholders to address contemporary global challenges. This reality highlights the critical need for multilateral engagement to progress sustainable development goals, reinforcing the urgency of furthering the Brundtland agenda as global challenges converge.

14

Cross-References

▶ Climate Change ▶ Innovation and Sustainability ▶ The Evolution of Institutional Environments in the Development of Corporate Social Responsibility in Selected ASEAN Countries ▶ The Emergence and Role of Nongovernmental Organizations ▶ The Sustainable Development Agenda ▶ Triple Bottom Line

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Human Rights Nour Mohammad and Syed Mohiuddin Hasan

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 The International Human Rights Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Charter-Based Bodies under the United Nations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Submission of Universal Periodic Review (UPR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 United Nations Human Rights Treaty Bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Bangladesh Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Constitution and International Human Rights Instruments in Bangladesh . . . . . . . . . . 3.2 International Law under the Constitution of Bangladesh . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Provisions Relating to Customary International Law in the National Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Constitutional Provision Concerning Treaties Adoption and Ratification . . . . . . . . . . . 4 Role of Higher Judiciary in Enforcing International Human Rights Law at a National Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Indian Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Constitutional Provisions for the Protection of Human Rights . . . . . . . . . . . . . . . . . . . . . . 5.2 Role of Judiciary to Protect Human Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Indian Position in International Human Rights Discourse . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Institutional Mechanism for the Protection of Human Rights . . . . . . . . . . . . . . . . . . . . . . . 6 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

Human rights are inherently involved with a human being regardless of race, color, nationality, language, religion, ethnic origin, or any other status. Human rights are N. Mohammad (*) Department of Law, Premier University, Chittagong, Bangladesh Western Sydney University, Sydney, Australia e-mail: [email protected] S. M. Hasan Casual Academic, Western Sydney University, Sydney, Australia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_22

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applicable everywhere and at all times because of their universality and inalienability (Akbari 2019). The universality of human rights is recognized through the adoption of the Universal Declaration of Human Rights (UDHR) 1948. Article 1 of the UDHR recognized that “All human beings are born free and equal in dignity and rights” (UDHR 1948 art 1). This article indicates that there is no hierarchical order of human rights by their nature. All rights have equal status, and denial of one right invariably impedes enjoyment of other rights. Every state should give equal priority over all rights. For instance, the state cannot promote any right while ignoring the other rights. Every human right is considered equal and on the same footing. Keywords

Human rights · International law · Treaty · Bangladesh · Constitution · India · Obligations · Legal framework

1

Introduction

Human rights are inherently involved with a human being regardless of race, color, nationality, language, religion, ethnic origin, or any other status. Human rights are applicable everywhere and at all times because of their universality and inalienability (Akbari 2019). The universality of human rights is recognized through the adoption of the Universal Declaration of Human Rights (UDHR) 1948. Article 1 of the UDHR recognized that “All human beings are born free and equal in dignity and rights” (UDHR 1948 art 1). This article indicates that there is no hierarchical order of human rights by their nature. All rights have equal status, and denial of one right invariably impedes enjoyment of other rights. Every state should give equal priority over all rights. For instance, the state cannot promote any right while ignoring the other rights. Every human right is considered equal and on the same footing. Any attempt at creating any hierarchies of human rights is doomed to failure. Nevertheless, the question of the universality of human rights is still open to debate despite the UDHR coming to existence 72 years ago. Most of the countries have ratified the core international human rights instruments for the protection and promotion of human rights such as the ICCPR and ICESCR. However, still, human rights are violated everywhere in the world. In 1993, the Vienna World Conference on Human Rights noted that states have to protect and promote all human rights and fundamental freedoms, irrespective of their political, economic, and cultural systems. Paragraph 5 of the Vienna Convention recognizes that: “All human rights are universal, interdependent and inter-related. The international community should treat human rights globally in a just and equitable way, on an equal basis and with the same emphasis” (Vienna Convention 993: Para. 5). The World community declared in the Vienna Conference that every state should adopt and practice the rights enunciated in the declaration into the national constitution, or any other domestic law for the protection of human rights at a national level. Human rights arise as a natural right, developed as individual rights (when human rights

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provisions incorporated in the constitution) and finally realized as a universal right (Norberto Bobbio 1998: 30). Many of the states ratified the core human rights instruments, which create the legal obligation to the state for ensuring human rights in its territory. The basic principles of human rights are universal, inalienable, indivisible, and interrelated. Human rights are universal because everyone is born with and possesses the same rights, irrespective of their color, origin, gender, religion, culture, or ethnic background. Human rights are inalienable because people’s rights can never be taken away (Akbari 2019). All human rights are indivisible and interdependent due to their nature. Human rights are equal and horizontally harmonizing in their value and entitled to equal protection of the law, and no rights can be given more priority or importance over others. They are protected and promoted as a whole because they are complementary to each other. This chapter examines the application or status of international law and human rights treaties in the domestic legal system. The authors chose the jurisdictions of Bangladesh and India to generalize the present position of implementing the process of international human right law at the domestic level.

2

The International Human Rights Structure

The United Nations Charter adopted in 1945 is the core international human rights instrument to respect human rights and human dignity. The Charter aims to achieve international cooperation to promote and protect the rights and freedoms of all people regardless of their religion, language, sex, and race (article 1.3). The United Nations Charter is a first global and imperative document which affirmed the human dignity and worth and legal protection of men and women, principles of equality and nondiscrimination (Aliyev 2016). There are various provisions in the Charter which aim at human rights protection such as Article 1.3, Articles 55 and 56 Article 76 c, article 13.1.b, and Article 62 and Article 68. The Article as mentioned above categorized three groups of norms of the Charter: Article 55 and 56 related to international economic and social cooperation; Article 76c related to norms on international trusteeship; and Article 13.1, Article 62.2 and 3, and finally Article 68 related to the jurisdiction of the United Nations bodies (Ibid). This is the document which provides universal respect toward the human rights and fundamental freedom of all people without making any distinction (Article 55.c). On the other hand, the International Bill of Human Rights comprises: The Universal Declaration of Human Rights, 1948; The International Covenant on Economic, Social and Cultural Rights, 1966; and The International Covenant on Civil and Political Rights, 1966. Other international human rights treaties were dealing with the various rights that protect and promote the human rights of people. The Universal Declaration of Human Rights adopted in 1948 is a document, which works for protecting the rights of everyone everywhere. The aim of the declaration is “a common standard of achievement for all peoples and all nations.” After passing 72 years of the declaration, it remains a primary source of global human rights standard (Hannum 1995). The declaration outlined 30 rights and

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freedoms that belong to every human being and nobody can take away from us. The UDHR first set out the core principles of human rights such as universality, indivisibility, interdependence and inalienability, and equality and nondiscrimination. Articles 3–21 contain all civil and political rights of a person, and Articles 3–27 defined the economic, social, and cultural rights. Over the years, these rights were incorporated into the national constitution, treaties, and convention and customary international law, through which human rights of all people were expressed and guaranteed. The United Nations is a mother organ to deal with the human rights system. This system consists of two essential mechanisms, i.e., Charter-based bodies and Treatybased bodies (committees). Charter-based bodies established under the United Nations Charter aim to uphold the international human right. Treaty-based bodies were created by the international human rights treaties to address and monitor the human rights situation of a particular state to comply with the human rights obligations in the particular treaty under which they have created.

2.1

Charter-Based Bodies under the United Nations

The Charter-based bodies are mainly responsible for enforcing and monitoring compliance with international human rights. This body includes Office of the High Commission for Human Rights (OHCHR) and Human Rights Council (HRC was established by the General Assembly (GA) in 2006 to replace the previous Commission on Human Rights in 1946). The primary function of HRC is to ensure the implementation of human rights, address the situation of human rights, and protect and promote human rights within all aspects of the UN work. The mechanism and procedure of Charter-based bodies is a special procedure of the human rights council and Human rights advisory committee.

2.2

Submission of Universal Periodic Review (UPR)

The Universal Periodic Review (UPR) is a peer review mechanism to examine the human rights records of all UN member states once every four and a half years. The UN General Assembly has created the UPR on 15 March 2007 through resolution 60/252. Conducting a periodic review is a fascinating and innovative development in human rights monitoring brought by the Human Rights Council (HRC). The purpose of this mechanism is to develop the human rights situation in all countries and address human rights violations wherever they occur (Begum 2016). Bangladesh submitted its first and second circle UPR reports in February 2009 and April 2013 respectively, reaffirming its stand on “Zero tolerance” against human rights violations law by enforcement agencies and their impunity. During the third UPR cycle that took place on 14 May 2018, Bangladesh is again expected to spell out steps they have taken to implement recommendations posed during their previous reviews, which they had committed to follow-up on, as well as to highlight recent human rights developments in the country. Presently, each year, forty-two states reports are

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reviewed at three HRC sessions, and each session reviewed fourteen state reports, which are generally held in January/February, April/May, and October/November.

2.3

United Nations Human Rights Treaty Bodies

The international human rights treaties created a legal obligations on state parties to implement the obligations enshrined in those treaties. The primary objective of the mechanism is to monitor and assess the extent to which states are respecting their obligations under those treaties (Begum 2016). These obligations are overseen by a system of the specialist committee, one for each treaty. Presently, ten treaty bodies are governing the international human rights. The committees are Human Rights Committee; Committee on Economic, Social and Cultural Rights (CESCR); Committee on the Elimination of Racial Discrimination (CERD); Committee on the Elimination of Discrimination Against Women (CEDAW); Committee Against Torture (CAT); Committee on the Rights of the Child (CRCD); Committee on Migrant Workers (CMW); Committee on the Rights of Persons with Disabilities (CRPD); and Committee on Enforced Disappearances (CED). All state parties to the treaties impose an obligation to submit an initial report within one or two years after the ratification of a treaty. Then, member states are required submitting periodic reports to the UN treaty bodies under the human rights treaties that they have ratified. As state parties of those treaties, Bangladesh should submit its report to the UN human rights treaty bodies in due time. On 15 January 2015, Bangladesh submitted its eleventh periodic report to the Committee on the Elimination of Racial Discrimination under article 9 of the convention on the Elimination of all Forms of Racial Discrimination 1965, and its eighth periodic to the CEDEW committee under article 18 of the CEDAW. Bangladesh is still far away to regularize the submission of report to the UN human rights committee. There is a lack of political will and coordination among the three organs of the state to submit the report on time. Bangladesh has also submitted some reports late since “reporting is a difficult and onerous process due to the need for extensive consultation and the compilation of comprehensive information from divergent sources” (Heyns and Viljoen 2002:33). Over the years only a small number of reports have been submitted to the UN Committees under a few human treaties. Reporting is widely seen as an ad hoc activity, a one-off burden that the state has to deal with every year and not a continuous effort involving an ongoing cycle of reporting, the dissemination of concluding observations and implementation (Heyns and Viljoen 2002:33).

3

Bangladesh Practice

Bangladesh got its independence in 1971 after the Liberation War against the Pakistani rule. The emergence of Bangladesh as an independent state was the cause and consequence of many deprivations and violations of human rights of the people of Bangladesh (then East Pakistan) by Pakistani military. The Liberation War

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lasted nine months and resulted in at least a hundred thousand deaths. The constitution of Bangladesh was adopted on 4 November 1972 and came into force on 16 December 1972, subsequently amended from time to time, including the last amendment on 8 July 2018. Bangladesh is a unitary, independent, and sovereign state, the state religion is Islam, and the state shall ensure equal status and equal right in the practice of the other religions (Art 2A constitution of Bangladesh). The President is the head of the state, but the Prime Minister is the head of the government and runs all executive power through the cabinet. After several decades of its independence, Bangladesh is still fighting to promote and protect the human rights of its citizens. The present situation of human rights in Bangladesh reflects the incapacity to win in the struggle to protect these rights in the territory. Although Bangladesh has adopted and ratified several series of international human rights treaties, it has not incorporated many of these instruments into national laws. In the absence of internalization of international human rights norms and principles into domestic legal system, the national human rights mechanism has largely remained ineffective in monitoring, preventing, and addressing human rights violations. There has been a little check on policies and practices that do not support human rights protections. Many existing socioeconomic and politico-legal inequalities and human rights violations have become the order of the day.

3.1

Constitution and International Human Rights Instruments in Bangladesh

Bangladesh has ratified almost all the core international human rights instruments to protect the human rights of its citizen at the domestic level. The crucial instruments Bangladesh acceded are the International Covenant on Civil and Political Rights (ICCPR) in 2000, the International Covenant on Economic, Social and Cultural Rights (ICESCR) in 1998, International Convention on the Elimination of All Forms of Racial Discrimination 1966 (ICERD), Convention on the Elimination of All Forms of Discrimination against Women 1979 (CEDAW), Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment Act 1984, (CAT), and Convention on the Rights of the Child 1989 (CRC). As a state party of those treaties, Bangladesh should implement the rights recognized in those treaties. Apart from treaties and conventions, customary international law also acts as a significant source for human rights obligations for Bangladesh (Haque 2017). As noted earlier, human rights provisions are enunciated in both Part II and Part III of the constitution of Bangladesh. The former one contained the economic, social, and cultural rights called “fundamental principles of state policy,” and the latter one contained the civil and political rights called “fundamental rights.” However, economic and social rights are not fundamental; instead, these rights stand as some aspirational targets or welfare programs in the form of “fundamental principles of state policy” which as per Article 8(2) are not judicially enforceable. While rights placed in Part III are fundamental rights that have been made judicially enforceable under Articles 44 and 102 of the constitution, therefore, markedly, while economic

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and social rights under the constitution lack normative force, can it be an alternative to invoke normative force from the related international human rights instruments under which Bangladesh has undertaken obligations to fulfill those rights? The same proposition applies in case of civil and political rights in widening their scope beyond the constitutional scheme in light of international instruments binding Bangladesh. It may appear from the above exposition that Bangladesh has agreed to recognize a wide range of rights, subject to the reservations, and set forth in these instruments for its citizens and persons within its jurisdiction. However, some of the rights are not directly enforceable in a domestic court as the rights are not incorporated in domestic legislation, even though the state ratified those human rights instruments. The researcher will take an optimist view to analyze their actual position in the state territory, obviously, in the light of the Bangladeshi constitution and approaches of the higher judiciary.

3.2

International Law under the Constitution of Bangladesh

The constitution of Bangladesh does not contain any specific provision concerning international law and human rights law. Absences of provision do not mean that international law has no application in the domestic jurisdiction. The norms and principles of customary international law are binding on Bangladesh and part of the law of the land if it is not contrary to domestic legislation (Karim and Theunissen 2011). The first case concerning the application of international law is the Bangladesh v Unimarine S.A. Panama (1977) 29 DLR, SC 252. The Supreme Court held that customary international law is binding on states and gives effect on the norms and principles that are consistent with the domestic legal order (Karzon and Faruque 1999). The court cited the immunity of foreign mission envoys in the territory of Bangladesh as an excellent example of the application of international law on a state (Karzon and Faruque 1999).

3.3

Provisions Relating to Customary International Law in the National Constitution

There is no specific provision in the constitution of Bangladesh referring to the application of customary international law at a domestic level, despite the two Articles 25 and 145A that implicitly provide the state responsibility and obligations to follow the norms and principles of international law. Article 25 of the Constitution sets forth certain basic principles of international law that are relevant to customary international law, which shall be the guiding principles of governing Bangladesh’s international relations. These principles include, inter alia: “The state shall base its international relations on the principles of respect for national sovereignty and equality, non-interference in the internal affairs of other countries, peaceful settlement of international disputes, and respect for international

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law and the principles enunciated in the United Nations Charter, and based on those principles shall – (a) strive for the renunciation of the use of force in international relations and general and complete disarmament; (b) uphold the right of every people freely to determine and build up its own social, economic and political system by ways and means of its own free choice; and (c) support oppressed peoples throughout the world waging a just struggle against imperialism, colonialism or racialism.” Article 145A (Article 145A was substituted by the Constitution (Fifteenth Amendment, 2011)) of the constitution provides for the adoption and codification of the treaties at the domestic level. The relevant part is: “All treaties with foreign countries shall be submitted to the President, who shall cause them to be laid before Parliament: Provided that any such treaty connected with national security shall be laid in a secret session of Parliament.” These constitutional provisions refer to the application of customary international law at the domestic level when there is no explicit provision in the domestic legislation. If the domestic legislation has a clear-cut provision on any issue, the court will give effect to the domestic law rather than looking to international law (Haque 2017). This article (145A) declares Bangladesh’s adherence to the stance against the widespread violation of human rights and refers to customary international law (when required). Though it does not clearly stipulate the status of international law into our municipal arena, it may not be wrong to infer that it embodies certain normative principles of international law, i.e., principles of jus cogens, and thus, gives constitutional effect to these universal principles within Bangladesh. However, the complexity is that Article 25 itself has no legal binding force since it belongs to the Part-II of the Constitution that lays down the fundamental principles of state policy. Though principles laid down in Part-II shall be fundamental to the governance of Bangladesh, Article 8(2) of the Constitution shall be applied by Bangladesh in making laws, shall be a guide to the interpretation of the constitution and of the other laws of Bangladesh, and shall form the work of the state and its citizens, but they “shall not be judicially enforceable” (Art 8.2). Nevertheless, it is evident that Articles 25 and 8(2) call upon all three organs of the government to make possible the invocation, interpretation, and application of the peremptory norms of international law in appropriate cases (Karzon and Faruque 1999).

3.4

Constitutional Provision Concerning Treaties Adoption and Ratification

The Constitutional stance is not clear on how to ratify a treaty at the national level. There is no express constitutional provision in Bangladesh concerning the ratification of treaties (Karim and Theuissen 2011), and no mention of any requirement for

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the legislative approval of treaties. Article 145A of the constitution merely states “All treaties with foreign countries shall be submitted to the President, who shall cause them to laid before Parliament. . .,” and thus, no reference for the ratification of the treaties is provided. Therefore, an ambiguity arises as to whether the treaties require implementing legislation or parliamentary approval. This ambiguity is addressed in the case of Kazi Mukhlesur Rahman v. Bangladesh (1974) 26 DLR SC 44 (known as the Berubari case), where the court held that “treaty-making is an executive act and so also ratification if a Treaty contains provisions for ratification and that both fall within the ambit of the executive power of the State” (1974) 26 DLR SC at 47. Occasionally, some treaties have been placed before parliament for approval. The treaty making power is based on the executive not in the legislative. The President is conferred the power of treaty-making under the constitution of Bangladesh. Article 48(2) provides that “The President shall, as Head of State, take precedence over all other persons in the State, and shall exercise the powers and perform the duties conferred and imposed on him by this Constitution and by any other law.” On the other hand, Article 55 (2) (4) of the Constitution provides that “executive power of the Republic shall, under this Constitution, be exercised by or on the authority of the Prime Minister.” The Prime Minister will do every work with the consent of President. Besides, the Rules of Business of the Government 1996 require all draft agreements, protocols, and treaties to be submitted to the Cabinet for approval, which is headed by the Prime Minister (Khair 2011). Bangladesh has a parliamentary form of government in with the consent of President is the titular head of the State and the Prime Minister and the cabinet perform all executive power. In the absence of any specific constitutional provisions regarding the position of international law in the domestic legal order, courts are reluctant to follow or enforce the international law provisions while trying a case unless it is incorporated in domestic law. Bangladesh is a common law country and follows the dualistic theory to implementing the customary international law, i.e., all international treaties are required to be incorporated in domestic legislation before taking effect and enforced in court (Karim and Theunissen 2011).

4

Role of Higher Judiciary in Enforcing International Human Rights Law at a National Level

As mentioned earlier, Bangladesh is a common law country and follows the dualistic theory, i.e., Bangladesh requires the incorporation of international treaties or conventions into the domestic legal system before giving the effect of these treaties or conventions at a domestic level. Bangladesh ratified most of the core international human rights treaties and covenants, but most of them have not yet been incorporated into domestic legislation. Subsequently, the status of international law and human rights remains unclear. The judicial invocation is explicit that where there is an explicit provision in the domestic legislation, international law

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and human rights will not be considered to settle a conflicted issue as in the case of Bangladesh and Others v. Samboon Asavhan (1980), 32 DLR 198. The Appellate Division of Supreme Court held “It is settled that where there is a municipal law on an international subject the national court’s function is to enforce the municipal law within the plain meaning of the Statute” (Ibid). The case concerned the illegal entry and fishing by a Thai fishing trawler in the territory of Bangladesh. Three fishing trawlers were captured by the Bangladesh Navy inside the territory of Bangladesh, and a case was filed against them for violation of territorial integrity and maritime boundaries. The Court held “the point touches international law. . . we are relieved from entering into a long discussion of diverse laws, conventions, rules and practices of International Law since there is a complete code provided by our Municipal Law” (Ibid). The Appellate Division of Supreme Court applied the national legislation Bangladesh Territorial Waters and Maritime Zones Act’ 1974 to settle the matter instead of applying the existing norms of international law. In the case of Saiful Islam Dilder v Bangladesh and Others (1998) 50 DLR 318, the case was concerned with the extradition and right to self-determination. The petitioner contended that the accused (Anup Chetia, leader of United Liberation Front Assam) should not be extradited because he was fighting for the right to selfdetermination for the people of Assam (Karim and Theunissen 2011). The petitioner also argued that the right to self-determination had been recognized as jus-cogens of international law, which is inserted in many international human rights instruments and therefore was binding on all members of the United Nations. Hence, extradition of Anup Chetia would violate the principles of international law, norms of human rights, and also Article 25 of the Constitution. Rejecting the argument of the petitioner, the court observed the extradition of Anup Chetia would, in fact, be. “in consonance with the Principles of State Policy and help base its international relations on the principles of respect for national sovereignty and equality, noninterference in the internal affairs of other countries . . .. Article 25(1)(c) enjoins upon the state to sup-port throughout the world waging a just war against imperialism, colonialism or racialism. We are afraid to accept the contention that as because Anup Chetia is struggling for “self-determination” for the people of Assam, handing him over to India would be violation of Article 25 of Constitution. The struggle in which ULFA and its Secretary General Anup Chetia is involved is not, in our opinion, “waging a just struggle against imperialism, colonialism or racial-ism” . . . Nor can it be said that the right to “self-determination” as canvassed in this petition falls within any of the three expressions viz. “imperialism,” “colonialism” or “racialism” as used in Article 25(1)(c) of the Constitution.” (Saiful Islam Dildar v. Bangladesh and others 50 DLR (1998) 318, 322–23). In the case of M. Saleem Ullah v Bangladesh (1995) 47 DLR 218, the petitioner relied on Article 25(1) and argued the constitutionality or legality of the government’s decision to participate in the UN-sponsored multilateral forces in Haiti was illegal because the operation was led by the United State of America and was illegal due to support the USA led operation. The petitioner also contended that government

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had violated Article 63 of the constitution, which only empowers the President to declare war with the assent of the parliament (Karzon and Faruque 1999). The court observed that: For the purpose of disposal of this petition Article 25(1) (b) is relevant. . . the decision, in our view, has been taken on the principles enunciated in the United Nations Charter which is in no way against fundamental principles of State Policy. The decision of the Government of the People’s Republic of Bangladesh is in consonance with the spirit of the Fundamental Principles of State Policy and in accordance with Chapter- VII of the Charter of the UN.

Therefore, it reveals that Article 25 of the constitution should be read in conjunction with Chapter VII of the UN Charter including principle 1 of the UN. The relevant case concerning the status of international law under the constitution of Bangladesh was Chief Prosecutor v Abdul Quader Molla (2013), where Chief Justice stated that Article 152 of the constitution, which has given the following interpretation, that the violation of international law does not have any coercive sanction in Bangladesh. Therefore, international law cannot be applied directly by a domestic court or tribunal if those provisions of law are inconsistent with an Act of Parliament or contrary to the judicial decision. In the case Hussain Mohammad Ershad v. Bangladesh & others (2001) 21 BLD (AD) 69, Hussain Mohammad Ershad, ex-President of Bangladesh, was stopped from going to London for his health checkups at the Zia international airport, Dhaka. He filed a writ petition challenging the order that violated his fundamental rights enunciated in Articles 31, 32, and 36 of the Constitution of Bangladesh, referring to the Article 13 of the Universal Declaration of Human Rights (UDHR) 1948. The High Court Division of Supreme court summarily dismissed the petition on the ground of section 7(4) of the Bangladesh Passport order 1974. However, on appeal, the Appellate Division of the Supreme Court took into consideration the constitutional provision vis a vis Article 13 of the UDHR while disposing of the appeal. The court held that “With regard to submission resting on Article 13 of the Universal Declaration of Human Rights we are of the opinion that such right is in the International Covenant and not a part of municipal law. Therefore, it has no legal binding force for Article 36 provides a complete answer” (2001) 21 BLD (AD) at 75. The Court agreed that domestic laws, whether constitutional or statutory law, do not always align with the provisions of international human rights instruments. In true sense, the domestic courts should not ignore the principles and norms of international human rights obligations in the country. If there is a conflict between domestic law and international law, domestic law will get priority with consideration of relevant principles enunciated in the international instruments. However, if there is clear-cut provisions in domestic law in any disputed matter, international law will not be considered in this matter and the national courts will apply the national laws but will draw the attention of the lawmakers to such inconsistencies (Khair 2011). The Supreme Court expressed similar views in the cases of Bangladesh v. Sheikh Hasina (2008) 60 DLR (AD) at 104 and State v. Metropolitan Police Commissioner (2008) 60 DLR (AD) at 660.

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Indian Practice

India is the largest democratic country in the world. As a successor of British common law, India was governed by the British practice, before adopting the constitution, as to the relationship between its domestic laws with international law (Kapoor 2002). However, the matter is now covered by the constitution. First, we will examine the relevant provisions of the constitution dealing with the status of international law into India’s domestic legal order, and as such, it will lead us to the examination of the general application of international human rights laws in India.

5.1

Constitutional Provisions for the Protection of Human Rights

The Constitution of India was adopted on 26 November 1949, when the Universal Declarations of Human Rights (UHDR) was in progress. Hence the drafter of the constitution was influenced by the basic core principles of human rights (2002, 7 SCC at 368). The constitution of India came into force on 26 January 1950. The constitution is the supreme law of the land, and all government organs derive their power from the constitution and must adhere to the suprema lex. The constitution has purposive existence, and it is not ephemeral, as it serves as a social, legal, and moral document and is legally enforceable. The Constitution of India is a transformative document (Robinson 2009) and has both direct and indirect provisions concerning the principles of administration, rights of the citizens, and limitation of the state power (Austin 1966) to protect and promote human rights wholly. The constitution is the foundation for the protection of human rights in India, especially Parts III and IV of the constitution namely fundamental rights (FRs) and directive principles of state policy (DPSP) comprise the “conscience of constitution”(Austin 1966). FRs are enforceable by a court of law if a state actor or nonstate actor violates these rights. The aim of enumerating the FRs in the constitution “is to safeguard the basic human rights from the vicissitude of political controversy and to place them beyond the reach of the political parties who, by virtue of their majority, may come to form the government at the Centre or in the State” (AIR 2000) SC 988). These rights include the right to equality (Articles 14–18), right to freedom (Articles 19–22), right against exploitation (Articles 23–24), right to freedom of religion (Articles 25–28), cultural and educational rights (Articles 29–30), and right to Constitutional remedies (Article 32). Judicial Review, justiciability, or enforcement became an inseparable concomitant of fundamental rights. No rights are absolute by nature; every right has some reasonable limitations or restrictions that are imposed by laws. Fundamental rights are not an exception; the state may impose certain restrictions on fundamental rights in the interest of state security and ensuring social justice (Kalse 2016) and may even be suspended or prevented in case of state emergency under Article 352 by the constitution (Art 358 and 359). All legislations must conform to fundamental rights (Art 13.2). Justice Beg rightly said in the case of ADM Jabalpur v. Shukla that the object of making certain general aspects of rights fundamental is to guarantee them

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against the illegal invasion of these rights by executive, legislative, or judicial organs of the state (AIR 1976 SC at 1207). The constitutional remedy guaranteed under Article 32 is itself a fundamental right. However, it is not a mere power of the Court but a constitutional obligation to protect and prevent the infringement of the fundamental rights of citizens. Fundamental rights are predominantly civil and political rights, and hence they are phrased in negative terms to prohibit the state from denying or restricting individual liberty, while the directive principles are the aspirations, framed as positive obligations. On the other hand, the directive principle of state policy provides a long list of civil, political, and economic rights of citizens. The primary purpose of these principles is to ensure social, political, and economic justice to all by laying down fundamental principles of governance. These principles need to be considered by the legislatures while enacting laws and by the executive authorities in enforcing laws. The directives principles mostly relate to the economic, social, and cultural rights which are unenforceable by a court of law, yet these rights have “fundamental values in the governance of the country, and it shall be the duty of the state to apply these principles in making laws for the general well-being, of its citizens, i.e. men, women and children” (Constitution of India, Art 37). There is no specific provision in the constitution regarding the status of international treaties into the municipal law. Only Article 51 of the Constitution refers to the international obligation arising from international law. It reads: The State shall endeavor to “foster respect for international law and treaty obligations in the dealings of organised peoples with one another; and encourage settlement of international disputes by arbitration” (Art 51.C). Article 51 of the constitution is a concrete provision that is dealing with the constitutional interpretation of international law at a national level. This article mandates the state to respect international law and to settle the international dispute by peaceful means, although it does not automatically incorporate international law into municipal law. However, article 51 is put in the category of unenforceable rights in part IV of the constitution. This article should be read with Article 37 of the constitution to understand the values of these rights, which are not enforceable by the Court of law but fundamental to the governance of the country, and it is the duty of the state to apply these principles in making law. It was observed in the case of Keshavanand Bharti v State of Kerala, and Chief Justice Sikri observed that “It seems to me that, in view of article 51 of the directive principles, this court must interpret language of the constitution, if not intractable, which is after all a municipal law, in the light of the United Nations Charter and the solemn declaration subscribed to by India.” Therefore, making laws is the exclusive power of the legislature; the legislature body can exercise this power to make a treaty binding on the state through ratification or approval. There are no laws that will restrict the government in exercising the power of making laws in matters of international law and relations, subject to the constitutional provisions or any other law made by the Parliament (Art 73). However, as per Article 253, the Parliament can enact laws to implement international obligations, notwithstanding the constitutional distribution of powers. As a result, the Supreme

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Court held that international law would apply in the domestic legal system where there is no conflict between international law and municipal law. The present stance in India is that approval of a treaty is required only if the treaty affects the rights of citizens or requires a new law or the amendment of existing municipal law. However, India follows the traditional dualistic theory in respect of the implementation of international law and human rights law at the domestic level. That means international law and human rights treaty are not automatically implemented in the national legal system, unless or until they are incorporated in the national legislation by an act of Parliament or judicial recognition. In a tiny number of cases, courts have applied the unincorporated treaties in the context of statutory interpretation and judicial review in administrative action. In this regard, the Indian Supreme Court had decided numerous cases invoking the international human rights treaties in deciding those cases. For example in the case of (Basu v. State of West Bengal (1997) 2 LRC 1), the Court invoked the International Covenant on Civil and Political Rights (ICCPR) in support of its constitutional holding and issued guidelines “to be followed in all cases of arrest or detention,” and ordered to disseminate those guidelines to every police station throughout the country (1997) (2 LRC). In another relevant case, (Vishaka and Others v. State of Rajasthan (1997) 3 LRC 361), the Court invoked The Convention on the Elimination of All Forms of Discrimination against Women CEDAW in support of its constitutional holding. The Court held that “the absence of enacted law to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment . . . at workplaces. Accordingly, the Court proceeded to lay down guidelines and norms for due observance at all workplaces and other institutions, until legislation is enacted for the purpose” (1997) 3 LRC.

5.2

Role of Judiciary to Protect Human Rights

The ultimate role of the judiciary is to provide remedies to the people whose rights, enshrined in the constitution, are violated. Article 32 of the constitution is the main pathway to go before the Court for a remedy for violation of a fundamental right. It is the constitutional mandate to protect citizen rights in the country. Supreme Courts and High Courts have given extensive power to interpret constitutional provisions and to take action to enforce these rights. Articles 32 and 226 of the constitution provide for the remedy for the violation of these rights. Any aggrieved person can directly approach the Supreme Court or High Court of the concerned state to seek the remedy for the violation of a fundamental right. In such cases, the Court will issue the appropriate order, directions to the concerned authority to take measures for the fulfilment of the rights (Kaur 2017). The Supreme Court is the head of the judicial organ and provides redress for the violation of human rights of the people. The Supreme Court not only protects the rights that are enlisted in the fundamental rights in the constitution but also interprets the unenumerated rights in Part IV in the constitution. As a result, people enjoy not only enumerated rights but also unenumerated rights.

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The Supreme Court of India has dealt with numerous cases such as Maneka Gandhi v. Union of India (AIR 1978) SC 597) in which the Supreme Court interpreted the right to life as being connected with the “right to live with human dignity.” The interpretations of the Supreme Court are clear and used the theory of “emanation” to make fundamental rights more evocative and active. After that, in many other cases the court tried to establish the link between fundamental rights and directive principles, such as People’s Union for Civil Liberties and another v. State of Maharashtra and others (2014, 10 SCC 635) and Francis Coralie Mullin v. The Administrator, Union Territory of Delhi (1981, 2 SCR 516). In both the cases, the Court held that the right to life includes the right to live with human dignity and right to life would be meaningless if there is no human dignity in life. Therefore, through judicial interpretations, various rights have been recognized though not explicitly mentioned in Part III of the Constitution (Kaur 2017). The Supreme Court of India has played a proactive role in protecting and promoting human rights in the state. Many vulnerable or underprivileged people, especially children, women, and workers, are affected by violations of human rights. The judiciary has taken steps to ensure the human rights of those people through judicial invocation. For example, in the case of Labourers working on Salal Project v. State of Jammu and Kashmir (AIR 1984) SC 117, the Supreme Court held that no child below the age of 14 years could be employed and allowed to work in the construction process. The Court issued various directions related to child labor. Another relevant case is Vishal Jeet v. Union of India (1990) 3(3) SCC 318), where the Supreme Court asked governments to form an advisory committee to make suggestions for the eradication of child prostitution and to evolve schemes to ensure proper care and protection to the victims. The Supreme Court further showed its concern in the case of Gaurav Jain v. Union of India (1997, 8 SCC at 114) about the rehabilitation of minors involved in prostitution and held that juvenile homes should be used for rehabilitation of them and other neglected children. Discrimination against women is a common phenomenon in the contemporary world. Women’s position in India is more vulnerable, and they are often the victims of disparity and cannot enjoy their legal rights due to unequal treatment, religious mentality, and traditional customary cultural norms. The Constitution of India contained the provision of equality in Article 14, but still, women are discriminated in the workplace, educational institutions, and in the job market. However, Article 39 provides for equal pay for equal work for both men and women. Despite this constitutional guarantee, women are not treated equally. In this situation, the Court played a significant role and ordered the concerned authority to take appropriate measures not to discriminate against women. In the case of Associate Banks officers Association v. State Bank of India (AIR 1998) SC 32), the Supreme Court held that women workers are in no way inferior to male counterparts and hence there should be no discrimination on the ground of sex against women. In another case, State of Madhya Pradesh v.Pramod Bhartiya (AIR 1993, SC 286), the Supreme Court held that under Article 39 the State shall direct its policy toward securing equal pay for equal work for men and women.

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Indian Position in International Human Rights Discourse

India is the largest democratic and second most populated country in the world. Total population is estimated to be 1.37 billion. As a hugely populated country, the government can often fail to ensure all human rights to everybody. Nevertheless, the government tries to ensure the rights of all citizens. It has established principles in the human rights discourse that a state has tripartite duties to ensure human rights for its citizens: the duty to respect, duty to protect, and duty to fulfill human rights. India has ratified several international human rights instruments, which oblige the state to ensure human rights and provide maximum assistance for its citizens. Among the human rights instruments, India ratified two significant conventions that are part of the International Bill of Rights – the International Covenant on Civil and Political Rights 1966 (ICCPR) and the International Convention on Economic, Social and Cultural Rights 1966 (ICESCR). Additionally, India has ratified several other core international human rights instruments such as International Convention on the Elimination of all Forms of Racial Discrimination 1965, the Convention on the Elimination of all Forms of Discrimination against Women 1979 (CEDAW), the Convention against Torture and other Cruel Inhuman or Degrading Treatment or Punishments 1984, the Convention for the Protection of all Persons from Enforced Disappearance 2006, the Convention on the Rights of the Child 1989, and the Convention on the Rights of Persons with Disabilities 2006 (CRPD). The major problem faced by India is that India has made substantive reservations and not ratified the majority of some optional protocols such as optional protocol to the ICESCR 2008, optional protocol to the CEDAW 1999, and optional protocol to the CRPD 2006, which dilute the effect of treaties. However, the Supreme Court of India has taken a positive approach to interpreting the municipal laws following international treaties to fill in the gaps in such laws. For instance, in the case of Vishaka v State of Rajasthan, the Supreme Court delivered a judgment in August 1997, that stated: “International Convention not inconsistent with the Fundamental Rights and in harmony with its spirit must be read into these provisions to enlarge the meaning and content thereof, to promote the object of the constitutional guarantee” (AIR 1997) SC 3011, para 7). In another case A. D. M. Jabalpur v. Shukla (AIR 1976 SC 1207), the Supreme Court considered, inter alia, whether the Universal Declaration of Human Rights and other two principal human rights instruments ICCPR and ICESCR, 1966, were part of Indian Municipal law and whether they could be directly applied. It was opined by the majority judges that both these instruments are not part of municipal laws and do not automatically incorporate in the municipal legal system. Justice H.R. Khanna in his dissenting opinion contended that in conflicts between municipal laws and international treaties the municipal law will prevail, but in a case where “two constructions of the municipal law were possible, the court should give that construction as might bring about harmony between municipal law and international law or treaty.” He urged to construe constitutional provisions in such a way to avoid conflict with the Universal Declaration of Human Rights.

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In a subsequent case, Jolly George Varghese v. Bank of Cochin (AIR 1980 SC 470), Lordship Krishna Iyer concisely reaffirmed this view, J Article 11 of the International Covenant on Civil and Political Rights (ICCRP) which reads as “prohibits imprisonment of a person merely on the ground of his inability to fulfill a contractual obligation,” and the section 51 of (proviso) and order 21 rule 37 of the Code of Civil Procedure (CPC), a domestic law, raised a conflict between them. In that case, the court took a liberal approach, so as to bring about harmony between them and also to prevent any apparent conflicts. There are many good examples in the Indian legal history to adopt international law or treaties into the municipal law. Justice Krishna Iyer referred the Robertson book “Human Rights in National and International law” in which he pointed out that “international conventional law must go through the process of transformation into the municipal law before the international treaty can become an internal law.” (Robinson 1968). This epoch-making message formed the basis of interpretation in a series of subsequent cases and developed jurisprudence in implementing international human rights laws in India. Over the years, the judiciary broadened its interpretation going beyond the previous traditional stance of looking toward the parliament or to the Government for implementing legislation or directives. No doubt, India still follows the dualist view. Nevertheless, within the short premise of dualism, Indian courts are playing an influential and remarkable role that vividly poses the phenomenon of “judicial activism” or positive or progressive interpretation and thus are paving the way for the implementation of international norms.

5.4

Institutional Mechanism for the Protection of Human Rights

5.4.1 The Protection of Human Rights Act 1993 The Government of India adopted the Human Rights Act in 1993 (the Act) for the better protection and promotion of human rights at the national level. The primary objective of this Act is to ensure human rights through some organizational methods such as a Human Rights Commission at the national level, as well as at state level and Human Rights Court at the district level for better protection of human rights and matters connected with the protection of human rights. The Act contains the provisions to comply with the other international human rights instruments ratified by India. Human rights are defined by the Act in Section 2(d) as “the rights relating to life, liberty, equality and dignity of the individual guaranteed by the Constitution or embodied in the International Covenants and enforceable by courts in India.” The above definition, however, limits the scope of the functioning of the National Human Rights Commission. India ratified two Covenants: the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. International covenants are not applicable before the courts, so there is a need for laws which conform to these conventions.

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5.4.2 National Human Rights Commission The National Human Rights Commission (NHRC) was established in 1993 to enquire and investigate complaints of violations of human rights and to take preventive measures for such violations. It is an independent statutory body and empowered to exercise the power of a civil court in respect to summoning, attendance and examination of witnesses, and discovery and inspection of documents on affidavit. The commission also exercises the power of recommendations on different issues such as medical health, education, jail reforms, extrajudicial killing, unwarranted arrest, food safety, and violence against women. The composition of the commission is dealt with in chapter II of the Act, and section 3 provides that the commission shall consist of one chairman and four other members. The composition of commission is required to be as follows: (a) A chairperson who has been a Chief Justice of the Supreme Court; (b) One Member who is or has been a judge of the Supreme Court; (c) One Member who is or has been the Chief Justice of the High Court; (d) Two other members are appointed having knowledge of, or practical experience in, matters relating to human rights. The appointment procedure has been provided in section 4 of the Act that stated that “[s]election of Chairperson and members of the Commission is made on the recommendations of a committee consisting of the Prime Minister, Speaker and leader of the opposition in the House of the People (Lok Sabha) and Deputy Chairman and leader of the opposition in the Council of States (Rajya Sabha)”(The Protection of Human Rights Act 1993, Section 4). The commission has given extensive power to deal with the cases of human rights violations in the state territory. The power has been enlisted in section 12 with the commission having power to enquire suo moto; to intervene in any proceeding involving violations of human rights; to visit any jail or other institution where violation of human rights are threatened; to conduct a systematic review of government human rights policy; to review any factors; to study treaties and other international instruments; to undertake and promote research regarding human rights; and to spread human rights literacy among the vulnerable society. 5.4.3 State Human Rights Commission The State Human Rights Commission is a state-level organization, which was established to protect and promote human rights at the state level (The Protection of Human Rights Act 199- Section 21.1). The Commission is composed of a chairperson and four other members. The State Commission is empowered to perform similar functions, which have been entrusted to the National Human Rights Commission. The State Commission inquires into violations of human rights only in respect of matters related to any of the entries enumerated in List II and III in the Seventh Schedule of the Constitution. The State Human Rights Commission is excluded from the study of treaties and other international human rights instruments because it is a state-based not national-based institution. With regard to the mechanism for the redress of human rights grievances in union territories, the Minister of Human Affairs had taken the position that the best way to proceed may be through the extension of the jurisdiction of the state commissions of

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neighboring states into the adjoining union territories; a similar approach had been taken in respect to the High Courts in India.

5.4.4 Human Rights Courts The Protection of Human Rights Act 1993 stated in its preamble that it was to establish a human rights court in district level. The primary purpose for the establishment of a human rights court at the district level was to ensure the expedient trial of offences considered to be human rights violations at a grass-roots level. Section 30 of the same Act provided that a state government might, with the concurrence of the Chief Justice of High Court, by notification, specify for each district a Court of Sessions as a Human Rights Court to try the offences of violation and abuse of human rights. The session judge cannot take cognizance under the Criminal Procedure Code (CrPC) 1973. He or she only tries the cases committed to him or her by the Magistrate under Section 193 of the CrPC. The state government shall appoint a special public prosecutor to carry out cases in the human rights court under Section 31 of the Act. Human rights courts have been established in the States of Assam, Andhra Pradesh, Sikkim, Tamil Nadu, and Uttar Pradesh (Motilal and Nanda 2010). The Commission stays in touch with the concerned high courts to make clear the precise nature of the offences to be tried in such courts and other details regarding the conduct of their business (Ray 2004). The National Human Rights Commission has inquired into thousands of complaints, and it has submitted reports to the government on various matters wherein it has made several recommendations suggesting measures that may be taken to curb human rights violations. In August 2016, it had received 7822 fresh complaints and had disposed of 7772 fresh as well as old cases (Kaur 2017). 5.4.5

The Citizenship Amendment Act 2019 (CAA): New Trends for Violation of Human Rights in India India passed the Citizenship (Amendment) Act (CAA) 2019 on 11 December 2019 revising the earlier Citizenship Act 1955. After passing the Act, many international experts, including the United Nations Special Rapporteur on minorities, described the new citizenship law as discriminatory and against the constitutional principles of equality and equal protection before the law. The Universal Declaration of Human Rights 1948 specifically prohibits the arbitrary deprivation of nationality. Under this Act, for the first time India introduced the process for granting citizenship on the basis of religion. The CAA fast-tracks nationality for non-Muslim minorities, irregular immigrants from the neighboring countries of Bangladesh, Afghanistan, and Pakistan, but excludes Muslim. The exclusion of Muslim minority from the ambit of the law constitutes extreme discrimination. The Office of the United Nations High Commissioner for Human Rights called the law “fundamentally discriminatory.” UN Secretary-General Antonio Guterres was concerned about the future of religious minorities in India after the enactment of the citizenship amendment law, saying, “there is a risk of statelessness.” The United States Commission on International Religious Freedom said the US government “should consider sanctions against the

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home minister and other principal leadership” and held a hearing in March 2020 in which one of the commissioners raised concerns that the law “in conjunction with a planned National Population Register and a potential nationwide National Register of Citizens (NRC) could result in the wide-scale disenfranchisement of Indian Muslims.”

6

Concluding Remarks

The discussion, state practices, and case law mentioned throughout this chapter have shown that implementation of human rights treaty norms remains complex to apply in the domestic jurisdiction. The domestic court is not obliged to apply the provisions of the international law while trying the cases to follow the provision of the domestic statute. The major weakness of applying international law at the domestic level is due to lack of incorporation and the steady codification of international law (Kumm 2004) into national legislation. Despite recommendations by various international treaty bodies as well as the various decisions of the Supreme Court, the codification process remains steady and conservative (Karim and Theunisse 2011). Most of the developing countries have faced the same problem to incorporate the international human rights treaty norms at the national level. The judicial approach concerning the application of human rights norms in developing countries, however, remains inconsistent and conservative. A more liberal and robust approach is needed to ensure greater compliance with human rights norms in developing countries. The decision to reform by incorporating international law into the domestic legal system mainly rests on the political will of the lawmakers and the independence and shrewdness of the judges (Khair 2011). Treaty making power is an executive act; the president is conferred with the power to enter into treaties with the foreign countries. There is a tripartite involvement of the state organs to apply the international human rights treaty provision in domestic level, there is a tripartite involvement of the state organs. Before ratifying a treaty, it must consult with the legislature in order to avoid any subsequent domestic conflict and balance of power between the legislature and the executive. Hence, after the ratification of a human rights instrument, the legislature shall harmonize with it and enact necessary implementing legislation. The optimistic view is that where international law and domestic law are not in conflict, the judiciary can apply the human rights law directly in national level without the need for implementing legislation (Alam 2007:130), and if there is a conflict between domestic law and international human rights law, generally the court apply the domestic law. It should call upon the legislature to harmonize the complexity and remove the inconsistency in the domestic law. Judicial activism is a potent weapon to implement international human rights law in the domestic legal system. The higher judiciary should be proactive and give up the traditional and unadventurous approach to uphold state obligation under international law. An innovative interpretation of the existing domestic laws should harmonize with international human rights law for the exhaustive realization of those rights where

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the courts are not free to invoke international law. Many of the developing countries, even some developed countries, have a poor record to submit the periodic reports under the UN treaty bodies, and submitted reports do not reveal the real scenario of implementation of human rights treaties. All UN members’ states should be more responsible for fulfilling the reporting obligations under the human rights treaty regime.

References Akbari ZM (2019) The role and importance of human rights law. Daily Outlook, 1 December Alam MS (2007) Enforcement of international human rights law by domestic court. New Warsi Book Corporation, Dhaka, Bangladesh Aliyev SF (2016) Theoretical and Practical Issues of the Implementation of International norms on Human Rights to the National Legislation (the example of the Republic Azerbaijan). International Journal of Environmental and Science Education, vol.11(12):5070–5085 Austin G (1966) The Indian constitution: cornerstone of a nation. Clarendon Press, Oxford, p 56 Begum N (2016) Implementation mechanism of human rights treaties in Bangladesh: a critical analysis. Australian Journal of Asian Law, vol. 17(2) Hannum H (1995) The Status of the Universal Declaration of Human Rights in national and International Law. Journal of International and Comparative Law, vol 25 Haque EM (2017) Current international legal issues: Bangladesh. Asian Yearbook of International Law 3. BRILL/Nijhoff Heyns C, Viljoen F (2002) The impacts of the UNs human rights treaties on the domestic level. Kluwer Law International, The Haque Hurst H (1995) The status of the universal declaration of human rights in national and international law. Journal of International and Comparative Law 25 Kalse A (2016) A brief lecture on human rights in constitution of India Kapoor SK (2002) International law & human rights. Central Law Agency, New Delhi Karim B, Theunissen T (2011) Bangladesh. In: Shelton D (ed) International law and domestic legal systems: incorporation transformation and persuasion. Oxford University Press, Oxford Karzon RHS, Faruque AA (1999) Status of international law under the constitution of Bangladesh: an appraisal. Bangladesh Journal of Law 3(1):25 Kaur A (2017) Protection of human rights in India: a review. Jamia Law Journal 2 Khair S (2011) Brining international human rights law home: trends and practices of Bangladesh court. Asian Yearbook of International Law Kothari R, Sethi H (1987) Special issue on the politics of human rights, Lokayan, Bulletin, p 33 Kumm M (2004) The legitimacy of international law: a constitutionalist framework of analysis. The European Journal of International Law 15(3):907–931 Motilal S, Nanda B (2010) Human rights, gender and environment. Allied Publishers Pvt Ltd, Mumbai Norberto B (1998) The age of rights. Polity Press, Cambridge, UK Ray A (2004) National human rights commission of India: formation, functioning, and future prospects. Khama Publisher, New Delhi Robinson J (1968) Human rights in national and international law. Manchester University Press/ Oceana Publications, Dobbs Ferry Robinson N (2009) Expanding judiciaries: India and the rise of the good governance court. Washington University Global Studies Law Review 1(4):1–69 Subhan FA (2016) Theoretical and practical issues of the implementation of international norms on human rights to the national legislation (the example of the republic azerbaijan). International Journal of Environmental and Science Education 11(12):5070–5085

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Legislations The Citizenship Amendment Act 2019 The Code of Criminal Procedure 1973 The Constitution of the People’s Republic of Bangladesh The Indian Constitution The Protection of Human Rights Act 1993

Treaties Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment Act (CAT) 1984 Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) 1979 Convention on the Rights of the Child (CRC) 1989 International Covenant on Civil and Political Rights (ICCPR) 1966 International Covenant on Economic, Social and Cultural Rights (ICESCR) 1966 International Convention on the Elimination of All Forms of Racial Discrimination (ICERD) 1965 The Universal Declaration of Human Rights 1948 The Vienna Convention and Programme of Action 1993

Cases ADM Jabalpur v. Shukla (AIR 1976) SC at 1207 Bangladesh and Others v. Samboon Asavhan (1980), 32 DLR 198 Bangladesh v Unimarine S.A. Panama (1977) 29 DLR, SC 252 Bangladesh v. Sheikh Hasina (2008) 60 DLR (AD) at 104 Basu v. State of West Bengal (1997) 2 LRC 1 Chief Prosecutor v Abdul Quader Molla (2013) Civil Rights Vigilance Committee, SLSRC College of Law, Bangalore v. Union of India and others (1983) AIR Kant Francis Coralie Mullin v. The Administrator, Union Territory of Delhi (1981) 2 SCR 516 Gaurav Jain v. Union of India (1997) 8 SCC at 114 Gramophone Company of India Ltd. v. Birendera Bahadur Pandey (AIR 1984 S.C. 667) Hussain Mohammad Ershad v. Bangladesh & others (2001) 21 BLD (AD) 69, Jolly George Varghese v. Bank of Cochin (AIR 1980) SC 470 Kazi Mukhlesur Rahman v. Bangladesh, (1974) 26 DLR SC 44 Keshavanand Bharti v State of Kerala, Labourers working on Salal Project v. State of Jammu and Kashmir (AIR 1984) SC 117 M. Saleem Ullah v Bangladesh (1995) 47 DLR 218 Maneka Gandhi v. Union of India (AIR 1978) SC 597 People’s Union for Civil Liberties and another v. State of Maharashtra and others, (2014) 10 SCC 635 Saiful Islam Dilder v Bangladesh and Others (1998) 50 DLR 318 State v. Metropolitan Police Commissioner (2008) 60 DLR (AD) at 660 Vishaka and Others v. State of Rajasthan (1997) 3 LRC 361 Vishal Jeet v. Union of India (1990) 3(3) SCC 318

Part III Environmental Aspects

Climate Change Environmental Commitment, Disclosure, and Communication Sibel Hoştut and Seçil Deren Van Het Hof

Contents 1 Key Arguments and Current Thoughts in the Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Historical Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Environmental Commitment and Disclosure of Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Climate Change Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

202 205 208 212 217 218 218

Abstract

Perception, understanding, and being engaged with climate change issues require efforts of all stakeholders, not just individuals or special interest groups, as everyone has a responsibility in this global and complex issue. However, instead of expressing all stakeholders, the segmentation of stakeholders into relevant publics with similar values, beliefs, and behaviors is a useful approach in managing and communicating environmental disclosures as there is no single application that covers all stakeholders and offers solutions for everyone. This study reviews the relevant facts and key arguments about climate change and history and analyzes how organizational commitment, environmental disclosure, and climate change communication are conceptualized in the scientific literature. Several theoretical perspectives, such as institutional theory, stakeholder theory, legitimacy theory, and situational theory, clarify the motivations of organizations to disclose information and explain their commitment to environmental performance. To bring a deeper understanding of communicative actions and develop effective communication strategies, the communication model of Harold D. Lassell has been used in conjunction with the findings of current empirical studies in the field of climate change. S. Hoştut (*) · S. Deren Van Het Hof Faculty of Communication, Akdeniz University, Antalya, Turkey e-mail: [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_12

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Keywords

Climate change · History · Environmental commitment · Environmental disclosure · Climate change communication

1

Key Arguments and Current Thoughts in the Field

Climate change poses an enormous threat, stressful situation, and anxiety for the lives of people around the world. Many people are confronted with significant impacts of climate change, such as storms, floods, global warming, extreme rainfalls and droughts, and massive bushfires which caused significant damages in recent years. Scientific studies have shown that climate change directly contributes to these incidents. It is also argued that the number of severe tropical cyclones like hurricanes and typhoons will increase, with every rise of the global average temperature by onetenth (Eckstein et al. 2019). Since 1980, extreme weather events have become more frequent, the data on floods and other hydrological events have fourfold, and storms, extreme temperatures, droughts, and forest fires have more than doubled (European Academies’ Science Advisory Council 2018). Such occasions have significant social, ecological, and economic effects. For instance, in 2019, 14 weather and climate disaster events including flooding, severe storm, tropical cyclone, and wildfire resulted in the deaths of 44 people across the United States (NCEI 2020). Globally in 2017, 11,500 extreme weather events caused the death of more than 526,000 people; and economic losses between 1998 and 2017 amounted to around US$ 3,47 trillion (Eckstein et al. 2019). These data show that long-term changes in the Earth’s climate and patterns (History 2020) are now at the highest levels in history. The UN Framework Convention on Climate Change (UNFCCC 1992) expresses an expanded definition by arguing that climate change is attributed absolutely to human activity “that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.” The issues of climate change have been growing for decades in developed countries, but little is known in developing countries (Sudibyo 2017). Law (2019) argues that climate change is expected to be felt in every country, but due to many different threats, regional differences, and circumstances, its impact will not be felt equally for all countries. In some countries or regions, these threats will be worse than in others. Developing countries and countries with high poverty and inefficient governments are most affected by climate change. Experts argue that especially Haiti, Nigeria, Yemen, United Arab Emirates, Manila/Philippines, and Kiribati will be particularly affected (Law 2019). But also prosperous countries feel the climate effects more clearly than ever before, as the 2017 Atlantic hurricane season has shown. So effective climate change mitigation is therefore in the interest (Eckstein et al. 2019) and responsibility of all countries, regardless of any level of development. Maintaining emissions of greenhouse gases will cause an overall warming and further changes and challenges in all components of the climate system (IPCC 2013),

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including the atmosphere, ocean, terrestrial, cryosphere, biosphere, and anthroposphere (Gettelman and Rood 2016). Food production is closely linked to the climate. Long droughts and increased irrigation demands associated with a warmer and less stable climate will increase the demand for freshwater which will become less accessible with the reduction of glacier sources. Another major factor is heat stress on crops and livestock. Areas of the world that specialize in growing certain crops may not be suitable for these crops (Future of Life 2020). The worrying aspect of the issue is that many aspects of climate change and associated impacts will continue for centuries, even if anthropogenic emissions of greenhouse gases are stopped (Tschakert 2014). Climate mitigation efforts and progresses made by individual countries are monitored by the independent Climate Change Performance Index (CCPI). The ranking results are defined by a country’s total performance within the categories of GHG emissions, renewable energy, energy use, and climate policy. According to the index, Sweden leads the ranking, followed by Denmark and Morocco. The bottom five of the CCPI are the Islamic Republic of Iran, the Republic of Korea, Chinese Taipei, Saudi Arabia, and the United States (CCPI 2020). Some key terms of the important 58 words and phrases relating to climate change are 1.5 degrees, carbon footprint, carbon neutral, emissions, feedback loop, global warming, geoengineering, the Intergovernmental Panel on Climate Change (IPCC), and runaway climate change (BBC 2019). In the year 2019, climate change was described as the “greatest public health challenge of the twenty-first century,” which caused thousands of deaths and displaced tens of thousands of people from their homes (Climate Health Action 2019). Today, the coronavirus outbreak in China threatens the life of people, especially who have chronic health problems, and are 60+ years old. As a result of the coronavirus pandemic, the global economic shutdown in many European and Asian countries, and the United States lead to significant drops in emissions and a variety of gases related to energy, transport, and travel restrictions. Especially China and Northern Italy have recorded significant falls in nitrogen dioxide and carbon monoxide (McGrath 2020). It is likely that the bans for traveling, working from, and staying at homes, the standstill of the aviation and tourism industries, will decrease emissions similarly in many other countries. But there are also warnings that levels could rise rapidly after the pandemic (McGrath 2020). Economic shocks, diseases, and wars experienced in the past caused a decline in the emissions worldwide. However, emissions show an increase again once the economy is back, patients overcome diseases, and wars end (Temple 2020). This seems also corresponding with the current pandemic coronavirus and reductions of emissions. According to several investigations and statistics, human-made greenhouse gas emissions are shown as the main cause of climate change (UN 2020). Greenhouse gases are defined as “those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and emit radiation at specific wavelengths within the spectrum of terrestrial radiation emitted by the Earth’s surface, the atmosphere itself, and by clouds” which causes the so-called greenhouse effect (IPCC 2013). Without natural greenhouse gases, the Earth’s average temperature would be about 18
C

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(0
F), instead of the current average of 15
C (59
F) (Ma 1998). Major greenhouse gases in the Earth’s atmosphere include water vapor (H2O), carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), and ozone (O3) (Breeze 2017). Various investigations disclose that among these gases, the carbon dioxide is the most harmful anthropogenic gas which is shown as the biggest trigger of global warming caused by human activities. Human-caused CO2 emissions come from the combustion of fossil fuels used in energy production, transportation, industrial processes (cement or hydrogen production, burning of biomass), and buildings (IPCC 2005). Major gases are the halocarbons and chlorine- and bromine-containing substances (IPCC 2013). So it can be repeated that humans are the major culprits of causing climate change (Oppenheimer and Anttila-Hughes 2016). In February 2020, the global atmospheric carbon dioxide average was expressed as 414,11 parts per million. Today, carbon dioxide levels are much higher than any data in the last 800,000 years (Lindsey 2020). In addition to the high carbon dioxide level, the average of the global surface temperature also showed the highest level of the last 141 years (1880–2020), with an average temperature departure of 1.14
C (2.05
F) above the twentieth-century average (CO2 Earth 2020). There are many applications people can do to ensure their future life as prosperous as possible. Our preferences will take us all to a more livable future. The road on the individual level involves daily decisions in many areas that can be reached such as driving and flying less, switching to a “green” energy provider, and changing the eating and buying habits. Social scientists have found that when one person makes a sustainability-oriented decision, other people do too. Customers at a US cafe who were told that 30% of Americans had started eating less meat were twice as likely to order a meatless lunch. Or, households in California were more likely to install solar panels in neighborhoods that already have them (Ortiz, 2018). James Clear examines the role of social connection when it comes to changing belief systems. He argues that persuading people to change their minds is the process of persuading them to change their tribe. If they give up their beliefs, they run the risk of losing their social ties. And if loneliness is the result, nobody wants to crumble their worldview. The way to change people’s minds is to become friends with them, to integrate them into your tribe, and to bring them to your circle. They can now change their beliefs without the risk of being abandoned socially (Clear 2018). Starting a conversation about climate change can be difficult. The most important when talking about climate change with those who don’t share your views is that people cannot communicate effectively when they feel threatened. Direct attacks, whether in the form of arguments, evidence, or name-calling, limit our capacity for reason, empathy, and self-reflection. People should feel safe and heard and then find common ground (David Suzuki Foundation 2020). Individuals’ contributions are essential to reach these goals but not enough; changes on a larger, system-wide basis are needed such as renewing our subsidy system or setting new rules and incentives for industries such as agriculture, transportation, deforestation, and waste management. Individuals need to exercise their rights both as citizens and consumers and to pressure governments and companies to make necessary system-wide changes (Ortiz 2018). In this context several actions

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are discussed within the climate change adaptation and climate change mitigation categories that express different things (WWF 2020). The essential challenge is that climate change adaptation and mitigation cannot be dealt with the efforts of a single person, a group, or one authority (Atun 2018). Such a significant threat needs applicable actions and policies with involvement, awareness, and communication of several stakeholders, such as governments, public institutions, businesses, communities, non-governmental organizations, media, individuals, and opinion leaders. In this study, the relevant literature on climate change has been reviewed, and key arguments and important findings on current thoughts in the field, historical development, and recent studies on corporate commitment, environmental disclosure, and climate change communication have been highlighted and discussed.

2

Historical Development

The first reported coal production and consumption dates as far back as 4000 BC to China where carving took place out of black lignite (a form of coal) (Golas and Needham 1999; Ritchie and Roser 2020). The big change in the population and industry, the beginning of the Industrial Revolution (about 1760) in the eighteenth century, stemmed from the use of coal as a mechanical power source, which later replaced the existing energy sources like wood, wind, water, and wax (Mumford 1934). The French physicist, Joseph Fourier, implied to the greenhouse effect when he compared the influence of the atmosphere to the heating of a closed space beneath a pane of glass (Jones and Henderson 1990). In several studies, Fourier’s (1827) article is being cited as the first reference in the literature to the atmospheric greenhouse effect (Fleming 1999). Fleming (1999) argue that there are indeed greenhouse analogies in Fourier’s writings, but they are not central to his theory of terrestrial temperatures, nor are they unambiguous precursors of today’s theory of the greenhouse effect. Irish physicist John Tyndall (1822–1893) is best known for his work on the absorption of heat by gases such as water vapor and carbon dioxide in the atmosphere (Tyndall 1861, cited in Hawkins 2018). Starting in 1861, he published a series of studies on greenhouse gases to trap heat in the Earth’s atmosphere (Darby 2016). Today, the Tyndall Centre in the United Kingdom represents an important unit to develop sustainable responses to climate change and to promote informed decisions on climate change mitigation and adaptation (Tyndall Centre 2020). In 1856, American Eunice Foote discovered that heat was absorbed by carbon dioxide and water vapor, 3 years before Tyndall (Hawkins 2018). Svante Arrhenius (1859–1927), one of Sweden’s leading chemists in 1896, thought that what people are doing on an increasing scale can make their land a little warmer (Baum 2016). Arrhenius’s article determines for the first time the contribution of carbon dioxide (CO2) to the greenhouse effect and speculates whether changes in the atmospheric concentration of CO2 contribute to long-term changes in climate (Arrhenius 1896). He argues that because of the natural greenhouse effect caused by the infrared absorption capacity of water vapor and carbon dioxide, the average surface

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temperature of the earth is about 15
C (Enzler 2020). According to Arrhenius, doubling the CO2 concentration would lead to a 5
C temperature rise (Enzler 2020). The 1903 Nobel Prize in Chemistry was awarded to Arrhenius, appreciating the extraordinary services that chemistry has advanced with the theory of electrolytic decomposition (The Nobel Prize 2020). Swedish physicist Knut Angstrom (1900) found that even in diminutive concentrations found in the atmosphere, CO2 strongly absorbs parts of the infrared spectrum (BBC 2013). Although the carbon dioxide theory of climate change was avoided in the early 1900s, it came back to the agenda in the 1930s (Jones and Henderson 1990). Since 1938, investigations of Guy Stewart Callendar, Gilbert Plass, Hans Seuss, Roger Revelle, Charles Keeling, and others stimulated the carbon dioxide theory of climate change and put it on a more solid scientific foundation (Fleming and College 2001). Guy Stewart Callendar (1898–1964), a specialist in infrared physics, is noted for identifying the link between the artificial production of carbon dioxide and global warming, called the “Callendar Effect” (Fleming and Fleming 2007). In the 1950s, scientists began to explore how carbon dioxide absorbs infrared radiation. The first reliable estimates of the emission fraction that remain in the atmosphere instead of dissolving in the ocean were presented. In the late 1950s and 1960s, research moved toward calculating the mean global surface temperature with an increase or decrease of the atmospheric carbon dioxide (Jones and Henderson 1990). Möllers’ (1963) calculations give a + 1.5
C when the CO2 content increases from 300 to 600 ppm. Although the modelers of the 1950s and early 1960s showed good results to encourage them to insist, they were still far from producing details of the Earth’s current circulation patterns and climatic zones (Spencer 2011). In the 1960s, modern computing eased to model the general circulation of the atmosphere and improved weather forecast (Oppenheimer and Anttila-Hughes 2016). Computer models have consistently shown that a doubling of the CO2 may cause warming of 2
C or 3.6
F within the next century (History 2020). In the late 1960s, research on CO2 and global warming has come to the agenda of international organizations. The North Atlantic Treaty Organization (NATO) was the first who recognized the environmental problems facing the international community when it set up the scientific research Committee on the Challenges of the Modern Society (CCMS) on November 24, 1969. The Committee provided knowledge and experience on social, health, and environmental issues in both civilian and military communities (NATO 2014). By the 1970s, substances other than carbon dioxide, such as water vapor, clouds, and minor atmospheric gases, were discussed in detail. Scientists discovered that the cooling effect of particulate matter, a by-product of dirty, fossil fuel combustion techniques significantly offsets the warming effect of carbon dioxide (Oppenheimer and Anttila-Hughes 2016). The peak of crude oil production in the United States was in 1970 (Heinberg 2005). Global cooling, a different climate concern, came up in the early 1970s (History 2020). Scientists claim that the tendency for cooling is due to sulfate particles from burning fossil fuels, which can diffuse sunlight and reduce atmospheric warming. This intuition proved true that when the United States and other countries started reducing sulfur emissions to lower acid rain and respiratory

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diseases in the 1970s, the cooling suddenly ended. Since 1975, the average global temperature has increased by about 0.6
C (Gramling 2019). From the late 1970s through the 2000s, rapid warming of the Northern Hemisphere (NH) and reduction of the Arctic sea ice followed (Delworth et al. 2016). Climate change and atmospheric warming as a result of the accumulation of CO2 and other “greenhouse gases” (GHGs) such as water vapor (H2O), carbon dioxide (CO2), or methane (CH4) have finally attracted concerted scientific research (Tucker 1997). Related research received attention from the United Nations and government leaders around the world. The United Nations Conference on the Human Environment, byname Stockholm Conference, held in Sweden from June 5 to 16, 1972, was the first United Nations (UN) conference that focused on international environmental issues and politics. Delegates from 114 governments attended the conference. The environmental action plan presents 109 specific suggestions on international organizations, natural resource management, pollution, human settlements, and educational and social aspects (Boudes 2020). In the 1980s and beyond, different models continued to find significantly different numbers on climate in one region or another (Spencer 2011). It is difficult to compile absolute estimates of the global average temperature. Global temperature data comes from many observation stations around the world, using different methods for calculating (Sharp 2018). Widespread drought and fires occurred in the United States in 1988, while temperatures have reached record levels compared to the past (History 2020). In the same year, scientific consensus that carbon emissions would warm the climate was sufficient to become an important political issue (Oppenheimer and Anttila-Hughes 2016). In 1988, the Intergovernmental Panel on Climate Change (IPCC) was established to provide governments scientific information to develop climate policies. The IPCC currently represents 195 countries (IPCC 2020). IPCC scientists review thousands of scientific articles published annually for the assessment reports to provide a comprehensive summary of what is known about the effects and future risks of climate change, the driving forces, and how adaptation and mitigation options can minimize these risks (IPCC 2020). In 1992, countries joined the United Nations Framework Convention on Climate Change, an international treaty as a framework for international cooperation to struggle climate change by limiting the average global temperature rises and dealing with the inevitable effects (UNFCCC 2020b). The Kyoto Protocol signed by President Bill Clinton and adopted on December 11, 1997, in Kyoto Japan, aimed to reduce six greenhouse gases (CO2, N2O, CH4, sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs)) in 41 countries and the European Union. Currently, there are 192 parties to the Kyoto Protocol (IPCC 2013; UNFCCC 2020a; History 2020). Since 1800, global fossil energy consumption has increased more than 1300 times. The great diversity of fossil energy consumption in the twentieth century resulted in a decrease in coal production. Total coal production declined from 96% in 1900 to less than 30% in 2000. Global CO2 emissions increased from 2 billion tonnes in 1900 to over 36 billion tonnes in 2015 (Ritchie and Roser 2017). Today, crude oil is the largest source of energy, accounting for about 39% of fossil energy, followed by coal (33%) and natural gas (28%) (Ritchie and Roser 2020). As reported

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by Friedrich et al. (2017), the top three greenhouse gas emitters such as China, the European Union, and the United States contribute to more than half of the total global emissions. As reported, 100 companies (most of these are coal and oil producing companies) are responsible for 71% of global emissions since 1988 (Byskov 2019). All types of energy production constitute 72% of all emissions. According to the World Resources Institute (2017), the primary sources of greenhouse gas emissions are electricity and heat (31%), transportation (15%), manufacturing (12%), agriculture (11%), and forestry (6%). Contributions to combat climate change will be reached with the choices made in our daily life at the level of nations, communities, and individual lifestyles. Countries around the world are rising their targets in combating climate change. The Paris Agreement was adopted in Paris on December 12, 2015, to address the major issues of climate change. The Agreement provides a roadmap to reduce emissions and create climate resistance. It aims to strengthen the global response to the threat of climate change by keeping the global temperature rise slightly below the pre-industrial levels of 2
C and to maintain efforts to further limit the temperature rise to 1.5
C (UNFCCC 2020c). It came into force on November 4, 2016, drawing a new route in efforts to combat global climate change (UNFCCC 2020b). All parties should engage in adaptation, submit, and periodically update communication describing their priorities, needs, plans, and actions (UNFCCC 2020c). As of April 2018, 175 parties have ratified the Agreement, and 10 developing countries reiterated their national adaptation plans for the first time to respond to climate change (UNFCCC 2020c). Countries agreed to work to limit the global temperature rise well below 2
C (UN 2020). In 2018, Greta Thunberg a teenage activist from Sweden started sitting in front of the Swedish parliament every Friday, requesting the government to reduce emissions by 15% per year. She aimed to make her voice heard by the United Nations, the US Congress, and the British Parliament. On September 20, 2019, Thunberg led the biggest climate demonstration in history with 4 million people from 161 countries and became the face of the youth climate movement of recent times. Further, she gave an emotional and tearful speech to world leaders at the UN Climate Action Summit in September 2019 (Woodward 2020).

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Environmental Commitment and Disclosure of Organizations

Previous research on environmental commitment and strategic responses of organizations has identified several drivers and motivations for environmental responses. Since the mid-1990s and early 2000s, continuity models range from a reactive stance that denies responsibility to proactivity, where managers envisage developments. Between these two extremes, defensive and harmonious positions can be seen, characterized by reluctant admission and acceptance of responsibility (Kolk and Pinkse 2004). A study conducted by Bansal and Roth (2000) revealed that three motivations, such as legitimation, competitiveness, and social/ecological responsibility, trigger corporate responsiveness. Boiral (2012) outlined the determinants of

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corporate commitment to reduce GHG emissions as business motivations, social and environmental motivations (defined as sustainability drivers by Littlewood et al. 2018), and pressure from various stakeholders. Economic motivations are related to corporate competitiveness or potential financial benefits, which may result from the reduction of greenhouse gas emissions (Boiral 2012). Minimizing the carbon footprint of processes can result in profits such as minimizing regulatory compliance costs, controlling risks, reducing operating costs, responding to stakeholders, increasing revenues, and competitive advantage (Ervin et al. 2013). Environmental and social motivations for businesses focus on the importance of meeting social expectations and showing organizational commitment to climate change (Boiral 2012). Nakao et al. (2007) investigated 121 corporations spanned over 19 categories in the manufacturing sector and found that the attempts to address environmental issues are not seen as a “cost factor” but as an “important strategic factor” supported by the market. Hence, the hypothesis that a company’s environmental performance has a positive effect on its financial performance and vice versa is supported statistically by Japanese companies. Socially and environmentally driven corporations will link their corporate initiatives to emissions reduction with human rights and a quality environment, which will lead to clear results in terms of transparency, accountability, litigation, legislation, and governance structures (Clapp 2005; Ahman 2006; Okereke 2007). In contrast, Le Menestrel and de Bettignies (2002) argue that oil corporations, which carry out climate activities on social and environmental motivations, will make deeper cuts than companies whose actions are based on economic rationality. Several theories clarify the motivations of organizations to disclose information and explain their commitment to environmental performance (Bewley and Li 2000; Ali and Rizwan 2013; Talbot and Boiral 2015; Omran and Ramdhony 2015). Institutional theory explains the adaptation of specific organizational practices or forms (in a particular organizational area) with the concepts of isomorphism and decoupling (Deegan 2009). While decoupling refers to situations in which organizations decouple structures from work activity to avoid the detection of inconsistencies between structure and work, which could result in loss of legitimacy (Ogawa and Scribner 2002), isomorphism refers to the adaptation of institutional practices of other organizations (Dillard et al. 2004) influenced by several stakeholder pressures, organizational pressures, and professionals’ own willingness (Deegan 2009; Ali and Rizwan 2013). Organizations provide environmental commitment or performance as a reaction to coercive isomorphism due to political effects from national and local governments and the problem of legitimacy or mimetic isomorphism due to uncertainty from standard responses such as suppliers, customers, and competitors. A further possible reaction is normative isomorphism, which is associated with professionalization (social stakeholders) (DiMaggio and Powell 1983; Dögl and Behnam 2015). Clarkson et al. (2008) classify two theoretical perspectives that are contrary to their estimates: economic theory such as voluntary disclosure theory and sociopolitical theories (see also Patten 2002) such as stakeholder theory and legitimacy theory. According to the voluntary disclosure theory, organizations will disclose

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good news and retain bad news (Bewley and Li 2000). Dawkins and Fraas (2010) argue that companies with low environmental practices will disclose less information to prevent negative exposure. The theory contains also information that is not required by law or enforcement or goes beyond what is necessary and is useful for stakeholders to make decisions (Dawkins and Fraas 2010). Popular communication tools for communicating voluntary disclosures to different stakeholders are corporate web sites and standalone environmental reports (Clarkson et al. 2008). Corporations can use web sites to interact with audiences and provide information directly to individuals without having to pass through the gatekeepers of the news media (Esrock and Leichty 1998). Environmental reports focus on reporting noneconomic performance to make organizations more accountable and transparent (Yongvanich and Guthrie 2006). The emphasize on the triple bottom line concept, based on economic, social, and environmental dimensions, creates value for companies or organizations (Elkington 2006). Previous studies classify the motivations for voluntary disclosure as information asymmetry, corporate control competition, capital market transactions, stock compensation, management capability signals, increased analyst coverage, and mandatory disclosure limitations (Graham et al. 2005; Shehata 2014). The restrictions can be summarized as the precedent for disclosure, proprietary rights costs, agency costs, and political costs (Graham et al. 2005; Shehata 2014). Boiral (2013) analyzed sustainability reports from the energy and mining sector and found that 90 percent of the major negative events were not reported, the disclosed information presents a trend toward organizational narcissism and proliferation of misleading images. So while voluntary disclosure theory predicts a positive association between environmental performance and the level of discretionary environmental disclosure, legitimacy theory and stakeholder theory predict a negative relationship between environmental performance and the level of discretionary environmental disclosures (Clarkson et al. 2008). While the voluntary disclosure approach focuses on the right to good performance, the legitimacy approach is aimed at justifying low performance and reducing social and political pressures (Dawkins and Fraas 2010). Legitimacy theory suggests that organizations are constantly trying to ensure that they operate within the boundaries and norms of their community (Guthrie et al. 2006). It relies on the notion that there is a “social contract” between an organization and the society in which it operates (Deegan 2002; Deegan 2009). Organizations with poor environmental performance try to increase discretionary environmental disclosures to change stakeholders’ perceptions about their actual performance, as they are subject to greater political and social pressure, and threatened legitimacy (Clarkson et al. 2008). The study conducted by Prado-Lorenzo and Garcia-Sanchez (2010) verified the importance of legitimacy, especially for those with poor social and environmental performance. While legitimacy theory treats the whole society as a single group and expects the organization to meet the expectations of the whole society, the stakeholder theory classifies the whole society (Ali and Rizwan 2013) in more homogenous groups and subgroups. Although there are numerous definitions, no common consensus can be stated on what the concept of stakeholder means (Miles 2012). However, a vast majority

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of investigations adopt the definition idealized by Freeman (1984) (Mainardes et al. 2011). Freeman defines a stakeholder as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (1984). Environmental information is used or perceived differently by different stakeholders. Therefore management should target its environmental disclosures to different audiences (Bewley and Li 2000). Freeman’s (1984) stakeholder map consists of 12 stakeholders including activist groups, competitors, customers, customer advocate groups, employees, financial communities, government and political groups, owners, trade associations, suppliers, and unions. Mitchell, Agle, and Wood (1997) define stakeholder salience as “the degree to which managers give priority to competing stakeholder claims” and classify stakeholders by their possession of the attributes power, legitimacy, and urgency, which has been widely used in the environmental management literature (Murillo-Luna et al. 2008). Stakeholders’ pressures can be classified as internal and external pressures (Wood and Jones 1995). Previous studies found that the main source for climate change issues comes from external pressures such as governments, media, and the public, who are increasingly aware of issues to greenhouse gas emissions. These pressures are increasingly made in sectors with high carbon emissions, such as cement, oil, and transportation industries (Okereke 2007; Boiral 2012; Cadez et al. 2018). Boiral (2012) argues that institutional and social pressures to reduce greenhouse gas emissions do not only depend on public policy and relations between governments and companies. Various other stakeholders can also have a significant impact on the implementation of emission measures and controls, such as investors, customers, suppliers, or competitors. The external stakeholder list continues with business associations, professional associations and chambers of commerce, financial markets and insurance companies, environmental groups, and local and national experts (Boiral 2012; Ali and Rizwan 2013; Murillo-Luna et al. 2008). Significant internal stakeholders are employees, management, leaders, and company headquarters (Littlewood et al. 2018). Murillo-Luna et al. (2008) classified the large number of stakeholders who demand companies to protect the environment into five groups: regulatory stakeholders and corporate government stakeholders are the groups that managers are most concerned about. Other groups are defined as external economic stakeholders, external social stakeholders, and internal economic stakeholders. Alternative classifications have been identified in previous studies conducted by Henriques and Sadorsky (1999) and Buysse and Verbeke (2003). Pressure from stakeholders to reduce greenhouse gas emissions is often perceived as one of the main drivers not only for corporate commitment but also for improving carbon performance (Boiral 2012). Littlewood et al. (2018) examined the European high emission industry and found that business drivers and stakeholder pressure increased corporate commitment to climate change action and higher commitment led to increased GHG performance. MurilloLuna et al. (2008) argue that the pressure from all stakeholders can discipline the environmental behavior of corporations and leads to greater environmental proactivity.

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Climate Change Communication

The issue of climate change communication has been studied by many researchers. Gammelgaard Ballantyne (2016) analyzed the body of scholarly literature on climate change communication and found that the research within climate change communication clusters around five main perspectives, such as public understanding of climate change, mass media, strategic communication, communication effects, and conceptual articles (historic overviews, conceptual, and theoretical frameworks of climate change communication). Most of the research on climate change communication has been carried out in developed countries, like the United States, the United Kingdom, Australia, Canada, and Western European countries. There is a need to expand the climate change communication research to developing countries, where little is known (Chadwick 2017). Besides becoming a notable topic in science and society, it has become something like a booming industry alongside more established communication businesses, such as health communication, risk, and crisis communication, science communication, and environmental communication (Nerlich et al. 2010; Chadwick 2017). Growing areas of climate research include civic engagement and public participation, organizational communication, and persuasive communication to influence individuals’ climate related attitudes, beliefs, and behaviors (Chadwick 2017). Lorenzoni et al. (2007) investigated the barriers that the population of the United Kingdom perceives in engaging with climate change issues. His findings demonstrate that people have personal, social, and moral responsibilities for climate change. However, these people also have barriers for not acting at the individual and social levels, which limits the cognitive, affective, and behavioral elements of their engagement. The individual barriers for not taken actions are identified as lack of knowledge, uncertainty, and skepticism, externalizing responsibility and blaming business, distrust in information sources, regarding the issue as a distant threat, or being reluctant to change lifestyles. Social barriers are described as lack of political action, business, and industry or enabling initiatives (Lorenzoni et al. 2007). In this context, effective communication efforts should be directed toward overcoming these individual and social barriers to public engagement (Ockwell et al. 2009). Ockwell et al. (2009) point out that the presence of widespread and deep-rooted social barriers poses challenges for efforts to mitigate climate change and weakens the reliance on individuals’ volunteer actions. As a complex, uncertain, global, and long-term problem, it is difficult to understand climate change and relate it to the individual level. Moreover, such an issue should be shared among individuals, scientists, businesses, industries, governments, and other countries (Lorenzoni et al. 2007). Situational theory is used by several researchers to explain the impact of communication behavior on attitudes, cognitions, and behaviors (Rawlins 2006). Grunig and Repper (1992) differentiate the term stakeholder from the term public. They argue that organizations identify their stakeholders in line with their employment, marketing, and investment strategies, but “publics arise on their own and choose the organization for attention.” Publics, thus, are organized around issues (Hallahan

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2000). Dewey (1927) and Blumer (1946) describe publics as critical components of the democratic process; they define publics as a group of people, who face a similar problem, recognize the problem that affects them, and organize and act similarly to resolve those problems (cited in Kim and Grunig 2011). The situational theory also provides a way to segment people into several groups relevant to communication practitioners (Grunig 1997). The segmentation of publics, or more precisely audiences, based on the variables of problem recognition, constraint recognition, and involvement allows a comprehensive understanding of stakeholders by uncovering what turns them into active and aware publics and less active ones, such as latent public and non-publics (Grunig and Hunt 1984; Grunig and Repper 1992; Grunig 1997; Kim and Grunig 2011; Illia et al. 2013). Active publics present high levels of involvement and problem recognition and lower levels of constraint recognition (Rawlins 2006). These people do something about the issue because they know how it affects them. They actively seek information and act on it (Chung et al. 2014). Aware publics are defined as those individuals who recognize the issue, process information, and might take action but are limited by lower levels of involvement and problem recognition or higher levels of constraint recognition (Rawlins 2006). Latent publics are aware of the issue but do not recognize it as a problem. This public could become active or aware as information changes its cognitions about the issue. Non-publics defined as passive groups or as individuals who face no problem, who have no knowledge and involvement with an organization or an issue (Grunig and Repper 1992; Hallahan 2000; Rawlins 2006). Hallahan (2000) redefined and expanded the typology defined by J. Grunig and differentiated between inactive and aroused publics, which J. Grunig combined as latent publics. Inactive publics are conceptualized as groups of individuals with relatively low levels of knowledge about an organization and low levels of participation in their activities. Aroused publics are groups of people with high level of involvement who have recognized a potential problem or issue. Several different factors can cause their arousals, such as personal experience, political parties, media reports, advertisements, discussions with friends, or special interest groups. In general, the public is also used to define segments, which is a group of people who share certain demographic, psychographic, or geodemographic features and thus are likely to behave or respond to organizational actions or messages similarly (Hallahan 2000; Rawlins 2006). Chung et al. (2014) explored the interactive impact between different types of local publics and their exposure to a supportive or opposite message about a hypothetical local governmental plan to build a nuclear power plant on community engagement intentions. The results show that regardless of the message types, active publics are more likely to participate in community activities than anyone else. While active publics strongly oppose the harmful facility, the inactive publics remain passive. However, aware and aroused publics were significantly affected by messages. A convenient way in dealing with communicative actions is to follow Harold D. Lassell’s communication model of “Who, says what, in which channel, to whom, and with what effect?” (Lasswell 1948). To understand the context of climate change communication these questions can be answered as follows:

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Who says it? Information can be provided by various stakeholders, such as government, politicians, scientists, advocates, experts, business people, citizens, celebrities, business associations, non-governmental organizations (NGO), and international organizations, research institutions, consultants, or people of different ethnic or socioeconomic backgrounds (Moser 2010; Sanz-Menéndez and Cruz-Castro 2019). It has been found that science is among the most confident institutions. At a time when science and politics collide, public confidence in scientists increases. A survey conducted in the United States finds public confidence in scientists equally with the public’s confidence in the military. It also exceeds the levels of public confidence in business leaders, elected officials, and the media (Funk et al. 2019). A research conducted by Sanz-Menéndez and Cruz-Castro (2019) measures the reliability attributed by citizens’ to scientific information on CO2 emissions disclosed by several institutions, such as business associations, government, and non-governmental organizations, international organizations, and national research institutions. The results show an institutional reliability gap in science communication. Information provided by the scientific institutions was found to be more reliable than that provided by the government or the business sector. Information supplied by the government was more reliable than the information provided by business associations. And the information provided by IPCC or Greenpeace was significantly more reliable than the information provided by business associations. The authors point out that the reliability of scientific information on climate change is higher when the source is perceived closer to scientific institutions and lower when it is connected to business associations. What is said? The content relates to questions about sources of information on climate change and reliability (Moser 2010). A link to traditions, experiences, shared values and beliefs, global patterns, and collective actions can be created to lead to strong arguments (Von Storch and Krauss 2005; Thompson and Schweizer 2008). Thompson and Schweizer (2008) outlined the main strategies for creating messages and communicating about climate change, such as know your audience and select a credible ambassador for this audience, know what kind of claim you are asserting, and why it is appropriate for your audience. Connect your message to cultural values and beliefs, make the message meaningful, and address the meaningful values to your audience. Lead with your strongest argument or confident point, strengthen the message by telling your audience what specific actions you can take to make a difference, and connect to global patterns and collective action. Develop a system perspective of the problem and potential solutions, and partner with other organizations, key players, leaders, employees, artists, and neighbors. Start from inside by involving organization’s top leaders, inspire actions internally, and communicate about it as actions and events are effective modes of communication. In which channel? An important issue in climate change communication is the used form and channel, which differently affects the persuasiveness of communication (Moser 2010). Various forms from written (books, newspapers, letters, leaflets, and reports) to verbal communication (speaking, storytelling, or conversation) or from non-verbal communication (gestures, body language, sign language, and facial expressions) to visual communication can be distinguished (Moser 2010). To make

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the message more acceptable, reach a broad target, and raise awareness among publics print, broadcast media, and the Internet (web sites and social media) can be used effectively. Convincing alternatives besides traditional media are photographs, arts, movies, documentaries, adverts, school programs, grassroots movements, and events (see also Thompson and Schweizer 2008; Nerlich et al. 2010; Schäfer and Schlichting 2014). In general, while face-to-face communication is more convincing and effective on personal behavior, dialogic and interactive forms of communication tend to provide more learning and active participation than one-way, written, or verbal communication (Moser 2010). The visualization of climate change through photography calls attention to communicate both temporal (long-term and developmental) and unseen (not always visible) environmental issues, through a medium that privileges the “here and now” of the visual (Doyle 2007). Corner et al. (2015) conducted a three-country, online survey in the United States, the United Kingdom, and Germany, where participants responded to a series of psychological measures related to their views about climate change and their evaluation of images. Participants answered a series of questions concerning their beliefs about climate change and willingness to take various actions. The report summarizes the key findings and emphasizes that the images used to communicate climate change should be more diverse than polar bears and melting ice. Also Doyle (2007) argues that photographs of glaciers temporarily represent the already seen effects of climate change. Key research findings of the investigation conducted by Corner et al. (2015) are summarized as: 1. Show “real people” not staged photo-ops: Authentic images are favored over staged photographs, which are seen as tricky or even manipulative. Politicians, notoriously low on credibility, attracted some of the lowest scores. 2. Tell new stories: Images that participants could quickly and easily understand like chimneys, deforestation, and polar bears on melting ice tend to be positively evaluated. Familiar and “classic” images can be particularly useful for audiences with limited knowledge or limited interest in climate change, but in other audiences, they prompt cynicism and fatigue. Less familiar and more thoughtprovoking images can help tell a new story about climate change and remake the visual representation of climate change in the public mind. 3. Show climate causes at scale: People may not necessarily understand the links between climate change and their daily lives. Individual “causes” of climate change may not be recognized in this way and, if so, can cause defense responses. If communicating the links between “problematic” behaviors and climate change, it’s best to show these behaviors at scale, for example, a congested highway instead of a single driver. 4. Climate impacts are emotionally powerful: Images of climate effects can stimulate the desire to react, but emotionally strong images can also be overwhelming. Coupling images of climate effects with behavioral “action” for people to take can help overcome this. 5. Show local (but serious) climate impacts: When images of local climate effects show an individual or a group of people with identifiable emotions, they are likely

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to be the most powerful. However, a balance must be struck between localizing climate change (so that people realize the issue is relevant to them) and trivializing (by not making clear enough links to the bigger picture) the issue. 6. Be very careful with protest imagery: Images depicting protesters attract low scores and widespread cynicism. Most people do not feel close to climate change protesters, so protest images may strengthen the idea that climate change is for them rather than for us. Protest images, including people directly affected by climate impacts, were seen as more authentic and therefore more compelling. 7. Understand your audience: The levels of concern and skepticism associated with climate change determine how people react to images. Images of distant climate impacts produce much flatter emotional responses among those on the political right. Images depicting a solution to climate change often create positive feelings for the political right and those on the left. So we can never rely on an image that appeals to everyone in the same way (Nicholson-Cole 2005). People’s previous perceptions, experiences, attitudes, social background, cultural orientations, and behavioral tendencies affect the messages they receive from the images of climate change and their further reactions and behaviors (Myers 1994). People react not according to abstract concepts and scientific data but to traditions, experience, and shared values (Von Storch and Krauss 2005). To whom? The heterogeneous nature of the individuals (Nicholson-Cole 2005) creates a major challenge for climate change communicators (Hine et al. 2014). Considering generic stakeholder groups will not provide effective communication and interaction for environmental issues. The situational theory provides convenience in determining within the stakeholder categories, in which publics will communicate actively, passively, or not at all about organizational decisions or environmental issues affecting them (Grunig 2005; Rawlins 2006). The segmentation is an important start to manage people; otherwise, all stakeholders will be treated the same (Curtin and Jones 2000; Muñuzuri et al. 2016). The segmentation of publics (active, aware, latent, and non-public) based on the variables problem recognition (high vs. low), level of involvement (high vs. low), and constraint recognition (high vs. low) explains why some people become active in certain issues or situations (Grunig and Hunt 1984; Kim and Grunig 2011). Here, organizations probably will ignore non-publics, such as lack of resources (Hallahan 2000; Kim and Grunig 2011). The growing interest in segmenting publics or audiences is a possible strategy for developing more effective communication strategies targeted and tailored to subgroups of publics who share similar values, beliefs, behaviors, or policy preferences related to climate change (Hine et al. 2014). With what effect? Macnamara (2006) emphasizes that communication is ensured when an audience somehow receives, understands, interprets, retains, and acts on information. Measurement and evaluation should start early and take place throughout the communication project as a continuous process, but planning and evaluation investigations are not used adequately in communication campaigns. Costs, uncertain how to measure, lack of standards, and lack of interest are shown as the main

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reasons for not measuring or evaluating. Applications require major reform to achieve professionalism (Macnamara 2006). Noble and Watson (1999) identified the leading models in public relations and corporate communications to explain research and evaluation. These models are “The Preparation – Implementation – Impact Model” (Cutlip et al. 1985), “The PR Effectiveness Yardstick” (Lindenmann 1993), “The Pyramid Model of PR Research” (Macnamara 2002), and “The Unified Model of Evaluation” (Noble and Watson 1999; Macnamara 2006). Communication efforts should aim to establish a meaningful engagement with the aspects of understanding, emotion, and behavior (Ockwell et al. 2009). There is no direct relationship between communication and behavior change or a single dimension that fits all solutions. What is needed is a mixture of measures where communication is only one and works only when it is embedded in other approaches that are more directly linked to practical behavior in social life (Nerlich et al. 2010).

5

Summary

Climate change is not a subject that is recently discussed and researched. In several studies on the atmospheric greenhouse effect, citations date back to the studies from the 1820s. While until the 1960s, especially physicists and chemists worked on CO2 and global warming, researching environmental issues has come to the agenda of international organizations, such as the Committee on the Challenges of the Modern Society (NATO) and the United Nations Conference on the Human Environment in the late 1960s and beginning of 1970s. Further establishments are the Intergovernmental Panel on Climate Change in 1988 (IPCC) and the United Nations Framework Convention on Climate Change in 1992. The Montreal Protocol in 1987 points to the fact that the main sources of greenhouse gases in the atmosphere are produced entirely by human activities. The Kyoto Protocol signed in 1997 sets binding targets to industrialized countries to reduce greenhouse gas emissions. Today many disciplines have contributed to climate change studies. This study explores the scientific literature on history, key facts about climate change, and organizations’ environmental commitment to climate change and climate change communication. The literature draws attention to several theoretical perspectives, such as institutional theory, voluntary disclosure theory, legitimacy theory, and stakeholder theory to identify the motivations for environmental commitment and to clarify the relationship between environmental performance and the level of environmental disclosures. Further, it presents the interrelated motivations of corporate responsiveness or corporate commitment to climate change ranging from business to social and environmental drivers, which are also defined as strategic factors (Nakao et al. 2007). Climate change is a global, multidimensional, and complex issue linked to human activities. As a crucial threat, it cannot be shaped or managed by the efforts of a single group or the lifestyles of individuals. Involvement, awareness, and support are needed from several stakeholders, especially from governments, public7 institutions, businesses, industries, communities, non-governmental organizations, and the media. The segmentation of stakeholders into publics

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according to the levels of involvement, problem recognition, and constraint recognition for the same issue (Grunig and Hunt 1984) is a useful approach in managing and communicating environmental information effectively. A convenient way to bring a deeper understanding of communicative actions and reach publics through effective communication strategies is the use of Harold D. Lasswell’s (1948) “Who says, what, on which channel, to whom and with what effect?” communication model with current findings of empirical studies conducted in the field. Climate change is a planetary threat and therefore requires large-scale reforms that can only be implemented by governments. Individuals can be most responsible for their own behavior, but governments have the authority to enforce legislation that forces industries and individuals to act sustainably. In response, we all contribute to global warming through the cumulative effect of our actions (Byskov 2019). However, it can be difficult to motivate people to change their views and behavior toward climate change. Two basic techniques, such as asking and listening, can help people to change behavior and overcome curiosity, misinformation, and lack of knowledge. And our preferences in this sense will take us to a more livable future.

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Cross-References

▶ Resource Depletion

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Water Resources Linne Marie Lauesen

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 State of the Art . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 The Water Cycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Wastewater Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Water Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 Waste as Water-Polluter: An Overlooked Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Global Issues Concerning Water Resource Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 OECD Water Governance Indicator Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Conflict over Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Environmental and Social Damages from Overexploitation . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Running Out of Water: Desalination? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Sustainable Water Resource Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

Water is one of the most important resources for life on Earth. The main use of water is for food, drinking, and watering, and it depends on a plentiful and good water quality. However, clean freshwater resources are scarce, and the climate change with extensive droughts has worsened water scarcity in many places. A clean water resource also depends on proper wastewater management, since polluted wastewater disposed into natural water bodies also affects the freshwater aquifers ultimately. Water must be seen in its entire cycle, from rain, hail, and snow from the sky dispersing into the sea, rivers, streams, and groundwater aquifers alongside the human systems of freshwater abstraction to wastewater management and outlet. To obtain sustainable water resources, responsible water L. M. Lauesen (*) Water and Waste Denmark, Vand og Affald, Svendborg, Denmark e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_16

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management in all aspects of the water cycle is required including: the prevention of overusing freshwater from scarce water aquifers; the prevention of further climate changes to stabilize and preferably in the future reverse extreme weather situations; as well as preventing the pollution of natural water bodies with untreated wastewater and waste in general. Keywords

Freshwater management · Waste and wastewater management · Water pollution · Water resources · Water scarcity

1

Introduction

The existence of life depends on the availability of fresh and uncontaminated water on our Planet. However, during the last half century, water availability has been a global issue concerning many regions especially in areas, where freshwater is scarce. Furthermore, global water resources are on demand from an increasing population – especially in regions where scarce water resources of both quantity and quality are decreasing. The competition for water resources between societies and businesses has increased during the last century, which results in both social, economic, and political challenges, especially aggravated by droughts and the climate changes (Durán-Sánchez et al. 2018). The latest OECD report from 2020 on freshwater abstraction shows a variety of water consumption per capita related to countries in different regions (See Fig. 1). Countries in the northern hemisphere with less agricultural activities as a primary source of income use less water per capita than countries where agriculture and manufacturing of products are more water demanding, for instance, in the USA, Canada, Ireland, Greece, Australia, and New Zealand. Though, data is missing Asia, South America, and Africa, where it is assumed that these regions have a relatively high water consumption either due to its main agricultural activities as well as for its production activities such as manufacturing and mining activities. When addressing water resources, two issues arise concerning the availability of freshwater: • Quantity • Quality Both issues are relevant because the sustainable state of water resources requires both plentiful resources of freshwater for all demands as well as the quality of the water must be safe and uncontaminated. This implicates a wider understanding of why water resources are not plentiful enough as well as why and from which resources it may be contaminated. For instance, if a plentiful freshwater resource is maintained by river water, the issue may be that this is contaminated from various polluting human activities, such

Fig. 1 OECD Environment Statistics: Water: Freshwater abstractions. (OECD 2020)

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as wastewater outlets, land erosion activities, water–air exchanges, for instance, acid rain, river–sea exchanges for salt contamination, and so on. Therefore, when discussing water quality in relation to water resources, other influences will be addressed. Today, sustainable management of water resources in society thus requires plentiful access to good quality water including eliminating the disparate resources dividing the availability of water among societies, and prevent the overexploitation of water, the pollution of water, and subsequently the degradation of associated aquatic ecosystems.

2

State of the Art

Many regions in the equatorial belt have suffered from water depletion and water scarcity for a very long time, especially in North Africa, the Middle East, South and Central Asia, North China, North America, and Australia. Access to pumped groundwater wells has since 1940s provided freshwater for many people, while the groundwater development for municipal, industrial, and agricultural supplies in 2000 has resulted in a global groundwater withdrawals of approximately 750– 800 km3/year (Shah et al. 2000; Scanlon et al. 2012). Good quality freshwater has increased the health of many people, but the flipside of this is that many groundwater reserves globally have been depleted, well yields have decreased, pumping costs have risen, water quality has deteriorated, aquatic ecosystems have been damaged, and land has irreversibly subsided (Konikow and Kendy 2005, p. 317). Groundwater depletion thus a natural consequence of withdrawing water from an aquifer. In good aquifers in regions, where rainwater is capable of infiltrating quickly into the groundwater aquifers, over time a new equilibrium has been reached, which sustains the aquifer for all external requirements. However, in fossil or compacting aquifers, where recharge is either unavailable or unable to refill it, depletion becomes permanent, and the further depletion is seen (Theis 1940; Konikow and Kendy 2005, p. 320). Public water abstraction from groundwater resources for household freshwater is a necessary consumption to maintain and enhance health among people and livestock living on Earth. However, the major impact on the groundwater depletion stems from indirect consumption used in the production of food, textiles, and other goods, which also represents human consumption eventually. Food production involves a large chain of water-consuming production sectors from agriculture to manufacturing facilities. Different water consumption key figures have been published recently to enhance the public awareness on how much water is used on a global average to produce (Table 1) goods (https://waterfootprint.org/en/ resources/interactive-tools/product-gallery/): Materials used for clothing, shoes, and accessories followed by food products like meat, dairy, and beverages score high, whereas vegetables beyond coffee beans, chocolate, etc. score lower in water consumption.

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Table 1 Water consumption for producing popular foods, drinks, and textile materials. (Source: Water Footprint Network Hoekstra and van Heek (2017). Below vector drawings are from www. pixabay.com – free of use, citation free) Illustration

Product Coffee

Liter per kilogram water used in production 18,900

Chocolate

17,196

Leather

17,093

Beef

15,415

Cotton

10,000

Tea

8860

Butter

5553

Chicken

4325

Egg

3300

Cheese

3178

Bread

1608

Beer

1420

Wine

870

Apple

822

Banana

790 (continued)

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Table 1 (continued) Illustration

Product Potato

Liter per kilogram water used in production 290

Tomato

214

Typically, it is luxury western lifestyle products such as coffee, chocolate, leather products, and meat, which have become everyday use in many rich countries, are very water-consuming in the process of making goods. Environmental assessments of vegan versus meat-eating diets have shown that all impacts regarded including the water footprint: a vegan diet has a less impact than a carnivorous diet. (https://www.azocleantech.com/article.aspx?ArticleID¼907) Regarding water footprint, a vegan diet requires up to 40% less than a carnivorous diet. Feed production, livestock breeding, fertilizer manufacture, farm operation, and the final food processing all require water before it ends on the table of the consumers. Approximately, 3,000 liters of water a day per person on average is used for a carnivorous western diet and cutting the meat from the diet could save half of that amount. (https://phys.org/news/2018-09-meat-free-diets-footprint-scientists. html) Health debates on vegan diets versus carnivorous is another discussion omitted here. Water resources used for food, production, and welfare differ from 1,500 to 10,000 liters of water a day per person depending on where you live. (https:// waterfootprint.org/en/water-footprint/personal-water-footprint/) Although water is a renewable resource, the availability and the regeneration of groundwater from depletion of water resources are diverse. This requires an understanding of how water is disposed and how it is cleaned afterward to enhance environmental health as well as the regeneration of new freshwater.

2.1

The Water Cycle

The water cycle consists of a natural planetary water exchange between the weather’s water release in the form of rain or snow, which runs or infiltrates into various natural water resources such as groundwater aquifers, rivers, dams, and the ocean (see Fig. 2). From these water resources, waterworks extract water, purify it if necessary, and distribute water to consumers. When consumers use water, they subsequently dispose wastewater, which is treated in wastewater treatment plants and finally disposed into a water body again. From the water body, steam evaporates into the weather systems again, and the water cycle begins anew. The critical step in the water cycle is the transformation from wastewater to water disposal. If all used water were cleaned to the same quality as the extracted water, the

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Fig. 2 The water cycle. (Illustration: Tankefuld)

cycle would theoretically be perfect. However, this is obviously not so. Wastewater treatment is expensive, and thus businesses and municipalities dispose various degrees of still polluted waters back into nature. Below are shown various issues related to the wastewater management, which ultimately has caused the unsustainable conditions, which many water bodies and aquifers are found in.

2.2

Wastewater Treatment

In most parts of the world, wastewater is treated centrally with the best available technologies, such as biologically as well as chemically. A high-technological wastewater treatment system consists of a sewer system, which transports

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Fig. 3 Combined sewer system. (Source: Teknologisk.dk. Drawing: Claus Riis)

wastewater from all buildings to local wastewater treatment plants. The system is only as robust as the design, it was created with (Fig. 3). Old combined sewer systems consist of a single pipeline system collecting both sewerage as well as rainwater to drain the surface. The old single-line system has several weaknesses, of which the major is its limitation to carry extended rainwater, which requires multiple intermediate overflow outlets to natural water bodies with combined sewerage and surface water, which has not been treated on a wastewater treatment plant, and thus pollutes the natural water bodies. (https://www3.epa.gov/ npdes/pubs/o&M.pdf) Newer separated sewer systems from the 1980s consist of twin-pipe systems with one line for sewerage and another for rain- and surface water. This double-line system is more robust toward overflow, and the separation of sewerage from rain- and surface water means, that the pollution of the water bodies in case of overflow outlets only happens with the rain- and surface water. The sewerage continues its transport to the wastewater treatment plant. Recent Millennial systems under the term Green Infrastructure such as bioretention facilities, such as rain gardens, gabions, green roofs, porous pavements, local dams, wadis, canals, etc., treat rainwater locally where it falls in order to reduce the risk of flooding as well as reducing the pollution from when rain meets the surface and becomes infected with pollutants present on the surface, such as roads, parking lots, etc. These local systems have become popular as a tool used in public service (De Sousa et al. 2012), because when private landowners manage rain fallen locally without burdening the sewer infrastructure, they can often receive public refunds of connection fees for the private rainwater main to use for the green investment (Fig. 4).

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Fig. 4 Separated sewer system. (Source: Teknologisk.dk. Drawing: Claus Riis)

The above three typical systems are of course very isolated seen in the entirety of a wastewater system, because most infrastructure is built on all three methods throughout times. Many cities and towns have a large amount of old single-line systems carrying combined sewerage and surface water in the same pipe system, whereas newer systems of double line have separated the two water streams, and a few areas have begun separating rainwater out of the pipeline system to treat it locally where it falls. This means that the three types of infrastructure are interwoven, and ultimately what many municipalities struggle with today is the continuous and enhanced combined overflow outlets, which with the climate changes resulting in more extreme weather and more stormwater has risen dramatically during the last few decades. It all comes down to taxpayers’ (voters’) and investors’ willingness to pay a higher price for a better wastewater infrastructure, which is a balance that is hard to strike in most societies. However, the combined system overflow outlets have meant throughout history that many groundwater aquifers are unavailable as a freshwater supply, because they are intensely polluted or drained, and surface water bodies are similarly affected with wastewater, which means that water taken from rivers, streams, and lakes must be chemically treated before it is suitable for drinking water quality in households and businesses ultimately. Furthermore, some industrial wastewater outlets to natural water bodies are still present although many governments have regulated and forbidden direct wastewater outlets with extremely polluting contents. Likewise, the draining from agricultural fields leads nutrient and fertilizer and pesticide pollutants into water streams and the groundwater aquifers, which too is unmonitored.

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Regarding protecting and mitigating the groundwater depletion as well as enhancing the sustainability of surface waters, wastewater treatment, reduction of combined overflow with sewerage pollution as well as reduction of industrial and agricultural outlets is crucial in protecting the environment as well as enhancing the water availability for all in terms of securing better freshwater resources.

2.3

Water Pollution

In this section, specific issues regarding water pollution are discussed, which contributes to the issues of water shortage in quantity as well as in quality. The issues covered are the before mentioned combined sewer overflow, infiltration of land use chemicals and nutrients from agricultural activities, and wastewater discharge from industrial sites.

2.3.1 Combined Sewer Overflow Combined sewer overflow (CSO) into natural water recipients is a result of rainwater run-offs into older single-pipe sewer systems from impervious surfaces on inhabited areas all over the world. CSO contains fecal particles such as suspended solids, nutrients with biochemical oxygen demand, oil and grease, floatables, toxic pollutants, pathogenic microorganisms, and other pollutants (https://www3.epa.gov/npdes/pubs/o&M.pdf) from sewerage, road surfaces and spill, rooftops biofilm, animal feces, and various chemicals used to clean and deice surfaces as well as water-bound pollutants absorbed into rain particles from the air, etc. (Schroeder et al. 2011). CSO is polluting water environments affecting living water species, cause oxygen depletion, and chemical and particulate build-up in the food-chain, but it is especially critical, when the water body is also used as freshwater resource, and thus freshwater deriving from surface waters such as rivers, lakes, etc. requires intensive purification with harsh chemicals before sending it to the taps (Jalliffier-Verne et al. 2015). With growing population, cities, wealth and welfare, more housing, infrastructure, and thus more solid surfaces combined with increased stormwater events, CSO has increased as well. The work initiated in societies for capturing, storing, and utilizing CSO to reduce flooding as well as water pollution has increasing accordingly. (https://link.springer.com/chapter/10.1007/978-3-030-11818-1_1) Before 1970s, most societies did not have wastewater treatment plants, and therefore all outlets from sewer systems was more or less discharged untreated to the water environment causing major pollution disasters with fish kill and death of other animals living in or by the waters (birds, seals, etc.) as a result. The invention of the biological and chemical wastewater treatment was thus a major leap in reducing the vast water pollution taking place globally (Tarr 1979). Since there is always a risk of a larger stormwater event than we have seen so far, no sewer system is (or cannot be) designed to capture and store all amounts of water run-offs from stormwater, outlet from the sewer system is necessary in order to

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prevent flooding and health issues related to the contact between citizens and sewerage. However, the risk of polluting the natural waters with CSO can be reduced severely, either by enhancing the sewer system with more and larger storage capacity, or to reduce the amount of rain- and surface-water run-off collected in it. The balance to strike is between costs and risks because sewer infrastructure is at large scale a high cost investment for societies (Schroeder et al. 2011). A continuing debate regarding either changing combined sewer systems into separate systems (one pipe for sewerage, another pipe or local infiltration for rain and surface water) or enhancing existing combined sewer systems with larger storage capacities, where as much combined sewerage is sent for treatment at the wastewater treatment plant, is going on. The benefit of separating combined sewer systems into separate systems is the minimization of sewerage pollution from CSO. However, there are also polluting elements in surface water, and the direct outlet of surface water will be more frequent over the year, which means more accumulated pollutants over time will be discharged into the recipient waters. Furthermore, separating surface-water from sewerage not only requires public investments in the main pipeline systems; households and businesses will also need to invest in separating private mains, which is expensive for them as well. (As a guideline or a rough estimate collected from the know-how of Danish public wastewater service officers working with sewer infrastructure, separating a single pipeline into a double pipeline system on a private one-family housing lot costs minimum 3 months net salaries (after taxes) in Denmark, which means that private households often need to take additional mortgage loans to complete such task.) Another solution, which has become more popular since the Millennium, is managing rainwater locally, where it falls, infiltrating, or leading as much as possible into green private and public areas and further on into natural water bodies and groundwater aquifers. The emerging literature on green solutions for rainwater management is growing worldwide; however, with extreme rainwater events – either stormwater or prolonged rain seasons – these solutions have its limitations as well (see Lauesen 2019). Furthermore, with a rising sea level, groundwater levels follow, and the risk of preventing infiltration of rainwater into the ground is therefore obvious in many areas. Thus, the right solution to plan sewer infrastructure and minimize CSO is complex. The combination of enhancing existing combined sewer systems and separating sewerage from rain and surface water is going on in multiple societies to minimize polluting water resources and mitigate flooding. The environmental benefits are often politically weighed against the costs, which dampens the initiatives for sustainable solutions in times of less risk of flooding; however, when a city or a municipality repeatedly has faced flooding with combined sewerage, the willingness to invest – both publicly and privately – is seen higher. There is among wastewater professionals a saying called “grantmaking rain,” meaning when rain catastrophes causing flooding are severe or frequent enough affecting many people and house and landowners, the political willingness for public investment in sewer infrastructure increases dramatically to make necessary wastewater management more sustainable.

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2.3.2 Infiltration of Chemicals and Nutrients Another source of water pollution stems from the agricultural field treatment with nutrients, pesticides, herbicides, and other harvest-promoting chemicals. These treatments in conventionally driven fields and woods leave residues to infiltrate into local water streams and the groundwater as an un-monitored impact on water resources. The impact of nutrients residue discharges to water environments enhances unwanted growth of algae as well consumes oxygen as a natural chemical reaction leading to oxygen depletion, which ultimately affects all living species in the waters affected the same way as mentioned above regarding CSO. A recently discovered environmental impact, though, is detected in many places in the groundwater, which is used in many countries as the main freshwater resource. (DMS is, for instance, found in almost a third of all groundwater wells in Denmark in March 2019 according to a national widened test for new pesticides, herbicides, fungicides, etc. https://www.dr.dk/nyheder/indland/svampemiddel-fundet-i-hvertredje-drikkevandsboring-det-er-den-vaerste-forurening-af) Centuries of use of pesticides, herbicides, fungicides, and other agricultural harvest-promoting chemicals have left a huge variety of decomposition products found in alarming amounts beyond the internationally approved limits in the groundwater aquifers. For instance, the degradation product desphenyl-chloridazon (DPC) derived from the herbicide n-chloridazon (n-CLZ) and dimethylsulfamide (DMS) derived from the fungicide Tolylfluanide, among thousands of other transformation products, have recently closed many groundwater wells in Europe and elsewhere (Kiefer et al. 2019; Lauesen and Bjerre 2020). Tests with advanced water treatment such as ozone or hydrogen peroxide treatment to further decompose the pollutants is taking place as part of research as well as in practice on waterworks, because some water companies have faced severe challenges in meeting freshwater demands after closing vital pumping wells due to pollution from agricultural residues (Kaarsholm 2019, forthcoming 2020). Comparable tests with these advanced techniques have correspondingly shown that ozone treatment of, for instance, DMS leaves a degradation product that unfortunately is even more harmful than DMS itself. It is the carcinogen N-Nitrosodimetylamine (NDMA), which is a byproduct created when oxidizing DMS with ozone, when bromide is present in the groundwater (https://www.who. int/water_sanitation_health/dwq/chemicals/ndmasummary_2ndadd.pdf) (ref). NDMA can be removed by UV irradiation below 0.005 μg/l given the water is not severely contaminated. NDMA is not removable by air stripping, activated carbon adsorption, reverse osmosis, or biodegradation according to the World Health Organization (WHO). However, newer studies indicate that activated carbon adsorption may play a vital role in polishing the results from other advanced water treatment techniques. Oxidization with hydrogen peroxide does in some tests do not create NDMA as a pollutant. However, it will need prepurification for iron and manganese in order not to react with these natural components, and requires further and very costly UV-treatment, because the biofilm is exposed when oxidized, which means that certain nutrients will blossom as another unwanted byproduct.

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A third variant is treating groundwater with chlorine; however, this method is more expensive compared with ozone or hydrogen peroxide (Krüger A/S 2019). The cost of such advanced water treatment adds exceptionally costs to the water production, up to doubling the basic costs per cubic meter calculated in a local waterworks in Svendborg, Denmark (Sølling et al. 2019).

2.3.3 Industrial Wastewater Discharge The UN estimates 80% of the global wastewater flows is discharged directly into the ecosystems without being reused or treated. (https://www.unwater.org/water-facts/ quality-and-wastewater/) This contributes to the 1.8 billion people use a feces and chemically contaminated drinking water source risking of contracting cholera, dysentery, typhoid, and polio. Although many societies have incorporated industrial wastewater into the public wastewater treatment system, industrial wastewater discharges still serve a major pollution source for natural water resources. Manufacturing is the greatest generator of wastewater among the main industrial sectors (including mining and quarrying, the production and distribution of electricity and construction). Only a proportion of wastewater is treated before being discharged from most of these sectors. The industrial wastewater contains a broad spectrum of pollutants, for which there are treatment technologies available. However, the cost of treating industrial wastewater prevents many industries from investing in them, although they are very cost-effective concerning the potential for reusing water. In low-cost production areas in highly populated regions of Asia serving most of the Western World’s consumption needs regarding manufacture, electronics, etc., the industrial wastewater discharge has given room for various pollution disasters, which affects the millions of inhabitants and farmers living on basis of river water for human and livestock water consumption (e.g., Mohanakavitha et al. 2019). The mining industry is often situated in or near diverse and sensitive environments, and the mining operations generate wastewater discharges, which affect surface and groundwater quality and thus drinking water supplies. Even abandoned mines can cause extensive losses of aquatic and terrestrial habitat. Mining has according to the US Environmental Protection Agency, for instance, impacted thousands of miles of streams and rivers throughout the western USA due to active and historic mining of metallic ores (e.g., iron, copper, lead, zinc, molybdenum, tungsten) and precious metals (gold, platinum, and silver). (https://www.epa.gov/ npdes/industrial-wastewater) The extent of industrial wastewater generation, however, is largely unknown. Globally, data and information concerning the volume of wastewater produced by industry are very deficient, the UN Industrial Development Organization says. (https://www.unido.org/news/wastewater-and-industry-world-water-developmentreport) In the European Union, for example, limited data show that wastewater generation has generally decreased. In China, a study by Ma et al. (2020) shows that from 2004 to 2015, first an incline in wastewater discharges was observed, and toward the end of the study, a decline has been observed mainly because the

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government has had focus on regulating wastewater discharges in order to enhance the environmental condition in rivers such as the Yangtze river, etc. In nations where scarce water resources threaten the livelihood of many inhabitants, industrial wastewater treatment is a focus that needs to be taken more seriously to improve water resource management for the sustainability of all living species. Thinking of wastewater as a vital part of the entire water circle and a resource for creating more freshwater availability and accessibility has a large potential to solve both environmental issues as well as life-supporting issues concerning reducing water scarcity.

2.4

Waste as Water-Polluter: An Overlooked Issue

When discussing water pollution, the obvious thing is to concentrate on improper wastewater management, however, waste management also affects many water resources negatively, and must be taken into consideration as well. In 2016, 2.1 billion tons of waste was generated estimated globally, of which approximately 33% is not handled environmentally safe (Kaza et al. 2018, p. 3). Waste has historically been stored as landfill, and although many nations have shifted from landfilling to incineration and recycling waste, still one-third of the generated waste ends as landfill and in the sea. Waste landfill produces toxic percolate (leachate) when rain dissolves the multiple surfaces and interacts with liquids in the waste and infiltrates into the groundwater (Poulsen and Møldrup 2005). The percolate from landfill consists of a concentrate of organic and nonorganic components including organic matter, phenols, ammonia nitrogen, phosphate, heavy metals, and sulfide (Kamaruddin et al. 2015, p. 113). Waste mountains are seen in many states, and the percolate from these have meant that freshwater abstraction from groundwater is not an option. In recent decades, many states with smaller amounts of waste landfill have changed from open landfill to closed. Open waste landfill is when percolate is not prohibited from infiltrating the ground, and closed waste landfill is when solid geo-textiles are closing the landfill, and drainage systems collects the percolate for treatment in a specialized wastewater treatment plant. However, the massive open waste landfills as high as small mountains in Asia, the Middle East, Eastern Europe, South America, and Africa are so large that it seems inevitable that percolate is producing a major issue concerning pollution the groundwater and other natural water bodies near them. Many nations in the above areas are changing into closed landfills in newer dumping sites and where possible in old sites. Although the USA, Canada, and most of Europe have changed into waste incineration and closed landfill sites, they too have a major part in exporting waste to these very nations with massive waste landfills, and thus they too are responsible for the problem as well (Kaza et al. 2018). Newer studies have suggested percolate management by clean soil coating and tree planting on top of old landfills to recover them and reduce percolate generation (e.g., Poulsen & Møldrup 2005; Kamaruddin et al. 2015; Qualls and Haines 1991; Hongve et al. 2000).

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239

Global Issues Concerning Water Resource Management

Different responses for mitigating water-resource depletion has been executed by societies such as locating and developing new supplies, augmenting supplies, conserving the groundwater, and reallocating existing supplies to other sites (Molle 2003). Augmenting supplies stands for both improving water quality or increasing water quantity. Improving the water quality is often done by water treatment, whereas quantity augmenting is mostly done by decreasing discharge or increasing recharge, for instance, with rainwater or treated municipal wastewater. Furthermore, decreasing the use of pesticides and nutrients in agriculture as well as reducing combined sewer overflow and industrial discharges is also a feature involved in augmenting the freshwater supplies eventually. Conserving groundwater can be done by various means: • Reducing pumping can be accomplished through administrative, legislative, or management controls, including economic incentives to reduce demand to save water. Lining irrigation canals to reduce seepage in agricultural areas, unless they are part of the natural feedstock for the underlying aquifer from the beginning. • Land-use change, for instance, redirecting area use from farmland to woodlands or likewise conservation of former cultivated lands also protects the groundwater aquifers, because woodland and other use of natural areas are not cultivated as water intensely and thus does require further irrigation than natural rain. Reallocating water such as selling water, exporting water on the water markets, leasing, trading, and other such trading mechanisms can move limited water from lower to higher productivity sectors, as an alternative to further depletion when executed carefully and sustainably for both the “selling” and “buying” aquifers (Konikow and Kendy 2005, p. 320). A widely recognized model (e.g., the Rio de Janeiro and Dublin conferences) to accommodate the human and businesses’ needs for plentiful of high-quality water is known as Integrated Water Resources Management (IWRM)), which is a process of coordinating and developing the management of water, land use, and related resources in order to maximize the economic and social well-being outcomes in an equitable manner without compromising the environment and the sustainability of vital ecosystems (Durán-Sánchez et al. 2018, p. 1191). The triple objective – to maximize economic outcomes, social well-being without compromising the sustainability of vital ecosystems – however have conflicting goals, since the economic and social optimums require the depletion of the vital ecosystems, which water resources are a part of. Balancing water resource sustainability in times of irreversible damages facing global societies from the climate changes, brings the competition further ahead among the three goals.

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Sustainable water resource management to fully contribute to the objectives of society, now and in the future, while maintaining their ecological, environmental, and hydrological integrity, which to some extent is voluntarily documented in sustainability indexes has largely been ignored or criticized by as well businesses, researchers, and authorities and in contemporary IWRM-systems (Loucks 2000; Oxley et al. 2016; Durán-Sánchez et al. 2018). Although several attempts to standardize and monitoring and reporting the sustainability effects of IWRM systems and actions have been made, critique has also followed. IWRM is a means to set and obtain goals with regard to transparency for operators as well as publicly in terms of documenting to which degree a certain operation is Often, in the zeal to document a system to be sustainable, ambitious goals, and key performance indexes, and monitoring attempts have been set; however, when it comes to real-life measurements, results, implementation in practice, etc., the goals have often not been met (Petit 2016). The major problems with IWRM concerns the accessibility, reliability, and comparability of data across IWRM systems and concepts. Data is often incomplete or defined in larger or smaller scales than the basins and aquifers relevant, and in the case of trans-border water resources, national and international cooperation for data exchange shows great shortcomings. Reliable benchmarking is often carried out nationally regarding IWRM, and although some data is exchanged internationally through intergovernmental agreed statistical indicators, these data are often comprised of different underlying measurements, which ends up in a few overall indicators in large groups, where the results are hard to dissect into concrete changes needed to make in practice locally. An example on environmentally useful and comparable data, which is used intergovernmental and reliably, are national statistics comprised into comparable groups of data, which can be analyzed in various softwares, for instance, Life Cycle Assessment (LCA) systems. Apart from multiple different databases available in most LCA programs, a relatively new database – ExioBase – has been developed based on international statistics collected by all OECD countries and interwoven in a way, so import and export as well as origin of production processes are comparable. However, since national statistics too are measured differently, the comparable data are assembled sectorially. This means, although water resources are interwoven locally, nationally, and sometimes internationally, the database of ExioBase is forced to operate on very large-scale measurements. Regarding water resources, ExioBase has one overall category freshwater collection and distribution; two categories for wastewater treatment – food and industrial, respectively; and one for biogas production from sewage sludge including landfill. These very broad categories cover all activities, products, consumption, etc. with in- and outgoing streams nationally as well as internationally. It means that all activities and products are connected globally, so, for instance, when a wastewater treatment plant uses electricity, its origin is from many countries besides electricity production in the specific country in question. And so forth: all

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consumption involves import and export, which is a very precise way of measuring through national statistics, but very coarse resolution concerning categorization, because every country, every municipality, every local site may run things differently. IWRM is a system which involves a holistic approach to manage (especially fresh) water resources compatibly with sustainable development issues. In other words, IWRM is not documenting water management as usual (Petit 2016, p. 59). Since its inception in the 1990s, IWRM has developed into a complex system encountering the entire water cycle about its impact on the freshwater resources on both short- and long-term scales. It emphasizes the involvement of both users and decision-makers at all levels and all stakeholders involved. As the ambitious concept unfolds, the critique becomes more obvious: how is it possible for a single water management framework to be universally useful across different physical, economic, social, cultural, and legal conditions, has been asked (Medema et al. 2008). Furthermore, universal indicators to fulfill the aim of IWRM systems in relation to sustainable development has also shown its shortcomings. There is a vast variety of water scarcity indicators as well as indexes used in different IWRM systems. Even indicators used nationally can exclude vital data locally as well as trans-boundary. Some indexes have been critiqued for being too complex to understand, and the mere use of such indexes and indicators is not politically neutral. There is a geopolitical signal in using on or another indicator or index, for instance, in justifying certain investments over others (Petit 2016, p. 59). That could be competing for international funds for advanced water treatment systems by over-exaggerating water shortage issues as well as the opposite to hide neglects of necessary investments nationally or locally. The overall goal for IWRM systems was to connect indicators with the United Nations’ Millennium Development Goals, although other organizations have suggested more and/or other indicators. However, the hardest critique of the IWRM systems is the indicators and their lack of effect in practice, lack of transferability between nations, and lack of quantification (Petit 2016, p. 60). In the next, the OECD Water Governance Indicator Framework is discussed.

3.1

OECD Water Governance Indicator Framework

The OECD Water Governance Indicator Framework (WGIF) is a tool supporting the implementation of the OECD Principles on Water Governance, adopted by the OECD Regional Development Committee in 2015 (OECD 2018a, n.p. see “About”). The WGIF is a voluntary assessment tool for OECD nations to adhere to with regard to its self-reporting on its water governance policy frameworks (what), institutions (who), and instruments (how), and their improvements over time across governance scales (local, basin, national, etc.) and water functions (water resources management, water services provisioning, and water disaster risk reduction). It has a multistakeholder approach rather than a reporting, monitoring, or benchmarking perspective, and its primary objective is to give a transparent display for all

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Fig. 5 OECD Principles on Water Governance (OECD 2018a, p. 5)

stakeholders on the state of the water resources and which methods, tools, practices, etc. that does or does not work (Fig. 5). The WGIF as a framework is structured as most OECD policies – to enhance efficiency, effectiveness, and trust in the public sector’s engagement as the main governance goals. Since most data is noncomparable across boundaries, as discussed previously, the more than 100 questions asked are being evaluated by each national member through a Traffic Light System of 36 indicators. Finally, an action plan, where nations describe how they work with water resource management concludes the WGIF. Respondents shall choose the color corresponding to the level of implementation in which the assessment is carried out as shown in Fig. 6. Respondents shall then identify the expected trend over the coming 3 years in terms of improvements, decreases, or stable situations, compared to the assessment related to baseline scenario as shown in Fig. 7.

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Fig. 6 OECD water governance indicator framework, traffic light baseline for respondents (OECD 2018a, p. 8)

Fig. 7 OECD water governance indicator framework, expected progress (OECD 2018a, p. 8)

Fig. 8 OECD water governance indicator framework, results of stakeholder consultation (OECD 2018a, p. 8)

Finally, respondents are requested to signal the level of consensus among stakeholders using a water drop signature to evaluate it as shown in Fig. 8. The first results gathered in 2018 based on 170 stakeholders from various OECD member countries, confirmed the above-mentioned critique of self-assessment concerning WGIF-evaluation: The results consist of a high number of eclectic case stories related to individual member states’ responses, which are as different as assumed, however indicates a high level of transparency and trustworthiness, although incomparable. What the survey concluded, however, is that 80% of the respondents used the principles for a multistakeholder dialogue, to assess their water governance performances, to guide reform processes and practices, to build capacities, and develop research (OECD 2018b, p. 17). The indicators were used to make road for sharing knowledge (from the case stories) and to enhance awareness on individual member state level on which ideas can be used to make progress in improving the state-of-the-art of the national and local water resources.

3.2

Conflict over Water

Despite the former, unfortunately, conflicts over water exits in many places in the World. Especially, where rivers and/or groundwater aquifers run through more countries. Geopolitical issues, such as discrimination and prohibition of access to water, causes conflicts between, for instance, the USA and Mexico (the Colorado River); Israel and Jordan, Lebanon, and the State of Palestine (the Jordan River); Egypt, Ethiopia, and Sudan (the Nile River); and Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan (the Aral Sea) (Kameri-Mbote 2007). Where water conflicts between nations enhance other geopolitical conflicts, on a smaller-scale, water conflicts also occur between regions, municipalities, and even

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neighbors in small communities. Let alone surface water running onshore, flooding, and damaging private and public properties. Upstream water issues often empower upstream rulers, whether it is the first, who dams a river for water harvesting, or the one who lives on the highest spot, from whose area a flood from a rainstorm runs down and harms downstream citizens. The challenge of securing safe and plentiful water for all is one of the most daunting challenges faced by the world today. . . Too often, where we need water, we find guns. Population growth will make the problem worse. So will climate change. As the global economy grows, so will its thirst. Many more conflicts lie just over the horizon. (Ban Ki-Moon, United Nation’s General Secretary, 2008, January 24. https://www.un.org/sg/en/ content/sg/speeches/2008-01-24/address-prepared-delivery-davos-world-economicforum)

3.3

Environmental and Social Damages from Overexploitation

Besides social conflicts over water, environmental and social damages from overexploitation of water resources are found, especially in the developing countries. Most producing multinational companies manufacture goods or mine or harvest resources in Asia, Africa, and South America, which consumes so much water that populations suffer from water shortage. For instance, cotton growing in Uzbekistan, where water consumption has created droughts and desert-like conditions in the area, and textile production in India and Bangladesh as well as beverage production harvest so much water that people cannot find water for their daily living (Menon 2016). Similarly, in drought-plagued California, where the almonds and grapes for wine-making is highly represented, farmers have a right over citizens to use water prioritized for production (Langridge and Ansell 2018). Even rivers have run dry because of over-exploitation of water consumption for agriculture in the equatorial area (Pearce 2018).

3.4

Running Out of Water: Desalination?

Coastal nations have tried to solve the problem of water shortage with desalination plants to convert salt water from the sea to freshwater, however with a huge cost. Where desalination plants were new and represented a tremendous hope in solving water shortage in many nations, these plants have shown their shortages as well. Where the results are good – it is possible to convert salt water into freshwater with reverse osmosis; however, it comes with a huge cost – economically as well as environmentally. The plants and the method are very effective, and salt water is plentiful. These are the major benefits. However, to do the conversion (reverse osmosis) requires a large consumption of energy, the plants are expensive to build, the brine from the salt removed harms the environment, and the CO2-footprint is massive (Abdelkareem et al. 2018).

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However, when the pros and cons are weighed against each other, desalination makes sense in areas highly suffering from water shortage despite the environmental costs, which in the future hopefully may be solved, both for economic, social, and environmental reasons. Businesses as well as nations have an economic interest in reducing energy costs, which subsequently reduces the CO2-footprint, and the brine issue will be of society’s interest to regulate, because the pollution both harms the nature including other freshwater resources nearby, and thus society in general.

4

Sustainable Water Resource Management

During the 1960s, the environmental scientist with a PhD in medicine, James Ephraim Lovelock (1919-) proposed the GAIA-hypothesis suggesting that life on Earth is a complex interacting system that can be thought of as a single organism, which adapts to changes in order to sustain life (Lovelock 1972; Lovelock and Margulis 1974). Later in 2006, Lovelock refined his theory stating that human activity in reducing planetary biodiversity, disposing nonreversible waste (e.g., nuclear), and emitting greenhouse gasses uncontrollably to the atmosphere eliminates the Planets capability to retain life sustainably (Lovelock 2006). From this perspective, Lovelock recommended a concept, he calls sustainable retreat, realizing that the state of the Planet has become irreversible with respect to some processes (e.g., the climate changes) that we cannot control, and the solution is to lower the human resource use and substitute depleted resources with less environmentally harmful types of resources. Lovelock asks: “Is there nothing, we can do to bring back the lush and comfortable Earth of a few hundred years ago? Probably not in times measured on a human scale” (Lovelock 2010, p. 22). He suggests, however, some courses of action as part of a planned program for survival as a civilized animal on a changed and hotter planet: • Adapt to a changing climate with rising sea levels, intense storms, and droughts • Prepare for climate refugees and assemble ourselves in oases with freshwater resources, raw materials, and food supply • Reduce the radiation input from the sun through geoengineering inventions to shield the Earth • Synthesize food and energy sources from other than fossil origins • Restrain our overuse of natural resources Lovelock’s main explanation for the cause of the misery of the Planet is the overpopulation. Had we been one billion instead of seven billion people on Earth, the situation would have been better, and the sustainability of the Planet more foreseeable, Lovelock explains. Sustainable retreat may be a way to escape the locked-in situation, also regarding the unequal distribution of goods and resources – simply to reduce our consumption to the most necessary and share from the “oases” that exists.

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Concerning water resources, a sustainable retreat approach would not mean reducing our basic need for fresh and high-quality drinking water, which is necessary for the upkeeping of life itself, but to reduce our indirect water use, which to a large extend is unnecessary, and reuse wastewater resources and treat it, so what is returned has the same quality as what was retrieved.

5

Summary

It is not necessary for us to maintain a modern Western World lifestyle characterized by a predominantly carnivorous diet, high consumption of fast and luxurious fashion, accessories and electronics, long-distance traveling, etc., but instead live more self-sufficient consuming locally grown vegetarian food, drop the use-andthrow-away culture and reuse, upcycle, repair, and, in general, surround ourselves with less property and goods, and reduce high-energy consuming activities, which demands airfreight such as long-distance traveling and mail-ordering etc. The sustainable retreat strategy on reducing water demands, treating wastewater sustainably, and think of water resources as a holistic system, where every drop of water is part of an entire water cycle, which should be protected sustainably, seems not pessimistic but adequate as a realization of the human activity has reached the point of no return, which Lovelock indirectly states. We cannot roll the time hundreds of years back to a world full of plenty undamaged resources; however, we can adapt to the world, humans have created, and with ingenuity and carefulness reduce our consumption to a necessary need instead of a luxury need, which – ultimately – will have a less negative effect on the water resources and its availability for people and living species on Earth. As a famous, controversial, and oftentimes media-ridiculed Danish climate researcher, Bjørn Lomborg said to the journalist from Politiken in November 2018 regarding the best way for individuals, who wants to contribute to mitigating the global warming crisis and cut their CO2 footprint is to “become poor” (Lomborg 2018, p. 4). With that response, Lomborg referred to poor people having almost nothing, impact the environment the least. Ironically, few understood the sarcasm because the devil was in the detail. The point, Lomborg tried to pursue was similar to Lovelock’s: to solve global environmental issues with global action and technological inventions for a greener and more sustainable consumption. Regarding making global water resources sustainable, the scale of the water crisis is too large for individuals to have enough effect on alone in reducing their direct as well as indirect water consumption. If we shall avoid the climate refugees in the future, which Lovelock talks about, solutions need to be scaled accordingly. Nations need their governments to introduce a much harder regulation on wastewater management and industrial and agricultural freshwater consumption, because the lack of technology is not an issue regarding water protection nor water treatment the same way as with green energy. The willingness to implement water regulation and the costs it requires is the biggest obstacle for water resources to become sustainable.

Water Resources

6

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Cross-References

▶ Geopolitics of Natural Resources ▶ Resource Depletion ▶ Sustainable Plastic and Corporate Social Responsibility

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The Emergence and Role of Nongovernmental Organizations Historical Review of the NGO Sector in the United States, Great Britain, and Japan Lowell J. Gretebeck

Contents 1 2 3 4 5

Introduction: Emergence of the International NGO Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definition and Typology of International NGOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ideological Foundation of Charity and Philanthropy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . External and Internal Determinants of NGO Sector Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Country Report: Defining the NGO Sector in the USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 US Government–NGO Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Scope of the US NGO Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 US NGO Financial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 US NGO Umbrella Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Country Report: Defining the NGO Sector in the UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 UK Government: NGO Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Scope of the UK NGO Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 UK NGO Financial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 UK NGOs in the European Union Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 UK NGO Umbrella Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Country Report: Defining the NGO Sector in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Japan Government–NGO Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Scope of the Japan NGO Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Japan NGO Financial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4 Japan NGO Umbrella Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

Nongovernmental organizations or NGOs were recognized at the turn of the century as a “third sector” to work together with the private and public sectors to “fill the gap” in helping people in need. Since the end of World War II, in particular, we have witnessed the most dramatic increase in international NGOs, with over 4,000 organizations now engaged in a broad range of overseas relief L. J. Gretebeck (*) Kyoritsu University, Tokyo, Japan © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_92

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and development activities. The global NGO sector is now equal to the eighth largest economy in the world, with annual spending of more than $500 billion dollars, which is comparable to the annual budget of the World Bank. These nonprofit entities employ 19 million workers, and engage thousands of volunteers to serve both domestically and abroad. Governments worldwide now recognize NGOs as important “partners in sustainable development” and have come to depend on these organizations to implement projects due to a favorable track record in reaching the “poorest of the poor” at the grassroots level. Extensive research has concluded that NGOs have a comparative advantage over government assistance programs which are often viewed as bureaucratically inefficient and limited in poverty reach. This chapter provides an historical review of the emergence and role of the international NGO sector, followed by three country reports (the USA, the UK, and Japan) that examine the context of the NGO sector in each country. Keywords

Nongovernment organizations · Charity · Philanthropy

1

Introduction: Emergence of the International NGO Sector

The definition of the word “poor” has significantly different meanings, depending on the place of an individual’s birth and historical background. Growing up in the USA, “poor” could mean not buying a new house, or perhaps having to postpone a summer vacation. In sharp contrast, being “poor” in parts of Africa or South Asia means something completely different: for millions of people, poor means a reduced life expectancy, deficiency in caloric and food intake, poor sanitation and lack of safe drinking water, lack of access to land due to caste discrimination, the frequent loss of newborns, inability to read and write, and low school attendance. White (1991) elucidates the life of the poor in the following words: They live in makeshift single roomed houses; they have few and poor quality clothes; they have little in the house but a few cooking pots and dishes; they may have no bed but sleep on bamboo mats; they have at best a few ducks and chickens, sheep or goats; they eat at most twice a day and may go without food all day at the lean times of the year. . . the poor quality of their diet means that they commonly suffer from illnesses (White 1991, p. 5).

It is estimated that over one-half of the world population still live in the grips of poverty – as defined as those who live on less than five dollars and fifty cents a day (World Bank 2020). What these numbers do not tell is the fact that poverty disproportionately affects children and women. UNESCO (2020) estimates that 264 million school-age children are deprived of education. Furthermore, WHO (2020) reports that 6.2 million children under the age of 15 die each year from preventable diseases, which could be treated with simple interventions such as

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immunizations, adequate nutrition, clean drinking water, and appropriate health care. Of this number, 5.2 million deaths occurred during the first 5 years of life. Millions of other children remain on the streets, subject to a life of crime, prostitution, and illiteracy. Clearly, in this age of Internet, Twitter, and CNN news, the disparities between the rich and the poor have become even more visible. In response to the poverty crisis, millions of people throughout the developed world have come together to ask the question, “How can individual citizens make a difference in eliminating or alleviating poverty in our world?.” This fundamental question on the part of men and women from Wall Street to Ginza has served as the catalyst in the establishment of citizen-based groups, commonly known as nongovernmental organizations or NGOs. Tens of thousands of international NGOs have now emerged as actors in the fight against poverty.

2

Definition and Typology of International NGOs

Let us begin by clarifying that the term NPO most often refers to organizations that operate domestically within a given country, whereas NGO/INGO is commonly used to describe a nonprofit organization that is headquartered in a developed country – such as the USA – but is focused on program delivery in developing countries. The concept of an international nongovernmental organization is not new. In fact, a type of NGO existed in prehistoric communities thousands of years ago (Smillie 1996). The more recent use of the term NGO as we know it today came into existence in the late twentieth century, and was officially sanctioned by the United Nations in 1950. However, it should be noted that some of the well-established Northern NGOs have origins that go back before the term NGO came into use. For example, Save the Children Fund was founded after World War I in 1919 by Eglantyne Jebb. Also, Oxfam began work in 1942 to provide famine relief to victims of the Greek Civil War. Similarly, Care USA dates back to 1946 when its main program included sending food packages to war-torn Europe (Smillie 1996). The term NGO is used to cover a wide range of organizations. NGOs are also diverse in program activities, ranging from child welfare to agriculture development to microfinance. As such, there is much confusion about the real operational definition of an NGO; this confusion is compounded by the fact that many other words are used interchangeably with NGO. Scholar Najam (cited in Fisher 1997) lists 48 different acronyms used for NGOs. However, NGOs are most commonly referred to as the “third” or “voluntary” sector. NGOs are also defined as “voluntary organizations,” meaning that citizens contribute their time, money, and resources to support the organization (Korten 1990). The current literature provides numerous typologies and a means of categorization. The most common categories include developmental, environmental, relief, and consulting (Edwards and Hulme 1996; Korten 1990; Riddle and Robinson 1995; Ronalds 2012). Carroll (1992) takes this definition one step further and categorizes an NGO by purpose and primary activity undertaken. Purpose categories include charity, relief, development, political action, and advocacy. On the other hand,

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activity categories include social, education, research, lobbying, and networking. Similarly, Clark (1991) puts NGOs into six categories based on the types of activities: relief and welfare agencies; technical innovation organizations; public service contractors; popular development organizations; and advocacy groups or networks. As another example, Salamon and Anheir (1997) propose an operational definition for the nonprofit sector, based on five characteristics: formal; private; separate from the government; nonprofit distributing; self-governing; and voluntary. One well-known NGO typology was proposed by Korten (1987); this scholar categorizes all nongovernmental organizations at a particular organizational stage or life cycle. Although several researchers have used the metaphor of the human life cycle to describe organizations, Korten was the first to propose an international NGO (INGO) model of evolution. The Korten model suggests that NGOs move through a three-stage sequence of organizational development. The first stage was that of providing emergency relief, such as food, health care, and housing. The work of the international NGO during this initial phase focused on symptoms of poverty, but did not usually address the root causes of human poverty. During this stage, overseas beneficiaries directly received both material and financial support. Clearly, project content was narrowly defined as providing humanitarian assistance to marginalized populations. Related NGO’s level and term of support were contingent upon funding and staffing. In short, logistics management – including the shipment of in-kind contributions – was considered the key management function of the northern organizations. Furthermore, the level of support to beneficiaries was contingent upon the capacity of the NGO to raise funds and administratively monitor disbursements. The seeds for this first phase were planted as early as 1647 when Irish protestants sent food and medical supplies to help the early settlers who were impacted by conflict with American Indians. Moreover, British charities – during the sixteenth and seventeenth centuries – funded the activities of early missionaries who worked to educate Indians and African Americans. This stage saw the establishment of some of the largest NGOs that were able to mobilize funding to help people in need. The earliest international NGOs founded during this first generation included the American Red Cross in 1881, followed by Catholic Charites in 1910, and Save the Children, UK, in 1919. Then, during and following World War II, many US and European organizations began work to help people who were displaced by the war in Europe and Asia. World Jewish Relief began operating in 1939, followed by Lutheran Immigration and Refugee Services in 1939, and UMCOR in 1940. According to the Korten model, the second generation of NGO life involved a transition from emergency relief to helping people become more self-sufficient. The underlying rationale for this change is that poverty alleviation and long-term, sustainable development would require that people at the grassroots level develop knowledge and skills to provide for their long-term needs. With this objective in mind, NGOs focused on activities such as preventative primary health care, improved agriculture production, and clean water provision. Northern organizations played an essential funding, planning, and training; however, project initiatives would be sustained through the efforts of the beneficiary local community. One of

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the first scholars who influenced this shift in thinking was John Sommer, author of Beyond Charity, in 1977. This approach is often described as “empowerment” of the people to help themselves. He cautioned that international NGOs must work to develop healthy partnerships with community-based organizations and individuals that do not promote dependent relationships (Sommer 1977). The third and final stage of NGO organizational development, according to Korten, is when the NGO works beyond the grassroots community to seek changes at the institutional and policy level. Specifically, NGOs at this level work to collaborate and establish linkages with the business sector, educational institutions, and governments to alleviate poverty. In making this shift, people recognize that authoritative and corrupt policies in beneficiary countries serve as obstacles to sustainable development. As such, international NGOs then accept responsibility to work in close coordination with domestic institutions to provide technical assistance and to promote local control, thus lending support to long-term sustainability. Although Korten identified this “third generation” as a type of linear evolution, most INGOS today tend to offer programs which blend second- and third-generation programs (Campfens 1996; Korten 1990).

3

Ideological Foundation of Charity and Philanthropy

The historical development of the NGO sector can be traced back to two distinct ideologies. The first ideology is that of Greco-Roman heritage in which care for the community and individual social responsibility is highly valued. This heritage is based on the premise that the social problems facing a community can be solved through collective community action. The second ideology contributing to the growth of the NGO sector emphasizes the Judeo-Christian belief that one’s faith relationship with God influences decisions to compassionately help people in need. Thereafter, out of these two ideologies emerged two types of nonprofit philosophy – philanthropy and charity. Philanthropy centers on that of donating a part of one’s well-earned financial resources for the common betterment of human livelihood. Here, the emphasis is on the individual’s responsibility to the community in which he or she lives. Charity, on the other hand, is based on acts of compassion to help others; it is best defined as one’s moral obligation to help those who are less fortunate. The literature further confirms that the well-developed NGO sector in the USA was the direct result of citizens banding together for a common good since the colonial period. At that time, people opposed a strong central government, and favored state rights and individual citizen involvement through charity to solve social problems.

4

External and Internal Determinants of NGO Sector Growth

The literature presents a clear distinction between external and internal determinants of NGO organizational development. First, one of the most significant academic writings, which addresse the external factors that have contributed to the growth of

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the nonprofit sector, was by Lester M. Salamon (1996) in work titled “The Emerging Nonprofit Sector.” In this writing, he confirms that NGOs are “open systems” whose development is determined, in great part, by factors external to the organization. Salamon asserts the following: the existence of the nongovernmental sector is the result of heterogeneity, or limitations of both the market and government to meet unsatisfied demand for collective goods; the size of the NGO sector is inversely related to the level of social services provided by governments; the level of economic development is a factor affecting the growth of the sector; the scope of the sector is determined by a supportive legal system; and religion and historical traditions, such as Judeo-Christian tradition, have influenced the development of nongovernmental organizations (Salamon 1996, pg. 9–10). On this point related to the environmental context of NGO growth and development, there is considerable overlap in thought between the writings of Salamon and other scholars in the field. For example, Farrington and Bebbington (1993) advocate that the mere development of the NGO sector is in direct response to failed government macro-development policies and aid programs over the past 20 years. These scholars argue that government “trickle-down economic theory” is flawed and that in practice at the grassroots level, the “rising tide does not lift all boats,” since institutional building and community-level reforms have not been adequately addressed. Following the lead of Salamon, other scholars) are advocates of the “theory of political space” to explain the growth of the NGO sector. This theory states that it is ultimately the government that defines the growth parameters of the sector by adopting public policy that will either encourage or discourage NGO activity. It is “within political space available” that NGOs and community-based organizations “intervene in the socioeconomic system, thus affecting and potentially challenging the prevailing patterns of development at the micro-level” (Wignaraja 1984, p. 5). As a corollary note, it is also argued that a lack of knowledge about the political environment in which one operates is a major factor contributing to NGO failure at the grassroots level. Our attention now turns to internal dimensions of NGO development. While most organizational theory has its roots in the business sector, many of its ideas are relevant to NGOs (Lewis 2001, p. 86). Although not NGO specific, one of the most comprehensive studies on organizational development was earlier presented by Hodge and Anthony (1984) in which they summarize eight pillars of organizational theory to explain why organizations develop. While all eight pillars may seemingly play a role in organizational development, two stand out in the current literature to support the development of the NGO sector. First, power theory states that organizations develop in order to influence others. A view of the NGO landscape today will show that this is indeed a major internal objective which has influenced the development of many nongovernmental organizations. Amnesty International and Greenpeace are but two examples of advocacy organizations that have come to fruition out of a desire to influence public policy and debate. A second and related theory which also explains the development of the NGO sector is the organizational goal theory. In sum, a desirable, unrealized condition is the basis for organizational

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development. Many development NGOs, such as Care and World Vision, which seek to alleviate world hunger and disease would fall into this category. (Hodge and Anthony 1984) There is a separate stream of research that distinctly links the availability of government and bilateral funding to the growth of the NGO sector. Data released by OECD (2019) indicates that the level of grants provided by private agencies and NGOs during the 2000–2018 period have grown fourfold from 10 billion dollars to more than 40 billion dollars today. It is argued that this high level of financial growth has enabled NGOs worldwide to take a more active role in international development programs in cooperation with governments and official aid agencies. It is estimated that one in eight of those living in poverty today are assisted by NGOs. The United Nation’s Human Development Report indicates that some 250 million people are affected by the work of NGOs, and that the number will most likely increase in the years ahead (UNDP 2019). NGOs are no longer considered minor players in the development arena, but important partners in implementing sustainable poverty alleviation programs. The increase in government funding channeled through Northern NGOs on a global basis speaks to the importance NGOs play in both charity provision and sustainable development programming. Many industrialized countries now channel 15% or more of official development assistance (ODA) through NGOs. The data shows that the US and European governments have especially close working relationships with NGOs to carry out relief and development projects. Sweden reports a comparatively high support level of 30%, followed by 29% in Switzerland, and 25% in Norway (OECD 2019). Following the pattern set by other leading industrialized countries, Japan has recently adopted new initiatives to channel more official development assistance (ODA) funding through nongovernmental organizations. What are the reasons for this change in funding pattern? First, governments have come to rely on NGOs to implement projects because of their comparatively good track record in reaching people at the grassroots level. NGOs are viewed as effective entities that work to remedy the “root causes” of poverty by increasing family income and improving basic health care, education, workers’ rights, and democratization. Michael Cernea (1988) was one of the earliest proponents that northern development NGOs have a comparative advantage over government programs. In a report commissioned by the World Bank, Cernea identifies four areas where nongovernmental organizations have superiority: (a) NGOs reach the poor in remote areas where government reach is limited (b) NGOs operate at lower costs as a result of the voluntary nature of their activities and lower overhead (c) NGOs better promote local community participation (d) NGOs are better able to adapt to local environmental conditions (Quoted in Lewis 2001, p. 77)

On the other hand, government-aid programs are often seen as bureaucratically inefficient and limited in poverty reach. Some studies suggest that as much as 30% of

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government-to-government development assistance is improperly used (Kenny 2017). Scholar Tim Brodhead (1988) echoes this point by writing that we have “witnessed an apparent shrinking of the roles,” and “dissatisfaction with the quality of state-provided services” (p. 9). Another reason given by the proponents of the funding change is that national aid programs often fail to address the structural causes of poverty, but are geared toward symptoms of a more fundamental problem. For example, critics point out that governments spend millions of dollars on quality health care programs, such as the building of hospitals, but fail to adequately address preventative issues like providing clean water and other preventative care. Therefore, from the standpoint of cost-efficiency and long-term program effectiveness, NGOs are an increasingly favored vehicle to implement development programs (Brodhead 1988, pg. 9). Research carried out by McGann and Johnstone (2006) identified other key factors that have contributed to the impressive growth of the NGO sector during the past 20 years. First and foremost, the development of civil society on a global scale has resulted in an environment where the establishment of nongovernmental organizations is viewed as favorable. With the fall of communism, societal values have shifted to place more emphasis on freedom of speech, an independent judiciary, and the desire of people to assemble to address key problems facing local communities. Typically, organizations that have been established through this process are not directly associated with governments but, rather, are independent – such as schools, universities, art associations, and religious organizations. In fact, civil society often fulfills the role of monitoring government actions, demanding accountability, and offering alternative policies which uphold societal accepted norms. Another reason cited for the rapid development of the NGO sector has been the creation of intergovernmental organizations – including the United Nations and World Bank – that were given legitimacy to work and develop civil society and institutions throughout the world. As a result of this mandate, hundreds of NGOs were established to fulfill a mission of both democracy and development. The NGO growth story is also related to technological and communication advancements. With the explosive growth of the Internet, the flow of information across borders is unabated. Today, grassroots and community-based organizations are in an unprecedented position to make their voices heard. The cries of injustice by those who live under authoritarian governments are easily seen and heard on evening news broadcasts throughout the world. A final characteristic of an expanded nonprofit sector is a globalization of NGO project funding. Local village communities are now able to establish funding partnerships with a broad range of international NGOs and intergovernmental institutions. This shift towards more direct funding flows has had a profound impact on the growth of southern NGOs and community-based organizations (CBO) (McGann and Johnstone 2006). The dramatic increase in microfinancing programs available is merely one example of this shift of direct funding from northern donors to people living in poverty.

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257

Country Report: Defining the NGO Sector in the USA

Alexis de Tocqueville in his 1835 book entitled Democracy in America wrote that a major strength of the new democracy was the development of strong voluntary organizations. Ian Smillie (1997) contends that the growth of the US nonprofit sector was due to a “fear of socialism and a fundamental mistrust of governmental action” (Smillie 1997, pg. 249). In commenting about the birth of the nonprofit sector in the USA, Lester Salamon (1997) writes, “Several factors have accounted for this phenomenon. One of these certainly was the deep-seated hostility to royal power and centralized state authority that the religious non-conformists who helped populate the American colonies brought with them when they fled the Old World. Hostile to state power, they were inclined to do things themselves” (Salamon 1997 pg. 282). As a result, private philanthropists aggressively supported the building of hospitals, universities, and community-based organizations out of a sense of private responsibility for the public good. During the first 30 years of the twentieth century, philanthropic activities were viewed as a clear alternative to government social welfare programs. Similar to other developed countries, the creation of US development nonprofit organizations, commonly termed NGOs, first emerged from a Christian and humanitarian tradition after the end of World War II. At the end of the war, the world faced serious post-war problems related to refugee resettlement, rebuilding of educational institutions, and the provision of basic health care needs. Hundreds of US international development organizations were incorporated during this period that were both religious and secular in nature. CARE, Catholic Relief Services, Project Hope, Institute of International Education, and Christian Children’s Fund are but a few of the major US NGOs that came onto the international development scene in response to post-war humanitarian needs. There are numerous scholars who have written about the emergence of the US nonprofit sector, including NGOs that require mentioning. Two significant writings include Beyond Charity: U.S. Voluntary Aid for a Changing Third World in 1977 by John G. Sommer and a second writing of importance is a book written by Brian Smith in 1990 entitled More Than Altruism: The Politics of Private Foreign Aid. It is significant to point out that both Sommer and Smith divide the evolution of US private assistance into three periods,as shown below (Sommer 1977; Smith 1990). • Period 1 – Up to 1900 Evangelical missionary endeavors result in extensive volunteer activities. The emergence of the NGO sector during this period is closely related to evangelical revivals. The goal of these early organizations included both proselytizing and providing humanitarian assistance. Main projects consisted of schools and hospitals. Philippines was one of the first locations of assistance since it was America’s first colony acquired from Spain at the turn of the century. The American Red Cross was a major organization established during this period in 1887.

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• Period 2 – 1914 to 1945 Growth of the nonprofit sector patterned the economic growth of the USA. During this period, there was an emergence of religious and secular groups to provide relief for disasters abroad. For example, the American Friends Service Committee was founded in 1917 to provide relief and medical services to civilian victims during and after World War I. Another example was the establishment of America Save the Children, which initiated a development approach that went beyond charity to include long-term child and family welfare. • Period 3 – 1945 to Present The distinction of this third period is a shift from short-term emergency aid to the contemporary model of designing and implementing long-term sustainable development programs. After World War II, church programs began to offer secular aid programs, without the goal of proselytizing. Examples include the Catholic Relief Services, Church World Service, and Lutheran World Relief. Another characteristic of this period was a new focus on building the capacity of indigenous partners in the field by offering training and technical assistance. Also, close working ties with the US government is a characteristic of this evolutionary stage.

5.1

US Government–NGO Relations

The NGO sector’s focus on long-term development, as noted above, opened the door for a close working relationship with the US government. Early in the twentieth century, officials of the government began to see that their policy goals of promoting democracy and economic development to be consistent with many nongovernmental organizations. As early as 1948, the US Agency for International Development (USAID) Advisory Committee on Voluntary Aid issued a statement that supports the role of NGOs in international economic development. Historically, the US government has aggressively adopted legislation to promote private philanthropy. Perhaps the most significant legislation promoting the growth of the sector was the 1936 Tax Act which allowed individuals and corporations to deduct charitable donations from income tax payments. Today, almost 80% of all private giving in the USA is from individuals, followed by eight % from foundations, seven % from bequests, and five % from corporations. It is commonly believed that the amount donated by the general public is indeed influenced by tax policy. In 2019, for example, a one-dollar donation actually cost the taxpayer only 72 cents due to IRS tax deductibility rules. The US tax environment is seen as comparatively favorable among Western countries. Aside from a favorable tax environment, incorporation of a private voluntary organization (PVO) is a relatively easy undertaking. Nonprofit organizations must initially register with the Internal Revenue Service (IRS) under section 501 of the Internal Revenue Code. Thereafter, to maintain tax-exempt status, the organization must submit a basic information reporting form (Form 990) on a yearly basis. Additional registration with the USAID is also required if the organization seeks government funding for international development work.

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In 2018, the Advisory Committee on Voluntary Foreign Aid completed an evaluation of the working relationship between private voluntary organizations and the US government. Although a government-sponsored committee, members consist of development specialists in the fields such as health, education, relief, and community development. The committee report stated there have been numerous efforts to improve NGO–GO relations such as increased consultations, new grant policies, and streamlining of NGO registration procedures. At the same time, however, the report cited areas where improvement is required, including the need for local NGO strengthening, sharing of information about “best practices,” and improvement in educating the general public on issues related to international development and foreign assistance.

5.2

Scope of the US NGO Sector

The term NGO as used in the United States usually refers to an organization that is engaged in work related to the “development of the third world.” The most common program areas include health care, agriculture development, environmental protection, refugee care, and economic development. Since the sector has such a broad program mandate, it is difficult to pinpoint the exact number of NGOs operating in the USA. According to the National Center for Charitable Statistics (McKeever 2018), in 2020 there were 1.6 million domestic and international nonprofit organizations classified by the IRS as tax exempt – and this number increases, on average, four to five % a year. It is also significant to point out that the nonprofit sector contributed approximately 1 trillion dollar to the US economy in 2016, which accounted for 5.6% of the country’s GDP. Statistics reveal that private giving in 2018 totaled 427 billion dollars. Moreover, it is estimated that 25% of US adults volunteer each year, contributing 8.8 billion hours with an estimated value of 195 billion dollars (McKeever 2018). Regarding program concentration, most US NGOs historically focused their efforts on emergency relief. Beginning in the 1970s, however, there was a major shift towards development programming in the areas of health care and education. Another major shift seen within the US NGO community is the approach to programming overseas. Throughout the 1970s, a vast majority of US development organizations had extensive direct program implementation overseas. Today, however, most US NGOs have developed an approach to development which calls for the identification of quality local partners (i.e., Southern NGOs or community-based organizations) to implement development programs. In fact, USAID now requires US private voluntary organizations to identify local partners in order to qualify for financial assistance (USAID 2017).

5.3

US NGO Financial Environment

NGOs in the USA encompass a wide range from small to some of the largest in world. The data reveals the high amount of financial inflows into some of the major US development organizations (USAID 2020). According to Forbes, the top 10 charitable

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organizations in the USA in 2019 had revenue exceeding $1 billion dollars annually, and another 100 organizations report revenue exceeding $100 million dollars. The US government has generally had a positive working relationship with its NGO community. The sector is viewed as a valuable partner which implements US development and relief programs. The US Budget Office reports that up to 28% % of ODA is channeled through nongovernmental organizations. At the same time, government officials in recent years have criticized many US NGOs for becoming overly dependent on the US government for financial support. USAID reports that NGO dependency on government funding has consistently increased since 1990. CARE USA, for example, reported in 2010 that government and agencies grant support accounted for 50% or $246 million dollars in revenue, compared to $129 million in donor contributions (Care 2010) Conversely, some major US NGOs have developed a policy of limiting its dependency on government funding. Christian Children’s Fund reports that 95% of its funding comes from private contributions. Author Smillie (1997) comments on the issue of government support of NGOs in the following manner: The dependency question remains more substantive in the US than in other countries because of the importance placed by the government on US strategic and programmatic objectives of development assistance. Dependency, of course, can be seen as a two-way street. USAID is heavily dependent on US PVOs for the effective delivery of food aid and for a high proportion of its emergency assistance. And, PVOs are also increasingly recognized as an important window of, and channel to, the development of pluralism in countries where the development of democratic institutions is a priority (Smillie 1997 pg. 247).

Currently, USAID provides two basic forms of support to the nongovernmental sector, including contracts and grants. Many of the grants offered to NGOs retain a matching requirement of 25 to 50% of the grant amount. The main US government grant support programs to NGOs include: • Matching Grants – The program supports capacity-building approaches and sustainable development methodologies. Support is provided to areas such as microenterprise, health care, environment, civil society, and agriculture. Awards are made for 3 to 5 years. The program requires that the NGO match at least 50% or more of the costs. • Child Survival Grants – Program maintains a 25% cost sharing requirement. Grants are targeted to meet health care needs of children and mothers, with an emphasis on nutrition and HIV/AIDS. The program provides for two-year and four-year grants. • Farmer to Farmer Program – Started in 1995, this program was established to provide technical assistance and training to farmers in developing countries under the US Farm Bill; the program sponsors approximately 600 volunteers each year, with a budget of $10 million.

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• Development Education Grants – This program was initially started in the early 1990s to promote public discussion in the USA on the topic of world hunger. The fundamental purpose was to increase US public awareness of the factors relating to world hunger. A limited $500,000 is available within this budget category. • Food Aid – The USA is a major provider of food aid throughout the world. In fiscal 2017, 2.5 million tons of commodities valued over $1 billion were donated to people in need. Over 90% of US food aid channeled through NGOs, such as CARE, Adventist Development and Relief Agency, Catholic Relief Services, and World Vision Relief and Development. • Emergency Aid – In addition to food aid, the US government budgets approximately $200 million for disasters worldwide. Approximately 60% of this funding was programmed through NGOs. • NGO Overhead Funding – The US government shares overhead costs under a formula known as Negotiated Indirect Cost Rate Agreement (NICRA). US government support of nongovernmental organizations began during World War II and increased rapidly during the 1950s and 1960s. The Office of Private and Voluntary Cooperation was established in 1974 to coordinate cooperative efforts between USAID and private voluntary organizations. A USAID report cited the key governing principles of the NGO–GO relationship. These principles include the following: • Objectives of USAID and the PVO community can be strengthened through improved consultation and dialogue. • Broad-based participation is vital to program sustainability and success of development efforts. It is USAID policy to promote opportunities for participation by host country organizations. • Private voluntary organizations must remain private and independent. US PVOs working with USAID must receive a minimum of 20% of their financial support for overseas activities from non-US government sources.

5.4

US NGO Umbrella Organization

The main NGO umbrella organization in the USA is InterAction, whose main objective is to promote the status of the NGO sector and support the capacity development of member organizations. InterAction’s committees focus on a broad range of development issues, including advocacy, development education, advancement of women, disaster response, and refugee care. The organization publishes a monthly newsletter, maintains a website, and conducts extensive dialogue with USAID regarding development programs. In 2020, InterAction had 180 members, who were involved in a broad range of development and relief activities worldwide. According to a 2020 InterAction Annual Report, these member organizations received more than $15 billion annually in private contributions to support marginalized people (InterAction 2020).

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The second major NGO grouping in the USA include organizations that are officially registered with the US Agency of International Development (USAID). Today over 500 US NGOs were registered with the USAID; these organizations received more than $1.5 billion from the US government through grants and specialized contracts. What differentiates NGOs associated with InterAction from organizations registered with USAID is the level of cooperation with the US government. Thirty-five (35) percent of InterAction members do not accept government funding.

6

Country Report: Defining the NGO Sector in the UK

The nonprofit sector in the UK is one of the oldest and most developed in the world. Secondary information reviewed indicates that philanthropy took hold with the adoption of Elizabethan Statute of Charitable Uses in 1601 (Kendall and Knapp, p. 250, edited by Salamon 1997). The formalization of philanthropy was in direct response to the economic and social turmoil of the period, and the seeming limitation of the state to adequately meet the needs of the people. Other scholars note that the problems associated with industrialization and rapid population growth brought about increasing demands on both the philanthropic sector and the state. The inability of the state to solve the many societal problems opened the door for the establishment of voluntary organizations at the local and national levels. Still other experts point out that it was the middle class that served as the impetus behind the growth of the nonprofit sector. The prominent areas of activity include orphanages, housing, schools, adult education, culture, and the arts and the environment. This early philanthropic activity set the scene for a well-developed nonprofit sector in the years ahead. Since the sixteenth century, many charitable organizations in the Great Britain have been active players in providing aid beyond their own country. The earliest of these international agencies were church-related organizations. Along with missionary organizations, educational institutions were founded to “educate” people in colonized countries in Africa and Asia. The first two educational institutions provided such aid included the Royal Society, founded in 1660, and the National Adult School Union, founded in 1798. One of the first secular voluntary organizations was Save the Children, in London.

6.1

UK Government: NGO Relations

Generally speaking, the relationship between the British government and the NGO development community can be described as positive. The backdrop of this close working relationship is a recognition on the part of the government that it alone cannot solve all societal problems. A favorable tax environment for NGOs, coupled with a streamlined registration process, has promoted the growth and development of the sector.

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In 1979, a new conservative government under the leadership of Margaret Thatcher came to power, with the commitment to limit and reduce the role of the government in many areas of social welfare support. Although it was extremely difficult in the face of a prolonged economic recession, voluntary organizations across the country stepped in to fill the gap to provide care to the needy. Later, in 1997, the newly elected Labor Government acted to take a more direct role in working with the NGO sector to eliminate poverty worldwide. A new Department for International Development (DFID) was established; DFID has its own Minister in the Cabinet, also called the Secretary of State for International Development. Under the leadership of its new Minister, the British government has set out four key DFID objectives related to development: • • • •

Refocus aid on poverty eradication Build partnerships with developing countries and the private sector Promote public understanding and support for development Ensure that government policies take into account the objective of sustainable development

The registration and approval process for applying as a nonprofit organization in the Great Britain is considered comparatively straightforward. Once recognized by the government as an organization aimed at benefiting the general public, taxexempt status is granted; furthermore, the door is then open to receive government funding to support a vast array of programs and projects. The most notable program which supports the NGO sector is the National Lottery Charity Support Program. This program started in May 1997, when Britain’s new National Lottery Charities Board announced that it would allocate 5% of its charity grants to international development organizations. Grants totaling $39 million were given to 130 organizations engaged in international development activities. It is assumed that lottery funds will be a significant source of funding in the years ahead.

6.2

Scope of the UK NGO Sector

As of March 2020, the government reports that 168,000 organizations were registered as charities, which had a total annual income of 79 billion pounds. Charities earning more than 5 million pounds accounted for 1.3% of the total organizations and 72% of revenue. Of this number, approximately 400 organizations are designated as development NGOs and receive about one-fifth of all private sector donations. In 2020, a total of 340 development NGOs are registered with the British NGO networking organization known as BOND (British Overseas NGOs for Development). Also, 12 of Britain’s 50 largest organizations are primarily concerned with overseas relief and development work. Furthermore, the charity sector as a whole employs more than 600,000 people, of which 1.6 million are engaged in a wide range of volunteer activities (BOND 2020).

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Of the 340 organizations registered with BOND, a vast majority or 70% of the NGOs are engaged in education, while 60% cite capacity building and 50% human rights as the primary program area. Furthermore, British NGOs report a high degree of involvement in health care, community education, and economic and rural development. On the other hand, the least represented program activities include water sanitation and the environment.

6.3

UK NGO Financial Environment

NGOs in Great Britain vary greatly in size from small issue-oriented groups to some of the largest organizations in the world. Christian Aid, Oxfam, and CAFOD are examples of some of these largest development NGOs. Great Britain is second, behind the USA, in terms of financial flows to nongovernmental development organizations. Today, private income to the top 500 UK NGOs exceeds $3 billion annually. According to BOND, income from members has grown 59% to a level of 3.89 billion pounds for the 10-year period ending in 2016. Individual giving accounted for 31% of income earned(BOND 2020). Similar to the USA, the British NGO community maintains a close working relationship with its government. The year 2016 data shows that the British government supported 33% of the funds earned by BOND members. Official funding for NGOs has remained relatively constant at a level of 10% since 1995. As shown, the British government currently has in place four funding schemes for NGOs: The Emergency Aid Funding; Joint Funding Scheme (JVS); VolunteerSending Agency Support; and Bilateral Desk Funding. • Emergency Aid – As its name suggests, these funds are made available to NGOs to assist in providing short-term relief to areas of the world hit by natural disasters. Approximately one-third of NGO supported money is allocated for emergencies. • Joint Funding Scheme (JFS) – The focus of the JFS is to fund poverty-focused projects. Often these projects are in very remote areas that are not deemed a priority of regular government programs. In this sense, the government takes advantage of NGO initiatives to reach out to those in need. Under the JFS program, NGOs may also allocate up to 10% of total program costs for UK administrative costs. Also, partial overseas administrative costs may be covered with JFS funds. • Volunteer-Sending Support – A key component of government support is funding to six volunteer-sending NGOs. There are two main objectives of this funding scheme. First, the British government wants to send volunteers overseas to work in projects that have a direct result in reducing global poverty. A secondary objective is to indirectly change the attitudes and values of people through a large body of volunteers returning to life in the UK. Volunteer Services Overseas receives 77% of the program budget, while five other organizations receive, on average, 4% to 5% of total program expenditures.

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• Bilateral Funding Program (BFP) – The BFP is designed to provide direct funding to Southern NGOs. One bilateral scheme, known as the British Partnership Scheme, allows British embassies to allocate funds to local NGOs.

6.4

UK NGOs in the European Union Context

NGOs in the UK are influenced greatly by the European Union content in which they operate. It is important to point out that the 18 core members of the EU currently channel approximately 17% of all ODA funding through Northern and Southern NGO partners. Generally, over 20% of EU’s budget is managed by NGOs. The main European umbrella organization is the NGDO-EU (Nongovernmental Development Organizations of the European Union) which represents some 800 organizations. NGDO-EU meets five times a year and sets general program and policy guidelines for European Union – NGO cooperation. British NGOs also cooperate with other European NGO networking organizations such as the Association of World Council of Churches, EUROSTEP – a grouping of 22 member agencies which focuses on the cooperation with multilateral institutions, and WIDE (Network Women and Development) in Europe – a network which promotes awareness of gender and development issues. In 2018, more than $1 billion Euros were contributed by the EU to NGO programs and activities. It is estimated that 1.7% of the EU budget and 6.8% of the European Development Funds are channeled through NGOs (2018, ECA). The majority of the EU funding, or 65%, was allocated to humanitarian aid and food assistance. A vast majority, 44 out of 69, of the projects for refugees and displaced persons were implemented by NGOs. The European Community Humanitarian Office (ECHO), which coordinates the EU’s humanitarian operations in nonmember countries, manages one-quarter of all international assistance. In addition to financial support, European NGOs provide 45% of world food aid. The food aid program is administered by EURONAID (European Aid), an agency of 24 European NGOs engaged in food aid programs. The sending of volunteers and developmental education at home are two additional ways in which the EU supports the NGO sector. However, the volunteer program known as the European Volunteer Service (EVS),only comprises 5% of all volunteers in the EU. Regarding development education support, the EU will cover up to 50% of development education program costs. The main country recipients of grant funding and budget allocation are as follows: Germany (18%); Great Britain (14.1%); Italy (13.3%); Belgium (11.9%); and the Netherlands (10.2%). At the time of this writing, it is uncertain how Britain’s decision to leave the European Union will impact its future cooperation with NGOs that are headquartered in EU countries. Early reports indicate that this cooperation will continue; however, it is expected that the government will place priority on funding home-based organizations that are engaged in international relief and development activities.

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UK NGO Umbrella Organization

The main NGO umbrella organization, British Overseas NGOs for Development (BOND), was established in 1993. The establishment of BOND was the result of dialogue between the NGO community and the government regarding the need to have a body that serve as a link on development issues. It can be said that the establishment of BOND tends to benefit smaller NGOs which do not have ready access to government officials, unlike many of the larger British NGOs. Thus, BOND has played an important role for smaller organizations with limited financial resources. In addition to serving as a channel between NGOs and the Department for International Development, BOND conducts various training sessions for nonprofit organizations. In 2020, BOND reports a membership of over 340 UK NGOs (BOND 2020). There are also a number of other NGO groupings which are focused on a particular program issue. The largest NGOs in Great Britain, for example, are members of a network organization known as the Disasters Emergency Committee (DEC), whose primary role is to coordinate aid appeals with the local media. A related organization which includes the top management of these same organizations is the British Overseas Agencies Group (BOAG); here, NGO managers meet regularly to discuss a variety of development issues and to coordinate program strategy. A unique characteristic of the British NGO community is their strong links to academic institutions. In cooperation with the academic community, NGOs regularly participate in the activities of the Development Studies Association, a major academic umbrella which focuses on development-related research. Also, it is commonplace for academics to hold positions on NGO boards and also to take the lead in assisting NGOs in program design and evaluation.

7

Country Report: Defining the NGO Sector in Japan

Japanese philanthropy has a limited, yet long history dating back to the seventh and eighth centuries. Much of the early philanthropy was limited to the building of temples and private schools for classical education. Historical documents reveal that Todaiji and Shitennoji Buddhist temples engaged in an indigenous form of fundraising known as kanjin to support hospitals, orphanages, homes for the elderly, and hunger charities. The Buddhist sects did not operate as independent institutions, however, but were utilized by the central government as a part of the feudal administrative system. Public participation in supporting these activities was not considered voluntary since Japanese households were required to formally register at some temple, and financially support the activities through offerings. Buddhist sects throughout Japan continued to play a prominent role in philanthropic activities through the end of the Edo period. The landscape of Japanese philanthropy witnessed significant changes during the Edo Period to include activities supported by the private initiatives of wealthy

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businessmen, prominent farmers, and Christian missionaries. Wealthy Osaka merchants, in particular, participated in philanthropic activities by supporting private schools known as shijuku. These schools offered coursework in classical literature, in addition to modern and western thought. These merchants, together with wealthy farmers, became involved in supporting shijuku because they believed that a high level of literacy was a necessity in their business dealings with foreigners. Still another early example of Japan’s private indigenous efforts in social welfare and relief occurred in 1829. Nawa Saburoemon Sukenari and 191 others contributed funds to purchase land in Akita Domain for agriculture production, and thereafter used the earned income to help poor farmers and orphans. This project known as kan-on-ko exists today as a social welfare organization. Jesuit missionaries also played a role in early Japanese philanthropy by establishing nursing homes and leprosy hospitals early in the Edo period. Groups known as misericordia collected funds to support social welfare activities. Although Christianity was banned in 1638, many of these early institutions continued in operation. As Japan opened its doors to Western influence late in the nineteenth century, Catholic and protestant missionaries become more engaged in philanthropy through the creation of mission schools, and a number of local relief organizations, to help people afflicted with disease or living in poverty. The Japan Leprosy Mission is an example of a relief organization established during this period; it was founded for the purpose of caring for Japanese lepers, and is still active today in promoting health care activities. In 1911, under the leadership of the Emperor and leading industrialists, the Imperial Relief Association (onshi-zaidan saiseikai) was established to provide medical relief to the poor. During this time, similar foundations (koeki hojin) were established under Civil Code 1896. In subsequent years, as Japan’s economy expanded, foundations such as Mitsui Ho-on Kai were formed by Japanese industrial or zaibatsu groups. Under military dictatorship in the 1930s and 1940s, all nonprofit organizations came under the control of the state. Mutual help community organizations (chonaikai) were put under the control of the central government. Furthermore, grassroots youth organizations were merged into one national organization. Scholars today believe that this historical development of totalitarianism halted the growth of Japanese philanthropy, and had a negative impact on the growth of the nonprofit sector long after the war. Japan’s new constitution and legal system adopted after the war facilitated the establishment of many new nonprofit organizations, particularly organizations involved in labor rights and women’s issues. The trade union movement, which was prohibited during the war was encouraged by the occupying forces; these organizations played a significant role in promoting issues related to worker’s rights. Christian organizations played a very active role in Japanese philanthropy during the immediate post-war period. In 1952, for example, Agape Workshop for the Disabled was founded by Japanese Christians to care for handicapped people in the Kanagawa prefecture. Leading Catholic and protestant

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denominations throughout Japan worked to establish social welfare institutions for the elderly and disabled. The year 1960 brought the birth of the first Japanese NGO, the Japan Overseas Christian Medical Cooperative Service, to provide medical services to neighboring Asian countries, especially Nepal. JOCMCS was established by Japanese Christians who desired to help people of other nationalities. In addition to JOCMCS, Japanese Christians took the initiative to establish many of the first NGOs during the 1960s and the 1970s. The Asia Rural Institute (ARI) was started by Christians to train agriculture leaders from developing countries throughout Asia. The Christian Child Welfare Association International Sponsorship Program (CCWA), established in 1975, is another example of a Christian-initiated NGO formed to support poor children and families throughout Asia. The indigenous phase of Japanese NGO development grew significantly in the late 1970s. The year 1979, in particular, is considered to be a “watershed” year in the history of Japanese NGOs. In response to an influx of Indo-Chinese refugees, Japanese citizens became aggressively involved to assist individuals in need. As such, indigenous organizations such as the Japan International Volunteer Center (JIVC), Caring for Young Refugees (CYR), and the Japan Sotoshu Relief Committee (JSRC) were established by Japanese citizens to help people in need. The growth of indigenous NGOs that are concerned with specific social and environmental problems continued throughout the 1980 and 1990s. In the late 1990s, however, newly established NGOs seemed to have a broader mandate to be engaged in a variety of fields such as rural or community development, health care, education, and human rights, to name a few. Examples of indigenous NGOs with a more general mandate include the Asian Health Institute (1980), Japan International Volunteer Center (1980), and Association of Medical Doctors in Asia (1984).

7.1

Japan Government–NGO Relations

Government–NGO relations in Japan have been strained over the past decade because of a most restrictive registration process for NGOs, and an unfavorable tax environment. Japan’s complex legal environment is often cited as an obstacle to the development of the nonprofit sector. Critics argue that Article 34 of the 1896 Civil Code gives the government excessive control over the sector in the form of burdensome reporting requirements, restrictive legal recognition, and unfavorable tax treatment. Although NGO–Government relations in Japan are gradually improving, there is general consensus that the current state of affairs remains relatively poor (Menju 1996, p. 149–151). Positively speaking, the government appears to be reaching out to the NGO sector by agreeing to modify the laws that govern nonprofit organizations. In December 1998, the specially-designated nonprofit organizations law went into effect, thus giving corporate status to volunteer groups by recognizing them as official organizations. Proponents of the new NPO law believe this change will encourage the creation of new nonprofit organizations because it will now be easier for

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organizations to carry out basic activities such as renting office space and opening bank accounts. NGO–Government relations have been a controversial issue and will most likely remain on the table for discussion in the years ahead. MOFA Japan currently provides support to Japan NGOs through various schemes. In fiscal 2016, 29 organizations received ODA funding to implement 38 projects in 15 countries. These projects focused on health care, water system provision, and support for people with disabilities. Starting in 2000, the Japan Platform – a consortium of 50 NGOs, government agencies, and members of the business community – cooperate to provide emergency humanitarian support. The government-sponsored JOCV (Japan Overseas Cooperation Volunteers) program, started in 1965, stands out as having the greatest impact. In cooperation with JICA, this program sends skilled volunteers – aged 20 to 39 – to work with local NGOs and government entities in more than 80 countries. To date, over 40,000 Japanese volunteers have served abroad in education, agriculture, and education programs. The Ministry of Foreign Affairs also sends seniors – aged 40 to 69 – to serve in developing countries. As of today, over 6,000 seniors have served in more than 70 countries. It is significant to point out that Japanese volunteers often return to Japan and play a significant leadership role in local NGOs, educational institutions, and the public sector. New legislation allows local government officials to take a leave of absence to work in an ODA project. This has resulted in a number of teachers joining JOCV as project volunteers. There has also been growing interest on the part of the business community in Japan to launch CSR programs. One of the most well-known CSR initiatives in recent years included Panasonic Corporation’s 100 Thousand Solar Lanterns Project. Since 2013, the company has cooperated with Japan NGOs and grassroots organizations to provide solar lights to needy people who have limited or no access to household in developing countries, including Cambodia, India, Vietnam, and Myanmar (Gretebeck 2019).

7.2

Scope of the Japan NGO Sector

Sources indicate that as many as 400 NGOs are operating in Japan, however, only 225 organizations are officially registered with the Japan NGO umbrella organization, JANIC. In comparison to the West, the Japanese NGO sector is relatively young. The mean age of Japanese NGOs in the present database stands at approximately 12 years. As previously noted, it was not until the late 1970s that the first major phase of NGO establishment occurred, when many international organizations opened branch offices in Japan. Between 1970 and 1980, 34 NGOs began operations; however, the main thrust of NGO growth occurred after 1985. Our attention now turns to the program characteristics of Japanese NGOs. Currently, Japan NGOs involved in seven major areas: 1) education; 2) health care and child support; 3) environmental protection; 4) women support; 5) community development; 6) employee training; and 7) agriculture development. More specifically, 60% of Japanese NGOs identify education as one of its program activities,

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while 25% report education as the primary program objective. Likewise, 47% of NGOs list health care as one of their program activities, with 15% listing this area as primary. Moderate involvement is reported in the areas of environment, women support, community development, and employee training. The program areas least represented by Japanese NGOs include handicapped care, slum development, microbusinesses, human rights, and housing. Since 2000, the number of Japanese NGOs engaged in the above categories has dramatically increased. In percentage terms, women support and agriculture have experienced the greatest increase. In absolute terms, however, the number of NGOs involved in education and health care have seen the most significant increase. The exceptions to this growth trend include areas of refugee support, human rights, and housing for the poor; these areas have either remained constant or even declined in number.

7.3

Japan NGO Financial Environment

A major characteristic of Japanese NGOs is relatively low budget levels, with the exception of branch offices of international organizations. According to the data released by JANIC in 2019, 70% of Japan NGOs have comparatively low annual budgets in the $50,000 to $400,000 dollar range. Only 30 NGOs in Japan have budgets exceeding $1 million dollars. Of this number, six of the largest NGOs were Japan branches of international NGOs and four were Christian organizations with significant overseas donor support. Another financial characteristic is that the level of donations, as a percentage of total income, is relatively low at 28%. In fact, 44% of NGOs receive less than 15% of their income from donations. Additionally, project income provides approximately 11% of the sector’s income, while income generated from endowment programs generate a mere 1% of total revenues. A significant government financial initiative that has contributed to the growth of the sector was the establishment of the Ministry of Foreign Affairs NGO Subsidy Program in 1989. The program was designed to subsidize the costs of Japanese NGOs working in areas such as health care, improvement of local industries, environmental conservation, and the sending of expertise. In 1995, projects which support women in development were added to the government list of acceptable projects. The number of projects supported under the subsidy scheme grew from 23 in 1989 to 600 in 2010. Moreover, during the same period, total program expenditures increased from approximately $1 million to over $30 million. Under this program, Japanese NGOs are eligible for a subsidy of 50% of the total project cost, up to 10 million yen. This program today provides needed support for smallscale NGO programs that are difficult for the government to carry out. A second avenue of government funding available to Japanese NGOs is the Grant Assistance for Grassroots Human Security Projects (GGP). According to the Ministry of Foreign Affairs ODA 2020 Annual Report, a grassroots organization overseas can apply for a grant up to $100,000 dollars to support health, education, and

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infrastructure projects. This program is primarily managed by Japanese embassies and consulates overseas in more than 120 countries.

7.4

Japan NGO Umbrella Organization

The main NGO umbrella organization in Japan is the NGO Center for International Cooperation (JANIC), whose main objective is to promote the development of the NGO sector, and to serve as a link between the NGO community and the Japanese government. JANIC maintains a small office in central Tokyo, whose staff work on a range of issues including advocacy, development education, disaster response, and promoting the legal status of NGOs in Japan. JANIC currently has more than 250 member organizations, who are engaged in a wide range of development programs throughout the world, with a focus on Asia. JANIC also works to maintain open dialogue with the Japanese government by promoting regular meetings between member organizations and government officials (JANIC 2020).

8

Summary

Nongovernmental organizations today play a significant role in relief and development activities throughout the world. These entities are viewed as “partners in sustainable development,” working closely together with governments and multinational organizations to plan and implement programs that reach people at the grassroots level. Primary research carried out over the past 20 years shows that NGOs have a comparative advantage over government assistance programs in alleviating poverty and developing long-term sustainable programs. The millions of children that die each year due to illness and malnutrition is witness to the fact that our journey must continue. Clearly, there is a growing need for nongovernmental organizations to maintain an active role, in partnership with government agencies, to alleviate poverty, care for refugees, and protect the environment. In the world of limited resources, governments alone cannot reach “the poorest of the poor.” Therefore, the landscape of poverty throughout the world requires more effective NGO– Government partnerships. However, this new development paradigm will require that NGOs become more effective and accountable organizations, both at international and grassroots levels.

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Sommer J (1977) Beyond charity: U.S. voluntary aid for a changing world. Overseas Development Council, Washington, DC UNDP (2018) Statistical Update: Human Development Indices and Indicators. New York. http:// hdr.undp.org/en/content/human-development-indices-indicators-2018. UNDP (2019) Human Development Report 2019. Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century. New York. http://hdr.undp.org/en/ content/human-development-report-2019 UNESCO (2020) Global Education Monitoring Report 2010. UNESCO, Paris USAID (2017) Development and humanitarian assistance budget. USAID, Washington, D.C. USAID (2020) Annual report. USAID, Washington, D.C. White SC (1991) Evaluating the impact of NGOs in rural poverty alleviation: Bangladesh country study. Overseas Development Institute, London Wignaraja P (1984) Towards a theory and practice of rural development, Development. Journal of the Society for International Development, Washington D.C. World Bank Trust Fund Annual Report for 2018-2019. World Bank Group, Washington, D.C., World Bank Group http://documents.worldbank.org/curated/en/461611570786898020/TrustFund-Annual-Report-for-2018-2019 World Health Organization Newsroom. (2020) Children: improving survival and well-being. World Health Organization. WHO, Geneva

Recycling Linne Marie Lauesen, Pia Duus Jensen, and Lene Ribens

Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Unlocking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Plastic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Institutional Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Firm Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Social Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Soft PVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Electronic Waste and Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Technology System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Textile Recycling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Technology System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Firm Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Institutional Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Social Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

Recycling is an omnipotent issue that has involved humans in all times of history to a larger or lesser degree. Many materials are already in the recycling loop, such as the recycling of paper and cardboard, wood products, metal, glass, organic components, home appliances, etc. However, some waste

L. M. Lauesen (*) · P. D. Jensen · L. Ribens Water and Waste Denmark, Vand og Affald, Svendborg, Denmark e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_38

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elements have not found a way to enter the recycling process, because it is hard, expensive, and complex to recycle it. This chapter focuses on the recycling of plastics, electronics, and textiles that currently lack sorting technologies, infrastructure, legislation, and social acceptance to be recycled at scale. The chapter concludes that many issues still need to be solved before the solution to recycling these three waste fractions is present and that the agents in doing so involve both businesses, researchers, politicians, authorities, and consumers. Keywords

Recycling · Plastic · Electronics · Textile · Technology · Institutional · Firm · and Social Responses

1

Introduction

Recycling is a very broad term covering issues regarding all waste fractions in today’s world. Recycling has always taken place in the history of mankind; however, the amounts of waste polluting the environment is today so vast that recycling and some of its derived forms such as reuse, upcycling, downcycling, etc. is even more relevant than it has been before. Globally, the newest data from 2016 shows that recycling as a waste treatment is only used on 13.5% according to the World Bank Group report “What a Waste 2.0” (Kaza et al. 2018, p. 34) (Fig. 1). Open dump of waste represents the majority on a global scale with 33%, unspecified landfill a second place with 25%, and beyond recycling (13.5%), waste incineration takes 11%, sanitary landfill with collected gas 7.7%, composting 5.5%, controlled landfill 4%, and other handling 0.3%. Seen from an environmental perspective, open dump and unspecified landfill are the most polluting waste management methods, and these two categories represent in total 58% of the global waste management. Open dump is environmentally uncontrolled and pollutes land areas inhibited by humans and other living creatures on Earth as well as the oceans. Unspecified landfill may be allocated on certain sites on shore; however, the category includes the extensive pollution from toxic percolate (leachate), which infiltrates the ground and nearby water resources and damages soil and water. (Waste landfill produces toxic percolate (leachate) when rain dissolves the multiple surfaces and interacts with liquids in the waste and infiltrates into the groundwater. The percolate from landfill consists of a concentrate of organic and nonorganic components including organic matter, phenols, ammonia nitrogen, phosphate, heavy metals, and sulfide. See the chapter “Water Resources.”) Recycling, as one of the least environmentally harmful choices regarding waste management, is on a global scale not happening much, and its potential for changing

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Fig. 1 Global waste treatment and disposal in percent. (Source: Kaza et al. 2018, p. 34)

waste management from being relatively unsustainable at the moment into being more responsibly taken care of is obvious. The literature of recycling is growing both in the academic and in the private and business sectors, and the development is rapid, so the way things were done even 5 years back has in some areas changed again, often to the better but sometimes also to the worse. Some recycling has reached good results. For instance, in the 1980s, the issue was the cutdown of the rain forest with the aim for producing furniture and making paper and cardboard products. Today, paper and cardboard are recycled in most parts of the world, and new paper and cardboard are made almost entirely out of recycled paper and cardboard. Wood certifications and legislation have also made it possible to avoid using hard wood and rainforest wood for products, although issues regarding deforestation of the rain forest have continued for other reasons: making room for palm trees, for cheap oil products, and for other farming purposes. Wood is today also recycled and made into other products, as is home appliances, all metals, glass, bricks, building materials, cars, and many other waste fractions. Those waste fractions are in the recycling loop already, although many things could be done to recycle them even more and better. In this chapter, the most problematic waste fractions according to its contribution to worldwide pollution of land sites and the ocean, the lack of recycling technology, infrastructure, legislation, as well as the social acceptance to recycle are described. These fractions are:

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– Plastics – Electronics – Textiles “Since 1950, close to half of all plastic has ended up in landfill or dumped in the wild, and only 9% of used plastic has been adequately recycled. Every year, it is estimated that 4 to 12 million metric tons of plastic waste ends up in the oceans1. How plastic waste is processed remains extremely variable from country to country, and recycling remains considerably under-used.” (d’Ambrières 2019, p. 12) “Electronic waste (e-waste) is one of the fastest-growing pollution problems worldwide given the presence of a variety of toxic substances which can contaminate the environment and threaten human health, if disposal protocols are not meticulously managed.” (Kiddee et al. 2013, p. 1237) “In recent decades, fashion and other textiles have been increasingly reduced to disposable items. What is considered a trend today will disappear in the depths of a wardrobe tomorrow. With low prices and ever-changing collections, fashion brands and the clothing industry as a whole are tempting shoppers to over-consume mass-produced items made from low quality textiles. . . Textile waste has therefore become a big problem in recent years (https://labfresh. eu/pages/fashion-waste-index?locale¼en).”

More issues, for instance, the decomposition of vessels, the disposal of hazardous materials and chemicals, and other issues, are also relevant; however, the limit of this chapter requires selection of subtopics. The chapter discusses plastics, electronics, and textiles because these fractions are used in everyday households. The recycling of these fractions thus involves most people, and the solution to its recycling success severely depends on citizens, households, businesses, and everybody on the planet. The chapter is structured, so after the acknowledgment for all those who have assisted us in writing this chapter, the approach to dealing with the issues at hand 9using Gregory C. Unruh’s techno-institutional complexes theory is shown and then continues the discussion of the recycling of plastics, electronics, and textile fractions of human waste. Finally, the chapter concludes with a discussion concerning the entire recycling movement and its future.

2

Theory

In this chapter, an institutional “approach to recycling” is embedded, because recycling involves both human behavior (culture), technology, legislation, and other agents such as specialized companies which interact in the field representing different institutional orders (Berger and Luckmann 1967) created by social mindsets and typified actions, which unconsciously has become institutionalized. The chapter is structured and inspired by Gregory C. Unruh’s institutional theory about techno-institutional complexes (TIC) (Unruh 2000, 2002). TIC is a composition of reciprocal technological systems and institutions.

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Unruh’s theory has a systems approach. This approach applied to recycling can illustrate, for instance, why “green transition” is hard, if you exclusively focus on one perspective. That could be a perspective focusing solely on technology development without having in mind, for instance, how legislation, infrastructure, behavior, etc. impacts how new technology will be a success or an obstacle. Unruh call this “lock-in” when an entity in society (for instance, the legislation) hinders “green technology” in breaking through, and he asserts that you need to approach the entire “system” and not only partials if you want to make changes to it. Unruh has four components, which the chapter is built up against: – – – –

Technological system Social response Institutional response Firm response

Unruh (2000) argues that coupling the institutional with the material or technological aspect in TIC consists of reciprocal-dependent components tied together in a network, which makes the systems hard to change. In his paper Understanding carbon lock-in (2000), he describes how technologies have become interwoven in the industrial economies’ technical systems and social arrangements. This has created a path dependency and the lock-in of systems: “TIC [Techno-Institutional Complex] arise because large technological systems, like electricity generation, distribution and end use, cannot be fully understood as a set of discrete technological artifacts but have to be seen as complex systems of technologies embedded in a powerful conditioning social context of public and private institutions. TIC develop through a path-dependent, co-evolutionary process involving positive feedbacks among technological infrastructures and the organizations and institutions that create, diffuse and employ them.” (Unruh 2000, p. 818)

When a TIC system is created, it is hard to unlock, because the technological systems and the social arrangements have become “systemic” barriers. Lock-in is possible both on the technological and the social level. “Once locked-in TIC are difficult to displace and can lock-out alternative technologies for extended periods, even when alternatives demonstrate improvements upon the established TIC.” (Unruh 2000, p. 818)

Unruh also use the term “dominant design” (Unruh 2000, p. 820), which means that a given system not necessarily is the most appropriate system but that a range of more or less random factors through a gradual development has led to that specific system or design to be dominant. These random factors can be timing, strategy, historical circumstances, and different types of scale advantages such as economy, learning effects, expectational effects, and network advantages (Unruh 2000, p. 820).

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The four components in Unruh’s theory, i.e., the technological system, social response, institutional response, or firm response (Unruh 2000, p. 827), are in this chapter used to understand “recycling” and the lock-in systems that may be present in the transition from a use and throwaway or incineration paradigm to a recycling and reuse paradigm. The chapter also inspects the possibilities and barriers that legislation as well as social behavior implies, for instance, the environmental costs of recycling, which is often neglected in the media and the general excitation of the recycling movement including industrial research. Lately, in the EU, the waste directive is being implemented in full scale, which means that waste is to be recycled to a larger degree than ever before and incineration of waste shall be as minimum as possible. This change is an institutional response, which has consequences for the other parts of the techno-institutional complex, which the waste system consists of. The changed legislation means that technology needs to change as well to make a full system change, for instance, in introducing sorting facilities for different fractions of waste. For instance, Denmark has (among other countries) historically built district heating facilities for incinerating waste, which means that the new transition into recycling and reuse requires new sorting facilities, a change of the renovation vehicles’ designs, as well as households’ waste bin type and number of necessary bins according to the fractions to be sorted at the source (OECD 2019). An institutional response is also how the waste tariff is set or other incentives changed to make people sort their waste in more fractions than before. “Firm response” is also important: Is it possible to find the right bidders on the market, are there suppliers of the right waste bins or the technology required, and what is the cost? Similarly it is with the social response enabling the recycling agenda.

2.1

Unlocking

Unruh (2002) describes three approaches to minimize the unwanted environmental changes: 1. Avoid system changes and treat outlets/disposals (end-of-pipe solutions). 2. Continue the old system but change single components into a new configuration (continuity). 3. Substitute the system entirely with a better system (discontinuity). According to Unruh, there are no examples of discontinuity in larger systems, which are due to lock-ins in political priorities and powerful components in existing techno-institutional complexes, for instance, the conservation of the incineration facilities for waste because of large municipal loans taken historically to invest in these plants to begin with. Unruh (2002) points out that although continuity can have the advantage that costs are often lower on the short scale and there may be less inertia in the green

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transition, there is also a risk of choosing solutions, which are less optimal in the long run. It is worth managing the unlock mechanism: external technologies, which may be evolved in niche sectors, and institutional changes. Regarding the institutional changes, Unruh says that political change can be hard, and social changes can often precede initiating such changes. In the next sections, the four terminologies of Unruh’s are used: technology system, social, institutional, and firm responses, to structure the description of the three chosen waste fractions studied regarding their potentials and uses with regard for recycling: plastic, textile, and electronic waste.

3

Plastic

It is difficult to imagine life without plastic. It is used for food packaging in order to lengthen its longevity, for toys, clothes, electronics, and much more. Plastic is a light, strong, and flexible material useful for many purposes, however, problematic when it has served its purpose and ends up as waste. Beaches are covered in plastic waste, huge islands in the sea made from plastics, and animals that have mutated or are mutilated or have died after digesting plastic waste. New problems with microplastics in water, in the food chain of animals, and in the environment in general have appeared, and the effects of the microplastic on our ecological systems are unknown. Finally, challenges collecting and recycling the plastic waste from households and consumers are tremendous. The issue of collecting and recycling household waste is the theme of this section.

3.1

Institutional Response

One of the reasons why plastic is difficult to recycle is due to the complexity of the material. Plastic is a common connotation of multiple compositions with different qualities of which some are relatively easy to recycle, whereas others with the current technologies available are impossible to use again. By 2025, the EU Waste Directive requires the member countries to introduce producer responsibility regarding ensuring that packaging is designed and produced for reuse or recycling. By 2025, 65% of all packaging must be recycled (i.e., 50% of the plastic packaging) (https://ec.europa.eu/environment/waste/packaging/index_ en.htm, https://eur-lex.europa.eu/legal-content/DA/TXT/?uri¼legissum% 3Al21207). The main challenge to fulfill the EU requirement for recycling plastics is the need for the establishment of national or local plastic sorting facilities to enable the recycling of plastics in relevant industries. There is little experience in such sorting facilities – especially high-tech machinery to carry it out – most experiences in

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plastic sorting is when industries themselves collect their own products back in order to recycle it directly into new products of the very same kind as the old one. Manual sorting such as this has the challenge of logistics. Who shall collect the plastic, who shall transport it to the relevant production sites, and in which condition shall the old item for reuse be in? These questions are elaborated on in the next.

3.2

Firm Response

Plastic waste from EU Member States is found on dumping sites in Malaysia and Indonesia, where it is used for, e.g., fuel in smaller factories or burned in the street creating immense environmental problems. This had led to a renewed focus on the recycling of plastic in the EU. In newer tenders, bidders are awarded according to how high percentage of plastic waste is sorted in “pure” plastic types. In these tenders, it is demanded that plastic waste must be treated in EEA countries. Here, used plastic can only be exported outside the EEA once it has been transformed to plastic pellets. It is, however, a difficult and resource-demanding task to control the entire value chain, and even the purchasers face challenges controlling what happens to the plastic once sorted in different plastic types for recycling. The industry claims to be willing to make sorting plants for plastics if the amount is large enough and chastises the municipalities for the lack of sorting in the collecting stages.

3.3

Social Response

Trust in the “system” is crucial for households to choose to sort plastic waste. Thus, it is a backset when the media shows that plastic ends up as polluting other parts of the world. The motivation for households to sort waste declines, and the distrusts affect other trust issues in the municipalities and the state. The general assumption is that all waste is incinerated anyway, which destroys many years of good waste sorting efforts in the municipalities. Likewise, requirements for cleaning materials before discharging it demotivate households to sort waste. The local municipalities have many different contracts with collectors, and the requirements for different fractions differ as well, locally as nationally, and make issues very complicated for households to make an effort to a better waste sorting at the source. Authorities need to create common criteria for waste sorting and cleaning to obtain uniformity among municipalities and collectors.

3.4

Technology

A rapid development in recycling technologies for plastic is going on many places around the world. Pilot project, however, in small scale is tried out in various

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places; however, the industry hesitates to include recycled materials and refers to the lack of plastic sorting and amount in the municipalities and claims that there is no “market” for recycling plastic domestically. In other words, the industry asks the municipalities and utility companies to push the technology development in assuring enough sorting and amount before the industry is willing to invest in recycling plants. In the next section, the issues in recycling soft polyvinylchloride (PVC) is dealt with, because it is one of the plastic fractions that are most difficult to recycle and has the most polluting issues regarding emissions from incineration.

3.5

Soft PVC

In the 1950s and 1960s, the invention of plastic revolutionized many industries, because it was a light and strong material compared with steel and concrete and it could have many colors. Depending on its composition, plastic manufacturers could produce a long range of different plastic types with different properties. However, one property was especially sought for: soft and flexible plastic, which was invented with the soft PVC. At the time of the plastic evolution, no one cared for the waste, because the over-excitedness of the new wonder material was very immense (https:// plast.dk). Today, we deal with the consequences of this neglect, and the world is full of plastic waste in millions of different compositions. Most of the plastics are not fit for recycling and are often incinerated in district heating plants or are disposed onto “waste mountains.” This section focuses on soft PVC, which is made of crude oil, chloride, and additives, which initially forms a hard kind of plastic. The hard PVC is suitable for recycling and is typically collected for recycling through a WUPPI scheme (The plastic industry’s national scheme for collecting and recycling hard PVC). Differently, it is with the soft PVC, which has many softeners added, which troubles the recycling of it. Especially phthalates are problematic because it has environmental as well as health issues. In the EU, the REACH regulation controls the components in soft PVC, and by 2020, the EU Member States have agreed to stop the import of products with troublesome phthalates (The EU regulation to ensure the protection of the environment and human health towards the risks of chemical exposure; https:// pvc.dk).

3.5.1 Waste Treatment of Soft PVC In the EU, some recycling of soft PVC is going on. In some countries, however, soft PVC is not collected fractionally, and is thus not recycled, because the common opinion among authorities and citizens is that soft PVC has limited recycling value because of the difficulties in removing the troublesome additives. Incineration of soft PVC is politically unwanted because of the chloride in the smoke, which is transferred into hydrochloric acid. The smoke, however, can be neutralized, but when one kilogram soft PVC is incinerated, two kilogram rest products are created, which must be treated as hazardous waste, which is required,

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disposed as controlled landfill (https://pvc.dk/wp-content/uploads/2019/04/ Hvordan-haandteres-PVC-affald-i-Norden.pdf). Other countries prefer incineration prior to landfill disposal until a better solution for disposing soft PVC, such as Norway and Sweden, where soft PVC is thought of as a resource for energy making by incineration.

3.5.2 Future Perspective on Soft PVC Another method to recycling soft PVC is refining, also called “feedstock recycling.” The soft PVC is with this method digested into small substances, from which the carbon content can be reused in the production of other materials. Refining is also interesting regarding other plastic types, especially for the large amount of mixed plastic or low-quality plastic, which is hard to recycle today. All in all, the future development in making soft PVC recyclable concerns the efforts in removing the phthalates. The producers of soft PVC should be forced to make a similar agreement as the WUPPI regulation, because soft PVC with the technology on the marked is suitable for recycling; however, the issue with phthalates must be solved.

4

Electronic Waste and Recycling

Electronic waste, or e-waste, generated in 2014 was according to the United Nations University (https://unu.edu/news/news/ewaste-2014-unu-report.html) 41.8 million tons consisting of approximately 30% small equipment (vacuum cleaners, microwaves, toasters, electric shavers, and video cameras); 28% large equipment (washing machines, clothes dryers, dishwashers, electric stoves, and photovoltaic panels); 17% temperature-exchange equipment (cooling and freezing); 15% screens; 7% small ICT equipment; and 3% lamps (Baldé et al. 2015). In 2018 this amount is expected to approach 50 million tons (https://www.statista.com/statistics/499891/ projection-ewaste-generation-worldwide/). E-waste consists of both hazardous (brominated flame retardants, lead, cadmium, polychlorinated and polybrominated biphenyls, mercury, and polyvinyl chloride), valuable (copper, silver, gold, and palladium), and recyclable materials. E-waste has traditionally been exported legally as well as illegally to China, India, and Africa, where it is recycled manually through hand dismantling, open burning, and acid leaching in order to recover gold, copper, and other valuable metals. Handling of e-waste has lately included a higher extend of regulation with extended producer responsibility laws making electronics manufacturers responsible for handling e-waste regarding taking care of minimizing risks for occupational health and environmental risks. E-waste is today collected informally via “waste picking” or formally through voluntary or mandatory producer “take-back” programs. Waste picking versus takeback programs are described in the next for illustrating the differences between the most significant and hazardous recycling method and the best available technology (BAT) in electronic recycling (Lucier and Gareau 2019, p. 2.).

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Technology System

4.1.1 Waste Picking Waste picking is the most hazardous yet the most profitable way of recycling e-waste with the least costs for the recycling industry in India, China, and Africa. Waste picking is low-cost, however, labor-intensive, and thus manually collected and sent to a recycling site, where hazardous components such as batteries and freon are removed. The manual processes include dismantling with screwdrivers and hammers, and the mechanical processes include dismantling with conveyor belts, shredders, and magnets. Precious metals such as silver, gold, copper, etc. are extracted through a refining process with chemicals, heat, or with metallurgical treatment. The competition for the precious metals in e-waste is very high, which makes many recycling companies offering low-cost strategies, which include human health disasters and no environmental protection. The components that cannot be sold or used as secondary raw materials are disposed of through means such as incineration or landfill. Rare earth elements with the highest resale value and risk of depletion are neodymium, europium, dysprosium, terbium, and yttrium which are found in LED lighting and touchscreen technologies, which can result in radioactive contamination (Lucier and Gareau 2019, p. 3). Child waste pickers have been found to suffer from respiratory problems, lead poisoning, and neurological, digestive, and bone problems. Airborne metal dust and chemical exposures are high occupational health risks in all the manual operations.

4.1.2 Take-Back Programs In the EU, take-back programs have been introduced, and as expected they cannot compete financially with the low-tech, high-risk waste-picking industries. Approximately 90% of the gold in discarded mobile phones can be recovered when manually dismantled, whereas only 26% is recovered through mechanical shredding. Take-back programs including extended producer responsibility (EPR) is executed in a number of US states, in the EU, and across many countries in Asia, Africa, and Latin America. These programs involve both low-cost labor-intensive dismantling and preprocessing in China, India, and Africa and high-tech end processing with modern facilities (e.g., the EU countries) (Lucier and Gareau 2019). “Safe conduct” programs are another alternative to recycling e-waste, which includes reuse of electronics. It can either be reused directly, because the device is functioning but “old,” or it may be refurbished into new electronic. The safe conduct programs include asking users to either give away their old but still working electronic devices, so others can take it for free (https://www.ugeavisensvendborg. dk/ugeavisensvendborg/Genbrugsstation-indfoerer-en-Her-maa-du-tacontainer/ artikel/399839), or asking for it to be sold on auctions, where the profit goes to research or charity purposes, for instance (https://www.odenserenovation.dk/omodense-renovation/nyheder/afslutning-paa-frit-lejde-kampagne/, https://www. assensforsyning.dk/da-DK/Affald/Kampagner/Frit-lejde-en-kampagne-omgenbrug.aspx).

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In general, mobile phones have a good secondhand sales potential in both reusing and refurbishing, since new mobile phones are expensive. Thus, many shops offer as well new mobile phones as well as “old,” refurbished ones, and they offer repair of old phones as well. However, it only goes well with electronic products less than 6 years for a smartphone and 10 years for laptops and desktop PCs and high-end speakers (http://ecircle.rf.gd/eol-reuse-repair-and-refurbishment/). After that age, direct reuse or refurbishment has no longer a market potential (Zhilyaev 2019).

4.1.3 Firm Response Out of the total e-waste, only 20% of e-waste was in 2016 documented and recycled properly, and 80% was unknown. Although the export e-waste to developing countries for low-cost recycling has declined a bit, the overall e-waste management market is mainly segmented into recycling and reuse, respectively, dispose and trash on the market in 2019. The increased awareness about health and environmental hazards of disposal and handling of e-waste and the technological advancements for recovery of precious metals from electronic scrap are making recycling an attractive and feasible option for recycling companies. In 2019, Europe dominated the global e-waste management market; however, during the forecast period, Asia-Pacific countries are expected to hold the largest growth potential for this market. Over the past 4 years (2016–2019), the e-waste management market has merged, expanded, and relocated their service facility centers, and at the moment, the largest recycling actors on the market are Electronic Recyclers International, Inc. (ERI) (US), Aurubis AG (Germany), Sims Metal Management Limited (USA), Umicore (Belgium), Boliden AB (Sweden), Global Electric Electronic Processing Inc. (Canada), Triple M Metal LP (Canada), Tetronics (International) Limited (UK), Enviro-Hub Holdings Ltd. (Singapore), and Stena Metall AB (Sweden) among others (Baldé et al. 2017) (https://www.globenewswire.com/news-release/2019/11/ 21/1950754/0/en/E-waste-management-Market-to-be-Worth-45-78-Billion-by2025-Exclusive-Report-by-Meticulous-Research.html). 4.1.4 Institutional Response The EU take-back programs are not as new as it could be expected by reading this chapter. Actually, the legislation on e-waste dates back to the beginning of the millennium. It is more likely the member countries’ implementation and practices on using the e-waste legislations that have taken speed almost 20 years after its initiation. The directive on waste electrical and electronic equipment (WEEE Directive 2002/96/EC) was provided for the creation of collection schemes where consumers return their WEEE free of charge. In order to tackle the fast-increasing waste stream, the new WEEE Directive 2012/19/EU became effective on 14 February 2014. The EU legislation restricting the use of hazardous substances in electrical and electronic equipment (RoHS Directive 2002/95/EC) entered into force in February 2003 and was recasted in 2013. The legislation requires heavy metals such as lead, mercury, cadmium, and hexavalent chromium and flame retardants such as polybrominated biphenyls (PBB) or polybrominated diphenyl ethers (PBDE) to be

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substituted by safer alternatives (https://ec.europa.eu/environment/waste/weee/ index_en.htm). The WEEE Directive says that “Member States have a responsibility to collect information on all WEEE” and “WEEE which has been received by all treatment facilities should count towards the target” (https://ec.europa.eu/environment/waste/ weee/pdf/WEEE%20workshol%20february%202017/All%20WEEE%20flows% 20workshop_Introduction.pdf). However, the Global E-waste Monitor 2017 showed that in 2016, Asia was the region that generated by far the largest amount of e-waste (18.2 Mt), followed by Europe (12.3 Mt), the Americas (11.3 Mt), Africa (2.2 Mt), and Oceania (0.7 Mt). Of the total of 44.7 Mt. in 2016, approximately 1.7 Mt. are thrown into the residual waste in higher-income countries and are likely to be incinerated or landfilled. Globally, only 8.9 Mt. of e-waste are documented to be collected and recycled, which corresponds to 20% of all the e-waste generated (Baldé et al. 2017) (https:// collections.unu.edu/eserv/UNU:6341/Global-E-waste_Monitor_2017__electronic_ single_pages_.pdf).

4.1.5 Social Response The University of Southern Denmark has completed a large-scale online survey regarding mobile phones, laptops, tablets, and desktop PCs in Denmark asking respondents on the online sales market called dba.dk “How did you acquire the device you are currently using?” The results showed that although most respondents wanted new electronic devices, up to 25% used secondhand devices (Zhilyaev 2019).

The biggest obstacle identified was a lack of warranty or guarantee coming with secondhand products. People expect secondhand products to be less reliable and afraid that if they will have some problems, there will be nothing they could do in this case (http://ecircle.rf.gd/direct-reuse/)

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Direct refurbishment is when a shop or sales company acquires used but fully or partially functionally electronic devices from private users and subsequently refurbishes the device for resale. The refurbished products are professionally tested, fixed, and cleaned (physically and from personal data) and are provided with a new warranty (http://ecircle.rf.gd/direct-refurbishment/). However, the main obstacles on both direct use and direct refurbishment are: • Lack of awareness of refurbishing and its environmental, convenience, and economic benefits • Lack of trust issues • Careless pre-use resulting in these wearing out quickly • Only high-end refurbishment market of e-products • Unreasonably low-acquisition price provided by refurbishers compared to secondhand markets • Lack of data safety and warranty Another obstacle is the way electronics are produced today. Many items are unsuitable for repair, and is not fit to open, because it is glued or melted together. This makes repair a complicated, time-consuming, and expensive task.

5

Textile Recycling

In 1970, approximately 25 million tons textiles were circulating worldwide (https:// dakofa.dk/element/hvordan-looper-vi-tekstilerne/). Today, it is about 100 million tons, and in 2030 it may well be doubled to 200 million tons. The remarkable rise comes from an expanded clothes consumption throughout time combined with the global population increase and the enhanced global living standard. The average use time of clothes has fallen 25% between 1998 and 2005, and most textiles, unfortunately, end up as landfill, although today many countries do collect some amounts of the textiles for recycling. In Europe, Germany collects about 74%, Denmark 44%, and Holland 37% textiles today. These textiles are being recycled into new fibers and often used in new clothes and for insulation of vehicles and mattresses, etc. However, the former is still an exception. As with plastics, the degradation of textiles leads to weaker strength in fibers, so a certain amount of downcycling occurs in the recycling process.

5.1

Technology System

T-shirts, for instance, are made of the weakest kind of fibers, so better fibers may end up in the production of new t-shirts. Used t-shirts, however, often end up as insulation fills in vehicles and mattresses, because most fibers have lost its

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strength. Jeans, or denim, on the other hand, are made of stronger fibers and can be recycled into new cloth or even new jeans. A pair of recycled jeans can have up to 30% recycled denim fibers mixed with virgin cotton fibers to reach the strength standards for new jeans (Lindström et al. 2019; Koszewska 2018). However, the cost of recycling fibers for textiles for clothes and fashion is still higher than using virgin materials, so new technology to produce at lower costs for recycling more textile is necessary. The benefit is the environmental impact emissions, which is as low as 3.8%. Even with only 12% of recycled content, recycled denim fabric has a much lower environmental impact than a similar virgin fabric, for instance, a reduction in water consumption by 9.8%, energy consumption by 4.2%, and CO2. Recycled shoes made from PET bottles, CDs, care tires, and other synthetic materials have also been on the market for more than a decade (Sarioğlu and Kaynak 2017; Kaynak and Sarioglu 2018; Palme et al. 2017) (https://www. brooksrunning.com/en_us/06-17-2009.html). Technologies can help textiles being decomposed into stronger fibers. The use of a lubricant pre-treatment on cotton and polyester textiles can decrease the friction during shredding in the process of making new textiles. This gives longer and stronger fibers and reduces the melted areas of polyester material (Lindström et al. 2019). The mixture of recycled polyester and cotton has found another new technological invention. These materials are often used in polycotton, which is typically used in service textiles such as sheets and towels at hospitals and hotels (Palme et al. 2017). Recycled textiles can be divided in open-loop or closed-loop recycling methods. Closed-loop recycling is garments used as raw materials for the manufacture of new products of similar quality, and open-loop recycling is garments used as raw materials to manufacture industrial products of lower value (Payne 2015: Russell et al. 2016). Recycling textiles can be done mechanically (typical for cotton) and chemically (typical for polyester). Mechanical recycling involves cutting, shredding, and mechanically disassembling materials, whereas chemical recycling breaks down polyesters for repolymerization. Disassembling textiles has been tested in lab scale, but full-scale technology still needs to be developed and set in production (Leonas 2017; Sandvik 2017). Exactly how much fiber strength is lost in the process of recycling textiles and how much virgin material is needed to fulfill the requirements is yet unknown. It may very well vary from product to product. Yet, the process of recycling fiber to fiber for polymers is less costly and uses up to 59% less energy – than extracting virgin materials (https://fashionunited.uk/news/fashion/how-sustainable-isrecycled-polyester/2018111540000). For cotton, the shredding process, the bleaching and recoloring involved, the mix of fibers for the final fabric, and the necessary mix with virgin cotton to sustain the desired strength are a process that involves more work and a higher cost (https://gabrielfariasiribarren.com/en/ organic-cotton-vs-recycled-cotton/). Recycled cotton will, however, reduce water and energy consumption in comparison with the growth and generation of virgin cotton.

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Firm Response

Reuse and recycling of textiles reduce the environmental impact compared to incineration and landfilling; however, apparently reuse is more beneficial than recycling, because recycling is a more complex process. Nevertheless, the avoided production of new products and the relatively clean recycling processes should not cause a turnaway from recycling textiles (Sandin and Peters 2018, p. 353). The overall production costs of making old clothes into usable fibers for new clothes and securing the quality and strength of the fibers in the recycled clothes are still making products made of recycled fabrics and materials premium priced. Others have found a new way of avoiding the extended costs of shredding fibers into entirely new making of clothes, and this is where fashion and clothes making and other textile recycling are used in the upcycling movement. Upcycling consists of recycled clothes in larger fabric parts, which does not implement the shredding and degradation of fibers. Instead, pieces of used clothes are patchworked into new clothes styles. This has become trendy among young consumers, is both made commercially and privately, and exposed on do-it-yourself sites such as Pinterest and Etsy.com. Although there are many barriers and technology needs for the recycling of textiles to take speed, the fashion trend in recycling and buying recycled clothes is becoming a fashion trend even in the developed countries and especially in the young generations (Koszewska 2018, pp. 344–346). • BIONIC (converts plastic bottles into new polyester yarn for textiles) (https:// www.bionicyarn.com/polymer.html) • Tonlé (uses surplus textile scrap from larger manufacturers) (https://tonle.com/) • Mud Jeans (leases jeans, recycles and upcycles fabrics) (https://mudjeans.eu/) • G-Star (creates new denim fabrics out of returned jeans) (https://www.g-star.com/ en_dk?utm_nooverride¼1&bgid¼16199-NIJJKVHCKBOAQ-243590330566& gclid¼Cj0KCQjwl8XtBRDAARIsAKfwtxC_uMN-F0lossyblyyg9WO3cxOZW mO2kO8HxjOKsK-5loErOHkiK3kaAl3iEALw_wcB) • ReShare (recycles used military workwear into new textile products) (https:// www.reshare.nl/) • ReBlend (makes yarn and textiles out of no longer wearable fabrics) (https:// www.reblend.nl/) • ReCover (recovers upcycled cotton yarns) (https://www.recovertex.com/) • H&M (collecting and recycling of clothes and footwear reuse) (https://www2.hm. com/da_dk/dame/Kampagner/16r-garment-collecting.html) High-end fashion companies have also adopted the ideas of recycling textiles and using it for their visions of being a part of the circular economy trend. Companies such as Stella McCartney, Bethany Williams, EcoAlf, Doodlage, Recode, Bundgaard Nielsen, Suave, Zurita, Eileen Fisher, Vivienne Westwood, Katie Jones, Waste Not, Spencer Phipps are among the abovementioned front-runners in using recycled textiles in their collections (https://www.stellamccartney.com/

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experience/en/sustainability/themes/materials-and-innovation/recycled-nylon-poly ester/, https://www.fashionrevolution.org/usa-blog/7-fashion-brands-that-are-design ing-out-waste/, https://motif.org/news/top-sustainable-fashion-designers/). Yet, recycling has its limitations in the circular economy. The degeneration of both polymer and cotton fibers means that the recycling is weakening the fibers each time it is regenerated, as mentioned earlier. In the plastic industry, PET bottles from beverage companies can be remelted and used approximately 25 times, and plastic pipe-making of the highest strength for water mains can have up to approximately 25% recycled plastic but requires 75% virgin plastic in order to maintain its strength to lie in the ground and resist traffic load (https://fashionunited.uk/news/fashion/ how-sustainable-is-recycled-polyester/2018111540000). Although technology for recycling textiles is present, the industry is still lacking investing in it. The issues are lack of proper waste management and textile sorting; lack of standardization; lack of regulation; and, ultimately, lack of customer awareness and of demand (Hole and Hole 2019).

5.3

Institutional Response

There are several barriers for recycling textiles to be overcome (Ljungkvist et al. 2018, pp. 4–5). • Reduction in demand for European used clothes in developing countries because of strong growth in export from Asia • Higher-quality demands for recycled clothes • Chinese ban of imports of waste streams from Europe including textiles • Collection volumes growth in Europe • Historically low prices for nonreusable textiles • A need for new fiber-to-fiber recycling solutions • A need for automated sorting solutions to lower costs • A need for new chemical recycling technologies, i.e., for separating mixed fiber textiles and generating the same fiber quality as virgin. • A need for extended producer responsibility payments or from local and/or central government in return for environmental (and social employment) services carried out by the collectors. The sustainability of recycling textiles has been investigated for its footprints (carbon, energy, ecological) as well as the measuring of the reusability of textile products, and full LCAs have been assessed in the textile industry (Taken from the Handbook of Life Cycle Assessment (LCA) of Textiles and Clothing edited by Subramanian Senthilkannan Muhtu. This book volume is from 2015.). The carbon footprint of a typical new pure cotton t-shirt shows that the yarn spinning is the highest energy consumer followed by the knitting process, the sewing process, and the cultivation and ginning process of raw cotton, and the least energyconsuming processes are the bleaching and drying. However, the studies reviewed

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do not include the use phase of the textiles, where washing and cleaning and the general use-and-throwaway culture as well as commercial interests in supporting that culture may have an even further impact on the life cycle of a t-shirt (Roos et al. 2015). The energy footprint of polyester fiber-based weaved textile production in India requires higher amount of energy compared to natural fiber, for instance, cotton or wool. The highest energy consumption stage in the production is the dyeing process followed by the fiber production, spinning, weaving, clothing, and other knitting processes (Palamutçu 2015, p. 36). The ecological footprint of two different shoes, one basically synthetic shoe and one mainly leather shoe, shows that synthetic material has in general a much lower ecological footprint than leather, despite the leather production is often a by-product of the main uses of the animal in question (milk and meat production). These are normally subtracted from the calculations (Roca and Herva 2015) (https://www. puma-catchup.com/pumas-environmental-impacts-decrease-15-since-2013/; https:// www.stellamccartney.com/experience/en/sustainability/themes/measuring-ourimpact/). Leather has a higher ecological footprint despite that leather production is a by-product of meat production, because there is limited skin on an animal, and the animal takes a certain amount of land, food, and water and emits methane gasses, which has a negative impact on the greenhouse gas emission. The energy used in the process of making leather shoes, however, is also higher than synthetic shoes, because synthetic shoemaking is a more automated process, and making leather shoes takes more handwork and skilled staff to make. The costs – economic, and ecological impact from emissions on recycled textiles versus virgin textiles may explain why the recycling of textiles has not caught the same interest as, for instance, the reuse of plastic. Only 1% of recycled textile finds its way into new clothes since recycling technologies are only starting to emerge. The EU Parliament adopted in 2018 a circular economy package that will ensure that textiles are collected separately in all member states, by 2025 at the latest (EU Briefing from January 2019). However, the main ecological footprint in the life cycle of clothes is the use phase of the clothes, i.e., the water, energy, and chemicals in detergents used in washing, tumble drying and ironing, and the microplastics shedding into water. The most efficient way to reduce the environmental impact of clothes is if the consumers reduce washing/iron times and temperature; wash at full load; avoid tumble-drying; purchase eco-friendly fibers, and donate clothes that are no longer used to be reused or recycled (Beton et al. 2014).

5.4

Social Response

The pop-up of secondhand mini-markets, stores, and collective events has a special appeal to the young, visionary, and fast-fashion consumer segments, who often have not much money to buy expensive fashion. The trend is rising in large cities as well

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as in small towns, and the concept of renting a clothes rail or a shelf and selling clothes that is good enough for direct reuse is becoming more and more popular in many cities. Facebook market is another example of an online platform, where people sell multitudes of things, as well as eBay, Etsy.com, Pinterest, and locally used market platforms (see also Diddi et al. 2019). Consumers’ interest in recycled clothes and textiles and sustainable solutions has increased. The idea of sustainable consumption and circular economy attracts consumers for reusing and recirculating textile waste. However, consumers ask for more transparency and information from the companies engaged in recycling textiles, and they want to know how the recycling process affected the environment (e.g., Vehmas et al. 2018; Weber et al. 2017; Diddi et al. 2019). A survey of consumer behavior regarding recycled clothes in Canada involving 410 people in Ontario with varying demographic characteristics asked how they currently manage their textile waste. The results showed that consumers with a high fashion index (i.e., fashion consumers) are more interested and more likely to participate in alternative methods (e.g., resell, swap, and take back) for removing unwanted textiles. Consumers with low fashion index (i.e., non-fashion consumers) manage their textile waste differently and typically donate and dispose their unwanted clothes (Weber et al. 2017). Young consumers habits of buying recycled fashion show their engagement in sustainable clothing consumption behavior including perceived value, sustainability commitment, uniqueness, acquisition from known sources, and lifestyle changes. Specific reasons for young consumers asked to not engage in sustainable clothing consumption include perceived lack of variety/style, budget constraints, skepticism, lack of knowledge/skills, emotions attached to consumption, perceived lack of availability, and consumers’ self-indulgent behavior (Diddi et al. (2019, p. 200) interviewed 41 young consumers.). Recycling textiles is thus in an urgent need for creating a sustainable planet, but the trend and fashion that have already begun have a growing potential market because of its sustainability. However, the road toward the fashion industry and the consumers becoming sustainable is still long and paved with obstacles such as the need to develop better collection systems, shredding and chemical procedures, and keeping costs down for the market to grow.

6

Alternatives

Plastic, textiles, and electronics as waste fractions share some of the same issues regarding recycling. They are all composed of multiple blends of different materials within their respective categories. Therefore, the recycling of them requires large machinery and extensive labor and logistics to divide all parts into multiple subfractions before they can be recycled. Alternatives to plastic and textiles as raw materials of which products are created are present within their own categories of products.

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Plastic, which basically is a fossil oil product, can be manufactured with vegetative oils (e.g., rasp and sunflower seeds, etc.) as alternatives. However, studies have shown that strength of the so-called biodegradable plastic as well as the strength of recycled fossil plastic products is harder to obtain compared to the virgin fossil plastic. Yet, biodegradable plastics are well suitable for a long range of lightweight products used in the daily households such as wrap, food packaging, disposable tableware, toys, etc. (https://plast.dk/2018/03/nye-lego-klodser-bliver-produceret-isukkerroer/). Some high-strength products can be manufactured on alternative materials than plastic. For instance, alternatives for plastic pipes are concrete and steel pipes, although these alternatives have a higher impact on the sustainability of the planet than plastic, unfortunately. Textiles are made of both natural and polymer fabrics, and in this respect, the polymer fabrics share the similar issues as plastic products, i.e., they originate from fossil oil. Natural textiles such as cotton, silk, and wool are reproductive, which gives them a better environmental footprint than polymer; however, leather, which is also a natural product, has a high impact in terms of CO2 outlet, because the animals, where it comes from, emit methane into the air and there is a limited amount of natural leather compared to cotton, for instance. New alternatives have been used in fabrics lately, such as hemp, bamboo, and other natural fibers woven into fabrics or blended with cotton, and these alternatives have shown even less impact on the environment, because they do not require as much water as cotton plants, for instance (Kumari et al. 2013). Electronics, on the other hand, has not changed in material compositions but in amount. Each component, such as chips and electronic devices, has become smaller and smaller in time; however, the amount of electronics used today is massive and so is the waste fractions. Computers have replaced much of the old paper-born decades prior to the millennium, and with the growth of the Internet, the cable industry has put many meters of copper and aluminum into the ground as well as satellites into space. It is hard to imagine alternatives to a growing need for global communication through electronic media, so in that respect, the aim for recycling outdated electronic parts seems the only way to limit the footprint hereof.

7

Conclusion

An ongoing theme when it comes to recycling and sustainability is whether the transition to a “greener” society requires changes in our everyday behavior or if we can find technological solutions to “fix the problem.” In spite of the increased focus on the sustainability of our planet, there seems to be an ongoing and persistent idea that we can continue our lifestyle of today and even expect an economic growth in BNP and at the same time mitigate the climate changes and reduce our environmental impact. The chapter has shown that there is a long way to go before that idea may be true if it ever will be true. The main obstacles in terms of recycling are the lack of technology, sorting facilities, and social behavior such as buy and throwaway, which

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historically has only increased the waste on Earth to amounts that seem unlikely to go away or even to be diminished. Recycling is not hereby excluded as a useful tool. However, recycling is not the quick fix as optimists wishes it to be. There are a lot of uncertainties in how to make recycling work, and the costs of recycling can end up in being so high that consumers and industries will not pay for it, which is apparent in the plastic, textile, and electronics industries as dominant factors at the moment. And the environmental costs must also be taken into consideration. Recycling is one tool among many which is needed to overcome the sustainability problem of waste generation and overconsumption. Another tool is minimizing or at least diminishing consumption and thereby diminishing waste generation. Minimizing consumption may even be a stronger tool than recycling; however, the obstacles for embedding this worldwide seem also not accomplishable, because this would require almost seven billion people to accept social changes that affect welfare and lifestyle changes in ways, and only few are willing to. As proposed by Unruh’s model on techno-institutional complexes, systemic changes must, however, happen as an interaction between changed lifestyle/social response and technological development, institutional response, and firm response if the waste issues on our planet can be overcome. Recycling is one thing, but it still has issues in itself, which needs to be addressed: source separation of household waste must be supplemented by technological development that ensures the recycling of the collected household waste and in some cases also by technology that facilitates and eases the task of the individual consumer.

8

Cross-References

▶ Geopolitics of Natural Resources ▶ Resource Depletion ▶ Sustainable Plastic and Corporate Social Responsibility Acknowledgments Dorte Eeg Auerbach, Magnus Kristian Hansen, and Lene Stig Andersen have counseled the authors in the process of writing this chapter. Furthermore, Dorte Grastrup-Hansen and co-author Pia Duus Jensen have granted permission to borrow parts of the theory chapter in their master thesis, “Om borgernes sortering af husholdningsaffald,” Aalborg University, December 2015, to reproduce translation into English for this chapter as well.

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Wastewater Disposal Techniques Izhar Alam and Azam Malik

Contents 1 2 3 4 5 6 7

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wastewater Treatment Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Requirement of Wastewater Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attributes of Wastewater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wastewater Treatment Stages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chlorination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wastewater Treatment Activities, Processes, and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Different Forms of Wastewater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Natural Wastewater Disposal Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Wastewater Treatment Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The Conventional Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Activated Sludge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Trickling Filter Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 Rotating Biological Contactor Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Bioreactor Membrane Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Type of Nonconventional Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Waste Stabilization Ponds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Construction of Wetlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Oxidation of Ditches Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 Upflow Anaerobic Sludge Blanket (UASB) Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Soil Aquifer Treatment Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Disposal of Fecal Sludge and Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Wastewater Recycles in Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Industrial Wastewater Treatment Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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I. Alam Department of Civil Engineering, Aligarh Muslim University, Aligarh, India A. Malik (*) Department of Human Resource Management, College of Business Administration, Prince Sattam Bin Abdulaziz University, Riyadh, Kingdom of Saudi Arabia © The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 D. Crowther, S. Seifi (eds.), The Palgrave Handbook of Corporate Social Responsibility, https://doi.org/10.1007/978-3-030-42465-7_90

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20 Modern Methods Used in Wastewater Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Obstacles in Wastewater Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abstract

Each and every human activity which uses water generates wastewater; however as the overall demand for water rises, the quantity and quality of wastewater generated. The major challenge is to provide an increasingly growing global populace with plenty of freshwater with increasing demands for growth of more power, more nutrition, more enterprise, and more consumption. Whereas wastewater is a vital component of the water conservation process, water is all too frequently seen as more of a nuisance to be disposed of or a hazard to be overlooked after it is used. The consequences of the negligence are now clear. The specific effects, including aquatic habitat depletion and waterborne disease from polluted freshwater sources, have reaching consequences to the well-being of ecosystems and the livelihoods of peoples. Facing with the ever rising demand, wastewater is attaining a momentum as a safe alternative water source, shifting the wastewater management paradigm through “treatment and disposal” to “recycle, reuse, and resource conservation.” Thru this manner, wastewater is no more seen as some kind of problem that requires a solution, rather than as part of a solution to the problems that society and the world facing today. This chapter focuses on the new wastewater technology which has been used in the world for the treatment of wastewater. The wastewater treatment methods are evolving with the rapid technical and time shift. Scientists and researchers are busy seeking new sewage treatment methods which are simpler to install and less costly to use. This chapter discusses wastewater treatment current methods which can make the water be reused for various purposes. Keywords

Wastewater · Waste Disposal · Water Treatment Methods

1

Introduction

Wastewater is water which is polluted with human being activity. Wastewater is “water used from any confluence of household, industrialized, commercial, or agricultural purposes, groundwater flow, or storm water runoff, and any infiltration by sewer or sewage system.” Wastewater is water which has changed in organic, physical, or chemical properties by adding up other substances which make it unsafe for other uses such as consumption (Xiao et al. 2017; Camargo et al. 2016). The daily activities of human beings are mostly water reliant, and thus dispose “waste” through water. Most of the stimulants include body waste (urine and facets), facial

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conditioner, scalp, food waste, greasy, cleaning liquid, textile detergents, toilet roll, toxins, cleaning products, dirt, and bio-organisms (germs) that can cause illness and harm to the ecosystem (Malik et al. 2019; Jain 2017). The supply of water should end up as wastewater which makes its disposal very important. Using new technology for water treatment is the only way to eliminate most of the pollutants present in water to create a safer environment and a significant public well-being. Wastewater management means ecologically sustainable wastewater management and supporting community health, economic, social, and political robustness (Capodaglio 2017; Massoud et al. 2009).

2

Wastewater Treatment Outline

Treatment of wastewater is a relatively recent concept since drainage systems were established well before the nineteenth century. “Night soil” had been put in containers along the roads before this time, and the workers drained them into tanks for “honey wagons” (Grady et al. 2011; Crites et al. 2014) sent to rural locations for disposal. In the nineteenth century, flush toilets resulted in the quantity of waste for this farmland. Because of this transport problem, cities started using drainage and storm sewer system to transfer wastewater to water bodies, contrary to Edwin Chadwick’s suggestion in 1842 that is “rain to the river and sewage to the land.” Waste discharge into watercourses has resulted in grotesque pollution and ill-health for surface water users (Lutchmiah et al. 2014; Zhang et al. 2016a). Lindley, an engineer, planned the first “modern” wastewater carrying sewage system in Germany, in the city of Hamburg in 1842. The Lindley system was advanced and essentially made up of quality materials with the accumulation of sewer pipes and sewer accouterments – the Lindley concepts are being practiced currently (Bani 2011). Wastewater treatment only became recognizable after the water bodies’ assimilative capacity was surpassed and health problems were unavoidable. The cost of treating wastewater is paid by discharging societies into the system. Producing portable water from wastewater has been producing great advances today. Previously, whatever the capability of the receiving source, a minimum level of treatment is needed unless discharge permits are issued (Bagal and Gogate 2014; Ayub and Alam 2016). The emphasis is also now evolving from unified systems to much more efficient, decentralized treating wastewater system (DEWATS) in emerging and developing countries where wastewater technology is inadequate and traditional methods are hard to control (Ugya and Ajibade 2016).

3

Requirement of Wastewater Treatment

Treatment of wastewater is very important for the reasons set out below, most critical to the:

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1. Reduction in the environment of biodegradable organic compounds: Chemical compounds such as nitrogen, phosphorus, carbon, and hydrochloric acid in organic matter must be degraded by oxidation into gases that are either emitted or which remain in water (Gikas 2017). 2. Minimization of environmental nutrient concentration: nutrients such as nitrogen and phosphate from wastewater enrich water bodies in the environment or make them eutrophic resulting in the growth of phytoplankton and other algae. Such plants reduce oxygen in water bodies, which hinders marine life (Valentino et al. 2015). 3. Pathogen eradication: Pathogens are microorganism which causes disease in flora and fauna and humans and are often called as microbes because it is very tiny for the human eye to see. Examples of microorganisms or microbes consist of bacteria or germs (like Vibrio cholerae), protozoa (such as Entamoeba histolytica, Giardia) virus (like hepatitis, Enterovirus, and E-coli virus), and fungus (like Candida albicans) (Donde et al. 2018). These microbes may form and absorb in the faeces (excreta) of animals and humans in large number (Alkaya and Demirer 2015). 4. Water recycling and reuse: Water is a precious, limited resource that is sometimes accepted as fact. Population has increased in the last half of the twentieth century, bringing pressure to bear on already limited water resources. Urban development has also transformed many areas of the agrarian environment (Boschee 2014). The increasing population means that more food needs to be provided for the growing population and livestock, as humans are realized to be by far the biggest consumer of available water, ensuring that economic growth puts new requirements on available water supplies. Water storage is also a major problem with overdrawn groundwater resources, temporarily and spatially (Harou and Lund 2008). The recycling and reuse are crucial for sustainable development for these reasons.

4

Attributes of Wastewater

Wastewater has unique features, depending upon its source. Industrial wastewater with municipal or household wastewater can be discharged together. If it is to be discharged with domestic wastewater, industrial wastewater might require some pretreatment (Tang et al. 2016; Malik et al. 2019). Wastewater characteristics differ from industry to industry and thus are using different types of treatment methods – for instance, a cocoa manufacturing unit using a skimming tank method in its initial treatment phase to manage spilled cocoa butter, whereas a beverage plant may bypass that in nature (Alam and Ayub 2019). The harmful pollutants which are present in the untreated wastewater are normally classified into biological, physical, and chemical. A number of factors are included to assess these pollutants (Sun et al. 2016; Yan et al. 2014).

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Treatment of wastewater is divided into three groups. 1. Physical Pollutants • Electrical conductivity (EC) shows the salt concentration. • Suspended solids (SS) include suspended (but not dissolved) solid particles in water. • Total dissolved solids (TDS) contain aqueous solutions and small quantities of macrobiotic matter submerged in water (Deng and Zhao 2015). 2. Chemical Pollutants • Dissolved oxygen (DO) represents the quantity of present oxygen in the water. • Chemical oxygen demand (COD) refers to the oxygen equivalent of the microbial activity of a sample which is prone to heavy chemical oxidation. • Biochemical oxygen demand (BOD) refers to the amount of oxygen that microbial cells need in a water sample to decompose organic matter over a reasonable period of time. • Total organic compound (TOC). • Total P represents the volume of phosphorus in a sample of all forms. • Total Kjeldahl nitrogen (TKN) is an organically bound calculation of nitrogen ammonia. • Dissolved NH4-N and NO3-N (ammonium and nitrate, respectively) (Boschee 2014). 3. Biological Pollutants • Total coliforms (TC) contain both fecal and common soil coliforms. • Microorganisms, which are a strong predictor of possible groundwater contamination. • Fecal coliforms (FC) are sources of contamination of fecal material by water. The lead indicator is Escherichia coli, or E. coli. • Helminth research checks into the water for worm eggs (Jain 2017) Wastewater treatment process: The unit operations and processes in wastewater treatment can also be categorized as such due to the nature of the pollutants in wastewater – physical, chemical, and biological (Han and Qiao 2014). The operations and processes of the units in the treatment of wastewater are summarized as follows: Physical processes include methods in which there are no significant chemical or biological modifications and the use of purely physical phenomena to boost or treat wastewater. Instances may be coarse testing to eliminate larger specialized objects and (or clarify) sediment. Physical Operation Unit • Large suspended material screening. • Equalization of flow • Navigation • A granular medium filter system • Communication of wastewater • Sedimentation

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Chemical treatment consists of using a certain chemical reaction or process to enhance the quality of the water. Possibly chlorination is the most widely used chemical procedure. Chlorine, a potent oxidizing compound, could be used to remove pathogens and slow down the rate of decomposition in wastewater. Pathogenic kill is accomplished when the chlorine activates essential biological processes (Ahmed et al. 2017). Ozone is another effective oxidizing agent that was often used as an oxidizing disinfectant. Chemical Operation Unit • By chemical precipitation • By adsorption • By disinfection • By dechlorinating various chemicals Biological wastewater treatment techniques used microorganisms, mostly bacteria, to create stable end products in the biochemical decomposition of wastewater. More microbes, or sludge, are produced, and part of the waste is converted into carbon dioxide, water, as well as other end products (Tran et al. 2016). Biological wastewater treatment technique can be classified into anaerobic and aerobic processes, depending on the level of dissolved oxygen available in the water. Biological Unit Operations • Rotating biological contactor method • Activated sludge processing • Pond of stabilization method • Anaerobic digestion method • Aerated lagoon method • Trickling filter method Although the devices used in sewage treatment are diverse and are likely to combine biological physical and chemical approaches, it can be classified into six processes in practice: (A) Preliminary treatment method (B) Primary treatment method (C) Secondary treatment method (D) Disinfection method (E) Sludge treatment method (F) Tertiary treatment method

5

Wastewater Treatment Stages

There are three wide treatment stages: primary, secondary, and tertiary (Fig. 1). Preliminary treatment often takes precedence over primary treatment (Zhao et al. 2014).

Fig. 1 Wastewater treatment process. (Source: Overview of wastewater treatment process (2017, March))

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(A) Preliminary treatment extracts suspended solids coarsely and the grits. The screening separate both in chambers respectively. This increases the operation and management of future treatment units. During this treatment process, flow measurement tools, often standing wave flumes, are required (Talvitie et al. 2015). At most plants, preliminary testing is used to safeguard the treatment processes of pumping equipment and reaction kinetics. Preliminary treatments are designed to strip or cut off the large suspension and suspended matter, reduce heavy inorganic solids, and extract excessive quantities of oil or lubricnats (Chavan et al. 2016). The following devices are widely used to influence the goals of the preliminary treatment: • Screens, rack, bar, or fine • Grit chambers • Pre-aeration tanks • Comminuting devices – grinders, cutters, shredders Chlorination can also be used in preliminary treatment simultaneously to the above given method. Although chlorination can be used in treatment at all stages, it is considered a process of its own making. Preliminary methods for the treatment require careful design and development (Wu et al. 2005). (B) Primary treatment extracts organic and inorganic solids able to settle by skimming through sedimentation and surface materials (scum). At this stage, 50% of BOD5, 70% of suspended solids, and 65% of grease and oil can be extracted. It also extracts some organic nitrogen, ammonium salts, and toxic substances. At this stage, however, neither colloidal nor dissolved constituents are being removed. The primary sedimentation unit effluent is known as primary effluent (Bhuptawat et al. 2007). In this treatment, the majority of the solids capable of settling are isolated or eliminated from wastewater by the physical sedimentation process. Any of the colloidal solids are often extracted when other additives are used in the primary sedimentation tanks. Wastewater bioavailability in primary treatment is of short-term purposes (Yoo et al. 2010). The primary aim of treatment is to reduce wastewater velocity enough to allow solids to settle and to surface floatable material. The primary treatment can therefore consist of sedimentation tank and clarifiers (Rusten and Ødegaard 2018; Zou and Curran 2017). Settling tanks can be divided into four general classes, due to differences in design, operation, and application: 1. Septic tubes 2. Two story Imhoff septic tanks and other proprietary units 3. Plain sediment transport tank with mechanical removal of sludge 4. Upward flow clarifiers with mechanical sludge elimination Many auxiliary treatment systems adopted when chemicals are used. Those are: 1. Chemical feedings units 2. Mixing devices 3. Flocculators

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(C) Secondary treatment is the application of primary effluent treatment and removes residual organic matter and dissolved particles. Using aerobic biological treatment systems, biodegradable dissolved and colloidal organic matter is extracted too. Deletion of organic matter occurs while removing compounds of nitrogen and phosphorus and microbial pathogens (Liénard et al. 2001; Verlicchi et al. 2012) mechanically as in trickling filters, activated sludge methods that rotate biological contactors (RBCs), or nonmechanically as in anaerobic treatment, oxidation drainage canals, stabilization ponds, etc. Secondary treatment is largely based on aerobic microbes that biochemically break down organic solutes into inorganic or stable organic substances. It is analogous to the recovery zone where a stream is self-purified (Giannakis et al. 2016). The secondary treatment systems can be divided into four groups: 1. Stabilization ponds 2. Activated sludge and finalized settling tank modifications 3. Intermittent filters to a sand 4. Trickling of secondary settling tank filters (D) Tertiary treatment or advanced processing is utilized when removing particular components of wastewater that cannot be eliminated by secondary treatment. Advance process reduces large quantities of nitrogen, phosphorus, toxic substances, recyclable organics, bacteria, and viruses (Maizel and Remucal 2017). The secondary effluent conventional sand filter (or similar media) and the newer membrane material are two techniques that can be used to control system. These filters were developed, and both filters and membranes strip helminths. The new method is disk filtration, using large canvas storage discs attached to revolving filtering devices (Krzeminski et al. 2019). During this process, irradiation disinfection of chlorine, ozone, and ultraviolet (UV) can be done to make sure that water meets existing global urban and agricultural reuse requirements.

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Chlorination

This is a treatment technique that has been used in all phases of wastewater treatment for many reasons and also before preliminary testing (Huang et al. 2011). For the following reasons, it includes the application of chlorine to wastewater: 1. Disinfecting or destroying pathogenic species 2. Prevention of decomposing wastewater: (A) Control of odors (B) Plant protection structures 3. Plant operating aid: (A) To sediment (B) Filter trickling (C) Bulking in activated sludge 4. Reduction or retardation of demand for biochemical oxygen (BOD)

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While chlorination has become commonly adapted over the years, particularly to disinfection, several methods are still being employed to accomplish disinfection and specific treatment ends. The most frequent use of ozone (Kupoluyi et al. 2018). Ozonation can be used more widely in the future, considering the toxicity of chlorine and chlorinated compounds for fish as well as other living organisms (Singare and Dhabarde 2017).

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Wastewater Treatment Activities, Processes, and Procedures

The treatment methods are comprised of unit processes and procedures, and the treatment programs make up their integration. Unit operations and unit process terms are also used interchangeably, as it can occur concurrently in the same treatment area. In general, the following concepts are accepted (Boiocchi et al. 2016; Durán and Durán 2018). • Physical unit operations: This method of treatment of prevailing physical forces (e.g., scanning, flotation, filtration, mixing, flocculation, and sedimentation,). • Chemical unit processes: This processing methods in which pollutants are eliminated or transformed by the introduction of chemicals or through chemical reactions (e.g., adsorption, disinfection, and precipitation). • Biological unit processes: These forms of treatment use biological activity (e.g., removal of carbonaceous organic matter, nitrification, denitrification) to eliminate pollutants (Akter et al. 2018).

7.1

Different Forms of Wastewater

The different types of wastewater that can be treated by using natural method of treatment are: • • • •

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Municipal wastewater Selected industrial wastewater Agricultural and ballast water Polluted storm water runoff

Natural Wastewater Disposal Techniques

Natural wastewater treatment technologies use natural or synthetic self-treatment processes that occur in soil, water, and wetland environments (Crites et al. 2014). These treatment techniques are known according to processing technology and general arrangement.

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Wastewater Treatment Methods

There seems to be conventional and nonconventional methods for treating wastewater that have been demonstrated and observed to be effective in treating wastewater. Conventional methods have a fairly high degree of automation compared with nonconventional methods of handling wastewater and typically need pumping and strength. To operate and maintain the system, it requires skilled labor.

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The Conventional Methods

Instances of conventional methods for treating wastewater involve trickling filter, activated sludge, and rotating methods for biological contactors. Trickling filters and rotating biological contactors are sensitive to temperature, eliminating very little BOD and costing much more trickling filters to build than activated sludge process. Activated sludge methods are much more costly to operate because water pumps and blowers require more energy (Hu et al. 2018). Within the following parts, these methods are discussed in depth.

10.1

Activated Sludge

Activated sludge is based on the biological treatment processes which implement growth of dissolved organisms to expel BOD and solid wastes (Fig. 2). It is based on the hypothesis that intense wastewater aeration produces bacterial flocks (activated sludge) that destroy microbial content and are segregated by sedimentation (Baronti et al. 2000; Van Haandel and Van Der Lubbe 2007). The system consists of ventilation and settlement reservoirs and other machineries like return and disposal pumps, air circulation blenders and blowers, and a flow measurement system. A segment of activated sludge is reused to keep the active bacteria in the tank concentrated. Primary wastewater is combined with reverse -activated sludge to generate blended liquid that is aerated over a given period (Radjenović et al. 2009). The enabled sludge species use the necessary organic matter as food by Fig. 2 Activated sludge. (Source: Wastewater treatment plant (WWTP) Activated Sludge n.d.)

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aerating the environment, thus creating stable solutes and more species. The suspended matter particles formed mostly by process and the extra organisms form the basis of the activated sludge. The solutes then are removed from wastewater throughout the sedimentation tanks and introduced to the powerful aeration tank. To boost system efficiency, the accumulated solids and microbes are regularly removed from the system (waste activated sludge) (Jafarinejad 2017). The performance of an activated sludge treatment system is affected by parameters such as temperature, rate of return, oxygen concentration available, presence of organic matter, amount of pH, frequency of waste matter, time of aerobic treatment, and wastewater contamination. Therefore, an equilibrium between the quantity of food (macrobiotic matter), microbes, and dissolved oxygen should be maintained (Korzeniewska and Harnisz 2018; Wei et al. 2018a). Activated sludge processes occupy less energy compared with filter trickling and are of high removal efficiency. The downside is that at one end of the tank, BOD is greater than others; at that end the microbes would be biologically more active than the other, except a full mixing activated sludge system mechanism is employed.

10.2

Trickling Filter Methods

This is a development cycle wherein the microbes are responsible for treatment that’s also connected to a packed inert material (Fig. 3). It consists of the round big tank with material from the vessel, e.g., volcano rocks, boulders, or synthetic fibers (Persson et al. 2002; Aslam et al. 2017). Wastewater is delivered from above which trickles thru the membrane pores enabling for the adsorption of organic material in wastewater with inhabitants of microorganisms (aerobic, facultative bacteria, microorganisms, anaerobic bacteria, and pathogens) connected to channel as a biological film or filth coating (estimated 0.10 to 0.20 millimeters thick). Decomposition of the macrobiotic substance through the microbial cells occurs in the upper layer of the slime layer (Żyłka et al. 2018). As bacterial activity hardens the layer, oxygen cannot reach the medium face, and aerobic bacteria evolve. The microbial film keeps growing to an extent that microbes near the surface are unable to hold the medium, and a portion of the substance layer falls off the filtration system. That method is called the sloughing process (Wells et al. 2014). Compared with activated sludge process or some package treatment plants, the process is simpler. However, due to the use of electric power, its operation and maintenance requirements are high. Maintaining trouble-free execution of the trickling filter requires labor force, e.g., preventing congestion, maintaining optimum flushing, and controlling filter flies. It is also suitable for fairly affluent, densely populated regions with a sewerage network and water treatment that is centrally controlled, even suitable for the treatment of gray water (Van den Akker et al. 2011; Thatai et al. 2019). This method also needs more volume compared to some other systems and has odor and filter flies capacity.

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Fig. 3 Trickling filtration method. (Source: Rotating Biological Contactor n.d.)

Waste Water

Biological growth layers

Media discs or panels

Anaerobic

Aerobic

Shaft

Media support 35-40% submerged

Disk Media

Side View Treated Water

Media disc or panel Motor

Organics Air CO2 Other oxidized products

One media pack

Optional air distributor pipe

Front View

Fig. 4 Rotating biological contactor method. (Source: Trickling Filtration n.d.)

10.3

Rotating Biological Contactor Method

Rotating biological contactors (RBCs) comprise a horizontal, rotating shaft with vertically arranged, plastic media (Fig. 4). Instead, the biomass-coated materials are subjected to sewage and oxygen in the atmosphere as the shaft turns steadily about 1–1.5 rpm (needed to sustain hydraulic tensile stress for shedding and also to maintain torque to retain solid in ejection), with about 40% of the materials being soaked (Najafpour et al. 2005). Large surface area enables a large, stable population

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of biomass to expand, with constant and automated overgrowth shedding and removal in a downstream clarifier. Biofilm thickness can reach 2–4 mm based on the resistance of the wastewater and the disk rotational speed. RBC methods are generally new, although it seemed best suited for municipal wastewater (Ugya and Ajibade 2016). It is installed in several petroleum plants due to numerous of their capacity to restore quickly from outraged c