Corporate social responsibility practices often lack ‘on the ground’ change – SFU research

By Melissa Shaw

The economic restart prompted by COVID-19 provides an opportunity to innovate and change how companies conduct business.

For instance, companies that practice corporate social responsibility (CSR) could ensure more positive outcomes by tackling “real change on the ground” rather than focusing on single projects and budgets, according to Simon Fraser University political science professor Andy Hira.

Hira’s paper, published this month in the journal Global Affairs, analyzes the impact of CSR in three industries: forestry, mining and textiles.

“When you look at CSR reports they’re talking about expenditures and these great one-off projects they’ve built for communities,’” he says. “But there also needs to be a willingness to tie themselves to real changes that will have broader and lasting impact.”

Hira also analyzed initiatives and programs designed to help consumers make sustainable product choices. He found that overall, few approaches translate into improvements for local communities.

Advocating for positive change

In terms of the bigger picture, Hira suggests there is a need for increased global pressure on firms to be transparent and enforce CSR practices.

“Consumers need to let retailers and politicians know that they are concerned about these issues,” Hira says. “Canada has ethical standards on the domestic level but we turn a blind eye to all the goods that we import. If we could extend those standards and say we’re not going to allow imports on unethically produced goods everything would change.”

Hira notes that government procurement could lead the way by ensuring ethical production and that Canada could coordinate with markets in Europe and U.S. to adopt standards, using market access as a lever to push for developing country standards enforcement.

The way forward

While increased consumer and investor awareness prompted companies to engage in reporting and auditing he found that more changes are needed. In addition to conflicts of interest, there are no consequences for companies that fail these audits and no required remediation. Among his suggestions:

1.     Improve auditing process: To improve audit neutrality, he suggests creating an international organization funded through a taxation system of member organizations to avoid the conflict of interest that arises from receiving a contract from one particular company.

2.     Harmonize standards under one label for consumers: Hira says companies could eliminate competing standards by working with international organizations, NGOs and governments on a harmonized label for consumers. This would improve consumer confidence that the products they are buying were produced ethically and sustainably.

3.     Get involved with local groups to create change: Organizations can work with local unions and activists to put pressure on local governments to improve conditions for workers. Better Work Cambodia is one example of this approach.

Hira is also editing a forthcoming special edition of the Journal of Developing Societies on the subject of developing country capacity, to be published this fall.