Corporate Social Responsibility: An Implementation Guide for Business
What is the relationship between CSR and the law? There is a close relationship between CSR and the law. The main instrument governments use to address a firm’s social, environmental and economic impacts is the law. Many countries have a wide range of laws, whether at the national, state or local levels of government, relating to consumers, workers, health and safety, human rights and environmental protection, bribery and corruption, corporate governance and taxation. A firm’s CSR approach should begin by ensuring full compliance with those laws already in place. No matter how good a CSR policy may be, failure to observe the law will undermine other good efforts. Looking ahead, the CSR activities of firms can be seen as a proactive method of addressing potentially problematic conduct before it attracts legal attention.
SustainAbility’s view on the changing landscape of liability “The issue of past, current and potential liabilities has exercised boards of large companies for decades. This report makes the case that the landscape of liability—and therefore the risks for companies and to shareholder value—is changing and changing rapidly. It explores the evidence, maps the changes and attempts to guide business with the help of studies to navigate new and uncharted territory. The studies examine and draw conclusions in relation to climate change, human rights, obesity and legacy issues.”19 A key feature of the emerging CSR debate is the difference between a “compliance” mentality (i.e., only doing those things that are required) and a “value driven” mentality (i.e., using a CSR approach to innovate and seek new markets). Some commentators argue that a compliance-based approach does not help business, because it tends not to drive innovation and the “out of the box” thinking they see as necessary in the rapidly changing business world. That said, a number of specific legal aspects are worth mentioning. •
Performance reporting and the law. In many jurisdictions there are laws in place requiring firms in particular sectors to publicly disclose certain of their practices and activities. The U.K. Companies Act 2006, for example, requires publicly-listed companies to report on a number of specific issues where they are necessary to understanding the company’s business. These include environmental matters (including the impact of the company’s business on the environment), the company’s employees, social and community issues, and risks through the company supply chains. Similar provisions also exist in France and across the EU.
19 http://www.sustainability.com/insight/liability-article.asp?id=180.
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