Global Governance—The Emerging CSR Example

Laura Albareda and Sandra Waddock

One of the amazing things that has occurred over the past several decades is the rapid evolution of thinking about corporate sustainability and responsibility (CSR).[1] From fragmented, single company initiatives that began as early as the 1950s and 1960s (or even earlier), today we can envision the outlines of an integrated network of CSR initiatives. These initiatives increasingly link to each other to cover a plethora of different types of corporate responsibilities around societies, ethics, and sustainability. Integration via networks is important to create coherence and the capacity for effective governance of planetary resources long term.

In our paper ‘Networked CSR Governance’ published in 2018 in Business & Society, we outline four developmental stages through which CSR institutions and related networks have evolved since about 1990. We believe that networked CSR governance represents an early example of what others have called ‘Earth system governance.’ Networked or Earth systems governance are emerging systems of global governance (not government, though) that can potentially integrate the formal and informal norms and practices in human societies towards greater equity and sustainability for all. In the CSR field, networked CSR governance based mostly on voluntary initiatives, though sometimes governments are involved.

We believe that understanding how networked CSR governance has evolved can help others know how their own efforts to bring about a more sustainable and equitable world are likely to shift over time—and prepare better for those shifts. For example, policy makers, scientists, business, government, and civil society leaders, and educators who are dealing with global challenges like the UN’s 17 Sustainable Development Goals may want to know how and when to begin linking their initiatives with others.

Our paper identifies four stages of development for networked CSR among multi-stakeholder initiatives, which we believe can apply to other types of emerging governance networks. The first stage is CSR governance, in which independent, fragmented, and unlinked, single-sector, global, and multi-stakeholder initiatives dominated. Such disparate independent initiatives, each with its own agenda, networks, supporters, purposes, approaches and processes competed with or ignored each other, though many were vying for the same corporate attention and commitments. When the array of initiatives became too confusing and companies began complaining of initiative overload, the second stage, collaborative CSR governance began to evolve.

In the collaborative CSR governance stage, some of the independent initiatives began informally collaborating with other, related initiatives around specific topics like reporting guidelines, labels, and certification processes for company practices, e.g., in supply chains or with respect to the natural environment. Networks of initiatives informally organized around similar long-term goals like creating global standards or rating systems that could be broadly applied, resulting in more coherence among the standards. For example, the UN Global Compact requested its signatories to use the Global Reporting Initiative (GRI) standards or work with SA8000 guidelines in supply chain management. These informal arrangements, however, soon proved in adequate to the continuing growth of initiatives, hence the next stage began to evolve.

Networked CSR governance represents the emergence of more formal collaborations and agreements with broader, defined topics, using similar ideas and guidelines. At this stage, various CSR initiatives attempted to rationalize existing programs into common or shared frameworks that promote desired changes—while recognizing that their own independence and capacity for self-governance needed fundamental realignment to achieve that end. In other words, in this stage, which is where a lot of CSR initiatives are today, formal MOUs (Memorandum of Understanding) emerged, linking initiatives. One important example is that of the UN Global Compact, which signed a formal MOU with the GRI in 2010, after six years of informally collaborating, to encourage signatory companies to use the GRI standards for environmental, social, and governance reporting.

Integrated networked CSR governance is a phase that we can only begin to see the outlines of even now. This stage means that a number of leading initiatives get together around a shared vision so that, collectively, they can reach a broader audience and have more impact. Institutionally, integration means that the collaborating initiatives create a shared vision, structurally align their organizations around common core principles, and acknowledge a set of shared values around corporate accountability, responsibility, transparency, and sustainability. One leading edge example is the Global Initiative on Sustainability Rankings (GISR), which is trying to rationalize standards for the multitude of sustainability ratings that now exist to lessen overload on potential company respondents—and, in the process, determine what really matters.

Looking at how CSR initiatives have evolved into increasingly linked networks provides an important lesson for policy makers and others interested in assuring a sustainable future. If Earth system governance is to be developed, it will not be done without considerable institutional realignment of existing institutions, initiatives, and enterprises. The emergence of networked CSR governance suggests that there is likely to be constant change over time, as new actors come into the scene with different standards and approaches. At the same time, it is important to realize that through alignment around core values, principles, and desired futures (visions), greater impact improving corporate responsibility in the overall system can potentially be achieved.

Laura Albareda is associate professor at the LUT School of Business and Management, Lappeenranta University of Technology, Lappeenranta, Finland. Laura.albareda@lut.fi

Sandra Waddock is Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility, and Professor of Management at Boston College’s Carroll School of Management, Chestnut Hill, MA, USA. waddock@bc.edu

[1] We use CSR as Wayne Visser does to mean corporate sustainability and responsibility rather than the more traditional meaning of corporate social responsibility because Visser’s CSR encompasses both sustainability and responsibility issues neatly.