Corporate Social Responsibility, Private Law and Global Supply Chains

Corporate Social Responsibility, Private Law and Global Supply Chains

Corporations, Globalisation and the Law series

Andreas Rühmkorf

This insightful book demonstrates that private law makes a significant contribution to the promotion of corporate social responsibility (CSR), but that with certain changes this contribution could be better. Based on the analysis of four substantive areas (company law/corporate governance, contract law, consumer law and tort law), the book covers a full range of issues that are important for CSR. These include directors’ duties, corporate reporting, the incorporation of CSR policies into the supply chain, consumer rights and the tortious liabilities of companies.

Chapter 1: Corporate social responsibility and private law

Andreas Rühmkorf

Subjects: law - academic, corporate law and governance, human rights, regulation and governance

Extract

The global economic and financial crisis has strengthened the interest in the concept of Corporate Social Responsibility (CSR). The public concern about irresponsible corporate behaviour and the impact of businesses on, for instance, the environment or their employees has increased. This interest has now expanded to the supply chain of companies and the working conditions of suppliers. As a consequence of these developments, many corporations have adopted CSR standards in which they pledge to conduct business in a responsible manner. These CSR standards are often passed on to the suppliers. The engagement of companies with CSR is partly due to the negative reputational effects of reports about irresponsible conduct of companies. For example, human rights violations committed by the subsidiaries and suppliers of Western companies in the developing world such as the use of child labour or excessive working hours have particularly harmed the reputation of brands. CSR has become an important issue on the political agenda. The United Nations (UN) has given prominence to CSR through the work of Professor John Ruggie from Harvard University who worked as Special Representative on the issue of human rights and business (SRSG) until 2011. Upon completion of his mandate, he published the UN Guiding Principles on Business and Human Rights which were called ‘a landmark in the CSR debate’. Moreover, in 2011, the EU Commission published a communication on CSR which contains an action agenda for the period 2011–14.