Corporations, Globalisation and the Law series
Chapter 4: Consumer protection law and corporate social responsibility
Consumers are increasingly a driver of Corporate Social Responsibility (CSR) activities of companies. Surveys have shown that up to 90% of consumers consider the social responsibility of companies in their purchase and consumption behaviour. The term ‘ethical consumerism’ denotes the situation that consumers care about issues of CSR and are positively influenced by a company’s CSR engagement in their purchase behaviours. Consumers’ perceptions of companies are better if they believe that companies are committed to CSR. This trend provides an incentive for companies to be socially responsible. Companies have responded to ethical consumerism by giving CSR an increasingly important role in their marketing activities. Brands are portrayed as being socially responsible. Many companies therefore publicise information about their engagement with CSR, including the codes of conduct to which they have signed up. These codes of conduct account for a significant part of the CSR strategy of companies as they usually contain principles of socially responsible behaviour with which companies pledge to comply. The rise of ethical consumerism raises the question how reliable the information is which companies release about their CSR record. Consumers, as the targets of corporate CSR marketing activities, require protection against false information. This chapter therefore addresses the question to what extent English consumer law currently promotes CSR. To that end, the chapter analyses if breaches of CSR policies by companies are encompassed by English consumer law at all and, if this is the case, then examine whether consumers may procure an appropriate remedy in such a situation. Based on this analysis, the chapter addresses the question how consumer law could better promote CSR. This section particularly discusses the Consumer Protection (Amendment) Regulations 2014 which introduced a private right of action for consumers. This chapter argues that the way in which consumers are protected in private law against false information of companies about their CSR commitments is inadequate. The new private remedy is a step into the right direction, but no more. The fact that consumers still do not have the right to injunctions is a missed opportunity from a CSR point of view. Reg 5 (3) (b) CPRs explicitly makes the breach of a commitment in a code of conduct a misleading action, if some further requirements are satisfied, and therefore brings CSR into the scope of the CPRs. Yet, without the right to an injunction it will be difficult for consumers to meaningfully promote CSR through consumer law. They are still dependent on the public enforcement bodies which are the only bodies that can exercise this right.
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