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For the last four years I have been developing a semester long course (directed primarily to law students and graduate students in international affairs) on Corporate Social Responsibility Law and Policy. The subject is usually neglected outside of Business Schools. or taught in modules that emphasize one or another of its many facets (eg human rights, or due diligence, or sustainability, etc.). Indeed, in some circles, the movement suggests a new fracturing as CSR becomes a term best left to the 20th century. For some, the field is now conflated with human rights, or with sustainability, or with something else.
'Things' have also become far more complicated in a field once notorious, when it was only CSR, a somewhat old fashioned; it was a term that reflected values and emphasis long abandoned. “'CSR is dead. It’s over!' declared Peter Bakker, president of the World Business Council for Sustainable Development. Bakker argues that leading companies are already going way beyond traditional CSR by integrating sustainability into all aspects of their business operations in recognition that business cannot succeed if society fails.” (Roel Nieuwenkamp, “2016: CSR is dead! What’s next?” OECD Insights (22 January 2016)).
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The term “corporate social responsibility” is still widely used even though related concepts, such as sustainability, corporate citizenship, business ethics, stakeholder management, corporate responsibility, and corporate social performance, are vying to replace it. In different ways, these expressions refer to the ensemble of policies, practices, investments, and concrete results deployed and achieved by a business corporation in the pursuit of its stakeholders’ interests. (Matteo Tonello, “The Business Case for Corporate Social Responsibility,” Conference Board 26 June 2011).CSR, as both a concept and the term used to describe those concepts, is part of a vigorous global debate about the language, concepts, and methodologies used by states and other actors to develop a system of values, expectations, and accountability mechanisms touching on the way in which economic activity is undertaken anywhere on earth. As a consequence, CSR is as useful a term as any of its competitors to describe a complex interplay of economics, politics, law, and value systems that together constitute the way in which economic activity is judged, valued, and ultimately regulated.
“The past few decades have seen an increasing scrutiny of the impacts – both positive and negative – that companies have on the societies in which they operate. A broad debate is ongoing, in which a wide variety of societal actors, . . . are arguing that both states and corporate actors have a role to play when it comes to fostering environmentally and socially sustainable business strategies and operations around the globe. The search for adequate responses to such scrutiny is reflected in developments in the societal, political and academic debate on three separate but interrelated concepts: corporate social responsibility (CSR), business and human rights (BHR) and responsible business conduct (RBC).” (Liesbeth Enneking & Jeroen Veldma, ‘Towards Responsible Business Conduct in Global Value Chains: Relevant Legal Developments in the Netherlands,’ Erasmus Law Review 4:1-5, 1-2 (2019))
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What comes next? That is an open question and the pedagogical core of the course. This post considers the lessons learned from Version 1.0 through 3.0. It also explains how the insights gained over the last three iterations have produced a set of (sometimes) substantial changes. These were made both to make the materials more relevant and to focus on the distinctive features of this sometimes complex system of management at the local, national, and international level. The syllabus of CSR Law and Policy Version 4.0 also follows, including a Statement of Course Content and Structure. All still remains very much a work in progress. That is as it should be for a field of law-politics-economics that is still in its infancy. Comments and suggestions still gratefully appreciated. The full syllabus also may be accessed HERE, along with Versions 1.0 2.0, 3.0, and 4.0. I will report form time to time on the course.
After Acton Reporting Versions 1.0 to 4.0:
CSR Version 1.0 was a good effort, but proved to be more challenging than expected for students. The reason was simple: it was an academic's syllabus. That was a problem especially since the object of the course ought to have been less to impress my colleagues than to effectively impart knowledge to students. A few lessons from that experience: Translating theory to immediate and concrete realities proved to be more interesting to students than a deeper but more abstract engagement with the critical issues and challenges of the topic. Second, working through a live example provided much more student ownership of the materials than the traditional approaches. Third, comparison across business sectors and states proved far more enriching than alternatives. Comparisons among enterprises, among institutions, and among states, proved quite useful in drawing insights that students found profitable.
So, with these insights I produced my CSR Syllabus 2.0, which drew on the lessons I hoped I learned. It was better, but still not as useful as it could be. The exercises were not as connected as they might have been. The focus on sustainability and data driven governance was given too little attention. Also necessary was more time devoted to actually understand the interrelationships between charity, human rights, sustainability and enterprise engagement with these as an interrelated set of business objectives (or costs of production or risk/compliance centers). My sense was that the mechanics of the course were now more compatible with the way students might better approach the course. But there was also a sense that the materials might be more immediate. I found that it was as useful to work through the materials (theory and application) through an analysis of events occurring in real time, than to isolate those and work through them in a more historical context. CSR, in effect, needed to operate in the present tense.
In Version 3.0 I sought to incorporate some of the insights learned from teaching Versions 1.0 and 2.0. Rather than developing a more complete taxonomy through which the class would dutifully journey, the syllabus was reconstructed so that multiple issues can be introduced and considered in context through a series of "as applied" assignments. Students will also be prepared better to fend for themselves--the course is now oriented more toward capacity building through deep knowledge and deep process exercises. At least that was the hope.
It was a hope only partially realized. For version 3.0 the class did a couple of new things. First was a greater emphasis on sustainability as it has been developing over the last several years. Second was to make more deliberate connections between the discourse of philanthropy, that of human rights, and that of sustainability in the construction of norms, and to their transposition to private law based international governance regimes. Greater emphasis was placed on the role of student led learning through intensified research and presentations built around the core pedagogy of the course, which is based on a series of group presentations that reflect research on the key areas of CSR and which ultimately are used as the basis for a final paper.
Student led learning models, however, serve as a great way to expose some of the weaknesses of teaching approaches, as well as of important gaps and misplaced focus on materials. In this case, running through the course in Fall 2019 revealed five important weaknesses.
The first was that the continued focus on corporations at the center of the CSR learning project was at best a distraction and a worst a contributor to misunderstanding. The responsibility of enterprises increasingly is not about the institution of the corporation but rather it is about the institutionalization of production. To those ends, corporations and their unique characteristics are important but hardly need centering. Rather it is the forms in which production is organized, whether to not based on ownership relationships and whether or not arranged around the corporate form, that better refocuses the materials. The solution here was to refocus the class from a primary emphasis of the corporation and by extension the multi-national corporation), to the enterprise, however organized.It was in an effort to refocus the materials along those lies that the 4th version of the syllabus was produced. The section on remedies was modified to center on the OHCHR Accountability and Remedy Project (ARP). That turned out to be a much cleaner means of organizing the discussion of remedy--especially its technical and procedural aspects. That also provided the students with an excellent means of recapping the course content. I was disappointed in the focus on due diligence. It could have been better integrated into the materials and developed as a theme throughout the semester. That may provide one of the methodological themes of the course. The shift in the focus on the corporation to economic collectives was an improvement. But it is one that needed further refinement. The interplay between legal, political, and economic conceptions of economic collectives and of production might have been better developed. In the future the emphasis will be on the process of production rather than the more technical aspects of the law of enterprise organization. That will also better respond to the role of risk in CSR. This version proved to be better at getting this point across. The risk mapping exercise was refined but it could be improved by narrowing its focus. This is especially important because, placed near the start of the semester, it requires more guidance for students.
The second is related to the first point. Here I noted that students have a much more difficult time understanding risk, and especially the normative dimensions, of risk and risk management. This is especially important in the context of CSR, which is in part driven by emerging cultures of compliance, accountability and risk management. And all of those are more and more understood as shaped by a core premise of risk mitigation that is based on the embrace of prevention-mitigation-remedy frameworks. The solution here was to move from an emphasis on institutional form (tough that remains an important element of study) to an emphasis on risk and risk mapping. That, in turn, requires the student to understand risk as a function of activity rather than as a characteristic or organization. It moves our focus from an institutional to a relational approach.
The third was the failure to understand and emphasize the critical importance of discursive approaches to CSR. That dimension is not only important for understanding how one speaks about CSR, and conceptualizes its parameters. But it is also a central element that shapes its regulation, and ultimately the way states and others seek to legalize emerging normative conceptions of CSR. More specifically, the interactions of discourses of philanthropy (and its structures centered on enterprise targeted wealth transfers), of labor rights (and their structures especially through the discourses structures of the ILO), of human rights (as the ordering principle around which a socio-legal culture of human rights harms that ought to be remediable), and of sustainability and climate change (understood not just as environmental and bio-diversity, but also as a human de-centering approach to the organization of economic activity), produce strong effects on the way in which these discourses are translated int practice, expectations, and law.
The fourth was the failure to adequately integrate remedies into the CSR discussion. Remedy has tended to be the weak link in the construction of CSR systems. The discursive elements are finely evolved, to be sure. But the integration into operating systems is still a work in progress. More importantly, perhaps, the integration of enterprises within remedial frameworks remains substantially unexplored (again despite the refined development of its discursive elements especially among elite civil society and international functionaries). Lastly, remedy itself remains highly controversial in virtually all of its elements. These include the incorporation of remedy into normative "prevent-mitigate-remedy" frameworks, the locus of remedial venues (states, judicial. non-judicial, or private organs), and the very nature of remedy. This last point has become important as human rights focused CSR remedy has tended toward a sort of harm principle, while philanthropy tends toward disclosure and civil fines, and sustainability toward rectification in the style of administrative organs of state. The UN Office of the High Commissioner's ARP (Accountabili8ty and Remedy Project) nicely captures many of these tensions and trajectories. As a result, the course shifted focus in remedial elements to its study through the ARP lens and by concentrating on the integration of private and state based remedies.
Lastly, by the end of the third iteration of the course it had become clear that the explosion of normative materials was proving a challenge for the students. It was not just a matter of organizing these normative sources; the problem ran deeper. CSR is in its infancy--and so are its norms. It is also transitioning between discursive centers (labor, human rights, good citizenship, and sustainability) each of which produce their own interpretive systems as well as an ordering of meaning that sometimes creates problems of coherence. While it is important to introduce the student to all of these vibrant sources, it is also necessary to provide students with a deeper grounding in at least one aspect of governance. To that end, the course will draw on the OECD's Due Diligence Guidance for Responsible Supply Chains. These provide sector specific frameworks which will make it easier for students to develop deeper knowledge in a more specific area. Study of these will be undertaken through the student presentations, starting with the first risk mapping exercise,and ending with a consideration of sector specific approaches to remedy.
But the most important lesson of Version 4,0 was the need for greater and varied student engagement with the materials. For this semester students were required to produce two group projects three group reports, and a final paper that is based on the reports and presentations. The object of these were to provide a basis for student application of the more conceptual materials reviewed in class to the real life operations of an assigned enterprise. The process of transposing theoretical to applied learning appears to be particularly effective in this context. More important are the class discussion of these group assignments. The object here is to draw some larger insights from the ways that each of the assigned enterprises embed these critical aspects of CSR into their corporate culture, how they translate these responsibilities into internal rules with applicability along their production chains, and the way that they have met the challenges of changing standards and expectations. This is particularly important to drive home the framework of compliance-accountability cultures, and the emerging relationship between states and enterprises. It workded resonably well this year, but requires refinement to provide students with more guidance so that they can maximize the value added of this engagement for their learning. In addition, more emphasis might have been paced on the pedagogy of presentation, analysis and engagement in group settings.
For this Version 5, some changes were made to reflect the substantial changes that have occurred since 2020. There is a greater emphasis on due diligence, on the new mandatory measures being enacted by states, and on the re-centering of CSR from a human rights orientation to one that moves more toward sustainability and climate change. It follows below. Engagement most welcome.
SYLLABUS
This Syllabus consists of a (1) Course Concept Statement, (2) Statement of Course Content and Structure, (3) Summary Syllabus (With Weekly Discussion Themes), and (4) Detailed Syllabus With Problems and Assigned Readings.
Course Concept Statement:
“The past few decades have seen an increasing scrutiny of the impacts – both positive and negative – that companies have on the societies in which they operate. A broad debate is ongoing, in which a wide variety of societal actors, . . . are arguing that both states and corporate actors have a role to play when it comes to fostering environmentally and socially sustainable business strategies and operations around the globe. The search for adequate responses to such scrutiny is reflected in developments in the societal, political and academic debate on three separate but interrelated concepts: corporate social responsibility (CSR), business and human rights (BHR) and responsible business conduct (RBC).” (Liesbeth Enneking & Jeroen Veldma, ‘Towards Responsible Business Conduct in Global Value Chains: Relevant Legal Developments in the Netherlands,’ Erasmus Law Review 4:1-5, 1-2 (2019))
Corporate social responsibility (CSR), sometimes referenced as responsible business conduct (RBC), and increasingly viewed through the lens of human rights and sustainability, has become one of the most important drivers of business culture, public policy and therefore, of economic regulation all over the world. corporate regulation. Though it manifests quite differently in states and international organizations, and though its normative principles are producing quite different models of the ideal forms of CSR and RBC within a human rights and sustainability context, the conversation of economic policy, especially around the best practices for economic production, is unavoidable. Liberal democratic states tend to see the discussion through the lens of the market and market integrity, based on principles of individual autonomy and choice. Marxist Leninist and some developing states tend to see the discussion through a development, anti-colonialist, and collectivist lens which puts the state at the center of an ordered regulatory universe.
Within both systems the scope and application of normative principles—human rights and sustainability—is also subject to great interpretive variation. For some actors, the fundamental principles of economic, social and cultural rights (either of individuals or of social collectives, like states) must be privileged in any CSR/RCB project. For others, the fundamental principles of civil and political rights is the starting point for any conceptualization or realization of CSR/RBC projects. In addition, there remain substantial groups of people who remain skeptical of the premises of the CSR/RBC project as a whole, or of the need for the state to interpose itself in that conversation. Likewise, there are groups who see in the CSR/RBC project the near perfect vessel for the realization of more transformative projects. At their extreme these transformations might include projects that (a) reject the autonomy of markets, (b) reject the privileged position of those who aggregate capital to engage in economic activity, (c ) characterize private law in economic organizations as a privatized form of public administrative regulation subject to state direction, (d) understand the primacy of politics over economics and collectives over individuals, (e) view the legalization and judicialization of economic activity as a necessary step to the reconception of economic activity as an expression of public policy objectives, and (f) value international law making as the ultimate approach to the global rationalization of a new normative economic order driven by public law and collective politics.
These are the larger themes that frame this course. Though it is titled “Corporate Social Responsibility,” the course uses CSR as an analytic platform through one students can be introduced to the historical development and conceptual origins of the societal expectations around economic activity, its current and its current manifestation as law and policy, and its likely future course.
Economic actors (and that can be anyone or ant collective that engages in economic activity), can be understood as operating at the center of a number of “responsibilities.” These actors are understood to have economic responsibilities; these include creating enough value to justify the activity and to offer returns (in the form of dividends, salaries, or other things of value) to all of its stakeholders. These actors also have legal responsibilities; they are understood to be an overarching duty to comply with law. By the 21st century this had blossomed into what is now understood as compliance and accountability cultures that serve as a core ordering set of premises for business enterprises. These actors also have political responsibilities; these involve concepts of good citizenship and avoidance of the corruption of the political model (democratic, development, or Marxist-Leninist) by assuming ort supplanting the role of the political apparatus (government or government managed societal organizations). These actors also have normative responsibilities. Normative responsibilities include not just those embedded in the “rules” that define economic, legal, and political obligations, but also those expected within the networks (or communities) in which economic activity is undertaken. All of these together may be taken to define the scope of the societal responsibilities of economic actors.
Nonetheless, as the opening quote emphasized, the language and vocabulary of the field has been changing even as its scope has expanded. Students should expect to develop some sensitivity to the way that the language and vocabulary of the field has not only changed, but also the effect of those changes on the political and ideological undertones of word choices. Thus, for example, the problem in contemporary usage of the term “Corporate Social Responsibility.” That phrase has become problematic for some. The problem is the way that some users of the term situate it in a historical and ideological context in which CSR represented the embrace of a particular form of the expression of societal responsibility (primarily through charity) and the application of the principle that separation between the public (political and collective) and private (individual and economic) spheres. Whether or not this is accurate is less relevant than the reality that some influential commentators and policymakers act as if it were so. For example, by the third decade of the 21st century the term CSR had appeared to become somewhat old fashioned; “‘CSR is dead. It’s over!’ declared Peter Bakker, president of the World Business Council for Sustainable Development. Bakker argues that leading companies are already going way beyond traditional CSR by integrating sustainability into all aspects of their business operations in recognition that business cannot succeed if society fails.” (Roel Nieuwenkamp, “2016: CSR is dead! What’s next?” OECD Insights (22 January 2016)).
And yet it is possible to suggest that any announcement of the “death” of CSR as a critical concept in the management of economic activity is premature.
The term “corporate social responsibility” is still widely used even though related concepts, such as sustainability, corporate citizenship, business ethics, stakeholder management, corporate responsibility, and corporate social performance, are vying to replace it. In different ways, these expressions refer to the ensemble of policies, practices, investments, and concrete results deployed and achieved by a business corporation in the pursuit of its stakeholders’ interests. (Matteo Tonello, “The Business Case for Corporate Social Responsibility,” Conference Board 26 June 2011).
CSR, as both a concept and the term used to describe those concepts, is part of a vigorous global debate about the language, concepts, and methodologies used by states and other actors to develop a system of values, expectations, and accountability mechanisms touching on the way in which economic activity is undertaken anywhere on earth. As a consequence, CSR is as useful a term as any of its competitors to describe a complex interplay of economics, politics, law, and value systems that together constitute the way in which economic activity is judged, valued, and ultimately regulated.
More importantly, CSR provides students (or at least those students in this class) with a unifying framework within which it is possible to begin to understand the shifting language (and its accompanying narrative) around which CSR is itself created, understood, and valued. These languages (and the way they value economic activities and shift the focus of regulation) can be reduced to three distinct clusters. The first is the language of philanthropy; it is the traditional language of CSR and one that detached economic activity from social duty except with respect to constraints on relationship with labor. The second is the language of human rights; this centers principles of harm measured against individual human rights, resulting from economic activity. The third is the language of sustainability; this centers the interaction of economic activity with issues of environmental management (reservation) and its effects on human rights. In this class, the CSR is understood as the umbrella term to describe the way that these distinct narratives of responsibility (of people, societal collectives, states, and international public and private organizations) affect the way in which society approaches the regulation of economic activity. Around that term the class will examine the emerging common language used to rationalize (in public and private law, through markets, and within international legal and normative projects) the conceptual lenses through which economic activity is given meaning and embedded into world views (normative ideologies) within which such meanings can be valued, assessed, and managed.
Like the subject itself, a course built around CSR (as an organizing concept) is inherently hybrid in its nature, character, and as manifested as both law and policy. Its governance trajectories touch on the essence of law and the lawyer's craft in a changing world in which the authority and character of law is itself changing. Its normative trajectories speak to politics, ethics and morals, as well as to the fundamental organization of cultures of human interactions in the economic sphere in a changing world in which the desire to institutionalize social and moral systems across borders is growing. Its accountability trajectories touch on the fundamental issues of the identification of those actors (states, economic, social, religious or other collectives, or individuals) are assigned the normative duties (understood as CSR values and expectations) and the extent to which others are assigned roles in managing systems of accountability.
Teaching CSR, then, involves more than the traditional identification of formal (and sometimes informal) legal structures, applying them within to for the purpose of managing social or political values and objectives), and then chronicling their development through formal (and sometimes informal) structures of dispute resolution (courts) or political-administrative apparatus of states (and sometimes of enterprises within their production chains). It involves as well the understanding of the way that one speaks about the issues (its language) shapes its governance and normative trajectories. This assignment is more somewhat more complicated in an era of globalization in which the old and straightforward authority relations have given way to a more diffuse exercise of authority of state and private actors. Today states may engage in economic activity globally while private enterprises maty be delegated substantial regulatory authority.
To begin framing CSR, it might be useful to start by considering two questions that dominated a century-long debate about the economic, social, and political role of economic actors operating in corporate form: (1) Whom must economic activity serve? And (2) to what extent should the regulation of the entities through which economic activity is undertaken be left to the market, to private ordering (contract law) among corporate stakeholders, or to public regulation by the state or international bodies? Both of these questions reflect an even more fundamental question, the answer to which remains unresolved: What is the essential nature of economic collectives organized for the efficient undertaking of economic activity, especially when operating in corporate form? Are these autonomous communities, like a nation-state? Might they be understood as the sum of contractual or mandatory societal relations among some of the people with stakes in the joint enterprise? Or are these organizations merely vessels, and in the corporate context a complex commodity, property in the hands of their shareholders? And to these questions must be added the fundamentally transforming questions necessary in the wake of the establishment and dominance of the structures of globalization on economic, political, and social activities: (1) do entities (again and especially those operating in corporate form) stand at the center of the regulatory structures of economic activity or are there better objects through which regulatory objectives can be met? (2) to what extent does law (and the nation-state) serve effectively to manage the behaviors that in the aggregate comprise organized economic activity, or even behaviors of or in markets; and if not what role for private ordering?
The first set of questions remained highly contested through the end of the twentieth century (Larry Catá Backer, ‘Multinational corporations, transnational law : the United Nations' norms on the responsibilities of transnational corporations as a harbinger of corporate social responsibilities in international law,’ 37(2) Columbia Human Rights Law Review 287-389 (2006). These formed the kernel around which the conceptualization of CSR, and regulatory initiatives, were developed. The issue of the focus of regulation remains controversial but is critical to the study of the regulatory reality (and potential) for CSR. With respect to these, and early on, Western states seemed to reach an uneasy stalemate about the contours of the debate regarding corporate social responsibility. First it assigned the corporation (a legal person) with the duty of socially responsible action. Second, it limited the legal regulation of that responsibility to what in retrospect is understood as a mandatory obligation to comply with law and as a discretionary responsibility to engage in philanthropic activity. That stalemate was famously memorialized in the great academic debates of mid-century and the grudging legalization of a small element of the field. That small space for legalization then, ironically, dominated and displaced the rest. During that time, it was fashionable (and for academics expected among their peers) to argue, mostly among themselves, about the nature, character, and purpose of the corporation beyond those limits of discourse enforced by the practice community. But influence leaders among the academic intelligentsia (within the law schools at least) knew enough not to stray too far if they wanted to retain their academic reputations.
But these accommodations and the premises underlying them, gave way quickly to the second set of questions after 2000. It was about at that time that the realities of globalization, with its effectively free movement of goods, investment and capital, appeared to explode onto the consciousness of influential people inside the academy, government, civil society and enterprises. With globalization (however understood, and there was little consensus on an orthodox understanding of globalization) as the perceived dominant driver of global economic, and then political and societal, forces, the concept of CSR changed as well. The original stalemate, and its accommodation of corporate charity, no longer seemed to serve the interests of powerful regulatory forces. These forces now worried about the inability of any state or group of states to effectively manage economic activity, or the activities of enterprises operating or domiciled in states, in a context in which the scope of the appetite for regulation had grown to include the effects of economic activity on the social, political and environmental spheres. Yet, these expanding ambitions, targeting a regulatory territory that spilled over national borders, created substantial governance gaps that implicated the value of traditional state-based law systems.
This was the context in which the traditional approach of CSR, and its relation to public power evolved from 1945 through the beginning of the 21st century. On started with the great debates about corporate social purpose as a function of either shareholder primacy or shareholder exclusivity (the later sloganized in Milton Friedman’s famous ‘the social responsibility of business is to increase its profits’), to one over the principles that integrate stakeholders in the calculus of shareholder primacy regimes (Business Roundtable, ‘Statement on the Purpose of a Corporation’ (19 August 2019). Nonetheless, the old stalemate served as the foundation of the new more expansive recognition of social responsibility—one based on the core notion that social responsibility was inherently an issue of profitability, and that profitability (whether for the enterprise or its shareholders) was still the central objective of economic activity. Martin Lipton, one of the most influential US corporate lawyers and thinkers of the issue offered his own interpretation of the refinement of this approach:
The purpose of a corporation is to conduct a lawful, ethical, profitable and sustainable business in order to ensure its success and grow its value over the long term. This requires consideration of all the stakeholders that are critical to its success (shareholders, employees, customers, suppliers and communities), as determined by the corporation and its board of directors using their business judgment and with regular engagement with shareholders, who are essential partners in supporting the corporation’s pursuit of its purpose. Fulfilling this purpose in such manner is fully consistent with the fiduciary duties of the board of directors and the stewardship obligations of shareholders. (Martin Lipton, ‘The Friedman Essay and the True Purpose of the Business Corporation,’ Harvard Law School Forum on Corporate Governance (17 September 2020)).
But what to use in place of law? And with respect to what were these additional or supplemental regulatory systems to apply? With respect to the first question there was already a number of answers. National movements towards cultures of assessment and accountability suggested the possibility of privatization of governance within enterprises or systems around which economic activity was coordinated. A movement toward internationalization of norms appeared to drove the creation of regulatory standards from states to public international organizations. At the same time, states resisted the creation of international law. Instead, international standards were viewed as a complement to the growing importance of regulatory governance and the reliance on markets to manage behaviors of economic actors. Regulatory governance and the move toward markets as behavior regulators complemented the growing cultures of accountability and self-governance, adding to it cultures of good governance and risk avoidance. These then intertwined with developments in states that saw in enterprise self-governance a means, not just of deputizing the enterprise, but of holding the enterprise to account for violations of rules the responsibility for the enforcement of which had devolved to the enterprise. In corporate law, for example, the interpretation of the duty of care to include a duty of self-monitoring, the conduct of which might be made available to state prosecutors seeking to enforce law. The relationship could as easily be used to manage the economic behaviors of enterprises as it might be used to devolve the enforcement of other statutory provisions. All of these movements occurred as globalization, and the changing demand for regulation, broadened the scope of the expectations for conduct by actors in the course of their economic activities beyond charity. But how far?
These are the questions that are currently the subject of wide ranging debate among law and policy makers, lawyers, civil society and enterprises. The way these questions are being answered are finding their way into national lawmaking and regulatory systems, into the self-regulatory systems of enterprises, and into the efforts of non-governmental organizations to hold others (and ultimately perhaps themselves at least) to account. This is the context within which influential actors have sought to provide a definition for CSR. In the dynamic context within which CSR is now considered, efforts at definition have appeared to become much more prescriptive (normative) than descriptive (in the sense of seeking to explain). It also follows that there is little consensus around definition. Where definition is vested with a political character, and where the political objectives of major actors are quite diverse and contradictory, it is unlikely that any orthodoxy of meaning is possible. Among the definitions with some influence are those that speak to CSR as a commitment to contribute to economic development (World Business Council for Sustainable Development); a comprehensive set of values and principles grounded in legal compliance (International Chamber of Commerce); a framework for protecting enterprise long term profitability (British Standards Institute); a commitment to take into account social, economic and environmental impacts of business operation along with financial implications (Australian Government); management practices that minimize negative impacts and maximize positive impacts of company management practices (Canadian Center for Philanthropy); a process of managing the costs and benefits of business activity to all stakeholder (World Bank); responsibility for impacts of business decisions on society and the environment through transparent and ethical behavior (ISO 26000:2010); the responsibility of enterprises for their impacts on society (European Commission, 2011); and a commitment to international public human rights principles enforceable through law (Amnesty International).
Emerging theorists, like Birgit Spiesshofer (Responsible Enterprise (CH Beck, 2018, p. 6-11) has characterized the contemporary search for infusing the term CSR with meaning amounts to its reconstruction as a set of guiding principles or leitmotif, which produces normative-cultural expectations for enterprises, that in turn are implemented through law (broadly understood as regulatory expression with varying degrees of ‘bindingness’). The object of CSR, thus framed, is to guide thinking rather than to a set of ideologically specific principles and conduct rules. That leitmotif, though, might perhaps have three distinct strands.
The first and most well-known is that of corporate philanthropy. Much of what passes for CSR is sourced in the concepts of charity. Charity remains a strong driver of CSR related activity in many states, all peoples are entitled to especially in Asia. Indeed, in some places, charity is itself the language if implementation of other CSR relate normative objectives, or the means by which CSR breaches might be remediated. But charity is no longer visualized in 19th century terms. Charity has become part of the business model of many enterprises. In some cases and organized in the form that mimics foundations, these operate as an integral part of the business of the enterprise. Charity, then, serves as a means of social engagement to the benefit of the enterprise. By the 21st century, that business model could then be used to pivot the form of charity to grants and other projects of assistance aligned with human rights, development, and more recently sustainability, including climate change mitigating programs.
The second are human rights related obligations. The shift toward globalization, and the internationalization of trade produced governance gaps, and the need for accountability. But accountability to what standards? Increasingly the central standards, at the international level, were seen as grounded in the human rights systems and norms that had been developed with increasing sophistication within international institutions. Human rights normative structures increasingly were understood as providing the baseline behavior norms to which enterprises ought to conform, whether they operated. Thus, if human rights provided the norms, philanthropy provided a means. Subsumed here are currents of societal expression around the principle of national or collective development—especially for states that have for almost the last century sought to transform themselves after liberation from a long period of territorial colonialism from which contemporary states emerged in many parts of the world (UN General Assembly, ‘Declaration on the Right to Development,’ GA/41/128 (4 December 1986 (“The right to development is an inalienable human right by virtue of which every human person and all peoples are entitled to participate in, contribute to and enjoy economic, social, cultural, and political development, in which all human rights and fundamental freedoms can be fully realized.” Art. 1”)).
Lastly are the emerging principles of sustainability, environmental harm (including issues of bio-diversity), and climate change. Once understood as largely apart from the business of enterprise conduct, the last decade has seen the growing consensus of the responsibility of enterprises for their actions with environmental effects. More important, as the challenges of global warming and climate change have accelerated, and in the face of the growing privatization of governmental responsibilities, sustainability objectives have come to be seen as important societal objectives of economic activity. By 2018, international institutions began to view the right to a clean, and safe, environment, along with sustainability practices for the protection of the planet for the enjoyment of future generations as much a duty of states as a responsibility of economic actors. By 2022, the UN General Assembly has declared the right to sustainability as a human right—a turn that seemed to align CSR as an expression of human rights, development, and sustainability, but which was, in turn subject to some criticism (Larry Catá Backer, Self-Centered Human Rights: UN General Assembly Adopts Resolution Declaring Access to a Clean, Healthy, and Sustainable Environment is a Universal Human Right, Law at the End of the Day (29 July 2022).
Through the lenes of the ways in which CSR is manifested, then, CSR/RBC begins on appearance of an aggregation of behavior frameworks grounded in enterprise responsibility for philanthropy, for national development, for the respect of human rights, and for sustainability. And these manifestations beyond the core principle that economic activity must conform to law. For states and international organizations, these clusters of objectives increasingly represented both a systematization of behavior norms as well as a framework for structuring compliance. For enterprises, on the other hand, philanthropy, human rights and sustainability could be understood as obligation (responsibility grounded in legally mandatory and markets driven measures), as well as in the methodologies of compliance. That is, these strands of CSR began to take on the characteristics of compliance, of risk management, and of methods of remediation. Accountability, compliance, risk management and objectives-based decision-making are concepts that enterprises understand. Nonetheless, the conceptual framing of these principles affected not just valuation (the cost of compliance) and its mechanics (the forms of compliance and the nature of accountability); it also (re) shaped risk. In the form of principles of prevention-mitigation.-and remedy embedded in CSR related compliance systems implemented through disclosure based accountability systems giving rise to liability, the downside consequences of risk in economic activity, especially where the risk might also produce actionable or markets based punitive responses, might begin to reduce incentives toward risk taking. That produced a move toward a governmentalization of economic activity that some feared might change its character to one more closely resembling a public bureaucracy (Larry Catá Backer, ‘The Emerging Normative Structures of Transnational Law: Non-State Enterprises in Polycentric Asymmetric Global Orders,’ 31(1) BYU J. Pub. Law 1 (2016) ). More fundamentally and especially where accountability incorporating principles of strict liability (e.g., no valuing the cost of human rights harm against benefit, pricing harm for compensation but imposing penalty even for compensated harm) appear also to contribute to changes in the way in which collectives approach the feasibility and engagement in economic activity.
Nonetheless, the three strand understanding of CSR can serve as a useful analytical baseline for the study of CSR’s methodological core. That core can be expressed in law, in social norms, and in the private arrangements of parties disciplined by markets. For our purposes, then, it is important to understand this wide spectrum of meaning, without the necessity of choosing among them. It is also important to consider that while there may be general consensus about the broadening of the scope of the societal embedding of economic activity, its manifestation, as well as its governing ideology, remains highly contested. It therefore becomes as important to understand points of divergence as it does to examine specific manifestations of CSR on the ground in any one place and at any one time. Within very wide parameters of law, social norm and the operational constraints of risk and compliance in business behaviors, the normative character of CSR can be understood within three quite broad conceptual categories.
To aid in that analysis, it may be useful for the student to organize the categories through which the three key areas of CSR—charity, human rights, and sustainability—may be expressed in the following way:
First, it focuses on enterprises (economic collectives)--that is on institutions organized for the purpose, principally, of economic activity. In a sense, CSR has outgrown its traditional starting point—the aggregation of capital within Western style corporations which became ubiquitous by the beginning of the First World War in Europe, and the Western Hemisphere. It is no longer possible to speak to the social responsibilities of economic activity as solely confined to the very peculiar form of corporations. Instead, the “corporate” in CSR is understood to refer either to enterprises (collectives engaged in economic activity) or to the organization of economic activity itself (within which all sorts of collectives play a role).
Indeed, globalization has to some extent transformed the “corporate” part of CSR, shifting the focus from the corporation to three distinct but related objects. The first is the enterprise (in whatever form organized). Enterprises refer both to constituted legal entities and to the networks of enterprises that create coordinated economic activity (usually understood as the transnational or multinational enterprise). The second is the process of production, especially production across borders. The process of production can be understood as a chain of connected activity (the production, value, or supply chain, for example), or it can be understood as the system within which production occurs, with respect to which enterprises contribute. The third is the relationship between economic production and its regulation. If production chains reference the aggregation of activities necessary to systems of producing and exchanging goods and services, then regulatory chains reference the way in which the authority to regulate production is distributed among producers and the state. In this sense the “corporate” part of CSR has merged with the compliance and governance part of production.
To some extent (along with the state and other actors) these economic collectives manage; they are units of functionally differentiated governance the scope of which is now contested through the language and expectations of CSR/RBC. This moves the project of business from one that is purely centered on shareholders and profit maximization, to one in which value maximization in which costs are more widely conceived and action taboos more clearly expressed. Collectives and collective activities, then, are at the center of the “corporate” field. The focus is realigned toward the individual within a collective that is not the state. As such, also embedded within it are those organizations and institutions that operate within or in relation to that sphere. At its limit, it touches on all organizations other than the state. The third is the expansion of the concept of risk and risk management to include the costs of failures to prevent, mitigate or remedy harms resulting from CSR related expectations of business conduct. The enterprise, in this sense, can be understood both as a generator of wealth and as a producer of costs. The risks of incurring those costs have now been expanded to include not just the direct costs of production of goods and services, but also the harm it may produce to rights holders involved in or affected by economic activity. From the perspective of CSR, then, the enterprise can be usefully understood as a generator of economic activity and of risk.
Second, CSR focuses on the societal role of enterprises and economic collectives more generally--that is on the structures and frameworks within which non-state organizations (and specifically enterprises) order themselves in and of themselves that are found outside the formal structures of state and government. That has been one of the greatest points of difficulty for the study of CSR by lawyers (at least). It is hard enough to conceptualize the application of a legal system to aggregations, processes and systems that are themselves not precisely recognized in law. Traditionally that meant that lawyers (and the educational sectors designed to train/socialize them) effectively ignored CSR, except to the extent that law was involved. CSR was relegated to the social sciences and the business schools. To some extent that is still true. In most jurisdictions CSR was of interest to traditional jurists only to the extent of the law’s interest in the regulation of corporate charity; in many jurisdiction it still does mean only that.
Again, globalization has helped transform the “societal” part of CSR. In this case, an increased focus on societal roles also suggested a legal basis for such conduct. Thus, from early in the 2000s one saw a movement, especially ay the international level, to transform the societal sphere into legal obligation—at the national or international level. Yet simultaneously, the drive toward markets based regulation also suggested that the societal be institutionalized and made obligatory, but outside the traditional mechanism of the public sector. That tension in approach is compounded where the structures of regulation are themselves not centered in law either. One speaks here of those direct relations between the enterprise/system and its communities; those relations are sometimes within and sometimes beyond the state and sometimes in a space ceded by the state. But these societal relations can have regulatory effect; and the state may well seek to legalize some to all of those societal relations.
Third, CSR focuses on responsibility, and especially on responsibility related to conduct. Here on speak to the responsibility of enterprises or of the systems or processes of production within the societal sphere, that is on the autonomous obligation of enterprises to embed itself within the regulatory structures through which it engages in the communities where it operates. Responsibility is to be differentiated from obligation. Here one also touches on responsibility that may be mandatory and imposed through law or by states otherwise, and conduct that is responsive to markets driven incentives. Responsibility touches on an obligation for which one is accountable—accountable to oneself or to others. These are acts which one is expected to do; that expectation arising from others or form oneself, the accountability for which is embedded in the relationships between the parties. These are responsibilities that oblige action and create consequences. These interactions are neither dependent on nor necessarily connected with the impositions of law. That is, these are responsibilities that exist autonomously of law, even if they are incorporated into law. They have a life of their own—in the way that natural law or religious obligation might be understood to exist in relation to law but not as something that proceeds form law. It follows that the societal responsibilities of enterprises are not to be confused with the mandatory obligations to obey the command of law of a government with the authority to subject its object to its authority. And yet the societal responsibilities of enterprises share with law the notion of authority and leadership, of accountability and of autonomy embedded within the strictures of the norms that frame responsibility.
CSR, then, occupies a conceptual space between the social and the legal, between the moral and legal order, between economic and political activity, between the public and private, and between the national and inter(trans)national. Such conceptual spaces complicate responses; make convergence more difficult, and produces a near constant state of instability that appears inherent in the character of the field. This instability is especially pronounced in the context of globalization. That context at once appears to shift public regulatory power to state collectives (energizing a robust sphere of public international law), even as it also appears to shift regulatory power to the private sphere. This instability thus manifests itself in contests for control of regulatory space--through robust projects of legalization and judicialization of the societal sphere in general, and the obligations of enterprises specifically--or through the privatization of the legal sphere as enterprises themselves are deputized to undertake the role once reserved to states. It is at this point that corporate social responsibility becomes interesting to the law--the lawyer, to the legislator, to the administrator and the courts.
Yet that convergence also reveals the vibrancy of governance beyond the control of law, and of the state. It is to these issues that the course is directed. This course provides an introduction to the law and policy issues that touch on the responsibility of enterprises for their business activities. It provides an overview of corporate social responsibility (CSR), as a subject of legal regulation within states, as a matter of international law and compliance beyond the state, and as a tool and methodology of corporate governance and finance with governance effect through contract. It focuses on the contemporary interplay between large corporations and governments, intergovernmental institutions, investors and non-governmental organizations (NGOs).
Over the past several decades, economic actors, and especially those operating as enterprises, have seen the development of efforts to impose on them certain responsibilities for the consequences of their decisions and to change the way that corporations view the scope and character of their obligations to inside and outside stakeholders. These efforts have produced both law at the domestic level and norms and structuring principles at the international level. During its evolution, CSR has progressed from legally tolerated traditional philanthropy and a consignment of the issues to the “social sphere” of moral and ethics, to encompass a much broader palette of actions and objectives. CSR now encompasses not only what companies do with their profits, but also how they make them in virtually every respect of their operations. Through their stakeholder relations and business models, companies can develop policies and practices to respect human rights and help address environmental and social concerns. These developments have occurred at the local and national level through law and the adoption of principles and expectations of conduct, they have also seen a strong growth in international soft law standards touching on corporate responsibilities to respect human rights, for sustainable business practices and for the protection of the environment.
There are many factors that have contributed to increased expectations for corporations to adopt CSR programs as governments have changed the scope and thrust of their regulatory and ownership roles, and as regulatory governance principles that favor of market-based approaches have become more compelling for many states. Companies have been encouraged through law and governance mechanisms to identify opportunities for innovative products, technologies and business models aimed at proactively solving social or environmental challenges. Many enterprises have developed internal governance structures that embed a governance framework for CSR within their international corporate governance.
As global production chains become more important, these internal enterprise governance systems begin to have profound effects throughout the entire production process, affecting workers and other partner enterprises in many states. CSR has also become a tool for investors, to mitigate emerging social, environmental and governance risks and to identify opportunities for aligning financial performance with social, environmental and governance (ESG) performance. In addition, CSR has become a lever for civil society organizations to influence corporate practice and public policy. The rise of global production produced a growing interest in the development of internal production chain wide systems of governance within enterprises.
This development has resulted, in part, in the acceleration of development of guidance at the international level, especially with respect to systems of monitoring, assessment, and accountability (e.g., OECD Due Diligence Guidance for Responsible Business Conduct (Paris: OECD, 2018), and OECD’s sector based due diligence guidance). Since the second decade of the 21st century, internal enterprise governance systems also have become an irresistible object of national legislative programs, each designed to rationalize and governmentalize the system of compliance, accountability and assessment grounded in prevent-mitigation-and remediation principles. By the start of the 3rd decade of the 21st century, mandatory disclosure and administrative-regulatory measures were becoming both more common and more accepted: disclosure systems around specific breaches of human rights (human trafficking and labor exploitation), or around the control of global production through the national home state regulation of mandatory human rights due diligence systems delegated to the apex enterprise managing a production chain based on the regulating state (e.g., French Loi de Vigilence, German Supply Chain Due Diligence law; EU Human Rights Due Diligence requirements).
Advocates have seen CSR as a cluster of premises, which when institutionalized within the governance structures of economic actors can serve as a means of addressing governance gaps where government is weak. In contrast, critics have seen CSR as an intrusion of corporate interests in the public sphere where government is strong. More recently critics have seen in internationalism of CSR a profound and direct attack on state sovereignty in the service of the objectives of autonomous multilateral institutions that do not reflect local wishes. At the same time, the limits of voluntary CSR measures as a transformative agent are also becoming clearer, and are raising questions about the need for a recalibration between the public and private domains.
Lastly, just as the scope of CSR has changed, and changed dramatically over the course of the last century, so has its discourse, and the concepts around which CSR is centered. At the beginning of the 20th century one spoke about CSR through the discourse of charity. And one battled over the value of CSR as charity by reference to the purpose and focus of corporate economic activity. By the middle of the century, charity became the means through which economic enterprises could contribute to society and the stability of the social and political order. This was the external discursive forms of CSR. But CSR early on also developed an internal discursive form. This internal discursive form centered labor and labor relations. Unlike its external discourse, labor and labor policy were not considered CSR, but rather formed part of the issues of production. And yet, labor became a matter substantially more entwined with public values and obligations after the success of the Bolshevik Revolution in Russia and the formation of the Soviet Union. In the wake of that victory and the development of a Communist International bent of global worker revolution, the issue of labor became critically important to the discourse of the stability of the social order. And thus, an acceptable approach to labor by enterprises began to be understood as a part of the social responsibility of business. This acquired an international organizational form, and the development of a language of labor rights and state-business duty, with the formation of the International Labor Organization (ILO) in 1919.
This initial external and internal discourse of CSR—one focusing on charity and labor, began to give way to a different way of understanding the scope of CSR and the obligations of economic enterprises after 1945. In the aftermath of the Second World War, a substantial political transformation of the global began to occur, one marked by decolonization. In the place of labor and charity, the public obligation of development, and more specifically, the development of former colonial states, began to play a more prominent role. This was a discourse grounded in technology and wealth transfer, of the New International Economic Order, of unequal trade, and of the obligations of enterprises (and their home states) to contribute to the development of former colonial spaces. CSR’s discursive tropes changed with the times. Its internal discursive forms now became centered on ethics—a discursive trope that is still the dominant form of CSR study in many business schools. But its external trope became far more important for purposes of CSR as a system of behavior management and governance. This development sensitive approach to CSR was manifested most decisively by the creation of the Organization for Economic Cooperation and Development (OECD) and its decisive turn toward the development of informal standards of behavior applicable to the worldwide operations of enterprises. The principal focus of these standards, the most important of which was the OECD Guidelines for Multinational Enterprises (first distributed in 1976), was on the behavior of economic enterprises within its supply chain, much of which was located in former colonial territories. This proved to be the channel through which CSR was able to expand eventually into an RBC project (e.g., OECD, Due Diligence Guidance for Responsible Business Conduct (Paris: OECD, 2018). Charity and labor policy now becomes subsumed with a larger set of core CSR issues—governance, taxation, corruption, non-interference in local affairs, technology transfer and the like.
By the 1990s, the focus of CSR again began to shift. This shift was meant to align CSR discourse with the accelerating move of international organizations, and an increasingly powerful global civil society, to the language and principles of human rights. Human rights, as a central element of international law had been developing an increasingly rapid rate from its modern institutional origins in the Universal Declaration of Human Rights, and a generation long and quite contentious international process of transforming the principles of the UDHR origins into two treaties, each representing a quite different view of the principal expressions of human rights—the International Covenant on Civil and Political Rights (favored by the US and liberal democratic states) and the International Covenant on Economic, Social, and Cultural Rights (favored by Marxist-Leninist and developing states). The language of rights, and the obligations they created not just in states, but in enterprises, especially those engaged in activities across borders, became increasingly important as the “new” basis of CSR. Over the course of a number of years initially unsuccessful efforts to develop an international treaty on corporate conduct and thereafter a set of Norms for Transnational Enterprises, eventually led to the adoption of the UN Guiding Principles for Business and Human Rights (UNGP). With that, internal and external discursive CSR tropes merged into the discursive language of human rights. Human rights absorbed within its legal and normative structures the older notions of charity, of labor (now labor rights), of development, and of ethics. Human rights becomes the operative language of CSR both within and outside the enterprise. For those committed to human rights as a core rationalizing principle, and the measure, of all economic conduct, the merger of CSR and human rights appeared inevitable. All that was left then was the old divide between those who viewed civil and political rights as human rights first principles, and those who viewed economic, social, and cultural rights in the same way.
But human rights discourse, and its merger with and into the larger CSR/RBC narrative pioneered by the OECD Guidelines and cemented in 2011 with the endorsement of the UNGP, appears now to be giving way to a new rationalizing discourse—the discourse of sustainability. Sustainability is only now developing its rationalizing principles and structures. Its most ambitious expression, like that of human rights, has emerged from an initiative of the United Nations. The Sustainability Development Goals consist of 18 principles that effectively embrace the entirety of the old approaches to CSR—charity, labor rights, development, ethics, governance, and human rights, and added to them environmental, climate change, bio-diversity, and related rights based principles—and fused them all together. But sustainability as CSR appears to be more than the sum of its parts. It is the discourse of a way of understanding responsibility that attempts to de-center individuals. That is a radical transformation from the baseline approach of human rights, labor, development and the like, all of which placed the individual at the center of the discourse. Sustainability is meant to embed the individual with rights, along with the enterprise (and the state) with duties and responsibilities, within a broader framework, where the principal obligation is to the planet, to stewardship, and to the protection of the collective within a complex global ecology. Ironically, CSR sustainability discourse appears to have revived the older division between internal and external CSR forms. Internally, sustainability CSR focused on the way in which the enterprise consumes its productive factors (labor, materials, natural resources) and the extent to which that use is sustainable and fair. Externally, sustainability CSR speaks the language of engagement in local context, of capacity building, and of the impact of economic activity on human and non-human populations. At its limit, sustainability CSR becomes the measure by which even the legal regulation of economic activity (and thus the duty of states) must be judged. Thus, by the third decade of the 21st century, CSR would have become virtually unrecognizable, and its discourse incomprehensible, to people living in the third decade of the 20th century. This is the framework within which it is necessary to study CSR in its theoretical and applied dimensions.
What comes next? That is an open question. As of 2022, for some the answer is an international instrument that effectively rewrites the law of economic activity at a global level around conceptions of human rights. For others it is the decisive triumph of CSR as the mechanisms through which sustainable economic development may be accelerated through ideologically convergent privileging of collective objectives of stability and prosperity. For still others, the future lies in generalizing modalities of compliance and accountability that merge the public and private and that, increasingly, may be quantified and curated in real time through artificial intelligence based models. What has become clear, though, is that the consequences of CSR/RBC as law and regulation can no longer be ignored. It has come closer to center stage whether directly—through measures hardening international soft law, or indirectly, through the delegation of governmental oversight responsibility to enterprises under compliance based administrative structures.
This course, then, seeks to focus the study of CSR on the core institutional space within which CSR is commonly understood to be manifested and managed—the large multinational enterprises and on global systems of production. The MNE are complex organizations are composed of one or more organizations woven together through ownership or contract and creating a set of business relationships that span production chains—the integration of the process of economic activity overseen usually by a corporate enterprise that serves as the apex of global production chains, but has application to enterprises throughout supply chains. The enterprise, embedded in global production within and outside the state serves, in turn, as the object of regulation, including (but not limited to) conventional systems of law. At its limit, of course, the relationship between the MNE and the production chain can be inverted. That is, production chains are complex organizations of economic activity that aggregate all of the steps necessary to draw together material and technological processes to produce objects for sale in markets that exist at every stage in the production process, the management and operationalization of which requires the organization of capital and labor. The emphasis of this course, then, is on the study of the legal and regulatory frameworks, both existing and emerging within states, in international institutions, and within production chains and the apex corporations that manage them. The course surveys the literature and examines topical examples drawn from today's US and global experiences. The object will be to begin to develop a conceptual and “as applied” basis for approaching key questions in CSR law in context: What has worked, what hasn't, and why? What are CSR's limits? What is the future of CSR?
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Statement of Course Content and Structure
This course, then, examines these emerging field of societally informed regulation of economic activity and related developments with a view to informing students, who may become lawyers or policy makers or who may work at enterprises (public and private), of their responsibilities to their clients and employers (or to their enterprises) in relation to CSR duties, obligations and responsibilities in ways that matter to clients and to institutions with authority to affect business behavior. For lawyers, policymakers, and advocates that means examining CSR for its potential mechanisms for business accountability respecting important substantive norms. For future government lawyers that means studying CSR for its relationship with and to legal regulatory tools. For future leaders of public and private enterprises that means understanding the impact of CSR in the cultures of their enterprises and in the role of CSR in economic decision-making. The course provides case studies, conceptual frameworks and tools to help students understand and assess different components of corporate social responsibility and different models of interaction between corporations, governments, intergovernmental organizations, investors and non-governmental organizations. It combines lectures, case studies, class discussions and practical assignments.
The course will be taught in a modified seminar style. Each week’s discussion will be built around a group of materials that suggest the central themes to be discussed. That discussion, in turn, is built around the application of emerging approaches to hypothetical problems. Each of the problems serves to center discussion of the materials assigned. Students will spend the bulk of the class discussing approaches to the issues suggested by the problems for which the readings may offer insight. Each student will be assigned an enterprise (For the most part an apex corporation heading up a global production chain). The student will learn CSR through its application by the assigned enterprise. The object is to teach “law and policy in action” at the operational level, and to avoid, to the extent possible, too great an emphasis on abstract concepts detached form the real world in which they are being applied, and through this application, changed.
The course is divided in five Parts.
Part I serves as introduction. Students will consider a core hypothetical around which most of the issues encountered in CSR can be applied. That will set the tone for the course, one in which the student will be asked to apply abstract knowledge to the concrete problems of enterprises. To that end, students will be broken up into small groups. Each will be assigned an enterprise. This enterprise will serve as the focus of the CSR work for the semester. During the term, students will produce four reports in which the issues studied will be applied. Students will be asked to compare the way in which these different enterprises respond to the challenges of CSR. Lastly, the introductory materials will deal with issues of definition.
Part II unpacks the corporate in corporate social responsibility. The object is to understand where CSR risk may arise within an economic organization, and where such risk within the organization risk should be prevented, mitigated or remedied. That requires a focus on two distinct objectives. The first is to understand the way in which economic activity is organized. Here the student is introduced to the basic building blocks through which responsibility is assigned: entities (corporations, partnerships, joint ventures, contractual and informal relationships). Students are also introduced to baseline concepts in law and policy respecting the alignment of legal and economic organization of economic activity. In this context the difficulties of creating coherence between legal forms and operational realities is explored through the consideration of the concept of the “multinational enterprise.” The second is to understand risk mapping. Students will be introduced to the concept of risk and risk assessment. Students will first consider the way that CSR can be understood as risk generating concepts for business operations. The distinctions between economic, social, environmental, political, and legal risk will be considered. The connection between CSR as a set of risk parameters and business operations will also be introduced. The object here is to align the operations of the institutions through which economic activity is undertaken with the risk that these produce. The student Also considered will be the range of enterprises and systems of production that are covered by CSR regimes—either as legal or societal matters. Part II ends with student presentations, “Risk Mapping and the Responsible Enterprise,” in which students attempt to align business and legal risk within the enterprise production chain. This provides the baseline knowledge necessary for deeper CSR study.
Part III draws students to a study of the alignment between corporate form and CSR responsibility. This part focuses examination on regulatory structures in national, international and private governance systems. The object is to introduce the students to the idea of polycentricity—the existence of plural legal and social systems whose rules are simultaneously applicable to economic actors. Governance gaps are considered, as are the fundamental issue of the source of regulation. These range from one extreme where the state is responsible for all regulation through law, to the other extreme where states are the protectors of the integrity of markets through which behavior is regulated through a constant interaction among actors based on consumption choices. of Students next consider enterprise self-regulation and third-party certification, along with its legal effects. The trend toward data driven compliance systems is also introduced. Students will then make their third presentation—an examination of how enterprises incorporate CSR into their management and decision making.
Part IV considers the “societal” in CSR. These materials serve as the conceptual heart of the course. Philanthropy and the legal regulation of social responsibility is first considered. Students will consider the legal framework in the U.S. and other states focusing on philanthropy and the notions of corporate waste. Next, students will examine CSR and human rights regimes. Special attention will be drawn to the development of human rights based normative systems for the regulation or management of economic activity. Lastly, students will consider the evolving systems of sustainability-based CSR responsibilities. Students deepen their exploration of the development of philanthropic, human rights, and sustainability based CSR initiatives through close study of the practices and systems of the enterprises they have been assigned. Each group will present reports on their enterprise’s philanthropic, human rights, and sustainability CSR initiatives. Students will be introduced first to responsibility as transparency. These include emerging national law-based disclosure regimes. But it also includes the use of markets driven management of behavior, the use of transparency and compliance systems by government to monitor and hold enterprises accountable.
Part V ends our examination of principal trends in CSR. It examines the “Responsibility” part of CSR with a focus on remedy. Students are first introduced to international and soft law approaches—with a focus on the mechanisms in the OECD Guidelines for Multinational Enterprises and its NCP system. The scope of non-judicial grievance mechanisms are considered through the work of the work of the UN High Commissioner for Human Rights. Students then consider the legal effects of CSR Codes. Lastly students consider the emerging international regulatory initiatives, focusing on the UN Human Rights Council’s Accountability and Remedy Project (ARP) which was created to formulate credible and workable recommendations to enable more consistent implementation of the UNGPs but which also has substantial application to issues of sustainability. The ARP Program consisted of three phases: (1) ARP I, enhancing effectiveness of judicial mechanisms in cases of business-related human rights abuse; (2) ARP II, enhancing effectiveness of State-based non-judicial mechanisms in cases of business-related human rights abuse; and (3) ARP III, enhancing effectiveness of non-State-based grievance mechanisms in cases of business-related human rights abuse Time permitting, discussion will also focus on the contemporary efforts to draft a comprehensive treaty for business and human rights. issues of home state remedies and extraterritorial application of law.
The course ends with a last student presentation, examining enterprise grievance mechanisms, anti-corruption efforts and assessments of reporting. The presentations will then be used as the basis for student final papers.
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