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“Bluewashing” the Firm? Voluntary Regulations, Program Design, and Member Compliance with the United Nations Global Compact

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Abstract

Voluntary programs have emerged as important instruments of public policy. We explore whether programs lacking monitoring and enforcement mechanisms can curb participants’ shirking with program obligations. Incentive-based approaches to policy see monitoring and enforcement as essential to curb shirking, while norm-based approaches view social mechanisms such as norms and learning as sufficient to serve this purpose. The United Nations Global Compact (UNGC), a prominent international voluntary program, encourages firms to adopt socially responsible policies. Its program design, however, relies primarily on norms and learning to mitigate shirking. Using a panel of roughly 3,000 U.S. firms from 2000 to 2010, and multiple approaches to address endogeneity and selection issues, we examine the effects of Compact membership on members’ human rights and environmental performance. We find that members fare worse than nonmembers on costly and fundamental performance dimensions, while showing improvements only in more superficial dimensions. Exploiting the lack of monitoring and enforcement, UNGC members are able to shirk: enjoying goodwill benefits of program membership without making costly changes to their human rights and environmental practices.

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... Scholars apply a similar range of approaches to studying transnational MSIs, including those with either firms or states as key members. States or firms that join MSIs, such as the Extractive Industries Transparency Initiative (EITI) (Aaronson 2011), the United Nations Global Compact (Berliner & Prakash 2015), or the Kimberley Process (Haufler 2009), make commitments to either general principles or specific policy changes (Eberlein et al. 2014;Rasche et al. 2020). Across differences in rationalist or constructivist theoretical orientation, most scholars share an understanding that for such initiatives to have an impact on member behavior, members must commit to policies that go beyond what they would have done anyway, must actually follow through in implementing their commitments, and finally those commitments must actually matter for measurable outcomes (e.g., Fransen & Kolk 2007;Locke et al. 2009;Berliner & Prakash 2015;Distelhorst et al. 2015). ...
... States or firms that join MSIs, such as the Extractive Industries Transparency Initiative (EITI) (Aaronson 2011), the United Nations Global Compact (Berliner & Prakash 2015), or the Kimberley Process (Haufler 2009), make commitments to either general principles or specific policy changes (Eberlein et al. 2014;Rasche et al. 2020). Across differences in rationalist or constructivist theoretical orientation, most scholars share an understanding that for such initiatives to have an impact on member behavior, members must commit to policies that go beyond what they would have done anyway, must actually follow through in implementing their commitments, and finally those commitments must actually matter for measurable outcomes (e.g., Fransen & Kolk 2007;Locke et al. 2009;Berliner & Prakash 2015;Distelhorst et al. 2015). ...
... For example, in the case of the UN Global Compact, scholars debate whether firm membership can drive progress toward its 10 principles through mechanisms of peer learning (Ruggie 2002), or whether the absence of meaningful monitoring and enforcement will lead to minimal compliance (Sethi & Schepers 2014). Berliner and Prakash (2015) find that while UN Global Compact members undertake more superficial corporate social responsibility efforts, they actually fare worse than non-members in terms of more costly, meaningful actions. Importantly, however, our paper also goes beyond previous firm-centric studies of MSIs to focus on a setting where governments are key members. ...
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How does membership in transnational multistakeholder institutions shape states' domestic governance? We complement traditional compliance‐based approaches by developing a process model, focusing on the independent effects of processes associated with institutional membership, but separate from commitments and compliance themselves. These effects can be driven by iterative and participatory institutional features, which are increasingly prevalent in global governance. We apply this model to the Open Government Partnership (OGP), a transnational multistakeholder initiative with nearly 80 member countries, featuring highly flexible commitments and weak enforcement. Although commitments and compliance have generally been limited, a compliance‐focused approach alone cannot account for myriad other consequences globally and domestically, driven by the iterative and participatory features associated with membership. We demonstrate these at work in a case study of Mexico's OGP membership, which contributed to the spread of new norms and policy models, new political resources and opportunities for reformers, and new linkages and coalitions.
... Moreover, the audiences and objectives of INGOs can be appreciated as more specific (Perez et al., 2019), requiring instruments that suit their specific needs and objectives. In contrast, given their mandate to represent a wide range of constituents with mutual concerns, IGOs need to produce only a few instruments that apply broadly (Berliner and Prakash, 2015). With respect to the lower number of instruments coproduced by IGOs and INGOs, these may only be needed on the rare occasions when the interests of both types of organization converge and the competencies of each are required. ...
... It is surprising that stakeholder involvement, or the lack thereof, is proportional between instruments produced by IGOs and INGOs. This could imply that there are issues with the practicality of stakeholder involvement, or that international organizations are more interested in establishing universal practices rather than getting MNCs to develop tailor-made solutions for their stakeholders, as previous researchers have argued (Berliner and Prakash, 2015;Brown et al., 2018). ...
... Moreover, there was a large proportion of instruments applicable to any industry between IGOs and INGOs. These findings support the argument that INGOs need more instruments to suit a wider audience (Perez et al., 2019), while IGOs need fewer instruments that can be applied more broadly (Berliner and Prakash, 2015). ...
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Purpose It has been more than 20 years since the idea of binding multinational corporations directly to international law was abandoned. Since then, concerned actors have sought to manage corporate conduct through voluntary regulation. However, little is known about the instruments produced in this regard. This study aims to understand the properties of the instruments that govern or regulate corporate social responsibility at the international level. Design/methodology/approach Systematic literature review and content analysis methods were combined to compile a list of 229 international corporate social responsibility instruments (ICSRIs) produced by intergovernmental (IGOs) and international nongovernmental (INGOs) organizations. These instruments were categorized according to an adapted classification framework. Findings The majority of instruments from our sample are produced by INGOs, focus on management activities and are applicable to specific industries. The most common issues addressed by the instruments are related to worker protection, human rights, governance and the environment. A limited number of instruments specify stakeholders’ involvement or feature an external orientation. Instruments rarely address issues related to product quality and safety, economic contribution or social performance. Practical implications Without a comprehensive overview, it has been difficult to develop broad-based understandings about voluntary regulation as a mechanism for controlling corporate conduct internationally. This study’s findings offer valuable insights, allowing policymakers and industry practitioners to understand the effectiveness of, and make appropriate enhancements to, ICSRIs. Social implications By enhancing ICSRIs to address the limitations highlighted in the current study, multinational corporations can be induced into contributing more productively to the sustainable development of the societies they impact and play a greater role in the realization of the Sustainable Development Goals. Originality/value Previous research has largely concentrated on analyzing small numbers of carefully selected instruments in a conceptual or descriptive approach. In contrast, this study represents a novel approach of systematic compilation and quantitative classification for a comprehensive list of ICSRIs.
... To address these deficiencies and focus sustainability commitments on specific goals in line with the 2030 Agenda for Sustainable Development, the UN launched seventeen Sustainable Development Goals (SDGs) in 2015. Corporate progress on SDGs can be measured by specific indicators consistent with the SDGs and main reporting frameworks, particularly the Global Reporting Initiative (Berliner and Prakash, 2015;United Nations Global Compact, 2018c). ...
... First, while multiple studies question the reliability and transparency of sustainability reports (Cho et al., 2012;Michelon et al., 2015;Talbot and Boiral, 2015), no previous research, to the best of our knowledge, has investigated this subject among companies that are, rightly or wrongly, considered to be sustainability leaders. Furthermore, the literature in this domain overlooks the 'bluewashing' phenomenon, which is defined in this paper as UNGC members 'paying lip service to the true goals of CSR instead of undertaking substantive but costly changes in their environmental and human rights performance' (Berliner and Prakash, 2015). The extent to which this phenomenon can be attributed to LEAD companies has yet to be investigated. ...
... In fact, it may be present in communication on all principles of the UNGC and SDGs. Bluewashing practices have been highlighted by several scholars (Berliner and Prakash, 2015;Hamann et al., 2009;Junaid et al., 2015;Rasche et al., 2013), although only a few empirical studies have analyzed such tendencies. For instance, Van der Waal and Thijssens (2020) analyzed the disclosures of the 2000 largest stock-listed corporations worldwide and concluded that involvement in SDGs seems to be primarily motivated by the search for legitimacy. ...
Article
This paper is aimed at analyzing, through a counter-accounting approach, to what extent companies considered to be sustainability leaders release transparent and balanced information on their commitment to the United Nations Global Compact (UNGC) and Sustainable Development Goals (SDGs). A content analysis was conducted on the sustainability reports of a sample of 28 companies from the UNGC LEAD program, and the results were compared with information disclosed by external sources not controlled by the studied organizations. Corporate disclosure counter-accounting reveals that more than 80% of the significant negative events related to LEAD companies were not reported or were only partially reported in their sustainability reports. Contrary to researchers' initial expectations, the length of the sustainability reports was not positively associated with their completeness or transparency. The findings of this study contribute to the literature on bluewashing and counter-accounting. They question the performance of companies considered to be sustainability leaders and the transparency of their reporting practices. From a managerial standpoint, the analysis of the results points at the necessity to shift the focus from the quantity of reports to their quality and transparency.
... VEPs' work when member cities meet (comply with) the requirements set by the city networks. The key challenge for VEPs is to find the balance between benefits and requirements that are of interest to both parties engagedmember cities and city networks (Berliner & Prakash, 2015). In practice, this challenge boils down to providing sufficiently attractive benefits by the city network for member cities to commit to the programme, while simultaneously setting requirements for a member city to meet that help city networks achieve their aims (van der Heijden, 2019). ...
... In overviewing the broader literature on city networks, we observe that city networks use VEPs to help cities create and disseminate knowledge, support the implementation and increased recognition of their urban climate actions as well as provide them access to third-party organisations such as (international) NGOs, IOs and businesses (Busch et al., 2018;Lee & Jung, 2018). These are akin to the benefits provided by other VEPs, discussed in the broader literatureinformation, financial profit, public recognition, and access to third parties (Berliner & Prakash, 2015;van der Heijden, 2012). We expect that cities prefer programmes with multiple benefits over programmes with single benefits. ...
... In terms of VEP requirements, entry and participation requirements are generally set to prevent the benefits for each participant from decreasing excessively by restricting the number of participants ('congestion problem'). The VEP provider generally undertakes monitoring and enforcement to prevent participants from receiving benefits without complying with the requirements ('free-riding problem'; Berliner & Prakash, 2015;Potoski & Prakash, 2009). The effect of strict or lenient requirements on attracting members to a VEP is not clear-cut (Berliner & Prakash, 2015;van der Heijden, 2012). ...
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Voluntary programmes provide city networks with a central link to their city members. These voluntary programmes provide cities with benefits (e.g., knowledge, recognition, access to resources) if they meet the city network's programme requirements. This article seeks to understand how city networks make trade-offs between programme benefits and requirements to attract cities to the programmes they offer. We do so by analysing 55 voluntary programmes offered by 22 climate-related city networks using qualitative comparative analysis (QCA). We are particularly interested in the design of voluntary programmes that attract large numbers of participants. We find three main insights. First, programmes with a clear, single benefit are more attractive to city members than programmes with a broad range of benefits. Second, the combination of programme requirements and commitments allows city networks to target cohorts of cities based on their capacities and needs. Finally, cities are attracted to programmes that do not explicitly ask for direct results.
... While it has received intense academic attention, scholars often appear to be divided into two camps with regard to the legitimacy and accomplishments of such initiatives (see e.g. Berliner & Prakash, 2014;Rasche, 2009;Voegtlin & Pless, 2014). Proponents argue that knowledge exchange and stakeholder interactions can support good policy-making and business practice in weakly or non-regulated issue areas (Djelic & Sahlin-Andersson, 2006;Scherer et al., 2006) and thereby contribute to the emergence of new global institutions (Maguire & Hardy, 2006). ...
... Proponents argue that knowledge exchange and stakeholder interactions can support good policy-making and business practice in weakly or non-regulated issue areas (Djelic & Sahlin-Andersson, 2006;Scherer et al., 2006) and thereby contribute to the emergence of new global institutions (Maguire & Hardy, 2006). Critics, however, highlight the lack of stringent enforcement mechanisms and state that "the UNGC has failed to induce its signatory companies to enhance their CSR efforts and integrate the 10 principles in their policies and operations" (Sethi & Schepers, 2014, p. 193) (see also Berliner & Prakash, 2014;Deva, 2006;Hemphill, 2005). Considering that a lack of impact would threaten the legitimacy of such initiatives and their participants alike, the first essay of this dissertation provides crucial empirical evidence based on a novel and theoretically informed assessment measure that helps shed light into this controversial debate. ...
... This research is mainly driven by the urgent need for empirical insights on the impact of transnational socio-environmental governance schemes (see e.g. calls by Berliner & Prakash, 2014). The UNGC encourages participants to commit to ten universal principles in the areas of human rights, labor standards, the environment and anti-corruption and, above all, aims to serve as a long-term CSR learning platform (Kell & Levin, 2003;Palazzo & Scherer, 2010;Rasche, 2009). ...
... In the scholarly fields of business and management, a broad-scope initiative such as the 2030 and Agenda SDGs 1 may be associated with voluntary self-regulation initiatives for CSR based on publicprivate partnership and launched as a reaction to alleged environmental and societal concerns about corporations (Macellari et al., 2021;Spraul & Thaler, 2019). The UN launched several more business-oriented CSR initiatives in this field, such as the UN Global Compact (UNGC) Kell, 2005;Williams, 2004), but it was also associated with the phenomenon of bluewashing (e.g., Berliner & Prakash, 2015;Garayar et al., 2016). ...
... Corporate engagement and progress on SDGs may be analyzed by specific indicators consistent with these goals and the main sustainability reporting frameworks, particularly the Global Reporting Initiative (GRI; Berliner & Prakash, 2015;Macellari et al., 2021), which have been extensively studied in the CSR field (e.g., Alonso-Almeida et al., 2014;Chiarini, 2017;Moratis & Brandt, 2017), despite increasing questions about the reliability of this type of reporting (e.g., Boiral, 2013;Cho et al., 2010;Diouf & Boiral, 2017;Moneva et al., 2006). Indeed, sustainability reporting has been identified as an enabler of SDG actions, investments and strategies (Rosati & Faria, 2019a), and the GRI has been indicated as a useful framework for the operationalization of the SDGs (Diaz-Sarachaga, 2021; Ordonez-Ponce & Khare, 2021). ...
... In the case of the UNGC initiative in self-regulation, a specific term was coined-namely bluewashing, referring to the blue UN flag. Bluewashing describes a smokescreen of practices used for purposes of public relations (Berliner & Prakash, 2015;Rasche, 2009). Very few empirical studies have analyzed such activities (Garayar et al., 2016;Macellari et al., 2021), and most research has focused on non-empirical reflection on the business case for SDGs. ...
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This article analyzes the organizational engagement with the United Nations sustainable development goals (SDGs), an initiative for corporate social responsibility also referred to as the 2030 Agenda. Engagement with the SDGs by organizations all around the world, whatever their sector and size, has attracted a lot of media interest and heightened expectations. Nevertheless, there is a lack of empirical work that sheds light on the commitment to this initiative at the organizational level. In order to fill this gap, this article examines the characteristics of engagement with the SDGs of 1370 organizations from 97 countries, taking data from their sustainability reports. The study looks at how and why organizations engage with the SDGs, as well as the priority they assign to them. The findings point to a superficial engagement with the SDGs for the vast majority of organizations, which suggests a process of “SDG‐washing”. Implications for managers, public policy makers and other stakeholders are analyzed.
... However, there are additional motivations for business actors to adopt stricter private standards or to even lobby for stricter public standards such as the considerations regarding competitive advantage (Morioka et al., 2017). It is also important to recognize that corporations are part of national and transnational climate change governance regimes, participating in organizations such as the United Nations Global Compact (Berliner & Prakash, 2015;Bernhagen et al., 2013). Consequently, they will be a subject of research in this journal as individual actors, but also as members of national or transnational climate change governance arrangements (Abbott, 2012;Bäckstrand & Kuyper, 2017;Chan et al., 2015;Roger et al., 2017). ...
... Given that climate change is a global problem, it is necessary to address it at the global level. Therefore, research traditionally focused on the international level (Bang & Underdal, 2015;Keohane & Victor, 2016;Tavoni & Winkler, 2020) and then broadened its perspective to include transnational governance (Bäckstrand & Kuyper, 2017;Bulkeley et al., 2014;Roger et al., 2017) and polycentric governance (Abbott, 2012;Cole, 2011;Jordan et al., 2015;Jordan et al., 2018;Ostrom, 2010). This literature has investigated both how domestic factors, including the existence of climate policy experiments Kivimaa et al., 2017) shape climate action at the international and transnational levels (scaling-up perspective), as well as how international and transnational factors affect governmental climate action in states (trickle-down perspective) (Clare et al., 2017;Dubash et al., 2013;Lachapelle & Paterson, 2013). ...
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This editorial introduces the journal Climate Action to its audience and defines its aims and scope. It first calls for the need to understand climate action as the choices and behavior of international organizations, governments, civil society, businesses, and individuals. Next, it discusses both the facilitators and impacts of climate action. The editorial concludes with a research agenda for climate action to be studied from a transdisciplinary perspective with practitioners for triggering widespread societal transformation.
... By creating standards, SDOs can also decide on monitoring, which is perceived as crucial for transnational sustainability governance to prevent greenwashing (Berliner & Prakash 2015). ...
... . Thus, the question of if and to what extent standards can hold companies accountable predominates(Berliner & Prakash 2015;Gilbert et al. 2011;Moser & Leipold 2020;Schleifer et al. 2019). As such, internal accountability focuses on ensuring compliance with the standards and thereby prioritizes monitoring and sanctioning as a means to strengthen it(Gulbrandsen 2008;Gulbrandsen & Auld 2016). ...
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Transnational sustainability governance often builds upon standards. Considering that the rise of transnational governance has blurred accountability relations, this article interrogates how and with what consequences a standards development organization (SDO) mobilizes standards for the sake of accountability. Following a partial organization perspective, standards are conceptualized as combinations of organizational elements that enhance accountability both retrospectively and prospectively. A historical case study of the Fairtrade program details the argument and shows how an SDO modified standards aligned with institutional expectations. Since the alteration of one organizational element led to a chain reaction, the standards unintentionally transformed from an organizationally lenient tool into a sophisticated blend of organizational elements. Thus, the standards strengthened the accountability of those being governed, while accountability to the public was enhanced by changes in the organizational structure of the SDO. The article contributes to a nuanced understanding of the link between accountability and standards, highlighting their contingency and context-dependency.
... Yet, the capability of MNEs to deliver substantial improvements for economic, social, and environmental UN initiatives like SDGs, let alone the very idea of corporate sustainability, have not remained uncriticized (Berliner & Prakash, 2015;Folke et al., 2019;. Factors playing an important role in MNEs' delivery of sustainability outcomes include: (1) knowledge of their supply networks and of intangible benefits; (2) their control over other actor's actions within the supply networks, and; (3) coordination of benefits of sustainability investments among actors in the supply network (Gereffi, Humphrey, & Sturgeon, 2005;Gimenez & Tachizawa, 2012;Lee, Gereffi, & Beauvais, 2012;Zeidan, Van Holt, & Whelan, 2020). ...
... The capacity of the UN to engage companies in achieving outcomes beneficial for the SDGs is yet uncertain. For example, companies have long recorded their sustainability performance in the UN Global Compact (UNGC) database, but studies have found that UNGC corporate members actually perform worse than non-members (Berliner & Prakash, 2015). Numerous authors also discuss the broader question of whether corporate sustainability agendas can lead to environmental and social progress (Lund-Thomsen & Lindgreen, 2014;Tokatli, 2012). ...
Article
Multinational enterprises face challenges to integrate the UN’s Sustainable Development Goals into their supply chains because it requires cooperation outside of their direct control. In global agrifood value networks, companies struggle to engage their suppliers in sustainability. One reason is that key intermediaries, the offtakers, have not been engaged in sustainability strategies in a way that is economically feasible, and thus fail to act as a cooperating link. We developed and applied a return on sustainability investment (ROSI) model of a more strategic supply-chain approach for food commodities (one that values partnerships over transactional relationships). We modeled the coconut supply network in the Philippines, and compared these findings to another agrifood system, Brazilian beef. Categories of benefits included: a stable and sustainable supply chain, long-term contracts, sustainable products, brand value and innovation, and reduction of corporate risk. In addition to the benefit of working with MNEs as a strategic partner, incremental benefits prioritized by stakeholders included intangibles that could generate value from cost savings, avoided costs, as well as new revenue opportunities to establish a more stable sustainable supply chain. Monetizing benefits to offtakers can help incentivize a new type of global value chain governance to a closed, more stable supply-chain configuration that can better address complex social–environmental dynamics, and foster strategic partnerships.
... 34. Berliner and Prakash 2015. most committed firms. ...
... The critical element is the extent to which global audiences perceive the initiative's public partner as a legitimate steward of 88. See Berliner andPrakash 2015 andMitchell 2010, respectively. global governance. ...
Article
Multinational firms operate in multiple national jurisdictions, making them difficult for any one government to regulate. For this reason the firms themselves are often in charge of their own regulation, increasingly in conjunction with international organizations by way of public-private governance initiatives. Prior research has claimed that such initiatives are too weak to meaningfully change firms’ behavior. Can public-private governance initiatives help firms self-regulate, even if they lack strong monitoring or enforcement mechanisms? I take two steps toward answering this question. First, I introduce a new measure of firms’ performance on ESG (environmental, social, and governance) issues: the extent to which the firms issue public responses to claims of misconduct from civil society actors. Second, I argue that public-private governance initiatives allow firms to benefit from the legitimacy of their public partners, lowering the reputational cost of transparent response. Employing novel data on firm responses to human rights allegations from the Business and Human Rights Resource Center, I find that membership in the largest and most prominent initiative, the United Nations Global Compact, significantly increases firms’ propensity to respond transparently to stakeholder allegations. These results suggest a limited but important role for public-private initiatives in global governance.
... Multi-actor global governance initiatives (henceforth multi-actor initiatives) have received considerable attention in the management research literature. However, the research focus is primarily from the business actors' perspective [5], discussing the positive impact of such initiatives on businesses' governance mechanisms [4,[8][9][10] and performance [11,12], while also voicing concerns regarding the initiative's voluntary nature [13,14]. Nonbusiness participants-NPOs in particular-are primarily mentioned as actors with a watchdog function [15,16], or as collaboration partners to strengthen businesses' implementation of the initiatives [17]. ...
... To date, scholarship on the UNGC has taken on a primarily business-focused perspective, providing evidence of the positive impact of the initiative on business governance mechanisms [4,[8][9][10], and performance [11,12]. Concerns have also been voiced regarding the lack of impact on, or "blue washing" of, corporate activities due to their voluntary nature [13,14]. NPOs, on the other hand, are primarily mentioned as actors with a watchdog function [15,16], or as collaboration partners to strengthen businesses' implementation of the 10 principles [17]. ...
Article
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This study empirically assesses the impact of nonprofit organizations (NPOs) on multi-actor global governance initiatives. Multi-actor global governance initiatives have emerged to strengthen joint action among different societal actors to tackle transnational social and environmental issues. While such initiatives have received a great deal of academic attention, previous research has primarily focused on businesses’ perspectives. In light of the important role of NPOs within such initiatives, critically addressing NPOs’ role by assessing their impact on the effectiveness of such initiatives is crucial. This article builds on the United Nations Global Compact (UNGC)—the largest multi-actor global governance initiative in the world—and offers a panel analysis on a unique dataset including 820 NPOs from 68 different countries. The findings suggest that NPOs have indeed strengthened the UNGC over time, yet their engagement explains only a small fraction of differences in UNGC activity across countries. This study contributes to the emerging research on nonprofits’ social responsibility by fostering the actorhood thesis, which places higher responsibility for the impact and requirements for accountability on NPOs. Furthermore, the study supports discussions about the increasing political role of NPOs by providing the first empirical evidence for their political leadership and impact in multi-actor global governance initiatives.
... This implies that participation in orchestration initiatives, as a strategic choice of organizations to satisfy their audiences' demands, can be driven both by a logic of consequence or a logic of appropriateness (Bernstein & Cashore, 2007). For the former, incentive-based conditions such as the degree of competition within the stakeholder group the organization is a part of, external pressure (in terms of reputation or potential state laws) as well as anticipated costs and benefits of participation are central (Grimm, 2019;Berliner & Prakash, 2015). ...
... For the latter, norm-based conditions such as the atmosphere between potential members, shared norms and trust as well as a common understanding of what can and cannot be done are key (Grimm, 2019;Berliner & Prakash, 2015). These considerations, in turn, shape the demands that stakeholders put on the initiative's purpose, procedure and performance, that ultimately determine the initiative's legitimacy. ...
... This implies that participation in orchestration initiatives, as a strategic choice of organizations to satisfy their audiences' demands, can be driven both by a logic of consequence or a logic of appropriateness (Bernstein & Cashore, 2007). For the former, incentive-based conditions such as the degree of competition within the stakeholder group the organization is a part of, external pressure (in terms of reputation or potential state laws) as well as anticipated costs and benefits of participation are central (Grimm, 2019;Berliner & Prakash, 2015). ...
... For the latter, norm-based conditions such as the atmosphere between potential members, shared norms and trust as well as a common understanding of what can and cannot be done are key (Grimm, 2019;Berliner & Prakash, 2015). These considerations, in turn, shape the demands that stakeholders put on the initiative's purpose, procedure and performance, that ultimately determine the initiative's legitimacy. ...
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Today, the world faces grand challenges that are both daunting and urgent to address. The decarbonization challenge in particular requires states to mobilize a range of actors to achieve structural changes. In this context, there has been a proliferation of orchestration attempts by states, whereby they use soft or indirect forms of steering to coordinate and engage intermediaries to achieve policy objectives. This type of steering raises a number of questions: How can such forms of steering gain legitimacy among the targeted actors and how can this legitimacy be maintained in the face of competing interests? This paper uses the case of the Fossil Free Sweden Initiative to highlight key factors and considerations in establishing and maintaining legitimacy in the orchestration of a varied set of non-state actors with differing interests. Specifically, the paper makes two core contributions to existing literature. Theoretically , it highlights how institutional legitimacy is obtained through a balancing act of stakeholder demands at different levels. Empirically, it examines how Sweden, considered a climate leader, governs toward decarbonization through national orchestration as an important tool. The paper thereby offers new insights into the legitimacy of orchestration with significant implications for how to understand rule-making and governance with the use of intermediaries. It particularly highlights how power and agency can create a governance dilemma for the orchestrator that may undermine legitimacy in the long term.
... Publishing sustainability reports is a way firms respond to such stakeholder pressures by communicating their aspirations and progress (Bebbington & Unerman, 2018;Cho & Patten, 2007;Reynolds & Yuthas, 2008). Sustainability reporting is largely voluntary and less prescribed than its financial counterpart (Berliner & Prakash, 2015;Kolk, 2003), so while certainly imperfect, these reports offer valuable insights on firms' sustainability efforts, both realized and aspirational (Christensen et al., 2013). ...
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In 2015, the United Nations launched the SUSTAINABLE DEVELOPMENT GOALS (SDGs) in collaboration with civil society and firms, recognizing that leading firms have the potential to innovate bold solutions at scale to achieve global sustainability. Exploring the impact of the SDGs’ launch on firms, through the lens of normative pressure, we apply computer-aided text analysis to the language used in sustainability reports of 164 large corporations to investigate whether and how the SDGs impacted sustainability reporting. Results show that, when comparing firms’ sustainability reports before and after 2015, increasing alignment was observed with the language of certain SDGs, while alignment did not significantly change for other SDGs. We further analyze these changes across industries, natural resource intensity levels, and geo-institutional contexts, revealing variation among firms based on institutional characteristics that may point to selection priorities and critical gaps as global firms engage with the grand challenges embodied in the SDGs. JEL CLASSIFICATION: M14
... This literature leads until now to relatively mixed results but tends to show that the degree of decoupling is a function of the requirements of each initiative. For example, Berliner and Prakash (2015), who analysed a sample of 3,000 US public listed companies, showed that due to UNGC's voluntary nature and its lack of stringent monitoring mechanisms, adherents do not tend to adopt costly steps to comply with program obligations. Instead, these companies rather adopt symbolic, low-cost steps to convey the impression of obligation fulfilment. ...
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Relying on the data provided by an ESG rating agency, this paper aims at bringing more understanding on the diversity of firms’ behaviours in terms of labour related CSR and filling a gap on the potential role of labour market institutions, including workers’ collective rights, to contribute to an effective CSR policy. Focusing on four different dimensions of labour CSR (freedom of association, non-discrimination, health & safety and the social monitoring of the supply chain), we assess the influence of a series of economic and institutional characteristics on the level of commitment taken by companies and on the decoupling between firms’ commitment and concrete implementation. In line with the proponents of the complementarity thesis of CSR, our empirical analysis provides evidence that the existence of strong labour institutions is positively associated with more commitments taken by companies despite sizeable variations according to the issues analysed and the institutions concerned. However, the analysis of decoupling provides a somewhat more nuanced perspective.
... Therefore, interaction with other UNGC member firms might improve MSRQ. Our findings are in line with the literature on the beneficial effects of UNGC membership (e.g., Schembera 2018) and disagree with the critical view that questions the UNGC's usefulness (e.g., Berliner and Prakash 2014). For robustness analyses, we additionally collect data on whether a firm joins the carbon disclosure project (CDP) or follows the UN's Sustainable Development Goals (SDG). ...
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This study analyzes the association between various sustainable corporate governance (SCG) mechanisms and mandatory sustainability reporting quality (MSRQ). To this end, we construct a novel MSRQ measure based on manually collected data from 220 German firms in their first year of mandatory sustainability reporting according to the European CSR Directive (2014/95/EU). Descriptive findings show a heterogeneous reporting quality for our sample. The regression analyses suggest an important role of SCG in ensuring high MSRQ. MSRQ increases with the number of SCG mechanisms employed. Regarding the individual mechanisms, we find that MSRQ is positively associated with a sustainable remuneration of the executive board, gender diversity at the supervisory board level, the existence of a CSR committee, engagement in CSR initiatives, and external assurance. However, we do not find any association between gender diversity at the executive board level and MSRQ, contradicting research on voluntary sustainability reporting. Finally, we derive several implications for preparers, auditors, stakeholders, and regulators.
... used to be and by pursuing a "rhetoric of renewal"(Ulmer et al. 2007). For example, prominent multinational corporations such as Nike or Shell have turned public outrage for violations in human rights into an asset of reputation management by successfully claiming global leadership in sustainable development and corporate social responsibility(Deitelhoff and Wolf 2013;Bernhagen and Mitchell 2010 ;Berliner and Prakash 2015). ...
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Massive instances of organizational failure may seriously affect the social legitimacy of international organizations (IO), i.e. stakeholders' recognition of IOs as capable and rightful agents of global governance. However, we lack systematic research of how IOs handle public "blame games" in which failure becomes a salient topic of public debate. The paper theorizes blame games as framing contests, negotiating the nature of organizational failure as well as its political implications. Empirically, the paper assesses the case of sexual exploitation and abuse (SEA) during peacekeeping missions, in which the UN Secretariat changed from initial neglect to claiming a new leadership role of advocacy for "zero tolerance." From the vantage point of classical accounts on crisis communication the UN Secretariat had a peculiar take on failure in the SEA case: apart from uttering excuses and justifications for what went wrong, they set in motion an impressive flow of speech that heralds the decision for or execution of policies aiming at SEA. In this way, the UN secretariat arguably sought to (re)frame SEA in the global public realm-from a pinnacle of organizational failure to an area of legitimate political intervention by the UN.
... When companies do publish a sustainability report, however, Model 2 aims to show if there are any associations with some attributes of sustainability reporting. Global Compact membership is sometimes associated with just providing a better image or financial gains to members (Arevalo et al., 2013;Coulmont and Berthelot, 2015), also called "bluewashing" (Berliner and Prakash, 2015). In the correlation matrix of Table 3, there is a weak positive correlation between Global Compact membership and patent counts. ...
Article
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The 2030 Agenda recognizes the role of the private sector and calls on its innovative and creative capabilities to help solve sustainable development challenges. Judging by the embracement of the SDGs in sustainability reporting, this call seems to resonate. However, the extent to which companies actually make a contribution to solving SDG challenges remains unclear. This paper aims to explore this innovative contribution to the SDGs. It does so by assessing the level of SDG relevant innovation by the largest multinational enterprises in the world. We develop a method for the identification of SDG relevant patent applications, distinguishing between “green” patents, related to environmental themes, and “blue” patents, related to “improving conditions” and meeting unmet sustainable development needs. In addition, we explore whether the level of SDG relevant innovation is systematically associated with a number of company characteristics. Our results show that large MNEs have similar levels of green patents, and lower levels of blue patents, compared to smaller companies. Using regression analysis, we find that there are regional and industry-specific differences. Corporate sustainable development attributes such as Global Compact membership and sustainability reporting, are less convincingly associated. It can be concluded that MNEs play an important role in SDG relevant innovation, but that there are trade-offs between different SDGs. Some SDG relevant innovation is not commonly associated with sustainable development. This study attempts to quantify the actual effect of sustainability strategies of companies by identifying their sustainable patents and associates this to company characteristics, using a new method for sustainable patent identification. Moreover, SDG relevant innovation is taken beyond green innovation to include the whole range of technical innovation that is related to the broad range of SDGs.
... 'Blue-washing' is another spinoff term, referring to marine conservation efforts that ignore the devastation caused by the impunity of industrial fishing (Schott 2010). Bluewashing is also used to refer to United Nations efforts to promote corporate responsibility that lead to window-dressing (Berliner and Prakash 2015). ...
Research
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This working paper is a review of keywords that communicate ideas associated with accountability. Words used to describe ideas about accountability often have different meanings, to different actors, in different contexts—and in different languages. This paper addresses the multiple, ambiguous meanings of accountability with the ‘keywords’ approach, a tradition that takes everyday big ideas whose meanings are often taken for granted and makes their subtexts explicit. Illustrations of different understandings of accountability are drawn mainly from cases in the international development field, but references to the persistent challenge of accountability in the US are also included. These serve as a reminder that democratic political systems and legal systems once considered robust are no guarantee of accountability. The paper addresses the scope of the concept and overlapping concepts before addresses widely-used keywords, keywords from more specialized communities of practice and accountability sayings.
... But, as Selmier and Newenham-Kahindi note (2017: 124), "Some [mining MNEs] … have simply paid lip service to UN calls for sustainable development and goals of CSR." This lip service has been described as "bluewashing", where an MNE attempts to wrap the UN flag of respectability around its operations to enhance its legitimacy (Berliner and Prakash, 2015;Selmier, 2015). Some mining MNEs instead place a "typical emphasis on physical infrastructure, on roads and pipelines, on new buildings output that looks good on a corporate website…" (Lange and Kolstad, 2012: 141). ...
Article
Communities of Place (CofP¹) members’ rights concerning their livelihoods, social structures and sustainability empower them to judge the legitimacy of a mining MNE’s “social license to operate” by demanding efficacious, just CSR programs and projects. Many eyes monitor whether mining companies pursue sustainable development, but no eyes are more important than those of CofP, whose lands surround mining operations, and those of artisanal miners (ASM), whose livelihoods depend on access to mining sites. Their rights have been recognized in UN programs such as the Sustainable Development Goals (SDGs). Conducting a longitudinal qualitative case study examining mining MNEs, CofP situations and country-level contexts in Tanzania and the DRC, we consider mining MNEs’ success and failure in pursuing SDGs. We sketch how efficacious CSR, monitoring, and political will have been necessary conditions in mining MNEs’ efforts to promote SDGs.
... Aravind and Christmann (2011) find in a study of ISO 14001 certification that there was no significant difference between the environmental performance of certified and non-certified facilities. Similarly, Berliner and Prakash's (2015) study of UN Global Compact implementation even finds that on some dimension firms participating in the standard performed worse than non-participants. Behnam and Maclean (2011) discuss what drives such decoupling behavior. ...
Chapter
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This chapter reviews the emerging landscape of voluntary standards in the business and human rights field. I start by defining ‘voluntary standards’, and I show how this type of regulation differs from legal sanctions and social norms. Next, I introduce a taxonomy to classify the landscape of standards for business and human rights. The taxonomy distinguishes standards based on their mode of governance as well as purpose. The following section reviews literature on voluntary standards and distinguishes between scholarly work on input to standard setting, the institutionalization of standards, and their impact (the “3Is”). Finally, this chapter outlines selected research topics that are either part of the contemporary debate on voluntary standards or reflect exciting research opportunities for future scholarly work.
... 'Blue-washing' is another spinoff term, referring to marine conservation efforts that ignore the devastation caused by the impunity of industrial fishing (Schott 2010). Bluewashing is also used to refer to United Nations efforts to promote corporate responsibility that lead to window-dressing (Berliner and Prakash 2015). ...
Article
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... Due to the relevance that environmental, social and ethical aspects have in today's society, CSR has become a key element in the business environment [37,38], which entails companies deciding to invest in CSR when the benefits exceed the costs [39,40]. Thus, many companies invest in communicating their CSR activities to create a positive image, mainly assuming the costs associated with advertising, marketing, communication, reports and dissemination of CSR activities [28] and being able to totally or partially avoid the costs of implementing CSR strategies [41] concerning the adaptation of organisational processes affecting the entire value chain, sustainable investments in process and product, etc., as well as more philanthropic actions oriented to a common good, such as resources allocated to public policy issues like health, education and public infrastructure. ...
Article
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Academic literature has begun to be interested in the informational gaps between what companies say and do in relation to their financial performance and their commitment to society and the environment, identifying the use of self-protection and self-enhancement strategies before their interest groups. In this research, based on a statistical analysis of textual data and a correspondence analysis, the sentiment of the discourse that Spanish CEOs have held with their stakeholders regarding the operational and strategic decisions they made in the face of COVID-19 is analysed. The evidence shows that managers who promptly reported negative news regarding divestments, cutting expenses and destroying jobs, used the epidemic as justification. The leaders who combined these decisions with responsible actions—focused on the ethical and commercial sustainable dimensions—adopted an approach with a different degree of self-enhancement to value their responsible decisions. In contrast, optimistic CEOs, altruistically committed to society, opted for more personal, emotional, dynamic and constant channels and procedures, avoiding selfish attributions for their actions.
... As a result of its embrace of corporations and philanthrocapitalists the United Nations is facing creeping corporate influence. For over two decades, analysts have warned of "bluewashing"-the use of the UN imagery and brand to strengthen the reputation of multinational corporations in the name of the public good-especially in relationship to the UN Global Compact and the Sustainable Development Goals (Bruno and Karliner, 2002;Utting and Zammit, 2008;Berliner and Prakash, 2015). Seitz and Martens (2017) point to a promotional UNESCO brochure that clearly describes the benefits for multinational corporations in partnering (i.e., contributing financially) with the United Nations. ...
Article
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This article analyzes the development and organization of the United Nations Food Systems Summit (UNFSS), which is being convened by UN Secretary General António Guterres in late 2021. Although few people will dispute that global food systems need transformation, it has become clear that the Summit is instead an effort by a powerful alliance of multinational corporations, philanthropies, and export-oriented countries to subvert multilateral institutions of food governance and capture the global narrative of “food systems transformation.” This article places the upcoming Summit in the context of previous world food summits and analyzes concerns that have been voiced by many within civil society. It elaborates how the current structure and forms of participant recruitment and public engagement lack basic transparency and accountability, fail to address significant conflicts of interest, and ignore human rights. As the COVID-19 pandemic illuminates the structural vulnerabilities of the neoliberal model of food systems and the consequences of climate change for food production, a high-level commitment to equitable and sustainable food systems is needed now more than ever. However, the authors suggest that the UNFSS instead seems to follow a trajectory in which efforts to govern global food systems in the public interest has been subverted to maintain colonial and corporate forms of control.
... Overall, we conclude that positive communication on corporate climate strategies and commitments are largely symbolic in nature (Bowen, 2014;Delmas & Montes-Sancho, 2010;Doda et al., 2016). Our results support the contention that voluntary, bottom-up climate governance systems alone are inadequate for dealing with the massive, systemic problem of emissions mitigation in the corporate and private sectors (Berliner & Prakash, 2015;Dingwerth & Eichinger, 2010;Diouf & Boiral, 2017;Marimon et al., 2012). Recent advances in climate regulation are promising. ...
Article
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This study conducts machine‐aided textual analysis on 725 corporate sustainability reports and empirically tests whether climate ‘talk’ within the sampled reports translates into performance ‘walk’, proxied by changes in greenhouse gas emissions over a 10‐year period. We find mixed results for the ‘talk–walk’ hypothesis, depending on the type of talk and the associated climate change actors involved. Indeed, our empirical models show that while some climate commitments are genuine, many constitute little more than ‘greenwashing’—producing symbolic rather than substantive action. We attribute this result to false signalling of climate transitioning in order to mislead due to misaligned incentives. An unexpected positive finding of the study is that talk about operational improvements is a significant predictor of climate performance improvement. On the other hand, reactive strategies are consistent with poor climate performance. Our findings highlight the significance of corporate climate strategies other than emissions reductions in assessing the effective contribution of business to the climate transition.
... Reporting (Berliner and Prakash, 2012;Moran et al., 2014;Raufflet et al., 2014), is that the latter are much more general and provide less accountability -with the possible exception of GRI -and do not provide direct and simple communication with final consumers and supply chain business partners. For instance, in the case of UNGC it was demonstrated that UNGC members sometimes tend to enjoy the benefits of program membership without making costly changes to their human rights and environmental practices (Berliner and Prakash, 2015). ...
Article
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This article examines the current state and drivers of environmental transparency in the Russian Mining and Metals sector. The study is based upon 2016–19 successive annual rankings calculated transparently, using publicly available information and a third-party-verified ranking system. Ranking results reveal a definite in-crease in the transparency level of one of the most closed industries in Russia. The findings from the study show that a company’s presence in the stock markets has a positive impact on its openness in environmental matters. However, a company’s listing on an international stock exchange does not guarantee high environmental transparency. Some evidence of a correlation between ranking positions and participation of diversified financial-industrial groups in the share capital was also found. Overall, our analyses suggest that ESG (envi-ronmental, social and governance) management in the Russian mining and metals sector is only in the process of development. To overcome this, the environmental transparency ranking of mining and metals companies in Russia creates a new mechanism for raising public awareness and dialogue between the public and one of the most closed industries. The ranking initiated calculation of industry-average quantitative impact indicators that, as the sample grows, will transform into an important benchmark for corporate self-assessment when comparing Russian practices with those of the largest international and foreign mining and metal companies across the globe
... Jest to zresztą też charakterystyczne dla podobnych rozważań dotyczących współczesnej etyki biznesu 3 . Niektórzy autorzy, próbując określić początki współczesnej koncepcji społecznej odpowiedzialności biznesu, wskazują na połowę XX w. ( [29][30][31][32][33][34][35][36][37][38][39][40][41][42][43]. To w tym czasie pojawił się słynny esej amerykańskiego potentata branży stalowej Andrew Carnegie -Ewangelia bogactwa − w której zdefiniował on dwie podstawowe powinności przedsiębiorcy: dobroczynność i dobre zarządzanie powierzonymi zasobami (Carnegie, 1900, s. 1-46). ...
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Monografia poświęcona jest sprawozdawczym i pozasprawozdawczym narzędziom komunikowania się z interesariuszami zewnętrznymi. W części teoretycznej omówiono istotę i znaczenie komunikacji CSR oraz przedstawiono szeroki wachlarz narzędzi, które mogą być wykorzystane w tym procesie. W części empirycznej opisano i oceniono wykorzystanie obu kategorii narzędzi przez cztery spółki, których siedziby główne znajdują się w Trójmieście.
... Repositioning XOM from a company focused on oil to one focused on climate change issues will take a long, long time." 6 A second major limitation of FCG is that, in common with corporate social responsibility (CSR) and other sustainability efforts, it is open to 'greenwash', the disjuncture between corporate efforts to burnish their environmental reputation and actual outcomes (Berliner and Prakash 2015;Raghunandan and Rajgopal 2020). Institutional theorists refer to 'decoupling' along the implementation chain between public pronouncements, internal policies and targets, corporate practices, and actual emissions (Lyon and Montgomery 2013). ...
... The initiative outlines ten principlestwo of them aiming at not causing or contributing to human rights abuseto which adhering companies commit and periodically report on the progress made. However, the Global Compact, set up as a soft law instrument, was soon criticized for lacking "teeth," falling short to provide accountability, while offering an avenue for corporations for "blue-washing" (Berliner and Prakash 2015). ...
Chapter
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The publication of the United Nations Guiding Principles on Business and Human Rights (UNGPs) was a watershed moment in the business and human rights (BHR) debate, a scholarly and policy discussion that has boomed over the last two decades. In parallel, the United Nations General Assembly issued its Agenda 2030, featuring 17 Sustainable Development Goals (SDGs) to be achieved by the end of 2030. Both, the UNGPs and the Agenda 2030, are instruments designed to advance corporate sustainability at an international level. Yet, despite their apparent complementarities and potential synergies, the connection between the two remains loose and therefore ambiguous. The disconnect is exacerbated by how the Agenda 2030 frames the role and contributions of the business sector, which holds strong parallelisms with the traditional notion of “Corporate Social Responsibility” (CSR). However, adopting a “CSR” approach to SDG implementation obstructs the integration of the UNGPs and hinders Agenda 2030 from taking advantage of the progress made in BHR over the last two decades and thus to realize their full potential in charting a holistic path of sustainability of business actors.
... 79). Berliner and Prakash [23] discovered that members exhibit poorer performance than nonmembers in crucial and cost-intensive dimensions, while merely making low-cost efforts to improve in rather superficial dimensions. ...
Article
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Growing awareness of the fashion industry’s negative impact on people and the environment has led to considerable growth of the sustainable fashion market. At the same time, Black Friday purchases increase annually as the sales event develops into a global phenomenon. As sustainable fashion brands are choosing to participate in the event, many communicate their offers via the social media platform Instagram. To gain a competitive advantage and maintain their sustainable corporate images, some brands use greenwashing and/or bluewashing strategies. The first part of this study explores which strategies were employed in Instagram content posted by sustainable brands, using quantitative and qualitative content analysis. We propose a research-based model of nine greenwashing/bluewashing strategies. The second part of the study examines predictive factors for consumer evaluations of Black Friday ads by sustainable brands, using an online survey and a stepwise multiple regression analysis. Findings show that consumers’ critical attitude towards Black Friday and high ad skepticism predict positive evaluations while sustainable purchase behavior predicts negative evaluations. These insights suggest that ‘sustainable’ Black Friday campaigns may appeal to consumers who show a general concern for the environment and issues of social sustainability, but not to those who exhibit actual sustainable behavior.
... Many of these firms are under pressure to secure their sustainability and legitimacy by becoming more responsive to their environment, societal and ecological alike. While corporate social responsibility may present a channel for improving corporate responsiveness to societal expectations, this channel's effectiveness is lowered by the phenomenon of corporate hypocrisy (Wagner et al. 2009), which includes several varieties, such as greenwashing (e.g., de Freitas Netto et al. 2020) and bluewashing (e.g., Berliner and Prakash 2015). Corporate hypocrisy means that corporations pursue their corporate social responsibility policies in a symbolic and strategic way to gain reputational advantages (Cho et al. 2015). ...
Article
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In a recent contribution to this journal, Deng et al. (2021) draw on an extensive range of theoretical and empirical literature to make the case for the tendency of social capital resources of agricultural cooperatives in the Western world to decline over time. The present paper revisits this argument by drawing on a Luhmannian systems-theoretic perspective that takes the capitalist economic system to be limitedly sensitive and receptive to a broad variety of human needs. Whereas many of these needs remain marginalized and neglected, some of them may be codified or translated into a profit-making calculus. Cooperatives are shown to present one of the channels through which this codification may be possible; namely, the codification effect of cooperatives enables the incorporation of a multitude of mutual self-help activities into the economic system. This incorporation gives rise to intrasystemic adjustment processes that can be considered complete when the mutual self-help activities introduced by cooperatives no longer require the cooperative form and are integrated into the activities of investor-owned firms. If this view is accepted, then declining social capital may be an indicator of the successful codification process, which helps to make the economic system less exclusionary and more sensitive to human needs.
... In a similar vein, concepts of blue-and greenwashing critically depict efforts of companies to enhance their CSR image by presenting their activities in a distorted way. This may be done by highlighting their environmental -friendly operations which, actually, do not exist (greenwashing; Gatti et al. 2019) or by associating themselves with UN development goals and benefitting from the symbolic value of the UN brand (bluewashing; Berliner -Prakash 2015). ...
Article
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This article introduces the concept of sport for development and peace both as a theoretical notion and a part of the political-economical practice. Together with a brief definition and a historical overview, the main goal is to present the sport and development in the context of international relations, a network of stakeholders, practical implementation within major projects and its progressive inclusion into the development documents and strategies. Specifically, the article highlights the adoption of the concept by two major institutions, the United Nations and the International Olympic Committee as formal umbrella organisations. Furthermore, the role of the sport for development within the UN’s agenda of Sustainable Development Goals is elaborated. Since the topic is a frequent object of academic research and critical analysis, the article concludes with an outline of the commonly mentioned contested topics and critical debates which permeate both academic production and activities of international state and non-governmental organisations.
... Scholars note the issue of shirking, where firms may join clubs but may not honor the membership obligations. For scholars, this is more likely to take place when clubs lack effective monitoring and enforcement mechanism (King and Lenox 2000;Rivera and Leon 2004;Delmas and Keller 2005;Morgenstern and Pizer 2007;Berliner and Prakash 2015). Our paper does not engage the debate on whether club membership is associated with cities that have improved climate resilience. ...
Article
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This paper examines whether US cities’ membership in voluntary climate clubs improves the municipal bond ratings issued by S&P, Moody’s, and Fitch. We suggest that only clubs focused on climate adaptation could help cities signal their resilience to climate risks and their ability to service their municipal bonds. Yet, club membership is only a signal of intent. By itself, it does not offer concrete evidence that cities have adopted adaptation policies or enhanced their resilience to climate risks. We examine three climate clubs: ICLEI, whose membership obligations cover climate and other environmental issues; C40, whose scope covers both climate mitigation and adaptation; and 100 Resilient Cities (100RC), which focuses on adaptation only. Employing a two-way fixed effects model for a panel of 80 US cities from 1995 to 2018, we find that 100RC membership leads to a small improvement in bond ratings. This has important policy implications: Assurances about implementing adaptation policy, as opposed to evidence about how adaptation reduces climate risks, could have spillover effects on municipal finance. In such cases, climate adaptation could have tangible implications for city-level finances.
... Repositioning XOM from a company focused on oil to one focused on climate change issues will take a long, long time." 6 A second major limitation of FCG is that, in common with corporate social responsibility (CSR) and other sustainability efforts, it is open to 'greenwash', the disjuncture between corporate efforts to burnish their environmental reputation and actual outcomes (Berliner and Prakash 2015;Raghunandan and Rajgopal 2020). Institutional theorists refer to 'decoupling' along the implementation chain between public pronouncements, internal policies and targets, corporate practices, and actual emissions (Lyon and Montgomery 2013). ...
Although franchise chains are increasingly committed to environmental, social, and societal transitions, only a few researchers have focused on Corporate Social Responsibility (CSR) in the specific case of franchising. The aim of our paper is to discuss the specificities and challenges of CSR in franchising, explore how franchisors report on their sustainable practices, and emphasize subsequent directions for future research. In order to do so, we focus on the Corporate Social Disclosure (CSD) practices of twenty-two retail and service franchisors operating in the French market where regulations of non-financial information disclosures exist for large companies. Our findings show that these franchisors disclose rich and diversified information about their CSR activities. However, franchisors’ disclosures can vary significantly, especially depending on their chain size and whether they are subject to reporting regulations. Our research contributes to the literature on CSR in franchise chains, as well as the practice.
Article
Not long after the formation of the United Nations Global Compact (UNGC) in 2000, two opposing theories emerged regarding its efficacy and why organizations continue to join UNGC. The critics take the position that because it has low barriers to entry and no enforcement of compliance, it attracts organizations with low CSR performance who merely want to enhance their reputations. The advocates reject these arguments because of their belief in the purpose of the UNGC, to offer a platform for learning and improvement, especially for under-resourced organizations. Haack, Martignoni, and Schoeneborn have offered a conceptual framework that has the potential to bridge the differences between these two opposing theoretical positions by suggesting that CSR can be adopted ceremonially under conditions of opacity and evolve to substantive adoption over time as transparency increases. In this study, we use the Haack et al. conceptual framework to empirically test this proposition by investigating U.S. corporations that have joined UNGC. We expand the analysis to examine the motivations for ceremonially adopting CSR. Our results support the conditions proposed by Haack et al., and we emphasize the importance of organizational learning to achieve substantive adoption of CSR practices over time.
Article
Corporate social responsibility (CSR) has steadily grown in importance. We show government regulation on corporate reporting of CSR, aimed to spur its growth and increase transparency, has grown in tandem. Such reporting regulation is more readily observable than CSR itself and can be used as a proxy for the latter. We show that larger economies with higher institutional capacity find it easier to develop reporting regulations, and that international influences and local pollution increase concerns are important contributing factors. We show that such regulation also increases CSR, even after accounting for common unobserved factors that may affect both.
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This chapter discusses the United Nations Global Compact as well as the Guidelines for Multinational Enterprises issued by the Organization for Economic Co-operation and Development (OECD). I start by providing the theoretical context in which both initiatives need to be discussed. I thereby highlight that both initiatives are part and parcel of a growing institutional infrastructure for corporate sustainability and responsibility. Next, I turn to a more practical discussion. I outline for each of the two initiatives: (1) its basic idea and history, (2) its relationship to the discussion of business and human rights, and (3) its enforcement mechanisms. Discussing these three issues helps to show the advantages and disadvantages of each initiative.
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Multinational corporations have been criticised for their rhetorical support to - as opposed to substantive engagement with - gender equality in their corporate social responsibility (CSR) activities in poor countries. Many host countries have started regularizing CSR in recent years, and there is great variation between countries and different sectors when it comes to the gendered dimensions of social investments. This article focuses on the factors that influence CSR in the petroleum sector, using Equinor in Tanzania as a case study. We argue that national regulations in host countries, perceptions of risk, as well as the need to gain ‘a social license to operate’ from host communities, means that the gendered dimensions of CSR in the petroleum sector differ in important ways from other sectors. The study also shows that company ownership by a state that profiles itself as a champion in gender equality does not in itself lead to gender sensitive social investments. The main ‘beneficiaries’ of Equinor's social investments in Tanzania are men, but this fact is disguised by using a gender neutral language in CSR reporting.
Chapter
Dispite its impressive economic performance, Botswana still faces a number of problems including poverty, high levels of unemployment, inequality and high HIV prevalence. This contradiction demonstrates that the assumption that promoting the development of the private sector leads to the improvement in the social conditions of the poor is flawed. Although businesses in Botswana generally regard CSR/CC favourably, most of them do not consider it as a strategic business concern. Evidence of this is the absence of CSR/CC policies in many companies, general lack of systematic budgeting for CSR/CC and weak integration of CSR/CC into company organisational structures. Given that maximing profit remains the raison d’etre for the existence of any business concern, voluntary CSR/CC initiatives will remain just symbolic and not lead to real inprovememt to the welfare of the poor.
Article
Acknowledging the roles and responsibilities of business in society and the importance of realizing the Sustainable Development Goals (SDGs), contemporary management education is characterized by the integration of a rich palette of initiatives in the field of Responsible Management Education (RME). It is important though to recognize that these initiatives, however laudable, so far represent rather basic, and thus insufficient, ways of truly integrating sustainability into management education. This Provocation to Debate essay therefore identifies three perspectives for bolstering RME through the SDGs: (1) addressing the fact that SDGs incorporate trade-offs, tensions, and paradoxes; (2) realizing the SGDs implies engaging in systemic activism; and (3) embracing the SDGs comes with emotional affect. As such, this essay is an invitation to critically reflect on the roles and contents of management education in spurring sustainable development and to engage in a meaningful discussion about the value and the limitations of the SDGs for advancing the RME agenda.
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This paper examines whether U.S. cities’ membership in voluntary climate clubs improves the municipal bond ratings issued by S&P, Moody’s, and Fitch. We suggest that only clubs focused on climate adaptation could help cities signal their resilience to climate risks and their ability to service their municipal bonds. Yet, club membership is only a signal of intent. By itself, it does not offer concrete evidence that cities have adopted adaptation policies or enhanced their resilience to climate risks. We examine three climate clubs: ICELI, whose membership obligations cover climate and other environmental issues; the C40 club, whose scope covers both climate mitigation and adaptation; and the 100 Resilient Cities (100RC) program, which focuses on adaptation only. Employing a two-way fixed effects model for a panel of 80 U.S. cities from 1995 to 2018, we find that 100RC membership leads to a small improvement in bond ratings. This has important policy implications: assurances about implementing adaptation policy, as opposed to evidence about how adaptation reduces climate risks, could have spillover effects on municipal finance. In such cases, climate adaptation could have tangible implications for city-level finances.
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Purpose - In a world characterised by increasing environmental and social awareness, the number of corporate social responsibility and sustainability initiatives has significantly grown. Among these, the United Nations Global Compact (UNGC) is one of the most important, involving more than 12,000 companies. The purpose of this study is to investigate the UNGC's worldwide diffusion, both at country and industry level, to understand the reasons leading to the highlighted dissemination patterns, and to propose various future projections. Design/methodology/approach - The study pursues its objectives by applying the logistic curve model to data provided by the United Nations. The analysis is complemented by adopting instability and concentration indexes. Findings - Results suggest that, while human rights and environmental safeguard in some areas and industries will remain a controversial issue, UNGC adoption will continue growing and giving the participants the required legitimacy to compete in worldwide markets. Originality/value - To the best of the authors' knowledge, this is the first paper that analyses the UNGC's worldwide diffusion and proposes a prediction model for its future dissemination. The findings are of considerable importance in extending the knowledge of the initiative and in understanding the potential values of its adoption.
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The “carbon-based” governance regime, defined as the governance of climate change through a unitary focus on carbon measurement, disclosure, focuses on the measurable success of private, public-private, and “hybrid” approaches to climate governance. Our research finds that, despite a groundswell in private activity, zones of fragmentation among a multiplicity of private actors, initiatives, and standards is stymying progress. Key actors are increasingly networked, yet key metrics remain severely fragmented; Moreover, while substantial resources have been dedicated to governing carbon emissions, greenhouse gas emissions keep rising. So far, the ultimate goal of carbon-based governance, to reduce emissions, is far from being realized. Whether this regime can be repurposed to fulfill this crucial function remains an open question.
Article
For decades, companies found in international protocols and standards an alternative source of normative guidance to operatively implement sustainability policies at an organisational level. The ever‐increasing adoption of these multi‐faceted policies and guidelines co‐occurs with a more proactive and voluntaristic attitude towards CSR implementation by companies. Born as a kind of soft corporate law to reinforce a regulatory answer to sustainability issues, today, CSR due diligence is becoming a central pillar of the transition of the economic system towards a great level of sustainable development. The paper presents the results of an interventionist research carried out by researchers in collaboration with the European Parliament, aimed at developing a normative resolution on the prominent role of CSR due diligence and its accountability. Through the exploration of the different state‐of‐the‐art of European companies on CSR due diligence, findings suggest that there is considerable room for improvement in CSR due diligence that can be reached through a normative intervention. In addition, the paper contributes to the development of the literature on interventionist research carried out by business scholars, focusing on academia‐industry‐institutions relations.
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Although corporate social responsibility (CSR) has gone “mainstream,” the relationship between CSR and corporate political activities (CPA) has received little scholarly attention. This is problematic because firms potentially have a more sizable impact through their lobbying activities for socially and environmentally beneficial (or unbeneficial) public policies than through their own operations. This paper investigates if, and how, UN Global Compact signatory firms differ in their policy preferences on key EU proposals compared to other interest groups. To capture state-of-the-art data on firms’ policy preferences, I draw from the INTEREURO database, which includes firms’ lobbying positions on forty-three directives and twenty-seven regulations covering 112 public policy issues in the European Union. Statistical results show that Global Compact signatory firms significantly lobby for stricter regulation than non-signatory firms and industry associations, however, their positions are still lower than nonbusiness groups. These results are similar across various public policy issues and suggest that the regulatory preferences of firms’ participating in soft law CSR initiatives are more aligned with stakeholders' interests. This paper contributes to public policy literature exploring the relationship between hard and soft law as well as literature studying the political representation of divergent interest.
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Partnerships for Sustainability in Contemporary Global Governance investigates the goals, ideals, and realities of sustainability partnerships and offers a theoretical framework to help disentangle the multiple and interrelated pathways that shape their effectiveness. Partnerships are ubiquitous in research and policy discussions about sustainability and are important governance instruments for the provision of public goods. While partnerships promise a great deal, there is little clarity as to what they deliver. If partnerships are to break free from this paradox, more nuance and rigor are required for understanding and assessing their actual effects. This volume applies its original framework to diverse empirical cases in a way that could be extended to broader data sets and case studies of partnerships. The dual contribution of this volume, theoretical and empirical, holds promise for a more thorough and innovative understanding of the pathways to partnership effectiveness and the conditions that can shape their performance. The broad range of crosscutting analyses suggest important practical implications for the design of new partnerships and the updating of existing initiatives. This interdisciplinary book will be of great interest to researchers, students, and practitioners within international relations, political science, sociology, environmental studies and global studies, as well as the growing number of scholars in public policy, global health and organizational and business studies who are keen to gain a deeper understanding of the pathways and mechanisms that influence the outcomes and effectiveness of cross-sector collaboration and transnational governance more broadly. The Open Access version of this book, available at www .taylorfrancis.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license.
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Corporate social performance (CSP) is increasingly viewed as an important business outcome by researchers, investors, and society as a whole. Furthermore, empirical research indicates that CSP is positively related to corporate financial performance. These considerations lead to the question of whether CEO pay is properly structured to provide incentive to the CEO to improve firm CSP. In a sample of 313 firms, the authors found that a short-term CEO pay focus was negatively related to CSP, whereas a long-term focus was positively related to CSP. Implications of these results for future research and CEO pay design are presented.
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Political scientists, sociologists, and economists have all sought to analyze the spread of economic and political liberalism across countries in recent decades. This article documents this diffusion of liberal policies and politics and proposes four distinct theories to explain how the prior choices of some countries and international actors affect the subsequent behavior of others: coercion, competition, learning, and emulation. These theories are explored empirically in the symposium articles that follow. The goal of the symposium is to bring quite different and often isolated schools of thought into contact and communication with one another, and to define common metrics by which we can judge the utility of the contending approaches to diffusion across different policy domains.For helpful comments on an earlier draft of this article, the authors wish to thank Barry Eichengreen, Lisa Martin, and John Meyer. Nancy Brune and Alexander Noonan provided excellent research assistance. The authors also wish to acknowledge and thank the Yale Center for International and Area Studies, the UCLA International Institute, and the Weatherhead Center for International Affairs at Harvard University for funding conferences at which this collection of symposium papers were discussed.
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We argue that the social construction of target populations is an important, albeit overlooked, political phenomenon that should take its place in the study of public policy by political scientists. The theory contends that social constructions influence the policy agenda and the selection of policy tools, as well as the rationales that legitimate policy choices. Constructions become embedded in policy as messages that are absorbed by citizens and affect their orientations and participation. The theory is important because it helps explain why some groups are advantaged more than others independently of traditional notions of political power and how policy designs reinforce or alter such advantages. An understanding of social constructions of target populations augments conventional hypotheses about the dynamics of policy change, the determination of beneficiaries and losers, the reasons for differing levels and types of participation among target groups, and the role of policy in democracy.
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The contribution of this work is a classification of corporate social action underlying the Social Ratings Data compiled by Kinder Lydenburg Domini Analytics, Inc. We compare extant typologies of corporate social action to the results of our exploratory factor analysis. Our findings indicate four distinct latent constructs that bear resemblance to concepts discussed in prior literature. Akey finding of our research is that positive and negative social action are both empirically and conceptually distinct constructs and should not be combined in future research. Additionally, we recommend that some prior research results be reconsidered to determine whether these newly derived measures might clarify some previous findings.
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This article reviews the interdisciplinary literature on the UN Global Compact. The review identifies three research perspectives, which scholars have used to study the UN Global Compact so far: a historical perspective discussing the Global Compact in the context of UN-business relations, an operational perspective discussing the composition and impact of its participants, as well as a governance perspective discussing the constraints and opportunities of the initiative as an institutionalized arena for addressing global governance gaps. The authors contrast these three perspectives and identify key empirical as well as conceptual scholarly contributions. The remainder of this article contains focused summaries of the articles selected for this Special Issue. All articles are introduced and evaluated against the background of the three research perspectives.
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The United Nations Global Compact (UNGC) was created in 2000 to leverage UN prestige and induce corporations to embrace 10 principles incorporating values of environmental sustainability, protection of human rights, fair treatment of workers, and elimination of bribery and corruption. We review and analyze the GC’s activities and impact in enhancing corporate social responsibility since inception. First, we propose an analytical framework which allows us to assess the qualities of the UNGC and its principles in the context of external and internal elements that influence code effectiveness and implementation. Second, we analyze UNGC performance in encouraging companies to become signatory members and bring about demonstrable change in corporate CSR-sustainability activities. In its 10-year report, UNGC has proclaimed growth in both membership and program activity. However, all credible and publicly available data and documentation conclusively demonstrate that the UNGC has failed to induce its signatory companies to enhance their CSR efforts and integrate the 10 principles in their policies and operations. The result has been a loss of public trust and support of UNGC from important constituencies among civil society organizations, and those individuals and groups adversely impacted by corporate activities and resultant negative externalities. This diminished credibility has also made UNGC largely dependent on the corporate sector for its very survival. We conclude that this dependence has in turn impaired and would continue to hinder UNGC’s ability to fulfill its mission. Such an outcome raises serious questions as to the viability, usefulness, and continued existence of UNGC.
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Theory suggests that when transaction costs are low, corporations and stakeholders can minimize social costs by transacting to their mutual advantage, but when trans- action costs are high, reducing social costs requires the intervention of a centralized institution. In surprisingly little work have scholars considered what happens in between—when transaction costs exist but recourse to hierarchical institution is barred. I use transaction cost analysis to hypothesize how collaboration between corporations and environmental stakeholder groups will be structured. Ronald Coase's "The Problem of Social Cost" (1960) was one of two articles mentioned by the Nobel Committee when awarding him the 1991 Nobel Prize in Economics. Yet, in his lecture at the award ceremony, Coase argued that the ar-
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This article examines the concept of the corporate “social license,” which governs the extent to which a corporation is constrained to meet societal expectations and avoid activities that societies (or influential elements within them) deem unacceptable, whether or not those expectations are embodied in law. It examines the social license empirically, as it relates to one social problem–environmental protection–and as it relates to one particular industry: pulp and paper manufacturing. It shows try the social license is important, the circumstances in which it may encourage companies to go “beyond compliance” with regulation, how its terms are monitored and enforced, and how it interacts with what we term the regulatory and economic licenses. Overall, this research demonstrates that corporate environmental behavior cannot be explained purely in terms of instrumental threats and moral obligations to comply with the law, and that the increasing incidence of “beyond compliance” corporate behavior can be better explained in terms of the interplay between social pressures and economic constraints.
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Under the leadership of Secretary-General Kofi Annan, the United Nations has played an active role in promoting corporate social responsibility as one means to respond to the challenges of globalisation. The Global Compact has been Annan's major initiative in this domain. It has explicitly adopted a learning approach to inducing corporate change, as opposed to a regulatory approach; and it comprises a network form of organisation, as opposed to the traditional hierarchicbureaucratic form. These distinctive and, for the UN, unusual features lead the Compact's critics to seriously underestimate its potential, while its supporters may hold excessive expectations of what it can deliver. Because organisational issues of this sort will continue to confront the search for viable global governance mechanisms for many years ahead, this paper spells out both the advantages but also the inherent limitations of the learning networks approach.
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A consensus has emerged in the burgeoning literature on corporate social responsibility (CSR) that “virtuous” firms are often rewarded by the marketplace. Unfortunately, the mechanisms through which those rewards materialize are not well understood. Furthermore, it is difficult for managers and investors to know whether a company is actually engaged in responsible behavior. Thus, many stakeholders rely on institutional assessments of a firm’s social practices to inform their own judgments about that company’s CSR reputation. In this article, we draw on institutional theory and research on reputation and legitimacy to investigate the relationship between institutional endorsements (and repudiation) of CSR and firm financial performance. Our empirical results indicate that institutional intermediaries influence market assessments of a firm’s social responsibility and highlight the importance of the legitimacy-conferring function of expert bodies in understanding the relationship between social and financial performance. Our findings also illustrate the delicate interplay among different social performance assessments, reputation, and measures of financial and operating performance such that operating performance may serve as an advanced indicator of social performance and one type of social performance assessment may temper market reactions to another.
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Policy Design for Democracy is a theoretically sophisticated work that draws examples from a wide array of public policy arenas. It summarizes four current approaches to policy theory-pluralism, policy sciences, public choice, and critical theory-and shows how none offers more than a partial view of the policy design characteristics that support and perpetuate democracy. Schneider and Ingram then develop a theory of public policymaking predicated on understanding how differences in policy designs are related to differences in the contexts from which they emerge and how these designs have an impact on democracy.
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Human rights norms are today a central aspect of the corporate social responsibility (CSR) agenda. After decades of exclusive attention to the behavior of states, human rights activists began during the late 1980s and 1990s to increase their pressures on corporate actors and demand commitment to and compliance with basic human rights in the business world. Unlike states, corporations lack international legal personality and cannot express commitment by signing on to formal international human rights treaties. Apart from voluntary standards, codes of conduct, and other UN standard-setting activities directed at businesses, the Global Compact (GC) represents to date the main UN sanctioned soft law designed to commit corporations to international standards of human rights and environmental protection. The GC does not replace the main compliance mechanisms set out by the legal obligations assumed by states under international law, but its goal is to supplement those existing mechanisms with an additional, non-binding avenue of promoting universal human rights principles. This essay argues that the relevance of the GC as a means to move businesses towards greater respect for human rights depends to a large degree on the emergence of local GC networks effectively faciliating engagement with civil society, learning about best practices, and providing a forum of deliberation. These services provided by local networks are particuarly important for small and medium-sized enterprises (SMEs).
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▪ Abstract The study of compliance with international agreements has gained momentum over the past few years. Since the conclusion of World War II, this research agenda had been marginalized by the predominance of realist approaches to the study of international relations. However, alternative perspectives have developed that suggest that international law and institutions are important influences on the conduct of international politics. This review examines four perspectives and assesses their contribution to understanding the conditions under which states comply with international agreements. Despite severe conceptual and methodological problems, this research has contributed significantly to our understanding of the relationship between international politics and international law and institutions.
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Corporate social performance (CSP) is increasingly viewed as an important business outcome by researchers, investors, and society as a whole. Furthermore, empirical research indicates that CSP is positively related to corporate financial performance. These considerations lead to the question of whether CEO pay is properly structured to provide incentive to the CEO to improve firm CSP. In a sample of 313 firms, the authors found that a short-term CEO pay focus was negatively related to CSP, whereas a long-term focus was positively related to CSP. Implications of these results for future research and CEO pay design are presented.
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Policy scholars, for at least a generation now, have addressed the usefulness of public-mandated "command and control" environmental regulations as an effica- cious means to promote a cleaner environment. In the United States, these policies go back at least as far as the Clean Air Act of the late 1960s and are quite often designed, evaluated, and generally shepherded under the auspices of the Environmental Pro- tection Agency (EPA). Given a series of mixed evaluations (for a recent review, see Coglianese & Nash, 2006; Prakash & Potoski, 2006) as to their overall effectiveness, the concept of a Voluntary Environmental Program (VEP) was posed as an alterna- tive to the extensive governmental rules and regulations mandated by "command and control" legislation. In general terms, VEPs are self-regulation agreements that can be promoted by firms, governments, industry associations, and/or environmen- tal groups to compel businesses to enhance their environmental protection perfor- mance (Steelman & Rivera, 2006). The idea underlying the voluntary programs concept was consonant with a widespread changing, deregulatory philosophy of government, and was reflected in a number of policy issue-areas, e.g., communications and transportation. However, it was in the area of environmental regulation where Voluntary Programs were most noted, especially under the sponsorship of the EPA (see the Green Lights—later incorporated into Energy Star—and the 33/50 programs). Still, it is important to recognize that the emergence of VEPs was more than just a public policy, as various industries similarly established their own set of VEPs, often in cooperation with and assistance of a government agency; for instance, the American Chemical Council created the Responsible Care Program and the National Association of Ski Areas created a Sustainable Slopes Program (see King & Lenox, 2000; Rivera, deLeon, & Koebler, 2006, respectively). Scholars investigating the VEP phenomenon have observed that there are a number of reasons for firms or industry to adopt VEPs, like as a way of reaching out to consumers with a green signal (thus abetting their comparative differentiation advantage), as a way of obtaining new technologies and information, or as a way of avoiding later, possibly more constraining and invasive government-imposed regulations. VEP scholars, not surprisingly, soon offered a small but growing number of VEP-specific evaluations, finding (again not surpris-
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Voluntary programs have become widespread tools for governments and nongovernmental actors looking to improve industry's environmental and regulatory performance. Voluntary programs can be conceptualized as club goods that provide nonrival but potentially excludable benefits to members. For firms, the value of joining a green club over taking the same actions unilaterally is to appropriate the club's positive brand reputation. Our analysis of about 3,700 U.S. facilities indicates that joining ISO 14001, an important nongovernmental voluntary program, improves facilities' compliance with government regulations. We conjecture that ISO 14001 is effective because its broad positive standing with external audiences provides a reputational benefit that helps induce facilities to take costly progressive environmental action they would not take unilaterally.
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Combining insights from international relations theory with institutional approaches from organization theory and public policy, this book provides a complete explanation for the adoption of corporate social responsibility (CSR), showing how global norms influenced CSR adoption in the mining industry. Global normative developments have clearly had an important influence on major mining companies: by the mid-2000s, the majority had adopted sustainable development as a normative frame for their CSR policies and practices. However, there is significant variation between firms in terms of the timing, degree of commitment, and the willingness to assume a leadership role in promoting global standards for the mining industry. The author finds that attributes internal to the firm, including the critical role of leadership, and the way in which management responds to the institutional context and operational challenges faced in different countries are important influences on CSR adoption and important factors explaining variation.
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This book examines and evaluates various private initiatives to enforce fair labor standards within global supply chains. Using unique data (internal audit reports, and access to more than 120 supply chain factories and 700 interviews in 14 countries) from several major global brands, including NIKE, HP, and the International Labor Organization's Factory Improvement Programme in Vietnam, this book examines both the promise and the limitations of different approaches to actually improve working conditions, wages, and working hours for the millions of workers employed in today's global supply chains. Through a careful, empirically grounded analysis of these programs, this book illustrates the mix of private and public regulation needed to address these complex issues in a global economy.
Article
This is the first study to evaluate the impact of self-regulation on industrial accidents. We examine Responsible Care in the US chemical manufacturing sector using our author- constructed database of 1,867 firms that own 2,963 plants between 1988 and 2001. Firms’ self- selection into RC is instrumented using pollution-related regulatory pressure on firms that influences their probability of joining RC, but not plant-level accidents. The average treatment effect on the treated indicates that RC reduces the likelihood of accidents by 2.99 accidents per 100 plants in a given year. This 69.3% reduction in the likelihood of accidents, accounting for the plants that participate in RC, translates to back-of-the-envelope avoided losses of $0.8 billion to $3.8 billion per year. RC also reduces the likelihood of more narrowly-defined accidents, i.e., process safety accidents and accidents related to violations of RC codes, by 5.75 accidents per 100 plants in a given year or by 85.9%.
Article
Institution theory and the resource-based theory of the firm represent two explanations of how organizations adapt to institutional change. These two theories are compared, contrasted, and applied to the context of environmental management. Arguments based on the theories are used to generate hypotheses about the diffusion and efficacy of the ISO 14001 system, a set of voluntary environmental standards. Empirical tests of the factors lying behind adoption of the ISO 14001 standards and whether or not the standards lead to toxic emissions reductions are conducted on a set of 316 electronics facilities located in the United States. Results support the idea that the standards allow facilities to "catch-up" to best practices if they are an especially high producer of toxic emissions. The paper ties the analysis back to current strategic management theories about organizations and institutional change, and then concludes by assessing the value of ISO 14001 versus traditional government regulation from the point of view of professionals and policy-makers.
Book
In recent years a set of new postempiricist approaches to public policy, drawing on discursive analysis and participatory deliberative practices, have come to challenge the dominant technocratic, empiricist models in policy analysis. In this book, Frank Fischer brings together this work for the first time and critically examines its implications for the field of public policy studies. He describes the theoretical, methodological and political dimensions of this emerging approach to policy research. The book includes a discussion of the social construction of policy problems, the role of interpretation and narrative analysis in policy inquiry, the dialectics of policy argumentation, and the uses of participatory policy analysis. After an introductory chapter, ten further chapters are arranged in four parts: Part I, Public Policy and the Discursive Construction of Reality (two chapters), introduces the re-emergence of interest in ideas and discourse. It then turns to the postempiricist or constructionist view of social reality, presenting public policy as a discursive construct that turns on multiple interpretations. Part II, Public Policy as Discursive Politics (two chapters), examines more specifically the nature of discursive politics and discourse theory and illustrates through a particular disciplinary debate the theoretical, methodological, and political implications of such a conceptual reframing of policy inquiry. Part III, Discursive Policy Inquiry: Resituating Empirical Analysis (four chapters), offers a postempiricist methodology for policy inquiry based on the logic of practical discourse, and explores specific methodological perspectives pertinent to such an orientation, in particular the role of interpretation in policy analysis, narrative policy analysis, and the dialectics of policy argumentation. Part IV, Deliberative Governance (two chapters), discusses the participatory implications of such a method and the role of the policy analyst as facilitator of citizen deliberation .
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Even when political interests control bureaucratic outputs, the control of policy outcomes is complicated by trade-offs between controllable versus effective implementation strategies. I use a nested game framework to explain why a cooperative strategy can increase enforcement effectiveness in the narrow administrative game and why principal-agent control problems and collective action problems associated with the strategy lead policy beneficiaries to oppose the effective strategy in the broader political games. Analyses of state-level Occupational Safety and Health Administration enforcement provide evidence that cooperation does enhance the impact of enforcement in reducing workplace injury rates but that policy beneficiaries oppose and sabotage cooperation. The interactions between administrative effectiveness and interest group politics in this and other implementation situations require that both be analyzed simultaneously, and the nested game framework can provide a systematic approach to such analyses.
Article
An increasingly common regulatory tool is one that delegates the duty to provide information to the regulated entities, creating new problems in principal-agency models of regulation. Failure to comply with regulations mandating information provision is as much due to ignorance of reporting requirements as to willful evasion. A modified detection controlled estimation model for coverage, violation, and detection of facility compliance with the EPA's Toxics Release Inventory, estimated for facilities in Minnesota in 1991. Violation is better understood by those variables associated with the likelihood that the firm is ignorant of TRI reporting requirements, than by those associated with evasion. Firms in violation tend to be small facilities, releasing or transferring small amounts of toxins to the environment.
Article
This article examines how the quality of domestic regulatory institutions shapes the role of global economic networks in the cross-national diffusion of private or voluntary programs embodying environmental norms and practices. We focus on ISO (International Organization for Standardization) 14001, the most widely adopted voluntary environmental program in the world, which encourages participating firms to adopt environmental stewardship policies beyond the requirement of extant laws. We hypothesize that firms are motivated to signal environmental stewardship via ISO 14001 certification to foreign customers and investors that have embraced this voluntary program, but only when these firms operate in countries with poor regulatory governance. Using a panel of 129 countries from 1997 to 2009, we find that bilateral export and bilateral investment pressures motivate firms to join ISO 14001 only when firms are located in countries with poor regulatory governance, as reflected in corruption levels. Thus, our article highlights how voluntary programs or private law operates in the shadow of public regulation, because the quality of public regulation shapes firms' incentives to join such programs.
Article
Norms shape policy when they get translated into concrete programs. What if a widely shared norm gets translated into a weak program? How might this influence the program's legitimacy? We examine these issues in the context of the United Nations Global Compact, a voluntary program that embodies the widely shared norm of corporate responsibility. While both international intergovernmental organization (IGO) and international non-governmental organization (INGO) networks support this norm, they differ on the adequacy of the Compact's program design. We explore how this tension affects the diffusion of the Compact across countries, which vary in their levels of embeddedness in IGO and INGO networks. Our findings suggest that embeddedness in IGO networks encourages adoption, while embeddedness in INGO networks discourages it. Our analysis provides important lessons for sponsors of voluntary governance mechanisms. Widespread support for a norm does not automatically ensure support for a program that claims to embody it.
Article
Governments enact environmental regulations to compel firms to internalize pollution externalities. Critics contend that regulations encourage technological lock-ins and stifle innovation. Challenging this view, the Porter-Linde hypothesis suggests that appropriately designed regulations can spur innovation because (1) pollution reflects resource waste; (2) regulations focus firms’ attention on waste; and (3) with regulation-induced focus, firms are incentivized to innovate to reduce waste. This article explores the regulation–innovation linkage in the context of voluntary regulations. The authors focus on ISO 14001, the most widely adopted voluntary environmental program in the world. Examining a panel of 79 countries for the period 1996–2009, they find that country-level ISO 14001 participation is a significant predictor of a country's environmental patent applications, a standard proxy for innovation activity. The policy implication is that public managers should consider voluntary regulation's second-order effects on innovation, beyond their first-order effects on pollution and regulatory compliance.
Book
In recent years a startling policy innovation has emerged within global and domestic environmental governance: certification systems that promote socially responsible business practices by turning to the market, rather than the state, for rule-making authority. This book documents five cases in which the Forest Stewardship Council, a forest certification program backed by leading environmental groups, has competed with industry and landowner-sponsored certification systems for legitimacy. The authors compare the politics behind forest certification in five countries. They reflect on why there are differences regionally, discuss the impact the Forest Stewardship Council has had on other certification programs, and assess the ability of private forest certification to address global forest deterioration.
Article
How do social movements influence corporations? Recent work suggests that movements can inflict material damage on their targets and shape categories of evaluation in organizational fields. Extending these ideas, we examine the effects of anti-sweatshop campaigns on sales, stock performance, reputation and specialized ratings of U.S. firms, using fixed-effects regression models and event study methods. The analysis demonstrates that social movements can in some circumstances shape both the markets and fields that firms inhabit. Specifically, anti-sweatshop campaigns (1. had negative effects on sales (though only among certain types of firms), (2. influenced stock prices, and (3. shaped specialized ratings of corporate responsibility. They also diminished previously positive corporate reputations (to a modest degree) but did not radically alter reputational hierarchies in the business community.
Article
We provide a theoretical analysis of multitask promotion tournaments in which workers increase their promotion chances by under-performing (over-performing) on tasks that are de-emphasized (emphasized) in a promotion rule. In some settings the firm can mitigate such “strategic shirking” by committing to a promotion rule that requires more balance in the performances across job tasks than would be justified on productivity grounds. The model can explain “Putt’s Law”, which states that competent workers are sometimes passed over for promotion in favor of incompetent ones. (JEL J24, M53).
Article
This article examines why global corporate social responsibility (CSR) frameworks have gained popularity in the past decade, despite their uncertain costs and benefits, and how they affect adherents’ behavior. We focus on the two largest global frameworks—the United Nations Global Compact and the Global Reporting Initiative—to examine patterns of CSR adoption by governments and corporations. Drawing on institutional and political-economy theories, we develop a new analytic framework that focuses on four key environmental factors—global institutional pressure, local receptivity, foreign economic penetration, and national economic system. We propose two arguments about the relationship between stated commitment and subsequent action: decoupling due to lack of capacity and organized hypocrisy due to lack of will. Our cross-national time-series analyses show that global institutional pressure through nongovernmental linkages encourages CSR adoption, but this pressure leads to ceremonial commitment in developed countries and to substantive commitment in developing countries. Moreover, in developed countries, liberal economic policies increase ceremonial commitment, suggesting a pattern of organized hypocrisy whereby corporations in developed countries make discursive commitments without subsequent action. We also find that in developing countries, short-term trade relations exert greater influence on corporate CSR behavior than do long-term investment transactions.
Article
We use panel data on ISO 9000 quality certification in 85 countries between 1993 and 1998 to better understand the cross-national diffusion of an organizational practice. Following neoinstitutional theory, we focus on the coercive, normative, and mimetic effects that result from the exposure of firms in a given country to a powerful source of critical resources, a common pool of relevant technical knowledge, and the experiences of firms located in other countries. We use social network theory to develop a systematic conceptual understanding of how firms located in different countries influence each other's rates of adoption as a result of cohesive and equivalent network relationships. Regression results provide support for our predictions that states and foreign multinationals are the key actors responsible for coercive isomorphism, cohesive trade relationships between countries generate coercive and normative effects, and role-equivalent trade relationships result in learning-based and competitive imitation.
Article
Drawing upon institutional and stakeholder theories, we explore the ‘causal’ mechanisms of institutionalization and their influence on Sustainable Development initiatives. To test our arguments, we study the registration patterns of 394 large corporations from 12 Western European and Latin American countries into the United Nations Global Compact. Results indicate that the normative and mimetic mechanisms of institutionalization (i.e., academe and peer influence) are better indicators of Sustainable Development initiatives than the coercive one (i.e., government regulation). The implications of these findings are consequential if SD practices continue as an ethical choice, and not a mandated obligation, for corporate decision makers.
Article
One of the emerging areas in the public policy literature concerns new modes of thought about the construction and analysis of public policy. This article extends notions about politics within the ‘policy design’ literature by considering the implications of different political environments for policy design and implementation. Two different political environments – policies with and without publics – that form ends of a continuum of policy publics are discussed. A contrast is drawn between these two polar political environments with respect to differing policy design and implementation challenges, as well as with respect to differing opportunities for policy learning.
Article
Little attention has been given in policy analysis to the creative process of designing solutions to public policy problems. There are a number of difficulties in applying macro-level theories – whether from economics, sociology, philosophy or macro-systems theory – in the policy process. Any macro-level theory will tend to provide inadequate guidance in one or more of three aspects of policy-making: a model of causation, a model for evaluating alternatives and outcomes, and a model of how interventions operate. Our current knowledge about which policy strategies work best under which conditions is at best rudimentary. Academic disciplinary perspectives focus on a narrow repertoire of policy instruments. What is required is a design focus which draws on instruments associated with a range of disciplines and professions. A design perspective involves both a systematic process for generating basic strategies and a framework for comparing them. Such an approach will require at least the following elements: (1) the characteristics of problems (scale, collectiveness, certainty, predictability, independence); (2) characteristics of goals (value-laden, operational, process of goal-setting); (3) characteristics of instruments (suitability of different instruments).
Article
Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them. Recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management, rather than traditional arenas of strategic management. Using a greatly improved source of data on corporate social performance, this paper reports the results of a rigorous study of the empirical linkages between financial and social performance. Corporate social performance (CSP) is found to be positively associated with prior financial performance, supporting the theory that slack resource availability and CSP are positively related. CSP is also found to be positively associated with future financial performance, supporting the theory that good management and CSP are positively related.© 1997 by John Wiley & Sons, Ltd
Article
Across Europe, there is considerable interest in establishing stronger links between environmental regulation and standards for environmental management systems (EMSs) such as ISO 14001. If it can be demonstrated that possession of an EMS results in improved environmental or regulatory performance, then there is a case for granting ‘regulatory relief’ in the form of, for example, reduced inspection frequencies. This paper describes the analysis of information on almost 800 sites regulated under the UK's Integrated Pollution Control regime. It demonstrates that having an EMS improves certain procedural aspects of environmental management but does not appear to reduce the likelihood of breaching permit conditions. Interviews with certification bodies revealed the factors, such as differentiation of services in the market for certification, that underlie this finding. It is concluded that some limited recognition of EMS in regulation is warranted, because there is overlap between some regulatory and certification procedures, and because having an EMS facilitates the supply of information necessary for regulation. The broader implications for regulated industry, certification bodies, regulators and wider environmental policymaking are considered. Copyright © 2003 John Wiley & Sons, Ltd and ERP Environment.
Article
Does membership in Intergovernmental Organizations (IGOs) affect states’ human rights behavior? One might expect IGOs with a specific human rights mandate, like the International Labour Organization or the Council of Europe, to have a positive effect on the human rights practices of their member states. But what about other sorts of IGOs, particularly those with no direct connection to human rights issues? This study employs cross-national data on abuses of “physical integrity rights” for 137 countries over the period 1982–2000 to test the hypothesis that IGOs can promote the diffusion of human rights norms by providing venues for interstate socialization. Recent empirical work on IGOs has suggested that this sort of socialization effect can play an important role in promoting democracy and can also lead to a more general convergence among states’ interests. The results presented here suggest that IGOs can have a surprisingly powerful influence on states’ human rights practices as a result of this process.
Article
Voluntary environmental programs (VEPs) seek to improve the environment by encouraging, rather than mandating, businesses and other organizations to adopt environmentally protective measures. Since the 1990s, VEPs established by industry, government, and nongovernmental organizations have proliferated around the globe, raising the question of how effective these programs are in securing environmental protection, both on their own and in comparison to traditional mandatory regulations. This article reviews the emerging research literature on VEPs, describing the variation in their structures, providing a framework for assessing their impacts, and summarizing what is known about why organizations engage in voluntary environmental action and what effects these programs have on environmental quality.