Financial Resource

society and academic institutions in a partnership, focusing on corporate best practices, resource gaps, partnership opportunities, philanthropy and the role of business in advocacy. The Global Business Council on HIV/AIDS is an international group of business leaders dedicated to advocating for an increased business response to AIDS both in the workplace and in the community. The Global Alliance for Vaccines and Immunization (www.vaccinealliance.org) was officially launched in January 2000 at Davos, with a mission of combining public and private resources and competencies to support immunization activities. It is a coalition of governments, the WHO, UNICEF and the World Bank; philanthropic foundations; the International Federation of Pharmaceutical Manufacturers Associations (IFPMA); and technical and research institutes.

v     Overcoming the digital divide: The ICT sector has engaged itself in a variety of policy dialogues and practical initiatives to bridge the ‘digital divide’ both within and between nations. Examples include: the G8 Digital Opportunity Task Force which consisted of leaders from the public, private and not-for-profit sectors; the UN’s multi-stakeholder ICT Task Force and the World Economic Forum’s Global Digital Divide Initiative. Business leaders are also supporting practical projects such as the Digital Partnership and Net Aid; and others such as those listed on the World Economic Forum website.

v     Investing in sustainable development: This has been an area of immense focus. The International Chamber of Commerce and World Business Council for Sustainable Development have established Business Action for Sustainable Development as a network and platform to provide business input and partnership examples to the World Summit for Sustainable Development in 2002.

v     Promoting good corporate governance: Business leaders are playing a role in several initiatives to promote good corporate governance. Examples include: The International Corporate Governance Network, pension funds and financial institutions with over trillion in assets under management working towards global convergence on standards of governance; and business support for Transparency International to tackle corruption. Another aspect of good governance is the efforts to promote sustainability reporting such as the Global Reporting Initiative.

v     Corporate citizenship at the sector level: The World Business Council for Sustainable Development and UNEP have played an important role in promoting sector-based initiatives for sustainable development in industries as diverse as mobility, cement, pulp and paper, information technology, banking and finance. Other examples include the E7 network of electricity companies; the International Hotels Environment Initiative; and the Global Mining Initiative.

v     Supporting national development: At the national level business leaders are supporting initiatives focused on goals such as education, local enterprise and job creation, and rural development. Examples include: Philippine Business for Social Progress; the National Business Initiative in South Africa;  Instituto Ethos in Brazil;  Business in the Community in the UK;  and Landcare in Australia.

v     Engaging Tomorrow’s Leaders: Today’s business leaders are supporting networks such as the World Economic Forum’s Global Leaders for Tomorrow, which consists of young leaders from the public and private sectors and civil society, and AIESEC, the world’s largest student-run organization to promote sustainable development and corporate citizenship. A small but growing number of business schools have started to invest in research and teaching in this area supported by some CEOs.

 
5.         Progress of Corporate Citizenship in a Global Context

While the leadership challenge is especially apparent for executives in Europe and North America, it is also becoming a reality for many in Asia, Africa, the Middle East, and Latin America, especially those who aim to be global players – either doing business with or competing against the world’s top multinationals. Business leaders in each region are obviously influenced by different economic, social, cultural and political traditions, and different industry sectors face different types of corporate citizenship challenges. Despite these differences, the following trends in the concepts of corporate citizenship or corporate responsibility are common across geographic and sector boundaries:

1. From the corporate margins to the mainstream

2. From assertion to accountability

3. From paternalistic approaches to partnership

5.1.      From the corporate margins to the mainstream

In leading companies, corporate citizenship is moving beyond the boundaries of legal compliance and traditional philanthropy to become a more central factor in determining corporate success and legitimacy, with implications for corporate strategy, governance and risk management.

There is now growing recognition that global corporate citizenship is essentially about how the company makes its profits, everywhere it operates, not simply what it does with these profits afterwards. It is about how the company operates in three key spheres of corporate influence.

§         First, in its core business operations – in the boardroom, in the workplace, in the marketplace and along the supply chain.

Second, in its community investment and philanthropic activities.
Third, in its engagement in public policy dialogue, advocacy and institution building.

In all three spheres of corporate influence, the challenge for leadership companies is two fold:-

First, aim to ‘do minimal harm’ in terms of minimizing negative economic impacts, bad labour conditions, corruption, human rights abuses and environmental degradation that may result from a company’s operations. This is a goal that calls for management strategies such as compliance – with internationally accepted norms, guidelines and standards, such as the OECD Guidelines for Multinational Corporations and the UN Global Compact, as well as with national laws and regulation – and control of social and environmental risks, liabilities and negative impacts.

Second, aim to ‘do positive good’ in terms of creating new value for both the business and its stakeholders in the countries and communities in which it operates. This can be achieved through strategic philanthropy and community investment, which harnesses the company’s core competencies, products and services, not only its philanthropic cheques. Examples include, ICT companies supporting community projects to tackle the digital divide, financial companies supporting microcredit initiatives, and professional services firms sharing management expertise with local community organizations. More strategic, are efforts by companies to create new business value through developing new products, processes and technologies, and in some cases even transforming their business models, to serve untapped social and environmental needs, or facilitate entry into underserved markets. Examples include developing new markets for carbon emissions trading, creating new environmental technologies, and producing more affordable access to essential services such as clean water, energy, food, housing and medicines for the estimated 3 billion people who live on less than a day.

A taskforce of the World Economic Forum, consisting of a group of over 40 CEOs and chairmen from 16 countries and representing 18 industry sectors signed a joint statement on global corporate citizenship. They agreed that: “The greatest contribution that we can make to development is to do business in a manner that obeys the law, produces safe and cost effective products and services, creates jobs and wealth, supports training and technology cooperation, and reflects international standards and values in areas such as the environment, ethics, labour and human rights. To make every effort to enhance the positive multipliers of our activities and to minimize any negative impacts on people and the environment, everywhere we invest and operate. A key element of this is recognizing that the frameworks we adopt for being a responsible corporate citizen must move beyond philanthropy and be integrated into core business strategy and practice.”

5.2. From assertion to accountability

A second key trend at the heart of the emerging corporate citizenship agenda is the growth in demands by stakeholders, including shareholders, for corporations to demonstrate greater accountability and transparency – and to do so not only in terms of their financial accounts and statements, but also in terms of their wider social, economic and environmental impacts.

Gone are the days when consumers, investors and the general public trusted all the information they received from companies and were relatively undemanding on what this information should cover in terms of

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