The Role of Governments in Promoting Corporate ...

1 The Role of Governments in Promoting Corporate responsibility and Private sector Engagementin DevelopmentAcknowledgementsThe Bertelsmann Stiftung and the United Nations Global Compact would like to thank the followingpublic agencies and international organizations for their efforts in contributing to this paper:Danish Ministry of Economic and Business Affairs, Denmark Emergia Institute, GermanyFederal Ministry for Economic Cooperation and development (BMZ), Germany German Agency for Technical Cooperation (GTZ), Germany Office of the Comptroller General, Brazil Organisation for Economic Co-operation and development (OECD)

2 Center Berlin, GermanyUN Global Compact Office, New YorkThe United Nations Global CompactThe United Nations Global Compact brings business together with UN agencies, labour, civil societyand Governments to advance ten universal principles in the areas of human rights, labour,environment and anticorruption. Through the power of collective action, the United Nations GlobalCompact seeks to mainstream these ten principles in business activities around the world and to catalyze actions in support of broader UN goals. With nearly 8,000 participants and other stakeholders from more than 130 countries, it is the world s largest voluntary Corporate citizenship more information, please visit Bertelsmann Stiftung The Bertelsmann Stiftung is committed to serving the common good.

3 Its work is based on the conviction that competition and civic engagement are fundamental to ensuring social change. In accordance with its articles of incorporation, the Bertelsmann Stiftung is a private operatingfoundation that carries out its own projects. It conducts several programs addressing issues in diverse areas such as education, health care, economic development and the state of Corporate Social responsibility (CSR) program pursues three objectives. The first is to promoteCR activities in business by highlighting firms that engage in exemplary activities, so that othersmight emulate them.

4 The second is to provide practical guidance on how to implement successfulCR strategies into business operations. The third is to develop instruments and establish platformsfor cooperation between business, civil society actors and policymakers that yield collaborative solutions. For more information, see 2010 United Nations Global Compact | Bertelsmann Stiftung3 The Role of Governments in Promoting Corporate responsibility and Private sector Engagement in DevelopmentImprintCopyright 2010UN Global Stiftung :UN Global CompactDC2-612, 2 UN PlazaNew York, NY 10017- United States of America - Bertelsmann StiftungCarl-Bertelsmann-Stra e 25633311 G tersloh - Germany Authors.

5 Anna PetersProgram Corporate Social responsibility Bertelsmann R Program Corporate Social responsibility Bertelsmann & Cover Illustration:Stefan M mpfer, grafic works, Frankfurt am MainCopy edit: Barbara Serfozo, BerlinPrint:DG3 - Diversified Global Graphics Group, New YorkDate of Publication: June 20104 ContentsExecutive Summary7 IntroductionCorporate responsibility as a Strategic Tool for Business and Society8 Chapter 1 Recent Developments in CR Public Policy in the International Arena 12 Chapter 2 government Intervention and Action Areas in Promoting CR16 Chapter 3 Good Policy Options to Foster CR22 Chapter 4 Innovative Examples of Public Policy for CR29 Chapter 5 Practical Guidance for Developing a CR Policy Framework 40 Annex44567 The economic crisis that so many countrieshave been experiencing has put the

6 Spotlighton the need for more Corporate responsibilityand what Governments can do to promote addition, interest in innovative ways tohelp stretch government resources for devel-opment has risen. Responsible business, as thekey driver of sustainable development , alsohas a lot to offer in the way of resources, expertise, distribution networks, personnel,and so this backdrop, this report focuses ontwo dimensions of the relationship betweengovernments and business. The first explorestrends in public policies Promoting corporateresponsibility (CR).

7 The second explores oppor-tunities for Governments to engage the privatesector in development . The approach advocatedby the report is that business efforts to pro-mote development are or should be seen ascore to being a responsible main public policy options for govern-ments in Promoting Corporate responsibilityand business engagement in development discussed in the report are: Awareness-raising efforts to create a sharedunderstanding of Corporate responsibilityamong companies and the broader public,including what business can do to imple-ment it.

8 Partnerships designed to create win-winsituations in which various stakeholderswork collectively toward a shared goal. Soft law approaches that promote and incentivise voluntary action by business asa complement to state regulation. Mandating instruments that allow govern-ments to monitor and enforce report illustrates the policy options witha number of examples of public actions andpolicies in the north and south. While thereis clearly no one-size-fits all approach, the aimof this report to assist government in consider-ing their menu of options specific to their national context and the specific thematicissue that they seek to address whetherhuman rights, labor, the environment, anti-corruption and/or business engagement ortopics like health, water, education etc.

9 A six-step model provides Governments with acompass intended to assist in designing thepolicy framework for Corporate responsibilityand business engagement in developmentthat is right for them. The six steps are: Understanding the CR-relevant context. Defining Corporate responsibility . Situating CR within a government struc-ture. Defining the CR public policy rationale Identifying appropriate types of policy in-tervention for CR. Monitoring and impact SummaryThe paper is based on records in the publication The CSR Navigator Public Policies in Africa,the Americas, Asia and Europe (2007).

10 * TheCSR Navigator was published by the Bertels-mann Stiftung and the German Agency forTechnical Cooperation (GTZ), and was updatedfor the purposes of this paper. The innovativeexamples in CR public policy are based on in-depth Internet research and consultationwith experts and public sector representativesaround the world. * The CSR Navigator public policies in Africa, the Americas, Asia and Europe (2007) (short and long version) is available at: Corporate responsibility (CR) agenda hasreached a tipping point in the year 2010. Twokey events leading up to this point the col-lapse of Lehman Brothers in 2008 and themixed results of the Copenhagen Summit in2009 have had game-changing consequencesfor businesses and Governments alike, callingthem to redefine their roles and responsibili-ties in society.