UN reports on emerging government roles for scaling CSR

Almost 20 years ago governments called on business and civil society to join the challenge of promoting sustainable development. Since the Rio Earth Summit in 1992, many companies, NGOs, unions and others worked together to create new standards for the social and environmental performance of business. The UN today reports that these are becoming influences in international trade and investment, with the Forest Stewardship Council (FSC) covering 11% of world timber trade and the Marine Stewardship Council (MSC) covering over 6% of the worlds wild caught fish.

There was a time when the growth of such corporate social responsibility (CSR) standards was hailed by some politicians and business leaders as evidence that governments did not need to intervene in markets for sustainable development. Yet the statistics of success do not justify such a a view, as simply inverting the numbers above, we see that worldwide 89% of timber and 94% of the wild fish catch are not certified as sustainable, while problems with deforestation and fisheries collapse are just two of many global challenges requiring international collaboration by governments.

The publication of the 2011 World Investment Report today shows that many governments have moved well beyond excuses for inaction, and are now actively leveraging private CSR standards to achieve public outcomes. This form of collaborative regulation by governments arises from the dual challenges of needing to make markets more sustainable and socially inclusive, on the one hand, and limited resources for enforcing regulations on the other. In this new policy arena, governments are using systems where businesses pay the costs of their own regulation, through certification schemes.

The UN report comes at an important time when governments are assessing what they can commit to do to promote sustainable development, at the twentieth anniversary of the Rio Earth Summit, coming next year in Rio De Janiero. If 1992 was about governments calling on business and civil society to work together for suatainable development, it appears that Rio 2012 may be about business and civil sociuety calling governments to join in and help to scale the approachges they have pioneered over the last 20 years.

As someone who heeded the original call of Rio to for collaborative innovation towards sustainable development, and had the privilege of working on the early phases of both the FSC and MSC, Im delighted to see this new agenda emerge. Its been a pleasure to work with UNCTAD on the CSR sections of this years World Investment Report.

Perhaps we are witnessing the birth of a new policy agenda on business regulation worldwide, where governments move beyond traditional hands-on or hands-off approaches to markets, and instead seek to nudge business towards more responsible and sustainable behaviours. As the UNCTAD report points out, in this new era we must remember to promote the effectiveness and accountability of any governance mechanisms. Only if these new approaches help empower those affected by trade and industry and have little voice at present, will they achieve a sustainable scaleable place in our global economy.

You can download section 3E of the World Investment Report 2011.

Professor Jem Bendell is director of Lifeworth Consulting. His last book was “The Corporate Responsibility Movement”


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