Voluntary “multi-stakeholder” programs have been a prominent feature of the corporate responsibility landscape for more than a decade. Launched by companies, industry groups, NGOs, governments and international organizations, programs like the UN Global Compact, the Voluntary Principles on Security and Human Rights, and the Fair Labor Association, bring together diverse actors to tackle common problems on the corporate responsibility agenda: human rights, labor standards, environmental standards, and transparency. Many of these pioneering efforts established best practices for subsequent multi-stakeholder collaborations.

But as the corporate responsibility field matures, many of these multi-stakeholder programs are struggling to remain relevant. Initial successes have been followed by substantial challenges. Stakeholders are questioning programs over the scope of their mandates, participation levels, and accountability and governance mechanisms. Some multi-stakeholder efforts face credibility and sustainability concerns with the potential to scuttle the programs altogether.

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Harvard professor John G. Ruggie has submitted his third and final report to the United Nations Human Rights Council in his role as Special Representative of the UN Secretary-General on the issue of human rights and transnational corporations.

The Ruggie Report is an important benchmark that captures current mainstream thinking on key business and human rights challenges. Ruggie’s recommendations are likely to influence businesses, governments, and non-governmental organizations working to improve corporate human rights performance. Companies seeking to meet stakeholder expectations for corporate responsibility should become familiar with Ruggie’s work.

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Many leading corporate responsibility efforts are the result of stakeholder pressure on companies to improve labor conditions in their global supply chains. Since the 1990s, industries ranging from apparel, sporting goods and toys, to food, manufacturing and technology, have sought to demonstrate responsibility through supply chain compliance programs. Supply chain best practices – codes of conduct, independent monitoring, public reporting, and collaboration with nongovernmental organizations – have shaped stakeholder expectations of corporate responsibility initiatives generally, often setting the bar for other companies and industries.

Supply chain best practices continue to emerge. Key challenges for today’s leading companies include:

• Moving beyond monitoring to focus on supplier training and education;
• Addressing “code and monitoring fatigue” by consolidating brand, industry and multistakeholder compliance efforts; and
• Finding ways to demonstrate (and reward) improved social and environmental performance al all levels of global supply chains.

Current issues in the sourcing world were the focus of Intertek’s Ethical Sourcing Forum North America earlier this month. Intertek provides auditing, testing, quality assurance and certification services for multinational companies, so the conference had a decidedly corporate perspective, emphasizing current corporate compliance efforts and attracting attendees responsible for supply chain management.

The opening panel provided a valuable survey of current trends by three experts on the challenges of responsible sourcing.

Marcela Manubens, Senior Vice President, Global Human Rights & Social Responsibility at Phillips-Van Heusen, noted that: Read more

Three years ago, when The Economist first published a special report on corporate responsibility, the magazine took a highly skeptical view, asking whether, to justify its activities, a company must do anything more than simply earn a profit?[i]

Not surprising, perhaps, that The Economist would echo the orthodox arguments of Milton Friedman, the economist who famously wrote in 1970 that the only “social responsibility of business is to increase its profits,” and that corporate social responsibility is a “fundamentally subversive doctrine in a free society.” [ii]

I was intrigued when the British magazine took up corporate responsibility again last month. It seems The Economist has had a change of heart.

The Economist’s 2008 Special Report acknowledges that corporate responsibility is now seen as mainstream by leading companies and concludes that it is worthwhile to single out corporate social responsibility “if it helps businesses look outwards . . . and think imaginatively about risks and opportunities.” [iii]

Why such a conversion in the space of three years? One reason may be the backlash generated by its 2005 Report, which was widely criticized by corporate responsibility practitioners and, reportedly, by members of The Economist’s own editorial staff.

It is more likely that The Economist is simply acknowledging business realities it can no longer ignore. Read more