The United Nations' top independent expert on corporate social responsibility issues has called for greater accountability by global corporations and said initiatives on this front had still not engaged many state-owned enterprises.
GENEVA — The United Nations' top independent expert on corporate social responsibility issues has called for greater accountability by global corporations and said initiatives on this front had still not engaged many state-owned enterprises.
Labor unions and human rights advocacy groups have reported and documented cases of abuse in the apparel industry in places such as China, Bangladesh, Cambodia and Jordan.
"Corporations are under growing scrutiny by the international human rights mechanisms," said John Ruggie, the special representative of the U.N. secretary-general on the issue of human rights and transnational corporations and other businesses, in a report to the 47-member-state Human Rights Council.
In his report, Ruggie, professor of international affairs at Harvard University, said evidence suggests that "firms operating in only one country and state-owned companies often are worse offenders than their highly visible private sector transnational counterparts."
Warren Tichenor, the American ambassador to the U.N. in Geneva said the U.S. "remains committed to voluntary corporate responsibility initiatives in a variety of sectors throughout the world."
He said these initiatives "are a complement to rule of law and can also help foster human dignity and improved working conditions, environmental safeguards and good governance."
Ruggie emphasized that supply chain assurance "faces the greatest credibility challenges" and noted global brands and retailers have in many instances "developed supplier codes to compensate for weak or unenforced standards in some countries because global social expectations require them to demonstrate adherence to minimum standards."
Asked if there was a trend toward better corporate social responsibility, Ruggie said, "I think the large branded companies are trying very hard. The rate of success is uneven."
Concerning the disconnect between the strict criteria adhered to by corporations in the Western countries where they are based compared with subsidiaries in developing countries where many processing activities are located, Ruggie said, "Subsidiaries are one issue, supply chain factories where there is no equity relationship are more difficult. The large branded companies have paid a great deal of attention to their first-tier suppliers, but of course it gets harder the further down the supply chain you go."
Ruggie, one of the pioneers of corporate social responsibility, stressed that consumer and activist pressure has always been important in enhancing corporate accountability and said he expects this will continue. But he also observed that more companies have internalized the need to do these things than in the past.Pressure is also growing for firms to deliver results as good corporate citizens or risk a fallout in the markets from shareholders and ethically sensitive investment funds.
"The financial community is increasingly interested in social performance and I think that's an important development that augers well for the future," Ruggie said.
In his report to the council, Ruggie stressed to delegates that even leading firms did not always fully meet expectations of 21st century accountability standards and noted that few conducted systematic human rights impact assessments routinely.
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