As Asian economies grow and corporate ventures become increasingly multinational, big challenges are emerging for corporate social responsibility and business ethics.
But how can Australian corporations advance socially responsible corporate behaviour in diverse value systems? And, given recent events like the collapse of Rana Plaza in Bangladesh, with the loss of more than 1100 lives, how can Western corporations effectively pursue responsible practice in the “Asian Century”?
For Australian corporations, engaging with Asia requires improved our understanding of values, priorities and approaches to the role of the corporation within diverse societies.
The Commonwealth Government’s recent $35 million commitment to a National Centre for Asia Capability, aimed at “upskilling” the Australian workforce to engage effectively with Asian nations, underscores the importance of such skills.
Jeremy Moon, Professor and founding Director of the International Centre for Corporate Social Responsibility, at the Nottingham University Business School, visited Melbourne as the Trinity College Gourlay Visiting Professor of Ethics in Business.
Professor Moon is a world leader in the study of businesses’ responsibility to society and co-editor of the Oxford Handbook of Corporate Social Responsibility.
Professor Moon discusses the link between corporate social responsibility and local supply chains with Centre for Public Policy Research Fellow, Sara Bice.
SB: Professor Moon, a number of years ago you wrote with Wendy Chapple about corporate social responsibility in Asia. In the article, one of your hypotheses was that CSR in Asia depends on development. Eight years down the track, and in light of the rise of Asia, does your hypothesis ring true?
JM: Our point was that if CSR is going to be seen as legitimate, both in host countries and among home country consumers, investors, employees, then it must be seen to be contributing to development in the broad, rather than just a footnote to it. And I think the claims of corporate social responsibility are often that companies, through their supply chains can achieve things which simple redistributions of wealth may not be able to be achieve or may be insensitive to.
In that sense, I stand by the expectation for corporate behaviour. And I think that governments in developing countries, in as much as they started to try to encourage corporate social responsibility, they’ve often harnessed it to national development goals.
The most obvious case is that of China, which is encouraging CSR to complement societal goals and to assist export industries to better meet the expectations of target markets. Countries like Singapore, which is developed, but nonetheless is worth thinking about in this conversation as they very clearly link CSR with development goals. I suspect the link runs through other Southeast Asian countries.
It’s been over a decade since we suggested that hypothesis; whether there is evidence that we were right, I’m not entirely sure. But what we do know is that the language of corporate social responsibility runs through local supply chains. It often sort of reinvigorated discussions of business norms and discussions around ethics.
So, in India, where there had been longstanding ethical norms on behalf of business people which then morphed into business philanthropy, that’s, if you like, been a very positive way of them integrating the spirit of philanthropy with doing the business more responsibly. To that extent again, I think that CSR is a way of managing and professionalising an ethical instinct. And over a decade of work in India, there is something happening there which I would regard as positive.
As always with these sorts of things, the challenge is getting these innovations and solutions to scale. And I think the challenges lie there for companies who really should use the Bangladesh situation to go to scale on standards enforcements, safety standards in factories. Why not?
SB: And certainly the Bangladesh case was in the news lately because some of these big multinationals came under scrutiny and said, “We didn’t realise that our clothes were being produced in that factory”.
JM: Yeah, and this might provoke two sorts of responses: The first being that companies should shorten their supply chains, which probably would mean requiring them to buy from a smaller number of bigger operators.
It may even prompt them to bring some of the production home. …But they need to understand the provenance of their goods. Otherwise, any claims being made to being members of ethical trade initiatives are simply fraudulent.
One needs to understand one’s business from beginning to end. This is one of the new demands in the CSR terrain. It’s not just about sourcing but also about disposal, as well.
The full interview transcript is available here. Jeremy Moon will return to Melbourne in November for the second series of Gourlay Lectures.