The Impact of Corporate Social Responsibility: Corporate Activities, the Environment and Society 2022011083, 9781032021881, 9781032021904, 9781003182276

Citation preview

Routledge Studies in Management, Organisations and Society

THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY CORPORATE ACTIVITIES, THE ENVIRONMENT AND SOCIETY Edited by Robert Kudłak, Ralf Barkemeyer, Lutz Preuss, and Anna Heikkinen

The Impact of Corporate Social Responsibility

The Impact of Corporate Social Responsibility: Corporate Activities, the Environment and Society adds to the current debate on the societal-level impacts of corporate social responsibility (CSR). This edited volume offers conceptual and empirical contributions highlighting various dimensions of CSR impacts. What differentiates the book from others is that we examine the impact of CSR at the societal level, rather than focusing only on those impacts that occur at the level of the firm. The book’s contributions present novel perspectives that comprise, among others, empirical analyses of CSR activities, accounts of impacts in various geographic locations and state-of-the-art reviews of extant literature on the topic. The practical examples and theory-building presented here help us to better capture the societal impacts of contemporary CSR practice. This book will appeal to scholars and students as well as practitioners and policymakers interested in practical and theoretical aspects of CSR impacts at the societal level. Robert Kudłak is an Associate Professor at Adam Mickiewicz University in Poznań, Poland, and a member of the Long Range Planning editorial board. Ralf Barkemeyer is a Professor of Corporate Social Responsibility at Kedge Business School in Bordeaux, France, and Co-Editor-in-Chief of Business Ethics, the Environment and Responsibility (Wiley). Lutz Preuss is a Professor of Strategic Management and Director of the PhD Programme at Kedge Business School in Bordeaux, France. Anna Heikkinen is a Senior Lecturer of Management and Organizations and Academic Director of the Master’s Programme of Responsible Business at the Faculty of Management and Business, Tampere University, Finland.

Routledge Studies in Management, Organisations and Society

This series presents innovative work grounded in new realities, addressing issues crucial to an understanding of the contemporary world. This is the world of organised societies, where boundaries between formal and informal, public and private, local and global organisations have been displaced or have vanished, along with other 19th-century dichotomies and oppositions. Management, apart from becoming a specialised profession for a growing number of people, is an everyday activity for most members of modern societies. Similarly, at the level of enquiry, culture and technology, and literature and economics, can no longer be conceived as isolated intellectual fields; conventional canons and established mainstreams are contested. Management, Organizations and Society addresses these contemporary dynamics of transformation in a manner that transcends disciplinary boundaries, with books that will appeal to researchers, students and practitioners alike. Recent titles in this series include: Corporate Social Responsibility and Sustainability From Values to Impact Edited by Katarzyna Bachnik, Magdalena Kaźmierczak, Magdalena Rojek-Nowosielska, Magdalena Stefańska and Justyna Szumniak-Samolej The Dark Side of Organizational Behavior Examining Undesirable Aspects of Organizational Life Edited by H. Cenk Sözen and H. Nejat Basım The Impact of Corporate Social Responsibility Corporate Activities, the Environment and Society Edited by Robert Kudłak, Ralf Barkemeyer, Lutz Preuss and Anna Heikkinen Workplace Monitoring and Technology Jacek Woźniak Human Capital, Innovation and Disruptive Digital Technology A Multidimensional Perspective Muhammad Shujaat Mubarik, Muhammad Shahbaz and Qaisar Abbas

The Impact of Corporate Social Responsibility Corporate Activities, the Environment and Society Edited by Robert Kudłak, Ralf Barkemeyer, Lutz Preuss, and Anna Heikkinen

First published 2023 by Routledge 605 Third Avenue, New York, NY 10158 and by Routledge 4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business © 2023 selection and editorial matter, Robert Kudłak, Ralf Barkemeyer, Lutz Preuss and Anna Heikkinen; individual chapters, the contributors The right of Robert Kudłak, Ralf Barkemeyer, Lutz Preuss and Anna Heikkinen to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloguing-in-Publication Data Names: Kudłak, Robert, editor. | Barkemeyer, Ralf, 1973- editor. | Preuss, Lutz, 1965- editor. Title: The impact of corporate social responsibility : corporate activities, the environment and society / edited by Robert Kudłak, Ralf Barkemeyer, Lutz Preuss and Anna Heikkinen. Description: 1 Edition. | New York, NY : Routledge, 2023. | Series: Routledge studies in management, organizations and society | Includes bibliographical references and index. Identifiers: LCCN 2022011083 | ISBN 9781032021881 (hardback) | ISBN 9781032021904 (paperback) | ISBN 9781003182276 (ebook) Subjects: LCSH: Project management. | Social responsibility of business‐‐Environmental aspects. Classification: LCC HD69.P75 I453 2023 | DDC 658.4/092‐‐dc23/ eng/20220404 LC record available at https://lccn.loc.gov/2022011083 ISBN: 978-1-032-02188-1 (hbk) ISBN: 978-1-032-02190-4 (pbk) ISBN: 978-1-003-18227-6 (ebk) DOI: 10.4324/9781003182276 Typeset in Bembo by MPS Limited, Dehradun

Contents

List of Figures List of Tables List of Contributors 1

Introduction: The Need for a Book on CSR Impacts

vii viii ix 1

ROBERT K U DŁ A K, RAL F BAR KEME YE R , L U TZ PREU SS, AND ANNA H E IKK I N E N

2

What Do We Know about Social and Environmental Impacts of Corporate Social Responsibility?

14

ROBERT K U DŁ A K

3

The Societal Case for Small Business Social Responsibility: A Review of the Evidence of Societal Impact Types and Their Relevance to Stakeholders

44

J OHA N LIND E Q UE AN D O L GA SA MUE L

4

Is This the Road Forward for CSR? How Fortune “Change the World” Firms Emphasise Activities over Impact

70

MA RIA BUST O S, W A RRE N A . KA PL A N , MA R K US T AUSS IG , AND VERONI KA J. WI RTZ

5

How Does CSR Impact the Austrian Welfare State? An Analysis of Opposing CSR Discourses and Their Implications on Labour and Work-Related Welfare Arrangements J ULIA DOM N AN O VI C H

94

vi

Contents

6

Capturing CSR Impact on Suppliers through Social Accounting: A Case Study of an Apparel Retailer

117

SILVIA AY U SO

7

Considering the Social and Economic Implications of Infrastructure Megaprojects: Theoretical Contributions, Practical Challenges and Managerial Implications

134

LAU RA CORAZ ZA , DA N IE L T O RC H IA , DA RI O COT TAF AVA , A ND GIUSEP P E TI PA L DO

8

Towards a Relational Understanding of the Impact of Organisational Pro-Social Activities

161

SÉBA STIEN ME N A A N D V A LE R I A C A VO T T A

9

The Ethical Dimension of Impact-Oriented Corporate Social Responsibility (CSR)

179

DU ANE WIND SO R

Index

202

Figures

3.1 3.2 3.3 4.1 4.2 5.1 7.1 7.2 7.3 8.1 8.2 8.3

Analytical categories for systematic review Frequency of coding for coding categories CSR type, societal impact and stakeholders Organisation type and orientations related to value creation General elements of a logic model Example of a logic model of a program distributing bed nets to prevent malaria in children Welfare state actors in the discursive construction of two opposing CSR approaches Main topics related to MSR Number of papers related to MSR per year of publication Structure of the protocol Relational work and impact of pro-social activities Assessing the relational impact of a sustainability program Assessing the relational impact of a model of social reintegration

47 49 62 73 74 102 144 145 152 165 167 170

Tables

2.1 2.2 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.1 4.2 5.1 6.1 6.2 6.3 7.1 7.2 9.1

List of academic journals included in the review Identified studies exploring the CSR impacts Overview of search by journal category and number of papers Search terms for SBSR articles Frequency of empirically supported evidence for societal impact 1958–2020 Degree of attention to social inputs 1958–2020 Degree of attention to social process 1958–2020 Degree of attention to social benefits 1958–2020 Degree of association between stakeholders and CSR types Degree of association between stakeholder types and societal impacts from SBSR for 6 most coded articles Summary codebook for study organised by code categories General overview of CSR reports by the Seven Evaluated Firms Atop Fortune’s 2017 “Change the World” The six programs including outcome reporting Data inventory Interviews held with supplier representatives Identified value variables Quantified and monetised value variables The megaprojects benchmarked for our analysis List of the main impact area emerging from literature review and documentary research Three kinds of interests combined differently in proposed general cases

17 20 45 47 51 53 54 55 59 60 68 78 82 100 122 123 126 146 149 182

Contributors

Silvia Ayuso is a lecturer and academic director of the MANGO Chair in Corporate Social Responsibility of ESCI-UPF School of International Studies (Pompeu Fabra University, Barcelona, Spain). She holds a PhD in Environmental Sciences (Autonomous University of Barcelona) and a degree in Environmental Technology Engineering (Technical University of Berlin). Prior to her current position, she has been a postdoctoral researcher at IESE Business School and an academic collaborator at the Open University of Catalonia. She has also worked as an environmental consultant and environmental management systems auditor. Her main research areas are social accounting, sustainability assessment and corporate social responsibility management. She has published several books and book chapters and more than 20 articles in relevant academic journals. Ralf Barkemeyer is a Professor of Corporate Social Responsibility and Head of the CSR Centre of Excellence at Kedge Business School in Bordeaux, France. Prior to that, he worked as a Research Fellow and Lecturer at the University of Leeds and Queen’s University Belfast, where he received his PhD in 2010. He currently serves as Co-Editorin-Chief of Business Ethics: A European Review. Ralf’s research focuses on the interface of business, environment and society. In particular, he is interested in the link between CSR and development; corporate sustainability reporting; and corporate sustainability performance assessment. Ralf has published in outlets such as Journal of World Business, Journal of Business Research, Ecological Economics, Nature Climate Change, Business Ethics Quarterly or Business Strategy and the Environment. Maria Camila Bustos is a Colombian physician and a Master of Public Health professional with concentrations in Healthcare Management and Pharmaceuticals, from Boston University 2018. During her graduate studies, Maria worked as a research assistant in the Boston University Department of Global Health, in research on social impact of pharmaceutical programs and health systems’ risks. After graduation, Maria returned to Bogotá, Colombia, working initially as an

x

Contributors

independent health economics consultant on efficient resource management for high-cost diseases in the country and capacity building on public health policy. Soon after, she joined the pharmaceutical industry in market access roles generating evidence-based communication and strategies to make novel treatments accessible. Her work has involved leading public-private partnerships for quality care and patient experience improvement in oncology, haematology and bone health in Colombia. Today Maria lives in Bogotá and works for Janssen in Latin America as Regional Market Access Manager for Neuroscience. Valeria Cavotta is an Assistant Professor in Management and Entrepreneurship at the University of Bolzano-Bozen in Italy, where she also co-directs the Observatory on Social Innovation and Social Entrepreneurship (OISIS). Her research interests include social entrepreneurship, informal entrepreneurship and governance. Her work has been published in the Journal of Business Ethics, Journal of Business Venturing, and Innovation: Organization & Management (IOM), among others. She received her PhD from the University of Lausanne. Laura Corazza (PhD) is an Assistant Professor and Lecturer at the Department of Management, University of Turin. She is also the Editor of the University’s sustainability report. She teaches Sustainability Accounting and Accountability and Circular Economy Management. Her research has been published in many books and peer-reviewed journals including the Sustainability Accounting Policy and Management Journal, Knowledge Management Research and Practice, the Journal of Applied Accounting Research, Corporate Social Responsibility and Environmental Management, the Business Strategy and Environment, the Journal of Business Ethics Education and the Accounting Auditing and Accountability Journal. Her research interests include stakeholder engagement, sustainability accounting and accountability in private, public and social enterprises, and recently, megaproject social responsibility. Dario Cottafava is a Research Fellow at the Department of Management of the University of Turin where he is currently investigating the socio-economic impacts of megaprojects and sustainable infrastructures. He holds a PhD in “Innovation for the Circular Economy”, a master’s degree in “Material for energy and environment” and an Italian-french dual master’s degree in “Physics of Complex Systems” between Paris XI and the Polytechnic of Turin. His research interests span from Circular Economy and environmental assessment to Education for Sustainable Development and behavioural change studies. His research studies have been published in various international peer-reviewed journals such as Sustainability Accounting, Management and Policy Journal, Sustainable, Production and Consumption, and Resources Conservation and Recycling.

Contributors xi

Julia Domnanovich is a PhD student and lecturer at the Department for Economic Sociology, University of Vienna, Austria. Her research encompasses the areas of employment relations and organisational institutionalism with a particular focus on the organisation of work and employment. She received her MSc in Socioeconomics from the Vienna University of Economics and Business and her MA in Political Science from the University of Vienna. In her PhD project, she examines how individual and collective actors influence the negotiation and implementation of socially responsible working conditions, thereby also illuminating the interlinkages between firms and their regulatory and political environments. Anna Heikkinen is a Senior Lecturer of Management and Organizations and Academic Director of Responsible Business Master’s Degree Programme at the Faculty of Management and Business, Tampere University, Finland. She holds the title of Docent (Adjunct Professor) of Business Ethics and Sustainability at University of Eastern Finland. Previously she has worked in various research positions at the Tampere University where she received her PhD in Management and Organizations in 2014. She is an internationally well-connected scholar, whose research is primarily in the areas of stakeholder theory, urban sustainability and corporate sustainability, as well as business climate change engagement, examining the relationships between business organisations and society. Her research has received several recognitions such as the Finalist for the Society for Business Ethics Best Dissertation Award. Her work has been published in edited volumes and international journals such as Journal of Business Ethics, Business Communication Quarterly and International Journal of Knowledge Management Studies. Warren A. Kaplan, PhD, JD, MPH is a Clinical Assistant Professor in the Department of Global Health at the Boston University School of Public Health. He received his PhD training as an ecologist and microbiologist from Boston University, his post-doctoral training in biogeochemistry from Harvard University, his law degree from Suffolk University and his MPH from Boston University. Between 1995 and 2001 he was Assistant General Counsel at Biogen, in Cambridge Massachusetts. His current research focuses on pharmaceutical and legal policies related to trade and health and evaluations of medicines’ access and utilisation. He has worked as a technical adviser for various international organisations and has published widely in international peer-review journals in science, law and public health such as Science, Nature, The Lancet, World Health Organization Bulletin, Health Policy and Planning, Health Policy, PloS One, Tropical Medicine and International Health.

xii

Contributors

Robert Kudłak is an Associate Professor at Adam Mickiewicz University in Poznań, Poland. Previously he worked as researcher at Vienna University of Economics and Business, Vienna, Austria. He led and participated in numerous research projects focusing on corporate social responsibility. His main research interests focus on corporate social responsibility and its institutional antecedents, corporate environmentalism as well environmental and social impacts of corporate behaviour. His research has been published such journals, such as the Long Range Planning, Ecological Economics, Journal of Cleaner Production, Journal of Corporate Citizenship, and European Planning Studies. He is currently a member of the editorial board of the Long Range Planning. Johan Lindeque is a lecturer (Dozent) at the School of Business of the University of Applied Sciences and Arts Northwestern Switzerland FHNW. He has previously held the position of assistant professor of strategy at the University of Amsterdam Business School and as lecturer in international business at Queen’s University Management School, Belfast (UK). He obtained his Bachelor of Business Administration (BSc (Hons)) and PhD degree from the University of Bath School of Management (UK). His current research interests focus on small and medium-sized enterprises’ strategic responses to transition processes, including the digital transformation of society, the European sustainability transition and the ongoing economic integration process in Europe and the international trading system. His work is published in the British Journal of Management, Business and Politics, European Journal of International Management, Industry and Innovation, Journal of Common Market Studies, Journal of Strategy and Management, Management International Review and Renewable and Sustainable Energy Reviews. Sébastien Mena is a Professor of Organization & Governance at the Hertie School. He previously held positions at City University of London, the University of Alberta and the University of Lausanne. His research focuses on the role of business in society and its responsibility for social and environmental issues. He adopts an organisational sociology perspective on business-society interactions to study how these shape corporate responsibility, sustainable development and governance activities, beliefs and norms. Sébastien’s research has been published in the Academy of Management Review, Human Relations, the Journal of Management Studies, and Organization Studies. Lutz Preuss is a Professor of Strategic Management at Kedge Business School in Bordeaux, France. Prior to this appointment, he served on the faculties of the University of Sussex, the University of East Anglia, Royal Holloway University of London and Heriot-Watt University, Edinburgh. He holds a PhD from King’s College London, in addition to qualifications from the University of Reading and Humboldt University

Contributors

xiii

Berlin. He currently serves on the Executive Board of the International Association for Business and Society. His research addresses a range of topics in the field of corporate social responsibility, in particular cognitive processes underlying decision-making in the face of tensions between economic and non-economic issues and international differences in conceptualisations of socially responsible behaviour. His research has been published in leading journals such as Academy of Management Review, Organization Studies, Journal of World Business, Business Ethics Quarterly or Journal of Business Ethics. Markus Taussig is an Associate Professor of management and global business at Rutgers Business School. He lived in Southeast Asia for nearly two decades, including 11 years in Vietnam designing and carrying out firm surveys and doing operational audits and business planning for the World Bank, International Finance Corporation, and many other international development organisations. Markus’ research on relations between businesses, government and other societal stakeholders includes impact evaluations in collaboration with organisations based in Southeast Asia, including Vietnam, Myanmar and Thailand. His work has been published in leading management, political science and economics journals and won best paper awards from the Academy of Management (AOM) and the Community for Responsible Research for Business and Management. He also received the AOM International Management Division’s best dissertation award and numerous fellowships for international research, including a Fulbright. Giuseppe Tipaldo is a Professor of Science Technology and Society, and Digital Methods for Social Research at CLE School of the University of Turin, Italy. He holds a PhD in Compared Social Research from the University of Turin, and has both a quantitative and qualitative background in sociological and communication research. He currently serves on the National Advisory Board of the Symposium on Circular Economy and Urban Mining (SUM 2022) and as external supervisor in the Interdisciplinary Committee on Waste and Health (CIRS), a nonprofit organisation of experts in the fields of engineering, social sciences, medicine, biology, chemistry, geology and legal professions. His research addresses a range of topics in the field of technoscientific controversies and conflicts, boundary objects, social media, fake news and democracy, civic culture, sociology of waste, content analysis of digital textual data. His research has been published in prominent journals, such as Waste Management, WIREs Water, Rassegna Italiana di Sociologia, ComPol or Quaderni di Sociologia. Daniel Torchia (PhD) is a Research Fellow and Lecturer at the Department of Management, University of Turin. His main research interests are alternative forms of organisations and Critical Management

xiv

Contributors

Studies. Specifically, he looks at those organisational models that aim to promote more humane and less oppressive forms of management by going beyond mere means-end rationality. Daniel is an organisational ethnographer and during his PhD at Alliance Manchester Business School (The University of Manchester, UK) he has lived with and studied FC United of Manchester, one of the most famous ‘rebel football clubs’ in the UK. His research has been published in journals like Culture and Organization and Managing Sport and Leisure. He teaches Business Administration and Organisational Behaviour to international undergraduate and postgraduate students. Olga Samuel is a lecturer and senior researcher at the School of Business of the University of Applied Sciences and Arts Northwestern Switzerland FHNW. She obtained her Master of Business and Economics at the University of Basel (Switzerland). Her PhD degree on corporate volunteering from a non-profit organisation (NPO) perspective was obtained at the ETH Zurich (Switzerland). She focuses her research predominantly on sustainable management, innovation, market research, social media analytics and inter-organisational collaboration, with a particular focus on sustainability. She has published in numerous scientific journals including in Nonprofit Management & Leadership and has written several book chapters on corporate social responsibility. She is also an active reviewer for several scientific journals including Nonprofit and Voluntary Sector Quarterly. Duane Windsor (PhD, Harvard University) is the Lynette S. Autrey Professor of Management in Rice University’s Jesse H. Jones Graduate School of Business. His research and teaching emphasise corporate social responsibility and stakeholder theory. He served as editor in chief of the academic journal Business & Society (2007–2014), sponsored by the International Association for Business and Society (IABS). He served as an associate editor for Sage Publication’s multi-volume Encyclopedia of Business Ethics and Society (1st and 2nd editions), edited by Robert W. Kolb. His papers have appeared in such journals as Academy of Management Journal, Academy of Management Review, Business & Society, Business Ethics Quarterly, Journal of Business Ethics, Journal of Business Research, Journal of Management Studies, and Philosophy of Management. Veronika J. Wirtz is a Professor of Global Health at the Boston University School of Public Health, where she is also the Director of the World Health Organization Collaborating Center in Pharmaceutical Policy. Dr Wirtz’s research focuses on health system strengthening and program evaluations of medicines access and utilisation. Her interest and expertise include the role of the private sector in promoting equitable access and efficient use of medicines in low-and middle-income countries, medicine price analysis, generic medicines policies and access to

Contributors

xv

medicines for non-communicable diseases. Between 2014 and 2016, she was the Co-Chair of The Lancet Commission on Essential Medicine Policies which published its report Essential Medicines for Universal Health Coverage in Fall 2016. Dr Wirtz received her training as a pharmacist from Albert-Ludwigs-University in Freiburg, Germany and her Master of Science degree in Clinical Pharmacy and her doctorate degree in Pharmaceutical Policy from the University of London, UK.

1

Introduction: The Need for a Book on CSR Impacts Robert Kudłak, Ralf Barkemeyer, Lutz Preuss, and Anna Heikkinen

The need for a book on CSR impacts Corporate social responsibility (CSR) can be conceptualised as the corporatelevel contribution to sustainable development (Bansal & Song, 2017; Moon, 2007). In other words, it is only at the overarching systems level where one can know whether any particular corporate initiative has contributed to sustainability aims – or not (Hahn et al., 2015). Given the salient role of the private sector in the current society, however, sustainable development will not happen without contributions by the corporate sector (George et al., 2016). In recent decades, there has thus been an unprecedented surge in theoretical studies and empirical analyses of companies’ broader role in society and in providing social and ecological well-being. Arguably, CSR has entered the mainstream of organisation and management studies and an increasing number of companies treat CSR on a par with other corporate functions. There is a growing literature on the strategies and tools companies can apply to engage with CSR, as well as on reasons why they should do so (see e.g. Crane et al., 2008). So far, so good. What has received less attention in the organisation and management literature, however, is the question what impacts CSR actually has on society (Barnett et al., 2020). This gap in the literature is somewhat understandable given the in-built focus of organisation studies on organisation-level issues. Researchers and practitioners alike are struggling to address challenges that are beyond the scope of an individual organisation (Gray, 2010; Milne & Gray, 2013). This also means that societal-level impacts of corporate activity have remained largely outside of the boundaries of organisation and management studies, the discipline that is arguably best suited to explore them. This situation is even more unfortunate, given that the vast majority of global economic activity occurs within global supply chains (Gereffi, 1999; Locke et al., 2009; Kim & Davis, 2016). Hence, the transition to sustainable development and progress towards Sustainable Development Goals (SDGs) will not be possible without the participation of the private sector (George et al., 2016; Kolk et al., 2017; Reinecke & Ansari, 2016). It is also worth DOI: 10.4324/9781003182276-1

2

Robert Kudłak et al.

noting that CSR has – at least in the eyes of some observers – been facing a credibility crisis for some time (Bansal & Clelland, 2004; Barkemeyer et al., 2014) – making it even more important to understand how businesses can have meaningful societal impacts. In other words, there is an urgent need to improve our understanding of the wider societal-level impacts of CSR, arguably making this topic an important research gap within organisation and management studies. In addition, various national and supranational bodies have been very active over the last decade or two in launching public policies to mobilise companies to undertake voluntary measures that combat some of the most pressing social and environmental challenges (Steurer et al., 2012; Knudsen & Brown, 2015; Kudłak et al., 2018). For instance, some countries introduced CSR into their public policies through adding labour and human rights, environmental protection and anti-corruption criteria to procurement requirements (Andrecka, 2017). In 2011, the EU launched a renewed strategy for CSR, in which the term was defined as “the responsibility of enterprises for their impacts on society” (European Commission, 2011). Through this document the EU explicitly recognised the role of companies in managing, mitigating and preventing negative impacts of their operations, as well as the important role of public authorities in encouraging and supporting companies to conduct their business responsibly. At an even higher level, the UN adopted the Global Compact initiative and the OECD revised its Guidelines for Multinational Enterprises in order to promote responsible business conduct. These CSR initiatives are based on the premise that companies can actually solve some of the important social and environmental problems which frequently go beyond the jurisdiction of national governments. This premise, however, is far from proven. The above-mentioned initiatives are often criticised for further empowering and legitimizing corporations while providing at best soft incentives for private entities to act responsibly. Correspondingly, evidence of actual positive impacts of these initiatives still seems rather limited (Deva, 2006; Fonseca et al., 2014). This is another argument why we need more research on the social and environmental impacts of CSR. An important practitioner voice who has addressed this question is former Unilever CEO Paul Polman. His book ‘Net Positive’ (Polman & Winston, 2021) explicitly asks executives to consider: “is this world better off because your business is in it?” As a practitioner-facing organisation, the Academy of Business in Society has argued that “impact is the last of several interlinked steps and finally is located on level of society” (ABIS, 2014, p. 9) and proceeds to develop tools for corporate impact assessment. Overall, however, the question of whether CSR initiatives actually succeed in offering the societal good that they promise has hardly been considered (Barnett et al., 2020). Certainly, we posit, it has received less attention than the large body of the literature on the impact of CSR on a company, i.e. the business case for CSR (see e.g. Carroll & Shabana, 2010). Even though a multitude of corporate

The Need for a Book on CSR Impacts 3

social performance measures have been developed and applied empirically (Wood, 2010), this has typically been done in an instrumental fashion, attempting to explain their impact on corporate financial performance; yet, this body of the literature has largely fallen short of making the link to the overarching social and environmental problems these corporate social performance indicators align with (Barnett et al., 2020). One key challenge in investigating CSR impacts, and in preparing the current volume, was to define a societal-level impact. Given that research into our topic is still the exception rather than the norm, our starting point was to delineate what a societal-level impact was not. We called for contributions that did not exclusively investigate companies’ intentions, inputs and processes. Rather, we invited works that went beyond a narrow focus on the effects of CSR for the company itself (e.g. improved competitiveness or more effective management of human resources). Among others, we encouraged contributions that investigated the influence of CSR on improving working conditions, alleviating environmental challenges, spurring sectoral and regional competitiveness, stimulating local economic development or making a contribution to the SDGs. Obviously, this list of potential topics was not exhaustive but served to attract studies which explored the various influences of corporate voluntary programmes and activities at a wider societal level. In other words, we searched for evidence of the consequences of CSR initiatives – whether positive or negative – for whomever other than the company itself (Khandker et al., 2010). This is where our book is positioned. It is part of a recent move towards opening up organisation and management studies (Crane et al., 2017; Wickert, 2021) to greater engagement with “grand challenges” (George et al., 2016) or “wicked problems” (Reinecke & Ansari, 2016) in a more meaningful way. It also speaks to the literature that seeks to alleviate the disconnect between CSR – as it is currently practised and theorised – and the natural environment (Hahn et al., 2017; Schuler et al., 2017; Whiteman et al., 2013). Finding authoritative answers to these types of questions can neither be delivered by this introduction, nor by the individual contributions in this book alone. Nevertheless, we aim to contribute to this pool of knowledge, providing pointers to pockets of research that can help us to gain ground in this context. This includes attempts to take stock of extant research and corporate practice in order to improve our understanding of and, ultimately, our ability to provide guidance for companies and policymakers on how to manage a company’s wider societal-level impact in a more effective manner. Sustainable Development and wider societal-level impacts inevitably require research that is interdisciplinary in nature, connecting organisation and management studies with a multitude of other literatures. The good news is that, as evidenced by the contributions to this book, there are many opportunities for doing so. For example, extant research at the interface of CSR and development studies (Blowfield, 2007; Fox, 2004; Gereffi, 1999)

4

Robert Kudłak et al.

can help us to conceptualise the relationship between corporate activity and typical development challenges such as poverty alleviation or child labour. Development studies are more accustomed to the attribution of societallevel impacts to individual actors and to develop theories of change that connect the two levels. Likewise, the field of environmental science has provided us with theoretical lenses, such as ecosystem services (Costanza et al., 1997, 2017), socio-ecological systems (Ostrom, 2009), and planetary boundaries (Rockström et al., 2009), that provide us with well-established starting-points for embedding corporate activity into wider systems-level frameworks.

Contributions in the book The volume starts with two chapters which review and summarise the existing literature on social and environmental impacts of CSR. In his work, Kudłak examines academic publications that have appeared in 27 leading management, international business and CSR journals since 2010, aimed at revealing the impacts of CSR engagement on local communities, the natural environment, employees’ well-being, etc. Despite a growing interest in CSR and an increasing number of CSR-related publications, the evidence concerning its contribution to society at large is actually surprisingly scarce. Over a 10-year span only 33 publications were found that meet the search criteria. Kudłak arranges the identified studies into four categories of explored CSR impacts, namely environmental pollution, developing and emerging economies, employment and quality of work, as well as tax avoidance. The findings of the publications reviewed are at best mixed and show that CSR engagement can lead to both positive and negative impacts. Moreover, studies searching for CSR impacts are burdened with numerous methodological shortcomings related, among others, to data collection issues (very often self-reported corporate data presenting events and outcomes that coincided with, rather than being the result of, CSR), and the lack of a control group and pre/postintervention design. Interestingly, some of the identified works show that, regardless of the actual intentions, CSR engagement can lead to negative outcomes, especially in developing countries where the presence of MNCs frequently interferes with local cultures, values and expectations. These findings invite the conclusion that the social consequences of companies’ CSR engagement have remained outside the key research interests of organisation and management scholars and call for renewed attention. The chapter by Lindeque and Samuel offers a systematic review of the small business social responsibility (SBSR) literature. The key argument behind their research focus is that small and medium-sized businesses are strongly embedded in their local and regional economy; hence, they should have a strong economic and social impact. Moreover, these impacts might be easier to identify due to the smaller scale of SMEs’ operations and a

The Need for a Book on CSR Impacts 5

greater geographical proximity between business activity and its consequences. Lindeque and Samuel analyse 226 articles published between 1980 and 2020 in 40 top business and management journals. Drawing on previous work (e.g. Drews, 2010; Weber, 2008), the authors employ a three-part definition of societal impact distinguishing between social inputs, processes, and benefits. In line with prior reviews (e.g. Kudłak, this volume; Barnett et al., 2020), their work suggests that existing studies predominantly report companies’ inputs (e.g. cash, volunteering time) and processes (e.g. public dialogue). In contrast, the societal impacts of SBSR (e.g. stakeholder effects, institutional and structural effects) receive very little attention. Regardless of the type of societal impact, Lindeque and Samuel find that philanthropy was the most frequently investigated CSR activity, followed by sustainable employment and community involvement, sponsorship and responding to customer needs. In line with the initial argument regarding the local embeddedness of SMEs, the study also reveals that local communities and employees are the two stakeholder groups that are impacted the most by SBSR activities. In sum, the two initial chapters confirm the existence of a research gap in the CSR literature and support the rationale behind the edited volume. Bustos, Kaplan, Taussig and Wirtz examine the extent and quality of impact data in CSR reports by analysing the annual reports of the top 10 “Change the World” firms of 2017. This list includes corporations with annual revenues of at least $1 billion, ranked according to their measurable social impacts, business results and degree of innovation. These companies are often perceived to be frontrunners in terms of their social engagement and impacts. In their study, Bustos and her colleagues employ a methodology that is frequently used in other disciplines, such as development economics and public health, in order to measure the results of various types of interventions (e.g. human aid in developing countries). The change occurring as a result of an intervention is tested with the use of an experimental or quasiexperimental design that compares the status quo (counterfactual) with the intervention. Surprisingly, Bustos et al. reveal that only six of a total of 73 CSR programmes reported by the top “Change the World” companies offered any information on outcomes. The majority of the reported data focus on intentions and activities, which is in line with the findings presented in the first two chapters by Kudłak and Lindeque and Samuel, respectively. Some examples of CSR impacts include Yara’s worker safety initiative that allowed the company to reduce its rate of injuries at work and Novartis’ Malaria Initiative which reduced the number of deaths from this disease. Last but not least, the study by Bustos et al. offers an innovative approach to measuring corporate reporting on the issue in question. They conclude by suggesting strategies on how to increase the quality of corporate reporting on the outcomes and impacts of CSR initiatives. The subsequent chapter by Domnanovich explores the ways in which the meaning and impact of CSR are affected by those who drive

6

Robert Kudłak et al.

the CSR discourse. Specifically, the chapter focuses on the impact of CSR on Austrian labour and work-related welfare arrangements. As her work shows, CSR is interpreted differently by traditionally the most important welfare state actors, whether trade unions, employers or the state. Actors representing the employers’ interests are more likely to understand CSR as a voluntary, self-regulatory measure aimed at improving competitiveness, potentially through weakening existing labour and work-related institutions. In contrast, employee representatives tend to interpret CSR in a way that protects or even extends the interests of their constituents. In other words, whoever holds the political power to promote a specific discourse will try to use CSR for their own purposes. In the analysis covering almost two decades of the evolution of CSR in Austria, Domnanovich also shows that the domestic welfare arrangements are to a great extent inert and protected by the interests and ideological stances of the existing political powers. Hence, attempts to use CSR in order to change these arrangements might not be effective, especially when the welfare state actors try to keep their counterparts in check. Overall, Domnanovich’s work represents an interesting study of a macroscale CSR impact and its locally and temporarily contingent nature. Ayuso introduces Integrated Social Value (ISV) analysis to identify and quantify the impacts of a CSR compliance programme. ISV was developed by Retolaza et al. (2016) as an application of stakeholder theory to social accounting. A novelty of this approach lies in that it attempts to capture the value created by an organisation for all its stakeholders, but at the same time intends to take into account both positive and negative effects that might not be directly economic. The calculation of ISV starts with the identification of the value that is perceived by the organisation’s stakeholders, and this value is then quantified through indicators and financial proxies to monetise it. Ayuso uses the case study of a large apparel retail company in order to demonstrate the validity of the method and to measure the value of a CSR code the company introduced to ensure good social and environmental practices in its supply chain. The study findings show that first-tier suppliers value the compliance programme because they mitigate the negative effects of companies’ operations (e.g. violations of workers’ rights), but also because they generate some positive impacts for suppliers’ employees. In sum, the strength of the ISV method lies in the facts that it captures the value of CSR from the perspective of the affected stakeholders (and not from the perspective of the company) and that it attempts to monetise a wide spectrum of impacts such as improvements in working conditions, improvements of factories’ facilities or increases in compliance with legislation. Although being to an extent context-specific and requiring elements of subjective judgement, the ISV method represents an interesting tool for assessing the impacts of CSR to a wider set of stakeholders than just the company itself. The following chapter by Corazza, Torchia, Cottafava and Tipaldo shifts attention to infrastructural megaprojects and develops a comprehensive

The Need for a Book on CSR Impacts 7

framework on how to evaluate the socio-economic impacts of such projects. Referring to the concept of Megaproject Social Responsibility (MSR) (Lin et al., 2017; Ma et al., 2017), they argue that the accomplishment of such projects requires attention to the planning, monitoring and measuring of their social, economic and environmental impacts. The authors use the case of the Turin-Lyon railway, which is part of the Mediterranean Corridor of the Trans-European Transport Network (TEN-T), to develop a taxonomy of macro-areas and indicators for impact assessment. These areas, among others, include health and safety in the workplace and for the local population, relational capital within the territory and cultural and identity capital in the region. The contribution by Corazza and her colleagues confirms that the existing CSR measurement and reporting tools predominantly have an organisational focus (see e.g. Global Compact), while they tend to ignore aspects of corporate intervention that operate at different levels. Mena and Cavotta start their chapter with the observation that scholars tend to focus on exploring short-term CSR impacts, especially financial and, less frequently, environmental ones. The authors argue that the longer-term, relational impacts may actually be the more interesting and relevant ones. In order to investigate the latter, Mena and Cavotta employ the idea of relational work. Originating from economic sociology (Zelizer, 2005), this concept explores how social action “creates, confirms, negotiates, or repairs”, intentionally or otherwise, an actor’s relationships (Tilly, 2008, p. 173). The authors claim that when undertaking some kind of prosocial action, companies build social relationships and in doing so face both intended and unintended consequences. They illustrate their idea of relational impact with two cases: a water cleaning programme introduced by a globally operating chocolate manufacturer in a rural area of Ivory Coast and a social enterprise in Southern Italy which aims to reintegrate people with mental health issues. Through their novel approach, Mena and Cavotta show that pro-social interventions can lead to positive and sometimes unintended social consequences which might differ from the strategic goals of the intervention. Their work also highlights that the social impacts of CSR engagement are much more complex than often assumed. Finally, the chapter by Windsor calls for a far-reaching shift in understanding, practising and measuring CSR – from the conventional business case to the perspective of society at large. The former, according to Windsor, tends to focus on financial and strategic impacts of CSR and its ability to generate wealth for some of the stakeholders in the context of a capitalist market economy. Windsor introduces an impact-oriented CSR framework which has a different ethical basis than conventional CSR as it aims to maximise positive impacts for society at large and to ideally eradicate any negative impacts. This radical shift also requires a move from free-market capitalism towards a social market economy, understood as an intermediary between free-market capitalism and state socialism.

8

Robert Kudłak et al.

Windsor uses several cases to illustrate the understanding of impact-oriented CSR. The case of Unilever is given to illustrate how corporations can genuinely redirect their strategies and operations towards the creation of positive social impacts. Windsor’s contribution, although taking quite a radical position that goes much further than the rationale of the whole volume, offers an intriguing conceptual stance on the role of private businesses in society and provides potential directions for future theoretical and empirical endeavours.

Concluding remarks and avenues for the future research The contribution of CSR to society at large remains one of the most central, and yet unanswered questions in the organisation and management literature. There is a plethora of publications uncovering corporate intentions, activities and outputs as well as works revealing the influence of CSR engagement on organisational processes, structures and outcomes. For different reasons these topics have received a lot of attention, and rightfully so. Now it is time to move out of the comfort zone and face new challenges. This will require not only a shift in research focus from the organisational to the community or society level of analysis but also a change in the research methods and tools we use. Undoubtedly, such a shift will represent a significant challenge for scholars of organisations. However, in light of a growing importance of CSR and increasing expectations that private businesses take responsibility for some of the key social and environmental concerns, this challenge needs to be taken up. Engaging with the call to capture societal-level impacts of CSR requires a multidisciplinary approach, as hopefully evidenced by the current book. The respective chapters represent different theoretical and methodological approaches and traditions. Such richness of approaches creates opportunities for cross-disciplinary fertilisation, which is especially relevant when moving into less charted territory. At the same time, the diversity of the research approaches suggests that scholarship on social and environmental impacts of CSR is far from mature. Rather, research on CSR seems still to be in its infancy when it comes to selecting approaches and methods aimed at determining the societal consequences of corporate voluntary programmes and activities. This conclusion can be drawn from the publications selected and reviewed in the two review chapters in this book (by Kudłak and by Lindeque and Samuel, respectively). In contrast, the literature concerning the business case for CSR (regardless of its limitations) is by now equipped with certain standard ways of research which even allow for conventional systematic reviews (Orlitzky et al., 2003). A lack of evidence concerning the social and environmental impacts of CSR might not necessarily be the result of corporate hypocrisy or windowdressing, but rather the result of an inability to establish a causal relationship between means (CSR activity) and ends (social or environmental change).

The Need for a Book on CSR Impacts 9

Generally speaking, it can be argued that many formal organisational structures (such as CSR policies and strategies, ESG criteria) mirror wider social and cultural meta-narratives present in the companies’ environment rather than technical requirements (Dobbin, 1994). These narratives are a source of myths as to which processes and issues are under the organisation’s control and what the causal relationships between means and ends are. In response to these narratives, organisations introduce formal policies and actions that are seen as appropriate and efficient, while in fact there might be very little evidence concerning the relationship between means and ends (Bromley & Powell, 2012). This means-ends decoupling is especially likely to occur in complex domains where it is difficult to establish causal links (Orton & Weick, 1990). For example, companies might introduce CSR policies and practices with regard to climate change or local development. These phenomena, however, are so complex that it is very hard to link companies’ actions with their outcomes. Hence, companies might be tempted to focus on monitoring, measuring and evaluating practices (perceived as appropriate and necessary in their external environment – e.g. CSR reports, ESG criteria) rather than presenting the actual outcomes of their efforts. Companies might therefore decouple their efforts from outcomes, as a result of the high complexity of the social or environmental goals to be achieved and the high complexity of the activity-impact causality chain. In sum, it can be another reason why it is so hard to identify social impacts of CSR. Another important conclusion of our book (and at the same time an avenue for future research) is that the existing CSR literature tends to look for positive social and environmental impacts, while ignoring the negative ones. To some degree, this tendency can be traced back to the voluntary, beyond-compliance nature of CSR (Bansal & Clelland, 2004; Barkemeyer, 2009). Yet, extant research that has explored the role of multinational companies (MNCs) in emerging and developing countries can serve as a case in point for the oftentimes negative social and environmental consequences of MNC operations in these locations (see e.g. Hennchen, 2015; Viveros, 2016; Devenin & Bianchi, 2018). In addition, another layer of complexity is added by the context-specific and subjective dimensions of CSR and sustainable development, blending science-based facts with value-based judgements. This does not only refer to CSR and sustainable development as such, having been described as “essentially contested concepts” (Moon, 2007), but also to divergent issue-level prioritisations and evaluations of specific CSR activities. Controversial debates regarding the CSR activities of MNCs in nonWestern contexts can again serve to illustrate this point, sometimes portrayed as imperialist or even neo-colonial in character (Kourula & Delalieux, 2016). Whilst a better understanding of the societal-level impacts of CSR is unlikely to reconcile these debates, it can nevertheless provide a more robust basis for negotiations regarding its positive and

10

Robert Kudłak et al.

negative consequences and, ultimately, better-informed decision-making in the context of specific CSR programmes and activities. Finally, scholars who want to determine the societal-level impacts of CSR in a more comprehensive way may need to rethink and redesign their methodological approaches. Prior studies exploring social and environmental consequences of corporate voluntary activities have often been conducted in ways that ignore counterfactuals and contingencies that might actually be the real causes of social change, rather than the corporate intervention itself. In order to separate CSR impacts from impacts resulting from other factors, scholars could try to control for such additional factors through the use of control groups. For example, if a company introduces a CSR project aiming at decreasing the illiteracy level in a given community, the proper measurement of the impact of such project would require either the verification of the influence of other factors (such as the education policy of the national or regional authorities) or the measuring of pre- and post-intervention levels of illiteracy between the affected and control populations. This kind of approach is frequently used by development agencies to verify the effectiveness of their policies. Existing CSR studies, however informative and thought-provoking, hardly ever offer such a research design. To conclude, there is a range of exciting research opportunities in the context of societal-level impacts of CSR, both in terms of theory-building and methodological advances. We hope that this edited volume can serve as a useful starting point for this important line of research.

References ABIS. (2014). CSR impact practitioners’ handbook – From CSR to CIAM: Corporate impact assessment and management – An illustrative guide for executives, managers and enterprise stakeholders seeking to enhance the positive impacts of responsible business in society. Brussels: Academy of Business in Society. https://www.abis-global.org/content/d9.8practitioners-handbook-final.pdf Andrecka, M. (2017). Corporate social responsibility and sustainability in Danish public procurement. European Procurement and Public Private Partnership Law Review, 12, 333. Bansal, P., & Clelland, I. (2004). Talking trash: Legitimacy, impression management, and unsystematic risk in the context of the natural environment. Academy of Management Journal, 47(1), 93–103. Bansal, P., & Song, H. C. (2017). Similar but not the same: Differentiating corporate sustainability from corporate responsibility. Academy of Management Annals, 11(1), 105–149. Barkemeyer, R. (2009). Beyond compliance–below expectations? CSR in the context of international development. Business Ethics: A European Review, 18(3), 273–289. Barkemeyer, R., Comyns, B., Figge, F., & Napolitano, G. (2014). CEO statements in sustainability reports: Substantive information or background noise? Accounting Forum, 38(4), 241–257.

The Need for a Book on CSR Impacts

11

Barnett, M. L., Henriques, I., & Husted, B. W. (2020). Beyond good intentions: Designing CSR initiatives for greater social impact. Journal of Management, 46(6), 937–964. Blowfield, M. (2007). Reasons to be cheerful? What we know about CSR’s impact. Third World Quarterly, 28, 683–695. Bromley, P., & Powell, W. W. (2012). From smoke and mirrors to walking the talk: Decoupling in the contemporary world. Academy of Management Annals, 6(1), 483–530. Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85–105. Costanza, R., d’Arge, R., De Groot, R., Farber, S., Grasso, M., Hannon, B., … & Van Den Belt, M. (1997). The value of the world’s ecosystem services and natural capital. Nature, 387(6630), 253–260. Costanza, R., De Groot, R., Braat, L., Kubiszewski, I., Fioramonti, L., Sutton, P., … & Grasso, M. (2017). Twenty years of ecosystem services: How far have we come and how far do we still need to go? Ecosystem Services, 28, 1–16. Crane, A., Matten, D., McWilliams, A., Moon, J. & Siegel, D. S. (2008). The Oxford handbook of corporate social responsibility. Oxford: Oxford University Press. Crane, A., Henriques, I., Husted, B. W., & Matten, D. (2017). Measuring corporate social responsibility and impact: Enhancing quantitative research design and methods in business and society research. Business & Society, 56(6), 787–795. Deva, S. (2006). Global compact: A critique of the UN’s public-private partnership for promoting corporate citizenship. Syracuse Journal of International Law and Commerce, 34, 107. Devenin, V., & Bianchi, C. (2018). Soccer fields? What for? Effectiveness of corporate social responsibility initiatives in the mining industry. Corporate Social Responsibility and Environmental Management, 25(5), 866–879. Dobbin, F. (1994). Cultural models of organization: The social construction of rational organizing principles. In D. Crane (Ed.), The sociology of culture: Emerging theoretical perspectives. Oxford: Basil Blackwell, 117–141. Drews, M. (2010). Measuring the business and societal benefits of corporate responsibility. Corporate Governance: The International Journal of Business in Society, 10(4), 421–431. European Commission. (2011). A renewed EU strategy 2011–14 for Corporate Social Responsibility. Brussels: European Commission. Fonseca, A., McAllister, M. L., & Fitzpatrick, P. (2014). Sustainability reporting among mining corporations: A constructive critique of the GRI approach. Journal of Cleaner Production, 84, 70–83. Fox, T. (2004). Corporate social responsibility and development: In quest of an agenda. Development, 47(3), 29–36. George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. (2016). Understanding and tackling societal grand challenges through management research. Academy of Management Journal, 59(6), 1880–1895. Gereffi, G. (1999). A commodity chains framework for analyzing global industries. Institute of Development Studies, 8(12), 1–9. Gray, R. (2010). Is accounting for sustainability actually accounting for sustainability … and how would we know? An exploration of narratives of organisations and the planet. Accounting, Organizations and Society, 35(1), 47–62.

12

Robert Kudłak et al.

Hahn, T., Figge, F., Aragón-Correa, J. A., & Sharma, S. (2017). Advancing research on corporate sustainability: Off to pastures new or back to the roots? Business & Society, 56(2), 155–185. Hahn, T., Pinkse, J., Preuss, L. & Figge, F. (2015). Tensions in corporate sustainability: Towards an integrative framework. Journal of Business Ethics, 127(2), 297–316. Hennchen, E. (2015). Royal Dutch shell in Nigeria: Where do responsibilities end? Journal of Business Ethics, 129(1), 1–25. Khandker, S. K., Koolwal, G. B., & Samad, G. (2010). Handbook on impact evaluation: Qualitative methods and practices. Washington, DC: World Bank. Kim, Y. H., & Davis, G. F. (2016). Challenges for global supply chain sustainability: Evidence from conflict minerals reports. Academy of Management Journal, 59(6), 1896–1916. Knudsen, J. S., & Brown, D. (2015). Why governments intervene: Exploring mixed motives for public policies on corporate social responsibility. Public Policy and Administration, 30(1), 51–72. Kolk, A., Kourula, A., & Pisani, N. (2017). Multinational enterprises and the Sustainable Development Goals: What do we know and how to proceed? Transnational Corporations, 24(3), 9–32. Kourula, A., & Delalieux, G. (2016). The micro-level foundations and dynamics of political corporate social responsibility: Hegemony and passive revolution through civil society. Journal of Business Ethics, 135(4), 769–785. Kudłak, R., Szőcs, I., Krumay, B., & Martinuzzi, A. (2018). The future of CSRSelected findings from a Europe-wide Delphi study. Journal of Cleaner Production, 183, 28–291. Lin, H., Zeng, S., Ma, H., Zeng, R., & Tam, V. W. (2017). An indicator system for evaluating megaproject social responsibility. International Journal of Project Management, 35(7), 1415–1426. Locke, R., Amengual, M., & Mangla, A. (2009). Virtue out of necessity? Compliance, commitment, and the improvement of labor conditions in global supply chains. Politics & Society, 37(3), 319–351. Ma, H., Zeng, S., Lin, H., Chen, H., & Shi, J. J. (2017). The societal governance of megaproject social responsibility. International Journal of Project Management, 35(7), 1365–1377. Milne, M. J., & Gray, R. (2013). W (h) ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting. Journal of Business Ethics, 118(1), 13–29. Moon, J. (2007). The contribution of corporate social responsibility to sustainable development. Sustainable Development, 15(5), 296–306. Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. Orton, J. D., & Weick, K. E. (1990). Loosely coupled systems: A reconceptualization. Academy of Management Review, 15(2), 203–223. Ostrom, E. (2009). A general framework for analyzing sustainability of social-ecological systems. Science, 325(5939), 419–422. Polman, P., & Winston, A. S. (2021). Net positive: How courageous companies thrive by giving more than they take. Boston, MA: Harvard Business Review Press. Reinecke, J., & Ansari, S. (2016). Taming wicked problems: The role of framing in the construction of corporate social responsibility. Journal of Management Studies, 53(3), 299–329.

The Need for a Book on CSR Impacts

13

Retolaza, J. L., San-Jose, L. and Ruiz-Roqueñi, M. (2016). Social accounting for sustainability: Monetizing the social value. Berlin/Heidelberg: Springer. Rockström, J., Steffen, W., Noone, K., Persson, Å., Chapin III, F. S., Lambin, E., … & Foley, J. (2009). Planetary boundaries: Exploring the safe operating space for humanity. Ecology and Society, 14(2), 1–33. Schuler, D., Rasche, A., Etzion, D., & Newton, L. (2017). Guest editors’ introduction: Corporate sustainability management and environmental ethics. Business Ethics Quarterly, 27(2), 213–237. Steurer, R., Martinuzzi, A., & Margula, S. (2012). Public policies on CSR in Europe: Themes, instruments, and regional differences. Corporate Social Responsibility and Environmental Management, 19(4), 206–227. Tilly, C. (2008). Why? What happens when people give reasons … And why. Princeton: Princeton University Press. Viveros, H. (2016). Examining stakeholders’ perceptions of mining impacts and corporate social responsibility. Corporate Social Responsibility and Environmental Management, 23(1), 50–64. Weber, M. (2008). The business case for corporate social responsibility: A companylevel measurement approach for CSR. European Management Journal, 26(4), 247–261. Whiteman, G., Walker, B., & Perego, P. (2013). Planetary boundaries: Ecological foundations for corporate sustainability. Journal of Management Studies, 50(2), 307–336. Wickert, C. (2021). Corporate Social Responsibility research in the Journal of Management Studies: A shift from a business‐centric to a society‐centric focus. Journal of Management Studies, 58(8), E1–E17. Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691–718. Wood, D. J. (2010). Measuring corporate social performance: A review. International Journal of Management Reviews, 12(1), 50–84. Zelizer, V. A. (2005). The purchase of intimacy. Princeton: Princeton University Press.

2

What Do We Know about Social and Environmental Impacts of Corporate Social Responsibility? Robert Kudłak

Introduction Corporate social responsibility (CSR) initially developed predominantly as an Anglo-Saxon phenomenon and in response to the failure of public authorities to provide society with basic public goods (Carroll, 1999, 2008). This led numerous industrialists (such as Andrew Carnegie and George Patterson) to claim some of the state’s responsibilities and invest their private wealth to create housing and pension schemes as well as improve wages and working conditions for employees. Since then, CSR has diffused to other countries and regions of the world and embraced other aspects of social and economic life including environmental protection, responsible investment, health care and safe working conditions, consumer and stockholder relations, etc. (Jamali et al., 2017; Kaplan & Kinderman, 2020). Irrespective of the type of investment, CSR is increasingly perceived as possible remedy for many contemporary grand social and environmental challenges (Mohr et al., 2001; Moon, 2007; Jamali & Karam, 2018; Medina‐Muñoz & Medina‐Muñoz, 2020). Currently, the quest for the societal case for CSR becomes even more urgent in light of the rise of political corporate social responsibility, i.e. the idea that private businesses take up quasi-state positions and assume some of the state’s powers and responsibilities (Palazzo & Scherer, 2008; Frynas & Stephens, 2015; Reinecke & Donaghey, 2021). This new role of corporations is a consequence of, among others, an erosion of national governance systems, the emergence of societal and environmental challenges that fall outside domestic jurisdiction (such as climate change), and national governments’ inability to create and redistribute income and wealth (especially in developing and emerging economies). Hence, there is a growing need to verify whether this new role of companies primarily serves to create or maintain their profits, or whether it facilitates specific social and environmental objectives. The existing literature is rich with evidence concerning the influence of CSR on corporate operations and performance (business case for CSR). Numerous studies showed the role that corporate social behaviour can play DOI: 10.4324/9781003182276-2

Social and Environmental Impacts of CSR

15

in terms of an organisation’s financial performance (El Ghoul et al., 2011; Fieseler, 2011), management of human resources (Stites & Michael, 2011), market value (Klassen & McLaughlin, 1996; Konar & Cohen, 2001), as well as brand value and consumers’ perceptions (Lai et al., 2010; Melo & Galan, 2011). The existing meta-analyses also seem to be in favour of arguing that, regardless of certain methodological concerns, CSR can help firms build a positive reputation and goodwill with its external stakeholders, and overall strengthen its legitimacy, market position and competitiveness (Orlitzky et al., 2003). While being informative and valuable, the existing research seems more concerned with corporate-level activities such as uptake of non-financial reporting (Jackson et al., 2020), formal certification of management systems (Hosoda & Suzuki, 2015) or introducing ecoefficiency measures (Broadstock et al., 2019), paying little attention to what these activities do at the societal level. In contrast, scholars seem to know relatively little about social and environmental impacts of CSR (Devinney, 2009; Kudłak, 2019). Although the question of business responsibilities towards society has been frequently recurring in the literature (see e.g. Bowen, 1953; Davis, 1960; Epstein, 1987), actual knowledge about how investments in CSR contribute to society at large remains ambiguous and scarce. In their very recent bibliometric analysis of the CSR literature, Barnett et al. (2020) argue that even the most cited studies have predominantly focused on measuring CSR activities rather than on the actual impacts, and on exploring the benefits resulting from CSR to specific stakeholders rather than to society at large. Hence, a question arises whether corporate engagement in CSR furthers the societal good (McWilliams & Siegel, 2001) or if it is nothing more than window dressing (Banerjee, 2008) and “organized hypocrisy” (Lim & Tsutsui, 2012). Some recent studies attempted to explore selected aspects of corporate/ CSR impacts. For instance, Schrempf-Stirling and Palazzo (2016) analysed the evolution of the practical and scientific discourses on upstream CSR respectively in NGO campaigns and leading business ethics journals. While their study did not directly explore CSR impacts, they found that the upstream CSR debate changed significantly over time and moved from a narrow focus on worker rights wrongdoings to a much broader focus on human rights misdemeanours as well as overall impacts along with the whole supply chain upstream operations. In other words, the corporate upstream responsibility shifted from ‘contract responsibility’ (i.e. responsibility in regard to the direct suppliers with a formal contract) to a ‘full producer responsibility’ (covering all suppliers without regard to contracting status). In contrast to this rather optimistic view, Yawar and Seuring (2017) presented findings resulting from a comprehensive review of studies exploring social issues, actions and performance in supply chains. In the light of their study, an overwhelming number of the reviewed papers explored responsible supply chain actions, such as communication,

16

Robert Kudłak

compliance and supplier development strategies, while saying very little about improvement in terms of social issues. Similarly, Barnett et al. (2020) conducted a bibliometric analysis of CSR-performance articles published in the last 50 years (1968–2018). According to their study, a majority of the identified CSR-performance papers focused on the antecedents of CSR, corporate activities and immediate outputs, and only six of them attempted to evaluate and measure social impacts of CSR. While very insightful, the aforementioned studies do not offer an ultimate answer to the question of CSR impacts, but rather open an avenue for further research. The purpose of this study is to identify the recent CSR literature focusing on societal and environmental impacts, to summarise findings resulting from this literature and to offer recommendations for further research. In contrast to the aforementioned works (Schrempf-Stirling & Palazzo, 2016; Yawar & Seuring, 2017; Barnett et al., 2020), the current chapter does not focus on any specific social or environmental issue (such as supply chain issues or NGO-corporation interplay), nor is it bibliometric in nature. Rather, it attempts to answer the following research question: What are the social and environmental impacts of corporate voluntary programs and interventions? In order to meet the goals of the study, a review of the existing literature has been conducted. The analysis covered academic articles published since 2010 in 27 leading management, international business and CSR journals. Impact was defined as any consequence of organisation’s CSR engagement which influenced society at large, local community, employees, the natural environment, etc., and went beyond the effects for an organisation itself. The most important and, to some extent, unexpected finding is that the issue of CSR societal and environmental impacts is hardly present in the analysed journals. In the past ten years, only 33 articles have addressed the topic. Another important observation is that the identified articles appeared almost exclusively in CSR-related journals, while the topic of CSR impacts has been missing in general management and IB literature. The current study suggests that, despite growing interest in CSR, knowledge about its actual societal and environmental impacts remains anecdotal. The scarcity of identified articles implies there is a great need to further scrutinise the impacts of CSR on issues such as the environment, quality of jobs and development, but it also opens several promising avenues for future research, e.g. impacts on supply chains and spurring green innovations.

Scope of the review This chapter draws on the approach of narrative literature reviews presented by Dixon-Woods et al. (2006) and Popay et al. (2006). This approach is employed when both the research problem as well as data and methods are not precisely specified and it serves more general assessment and discussion of previous studies. The narrative review leads to rather descriptive

Social and Environmental Impacts of CSR

17

presentation of the existing empirical evidence, is more suitable for deeper, more qualitative understanding of the investigated topic, and relies to greater extent on investigator’s knowledge and intuition. The purpose of the study was to identify the recent CSR literature focusing on societal and environmental impacts, to summarise findings resulting from this literature and to offer recommendations for further research. Similar to existing studies (e.g. Aguinis & Glavas, 2012), information used in the current review was extracted from the leading general management, IB and CSRrelated academic journals (see Table 2.1). The review covered publications that appeared in these outlets from 2010 to 2020. In the first step, the SCOPUS database was employed to identify articles that dealt with CSR impacts. In order to avoid a possible omission of any relevant articles, a wide spectrum of key words was used. They addressed the following two key variables: CSR (“corporate social responsibility”, “CSR”, “environmental responsibility”, “corporate citizenship”, “corporate philanthropy”, “corporate sustainability”) and impact ("impact”, “effect”, “consequence”, “outcome”, “performance”, “environment”, “social”, “societal”, “rights”, “development”, “innovation”, “corruption”, “human” and “climate”).

Table 2.1 List of academic journals included in the review Academic Journals General Management Journals

Specialised IB Journals

CSR-related Journals

• Administrative Science Quarterly • Academy of Management Journal • Academy of Management Review • International Journal of Management Reviews • Journal of Applied Psychology • Journal of Management • Journal of Management Studies • Journal of Organisational Behaviour • Management Science • Organisational Behaviour and Human Decision Process • Organisation Science • Organisation Studies • Strategic Management Journal

• Global Strategy Journal • International Business Review • Journal of International Business Studies • Journal of International Management • Journal of World Business • Management International Review

• Business & Society • Business Ethics Quarterly • Business Ethics: A European Review • Business Strategy and the Environment • Corporate Governance: An International Review • Corporate Social Responsibility and Environmental Management • Journal of Business Ethics • Organisation & Environment

18

Robert Kudłak

Each of the identified articles had to include at least one key word from the above two groups. This helped to create an initial sample of 1,140 texts. In the next step, titles, abstracts and key words of the identified works were carefully analysed in order to select all articles which explored CSR impacts and to exclude those concerned with other aspects of CSR. Consequently, all studies that: (a) contained only keyword from one of the abovementioned groups, (b) focused on organisation-level effects of CSR engagement or (c) targeted non-social or non-environmental aspects of organisational performance and impacts were rejected from the sample. This process uncovered a total of 33 articles. A great majority (30) were published in CSR-related journals (14 in JBE, 9 in CSR&EM, 4 in B&S, 2 in BSE, 1 in BEQ), and only three in general management journals (one article each in Journal of Management, Journal of Management Studies and Management Science). Of the selected texts, 29 were empirical and four were conceptual/theoretical. Each paper was read in full and analysed from the point of view of CSR impacts. Over the course of the analysis, similar to existing reviews (Lockett et al., 2006; Egri & Ralston, 2008), the articles were coded by orientation (empirical, theoretical), type of methodology, geographical focus, etc. However, special attention is given to reporting and summarizing the societal and environmental impacts presented in the selected articles. Impact was understood as any consequence (positive or negative) of corporate CSR activity that affected society at large (e.g. change in the institutional environment concerning labour), local community (e.g. better access to education and health care), employees (e.g. improved working conditions or increased job satisfaction) and the natural environment (e.g. reduced emissions) (Khandker et al., 2010). This understanding of impact corresponds with the last element of Wood’s (1991) research model for studying corporate social performance (CSP) i.e. outcomes of corporate behavior. Specifically, however, the current work exclusively focuses on “social impacts” (to use Wood’s terminology), but it ignores the “social programs” and “social policies” parts of the model. While important, the two latter aspects clearly represent the organisational output side of the whole model rather than inform about the consequences for society. Importantly, studies that explored the effects of corporate responsible behaviour for the economic entity itself (e.g. reduced costs or labour turnover) were rejected from the analysis.

Findings The most important and striking finding of the current review is that only 33 articles exploring the societal side of CSR engagement over the past ten years could be identified. Even when we contrast this number with the 1,140 texts initially found in the SCOPUS database (which can be assumed to be a relatively small number when considering the overall research

Social and Environmental Impacts of CSR

19

stream focusing on CSR), it shows that the topic of CSR impacts has not attracted much attention on the part of scholars. Another interesting observation is that a great majority of articles have been published in academic outlets at the border of management and society/ethics disciplines (e.g. Corporate Social Responsibility and Environmental Management, Journal of Business Ethics, Business & Society, Business Strategy and the Environment), while very few have appeared in the mainstream management and IB journals. This seems evident since the former outlets usually have a wider spectrum of interest (in comparison to general management journals) and focus not only on organisational matters but most importantly on the relationship between organisations and their social environment. It is also important to note that the key finding of this chapter might be restricted by the fact that the spectrum of keywords was narrowed down to those phrases which are the usual suspects in the organisation and management disciplines. It is likely that other disciplines and their respective journals explored the matter of “impact” in different terminology and focused on the social consequences of interventions instead of organisational matters. The identified articles can be divided into four categories: namely, according to those exploring (1) the influence of CSR on combating environmental pollution, (2) the role of corporate responsibility in alleviating social problems in developing and emerging economies, (3) the impacts of CSR on employment and working conditions (such as job satisfaction, workers’ rights) and (4) the role of CSR on mitigating tax avoidance by companies (see Table 2.2). CSR impacts on combating environmental pollution

The first of the aforementioned categories includes contributions that investigate CSR impacts in regard to environmental problems which might be disruptive for the sustainability of broader ecological systems and affect health and well-being. In this line of research, Jiménez‐Parra et al. (2018) enquired whether a larger number of socially responsible companies in a given territory contributes to reducing pollution levels in this territory. Specifically, they used Global Compact participation as a proxy for corporate responsibility and OECD data on air pollution, and discovered that the greater the number of companies involved in CSR, the lower the level of air pollution of a given country. Similarly, Graafland and Smid (2016) analysed the relationship between CSR policies, implementation of CSR programs and CSR impacts for numerous environmental and social issues. Their study was based on data from about 1,000 companies operating in 24 countries, and both the CSR measures and impacts were measured with the use of Sustainalytics indicators of environmental, social and corporate governance (ESG) ratings. Graafland and Smid (2016) hypothesised that the higher the quality of CSR implementation (i.e. CSR policies and

Key Research Problem

Measure of CSR Impact/Outcome

3. Bird & DavisTo discuss avoidance − Nozemack (2018) as sustainability issue − 4. Blowfield & Dolan To discuss the (2010) complexity of analysing and measuring CSR impacts GDP per capita 5. Boulouta & Pitelis To verify the (2014) influence of CSR on competitiveness at the national level

1. Ahmed et al. (2020) To analyse the Employees’ influence of CSR perceptions measured on on well-being and Likert scale green behaviour of employees 2. Barnett et al. (2020) To explore the − existing CSR literature in regard to the performance of CSR initiatives

No. Author(s)

Table 2.2 Identified studies exploring the CSR impacts

Dynamic panel The overall national model CSR performance regression might contribute to national competitiveness

−

19 developed economies

−

−

−

Pakistan

Countries Covered

−

−

Conceptual paper

Conceptual paper

Majority of identified − studies focused on CSR activities or outputs, some on outcomes and none of CSR impacts − −

Bibliometric analysis

Hotel sector

Sectors Covered

CSR efforts improved the employees’ wellbeing

Key Finding

Structural equation modelling

Method

20 Robert Kudłak

8. De Roeck & Farooq To scrutinise the Employees’ perceptions (2018) impact of CSR on pro-environmental measured on behaviour of Likert scale employees No quantified 9. Devenin & Bianchi To investigate the measures; (2018) influence of CSR impacts assessed initiatives in the through mining industry on qualitative local development interviews

6. Brieger et al. (2020) To prove that CSR Perceptions might negatively measured on affect employees’ Likert scale well-being (through work addiction) 7. Cheema et al. To scrutinise the Employees’ (2020) impact of CSR on perceptions pro-environmental measured on behaviour of Likert scale employees

Multiple case study

Structural modelling

Mining industry CSR activities fail to contribute to development and well-being of the local communities and to adapt to the socio‐cultural characteristics of the targeted groups

EnvironmentallyHotel sector friendly CSR activities might mobilise employees’ pro-environmental behaviour Confirmed CSR impact Various on employees green manufacturing behaviour and societal industries behaviour

Regression analysis

−

The hypothesised relationship was confirmed

Regression analysis

(Continued)

Chile, Australia

Pakistan

Pakistan

Switzerland

Social and Environmental Impacts of CSR 21

12. Glavas & Kelley (2014)

11. García‐Rodríguez et al. (2013)

To verify the impact of CSR on decreasing the amount of food waste

10. Devin & Richards (2018)

Measure of CSR Impact/Outcome

Method

Key Finding

Sectors Covered

Impacts not directly Interviews and CSR activities were Retail measured; documents largely symbolic, qualitatively analysis allowed companies to analysed decrease costs and shift food waste elsewhere in the supply chain Oil industry No explicit Case study Improvement of To scrutinise the impact of oil measurement of wastewater treatment impact system and waste multinational CSR transport conditions; strategy in diffusion of EMS environmental among other performance companies; introduction of new national regulations concerning environmental protection Structural Relationship confirmed Food and To investigate CSR Employees’ perceptions modelling agriculture impact on job industry satisfaction measured on Likert scale

Key Research Problem

No. Author(s)

Table 2.2 (Continued)

USA and Canada

Angola

Australia

Countries Covered

22 Robert Kudłak

To verify if sustainability leaders set meaningful sustainability targets (i.e. in relation to planetary thresholds)

To identify institutional configurations leading to improved and nonimproved sustainability performance

15. Haffar & Searcy (2018)

16. Halme, Rintamäki, Knudsen, Lankoski & Kuisma (2020)

Regression analysis

A positive relationship between CSR implementation and absolute GHG emissions as well as number of fatalities Positive relation between sustainable HRM and job satisfaction

(Continued)

Industry, Health, Numerous Consumer, European Financial, IT and Asian and Telecom, countries Utilities, Material Italy, France, Managers’ Structural Manufacturing perceptions modelling and services Ukraine, measured on sectors Macedonia, Likert scale Croatia, Slovenia Sustainability Multiple case Majority of companies Various industry Canada sectors (e.g. targets study do not set targets in utilities, regard to planetary banking, thresholds which energy, implies that impacts of materials) their voluntary activities are of low relevance Various Most of the identified Automotive, Selected social (e.g. Fuzzy-set configurations do not construction, European qualitative rate of injury) lead to improved ICT, retail and countries comparative and sustainability textile analysis environmental improvements (e.g. use of raw materials) indicators

To analyse CSR Derived from impacts on selected Sustainalitycs environmental and data base social issues

14. Guerci et al. (2019) To verify if sustainable HRM can increase job security of the HR professionals

13. Graafland & Smid (2016)

Social and Environmental Impacts of CSR 23

18. Jamali, LundThomsen & Khara (2017)

Not explicitly To analyse the measured; relationship derived between CSR qualitatively engagement and working conditions in developing country Exposure to air 19. Jiménez‐Parra et al. To investigate pollution by (2018) whether presence country’s of socially population responsible companies leads to reduced pollution levels at a given territory

To explore the Not explicitly MNC’s measured responsibilities in developing country

17. Hennchen (2015)

Measure of CSR Impact/Outcome

Key Research Problem

No. Author(s)

Table 2.2 (Continued)

Regression analysis

Qualitative analysis of interviews

Case study

Method

Sectors Covered

The higher the number − of companies engaged in CSR, the lower the level of air contamination

Views of corporate Oil industry responsibilities evolved over time and embraced not only worker rights but human rights violations as well as social and environmental impacts CSR engagement served Manufacturing sector mainly to legitimise companies’ operations and did not have a significant impact on working conditions

Key Finding

31 OECD countries

India

Nigeria

Countries Covered

24 Robert Kudłak

Number of ESG incidents

Regression analysis

Presence or absence Regression of tax avoidance analysis

To analyse to CSR Several measures of Regression impact on tax avoidance analysis corporate tax (e.g. effective tax avoidance rate) Structural Employees’ To test the link 23. Pellegrini et al. modelling perceptions (2018) between sustainable measured on human resource Likert scale practices and employees’ environmentally sustainable behaviour Structural 24. Romani et al. (2016) To assess the influence Perception modelling measures of environmental collected initiative on consumer reactions through survey to water consumption and more generally to support of green products

22. López‐González et al. (2019)

20. Lanis & Richardson To explore the CSR (2015) impact on corporate tax avoidance 21. Li & Wu (2020) To verify the role of CSR engagement in decreasing ESG incidents

Italy

−

(Continued)

Italy

28 countries

Multiple countries

USA

Multiple sectors

Multiple sectors

−

Initiative led to more Retail sector responsible water consumption and support of green purchasing behaviours in general

The higher the CSR performance, the lower the likeliness of tax avoidance CSR engagement leads to lower number of ESG incidents but only among private (not public) companies Corporate tax avoidance decreases with higher CSR commitment and performance Sustainable HRM lead to employee sustainable behaviour

Social and Environmental Impacts of CSR 25

Key Research Problem

Measure of CSR Impact/Outcome

Method

27. Tian & Robertson (2019).

Perception To scrutinise the impact of CSR on measures pro-environmental collected behaviour of through survey employees

Regression analysis

25. Salazar et al. (2012) To analyse the impact Reduction of time Propensity of CSR initiative and costs of score on construction of house matching housing in lowconstruction; income areas increased welfare of families affected by initiative − Literature 26. Schrempf-Stirling & To analyse the review Palazzo (2016) evolution of practical and academic discourse of upstream CSR

No. Author(s)

Table 2.2 (Continued) Countries Covered

China

−

Cement industry Mexico

Sectors Covered

− The academic and practical debates concerning CSR impacts in the supply chains enlarged their scope and depth (e.g. from worker rights violations to on human rights violations; from reactive to proactive approach) CSR impact confirmed Hotel sector

Some positive (but not always significant) impacts for the families targeted by the initiative

Key Finding

26 Robert Kudłak

No quantified measures; impacts assessed through qualitative interviews

Qualitatively assessed through interviews, focus groups and items adapted from the literature

To examine the CSR No quantified impacts of the measures; mining industry on impacts assessed the local through communities and qualitative natural interviews environment in developing country

30. Walker et al. (2017) To assess the impact of CSR program targeted at improving youth employability

29. Viveros (2016)

28. Vestergaard, To analyse if crossMurphy, Morsing sector partnership & Langevang contribute to the (2020) local development in a developing country

(Continued)

Some positive (e.g. job Design, glass and Ghana an income creation, jewellery development of production work-related skills) and negative impacts identified; however, these impact were not significant for the whole targeted group or local community Analysis of Mining industry Chile Positive economic semiimpacts, but negative structured social (e.g. on families interviews and local traditions) and environmental (e.g. increased energy consumption, destruction of fauna and flora) UK CSR program improved Banking and Mixed football participants’ selfmethods esteem, self-efficacy applied (preand employment and postmotivation; these intervention outcomes did not turn questioninto actual naires, focus employment groups and interviews)

Case study analysis

Social and Environmental Impacts of CSR 27

Source: Own elaboration.

33. Yawar & Seuring (2017)

32. Zhou et al. (2018)

To summarise the existing literature on managing the social issues in the supply chains

−

To introduce the idea − of Planetary Boundaries to corporate impacts analysis To investigate CSR Employees’ impact on job perceptions satisfaction measured on Likert scale

31. Whiteman et al. (2013)

Measure of CSR Impact/Outcome

Key Research Problem

No. Author(s)

Table 2.2 (Continued)

Literature review

Regression analysis

Conceptual paper

Method −

Sectors Covered

CSR has impact on − employees’ job satisfaction (especially at high level of CSR commitment) Almost no evidence of − CSR impacts on social issues in the supply chains

−

Key Finding

−

China

−

Countries Covered

28 Robert Kudłak

Social and Environmental Impacts of CSR

29

programs), the higher the social and environmental impacts of corporate voluntary engagement. The authors found a positive relationship between CSR implementation and impacts in regard to absolute GHG emissions (relative to industry average) and for the change in GHG emissions (and partly for the number of fatalities). However, no such relationship was found for water consumption and waste production. Interestingly, they showed that regardless of a CSR program’s quality (weak, adequate, strong), all led to positive impacts, and concluded that even a weak CSR program is better than no program. An important challenge related to assessing impacts of corporate responsible activities is a lack of objective referential framework helping to contextualise importance and scope of companies’ efforts. Whiteman et al. (2013) offered a solution to this challenge by introducing the concept of Planetary Boundaries (PB) to the management scholarship. The idea relies on nine critical Earth-system processes and their associated thresholds concerning e.g. climate change, rate of biodiversity loss, stratospheric ozone depletion and ocean acidification. The PB approach helps to set straightforward ecological thresholds which represent a maximum admissible limit for corporate (and, more generally, human) impacts. These thresholds can be defined with the use of ecological indicators such as carbon dioxide concentration. These indicators could potentially be disaggregated into industry and corporate level operational indicators and serve as measures of CSR impacts. Applying the PB framework, Haffar and Searcy (2018) attempted to empirically analyse corporate environmental targets of 50 Canadian companies. The authors explored sustainability reports in order to verify if corporations set their sustainability targets in line with these global “safe limits”. An investigation of 303 environmental targets showed that an overwhelming majority of the companies in the sample set their targets in a manner unrelated to the wider ecological environment. There is also a sample of publications that attempted to verify if CSR engagement might lead to change in terms of employees’ behaviour towards the natural environment. These studies highlight an indirect impact of CSR on the natural environment, which occurs through a change of individuals’ attitudes and actions. In this stream of research, Cheema et al. (2020) showed that companies which implemented CSR projects in an environmentally friendly manner managed to stimulate pro‐environmental behaviour among employees. A similar relationship between CSR and employees’ pro-environmental behaviour was confirmed by Pellegrini et al. (2018), Tian and Robertson (2019), Afsar and Umrani (2020) and Ahmed et al. (2020). In a similar vein, De Roeck and Farooq (2018) found both direct and indirect influence of perceived CSR on employees’ green behaviour within the organisation (e.g. rational use of resources). However, they also showed that the perceived CSR might also affect employees’ behaviour towards society at large (e.g. actions supporting overall community well-being beyond the work environment). Zhou et al. (2018)

30

Robert Kudłak

analysed and confirmed the impacts of perceived CSR on employees’ job satisfaction. They also argued the impact of perceived CSR on organisational pride rises slowly at low to moderate levels of perceived CSR and as CSR is increasingly perceived as high, its effect on pride accelerates significantly. Finally, Romani et al. (2016) confirmed the impact of corporate socially responsible initiatives on stimulating consumer green buying behaviour. CSR impacts in the developing and emerging economies

A second category of articles addressed the role of corporate responsibility in alleviating social problems in developing and emerging countries. The latter frequently lack governmental capacity and an institutional environment to meet even the very basic needs of their citizens. Given the high economic power and global influence of multinationals, they are expected to take a quasi-state position and act as development agents in the developing countries. This requires that organisations (such as companies operating globally) intentionally engage in efforts going beyond their conventional economic activities, consciously undertaken to positively impact lives in the developing countries (Blowfield & Dolan, 2010). While corporations tend to create a narrative that their presence in these countries positively contributes to their development, their actual impact in combating poverty and marginalisation remains to be verified. Scholars tend to be especially attentive to extractive (oil and gas, mining, quarrying) industries and their developmental efforts in developing countries. This is due to the fact that corporations from the oil or mining sectors have a long history of social and environmental conflicts. In addition, this industry can be considered as inherently unsustainable since it extracts non-renewable resources, while at the same time carrying a huge potential of stimulating growth and reducing poverty in the host region e.g. by creating jobs, income, technology transfer and infrastructure development. Evidence of a positive CSR impact was provided by García‐Rodríguez et al. (2013), who analysed a case of an oil refinery (with a French oil multinational as the majority owner) located in Angola. They found that the implementation of the ISO 14001 environmental management system led to, among others, improvements in terms of wastewater treatment system and waste transport conditions. Interestingly, the activity of the oil company initiated other second-order impacts. For example, the Angolan authorities launched regulations that forced other economic entities to take similar, pro-environmental actions. Moreover, several other companies followed the corporation under analysis and voluntarily adopted environmental managements systems. However, the majority of the identified articles remain largely sceptical and ambiguous about the ability of CSR initiatives to deliver the intended social outcomes to the local communities. For instance, Devenin and Bianchi (2018) examined ten CSR initiatives of large‐scale mining

Social and Environmental Impacts of CSR

31

companies and revealed that these initiatives: (1) failed to contribute to the actual community needs (companies frequently undertake activities that are not appreciated by the local community as improving its quality of life, e.g. financing of cultural events in deeply underdeveloped and remote areas); (2) failed to adapt to the socio‐cultural characteristics of the local community (CSR initiatives are often designed and implemented in a way which reflects the values and vision of a given company or its home country, ignoring the values and expectation of the community, e.g. some mining companies offer full time entrepreneurship programmes for women who rather seek opportunities that allow them to reconcile potential professional activity with family life); and (3) failed to ensure a long term durability of the introduced activities and their impacts (frequently corporate initiatives have a single, one-off character and are not designed and developed in alliance with the community or local authority, and hence after the corporate financing and involvement terminate, the initiative dwindle). Similarly, Viveros (2016) investigated the Chilean mining industry. The interviewed stakeholders acknowledged the positive economic impacts which stimulate economic growth, local employment and tax revenues. However, when it comes to social and environmental impacts resulting from the sector’s presence in a region and its CSR engagement, the mining industry was perceived as significantly damaging to local families and indigenous communities, harming people’s health, increasing living costs and devastating the natural environment. The positive impacts of CSR engagement were also questioned by Hennchen (2015) who conducted an in-depth study of Shell operations in Nigeria as well as the evolution of its CSR programs and activities. After the corporation faced accusations of violating human rights and damaging the natural environment in the 1990s during the Ogoni crisis, it launched numerous CSR-related initiatives and gained a reputation of a sustainability leader. However, in 2012 Shell faced new accusations including soil contamination, displacement of thousands of local people and violations of human rights. These accusations were confirmed in 2013 by the court of the Hague for one case of oil pollution in the Niger Delta. In similar vein, Jamali et al. (2017) analysed the impacts of CSR engagement of smalland medium-sized companies in the manufacturing industry in India. Interestingly, they documented that the Indian companies undertook activities that exemplified institutional coupling and decoupling. On the one hand, they embraced international norms and expectations concerning CSR and highlighted their commitment to tackling child labour issue. This increased their legitimacy in the eyes of international organisations (like UNIDO) and foreign contractors. However, a closer look at their actual CSR efforts showed little to no improvements in regard to working conditions. Most recently, Vestergaard et al. (2019) investigated the role of a nongovernmental organisation (NGO) - business partnership in Ghana, in stimulating positive impacts for the local community. They found that the

32

Robert Kudłak

partnership provided new resources and knowledge to the beneficiaries but did not manage to generate the conditions for these resources to be transformed into significant changes in local beneficiaries’ lifes. The findings suggest that CSP caused certain positive (but also negative) outcomes to the local beneficiaries such as jobs, income (although only for parts of the year), work-related skills, additional education (e.g. concerning protecting themselves from diseases like cholera). However, these outcomes and impacts were not significant enough to have any immediate impacts on the whole target group (single mothers) or the whole community. Finally, Blowfield and Dolan (2010) discussed challenges associated with corporations acting as development agents and attempting to alleviate poverty through initiatives such as Fairtrade. Analysing the case of tea producers in Kenya, they showed that the claim that businesses are capable of combating poverty is attractive but needs to be treated with caution. Blowfield and Dolan (2010) argued that the nature of poverty in the developing countries was very complex and, in many cases, it might even be difficult to define what constitutes a favourable outcome for the poor and marginalised. The complexity of the situation relates to, among other factors, the price paid to the local producers and challenges related to establishing transparent institutions. This is further supported by a lack of clear evidence concerning the actual outcomes of CSR-related programs and projects as well as the discrepancy between the local beneficiaries’ expectations and the corporations’ approach to poverty alleviation. CSR impacts on employment and quality of jobs issues

Another group of articles focused on CSR impacts on employment and job quality issues. For instance, Guerci et al. (2019) empirically confirmed the role of sustainable human resource management (HRM) for increasing employees’ job satisfaction. They argued that when sustainability was genuinely embedded in the corporate practices, operations and routines, employees were more likely to perceive their work as having positive societal and environmental impacts, which increased their job satisfaction. In contrast, when the sustainability of HRM remains at the periphery of corporate operations, it does not have such a positive influence on HR managers and professionals. Similarly, Glavas and Kelley (2014) found that perceived CSR was positively related to job satisfaction. Walker et al. (2017) scrutinised a youth-based employability program that aimed to help young people gain or return to employment through work-related training, skill and attitude training, mentoring experience, etc. Pre- and post-intervention questionnaires as well as focus groups and interviews revealed that the program had a strong, positive effect on the participants’ attitudes; they rejected their previous negative life routines and got motivated to seek and gain employment. The findings moreover suggested that the program strengthened the participants’ self-esteem and

Social and Environmental Impacts of CSR

33

self-efficacy. However, these positive consequences in terms of attitudes did not turn into ‘hard’ outcomes such as skill development and gaining employment. Interestingly, Brieger et al. (2020) presented a rare case of a negative unintentional impact of CSR on employees. Specifically, they hypothesised that corporate commitment to CSR can lead to employee work addiction. Employees who work for an organisation with a strong focus on CSR tend to identify more strongly with their employer and perceive their work as more meaningful which might lead them to think about work and work excessively. Brieger et al. (2020) confirmed the alleged relationship and revealed that the impacts of CSR engagement on work addiction are even stronger if employees express a strong priority for the welfare of the wider public (i.e. local community, nation or world). CSR impacts on reducing tax avoidance behaviour

Finally, the review revealed few studies analysing the impact of CSR involvement on reducing tax avoidance behaviour by companies. Tax avoidance encompasses activities which aim at reducing tax responsibility in a manner contrary to the policy or spirit of government legislation. Paying taxes is one of the key corporate obligations towards the state and society, and hence economic entities should not purposefully engage in activities targeted at minimizing their royalties towards society. Bird and DavisNozemack (2018) argued that the harm resulting from tax avoidance exceeds the economic value that does not reach the society. They identified three ways in which fraudulent corporate behaviour affects society: (1) it deprives the public system of the necessary financial resources, (2) it erodes the regulatory sphere by violating mutual expectations, norms and understandings that are shared between firms and the authorities who regulate them and (3) it erodes the culture of trust and mutual commitment in the organisation. In short, the issue of tax avoidance seems to be increasingly recognised in the management and CSR-related literature and the initial findings of the empirical works suggest that socially responsible companies are less likely to engage in unfair tax activities. An empirical analysis of corporate tax avoidance was conducted by Lanis and Richardson (2015) as well as López‐González et al. (2019). Both studies, based on multi-year observations of hundreds of companies, confirmed the hypothesised relationship between CSR performance and corporate tax behaviour. Specifically, they showed that the higher the level of CSR performance, the lower the probability of tax avoidance. Next to the above articles, a few other studies were identified which do not represent any of the suggested categories. These contributions explore the impact of CSR on national competitiveness (Boulouta & Pitelis, 2014), food waste in the retail sector (Devin & Richards, 2018), reduction of the number of negative ESG incidents (Li & Wu, 2020), pathways to overcome

34

Robert Kudłak

institutional pressure towards (non)improved sustainability performance (Halme et al., 2020), and suggest an alternative study design to assess CSR outcomes (Salazar et al., 2012). Finally, three other studies referred to in the introduction of the chapter had the character of reviews (SchrempfStirling & Palazzo, 2016; Yawar & Seuring, 2017; Barnett et al., 2020).

Discussion and conclusions Overall patterns

This chapter aimed at identifying and summarizing the existing studies exploring the impacts of corporate engagement in CSR. Similar to Barnett et al. (2020), the analysis of a vast spectrum of academic journals revealed that research concerning the societal impact is very scarce and remains in its infancy. Keeping in mind the long and rich tradition of the CSR literature in this regard, it is surprising how little we know about the actual contribution of corporate voluntary activities to society at large (Wood, 1991). Moreover, the findings arising from the selected articles are at best mixed. While some of them suggest positive CSR outcomes, a large number of studies, especially those investigating the role of corporations in the developing countries, are predominantly critical about the social benefits of corporate initiatives. This finding, however, needs to be treated with some caution. Although the current review embraced a large number of academic journals, it can nevertheless be expected that the topic of CSR impacts has been covered by outlets beyond the scope of this review. For instance, the issue of collaboration between business, NGOs and public authorities has been on the research agenda of the scholars investigating the performance of the third sector. It can be expected that further studies concerning CSR impacts could be identified and extend the existing knowledge on the topic. The selected publications provide some evidence that corporate engagement in CSR might (a) improve employees’ job satisfaction and wellbeing, (b) stimulate employees’ pro-environmental behaviour which goes beyond in-job activities, (c) reduce tax-avoiding behaviour, (d) contribute to the development of local communities in the developing countries through improving employees’ work-related skills and providing additional education, (e) stimulate positive changes in the sectoral and institutional environment in the developing countries mobilizing other companies to act more responsibly or (f) decrease air pollution and GHG emissions. The evidence is, however, anecdotal and does not allow for any generalisation. While interesting, the aforementioned studies do not impart robust conclusions on CSR impacts, if only due to numerous issues related to data collection and the methodology applied (Crane et al., 2017). Many of the reviewed works rely on self-reported or perceived measures of CSR and impacts, or meta indicators developed and provided by third-party bodies

Social and Environmental Impacts of CSR

35

(such as MSCI) which do not allow to properly conclude about the actual social outcomes. Frequently, the analysis applies to the whole corporation or the totality of its CSR programs and activities. This may mask the (positive or negative) impacts of specific CSR activities and limit the possibility to unveil the causal relationship between these activities and social outcomes. Furthermore, studies exploring CSR impacts rarely include a control group and pre/post-intervention design, which would help distinguish the influence of corporate actions from other counterfactuals and contingencies (Salazar et al., 2012). Finally, it is quite apparent that both corporations and scholars (but also third-party organisations, such as private consultancies or public organisations such as the UN) tend to measure and assess corporate activities rather than the improvement of social welfare (e.g. increased income, improved working conditions). In other words, the existing works report what “happened”, but say very little about pre-intervention objectives and the progress in their achievement. Furthermore, it seems that the existing CSR literature tends to ignore potentially negative impacts resulting from CSR investments. Especially articles exploring corporate voluntary programs and activities in developing countries suggest that in many cases the conscious corporate efforts (e.g. CSR programs and activities) fail to contribute to the development and well-being of the local beneficiaries. Moreover, while these corporate interventions meet the Western standards and expectations concerning appropriate business conduct (e.g. Global Compact), they often miss the actual needs of the targeted community and interfere with its values and social norms. It is not to say that corporate investments in developing countries do not contribute to their development by stimulating economic growth and creating jobs and income. There is, however, very little evidence that corporate voluntary activities going beyond conventional economic operations bring about positive, long-term and resilient social and environmental change. The state of knowledge concerning social and environmental impacts of CSR engagement might be seen as disappointing when considering a long tradition of the overall CSR research and publications. Wood (1991) and other scholars (Davis, 1973; Carroll, 1979; Wartick & Cochran, 1985) have long offered various models and framework circulating around social performance of companies. Nevertheless, despite these significant conceptual and theoretical developments, the actual CSR research has been predominantly occupied with investigating organisational processes and activities rather than impacts. Even many of the most known and impactful academic contributions seems to offer rather little advancement in this regard. For example, Aguinis and Glavas (2012) in their major review article attempted to uncover the empirical evidence concerning CSR outcomes at different levels of analysis. Their study does not, however, report findings that would go beyond companies and their employees. In sum, scholars have largely overlooked the actual impacts of organisational behavior, preferring to focus on antecedents of CSR, corporate intentions, activities and processes.

36

Robert Kudłak

Contribution to CSR literature

In contrast to the study by Barnett et al. (2020), the current chapter used a more extensive range of keywords and took a more qualitative approach which aimed at identifying and summarizing the findings of studies dealing with social and environmental impacts of CSR. By doing so, it revealed a slightly different picture of the state of the art in regard to the relationship between business and society. Moreover, a review presented in this chapter suggests that although the past 10 to 15 years have witnessed significant growth in the number of performance-related academic papers (as presented by Barnett et al., 2020), actual research on the effects of CSR engagement remains very scarce. It can be argued that the bibliometric analysis employed by Barnett et al. (2020) superficially inflated the number of publications related to CSR performance as it rested purely on occurrence of selected keywords. A deeper investigation of studies published over last decade suggests that the actual interest and knowledge about impacts of corporate social and environmental engagement is very limited. However, irrespective of the methodological differences between this study and the bibliometric analysis by Barnett et al. (2020), both works seem to complement each other and provide CSR scholars with valuable and informative findings concerning CSR impacts. The findings of the current chapter also shed doubts on the existing studies uncovering the link between corporate social and financial performance (Margolis & Walsh, 2003; Orlitzky et al., 2003; Margolis et al., 2007). While these and other studies seem to be moderately optimistic about the financial results of corporate social engagement, their findings might actually be distorted by the incomplete or misleading measures of CSP. Since we know so little about the social side of the above-mentioned relationship, it can be argued that it is very unlikely to infer about the CSPCFP link in a credible manner. Moreover, lack of evidence concerning CSR impacts might question the increasing tendency of many international organisations (e.g. EU) as well as the national governments to mobilise companies to claim some of the social and environmental responsibilities (Albareda et al., 2007; Knudsen et al., 2015; Mazboudi et al., 2020). This process might lead to further erosion of the power of states and empowerment of corporations while not offering genuine solutions to new challenges (such as climate changes) and impairing the existing regulative milieu securing social well-being and protection of the natural environment. Recommendations for future research

It seems one of the reasons why we know so little about CSR impacts stems from the fact that the CSR literature has been dominated by management journals which naturally focus on organisation-related issues and on explaining how organisational form and operations are determined by the

Social and Environmental Impacts of CSR

37

(societal, institutional, natural) environment in which they are embedded. For this reason, scholars have been much more interested, for example, in antecedents of, or the business case for, CSR. Clearly, there is a deficit of works that analyse the influence of organisations on the environment in which they operate: e.g. how companies contribute to alleviating “wicked” problems, if and how do they change the existing social order and norms. The findings of this review support this observation, as a great majority of the selected texts were published in journals addressing management, ethical and social topics. Very few studies occurred in mainstream management outlets. This also implies that the forthcoming reviews should take into consideration studies published in academic journals from other disciplines such as development studies, economics, finances, accounting, non-profit and voluntary sector. Another suggestion is that management scholars should consider applying approaches and methods known and used in other areas such as medical research and development economics. These disciplines have a long tradition of isolating and analysing impacts of certain kinds of interventions (either introduction of a new medicine or a development project), which might be useful and insightful from the CSR perspective. Additionally, as mentioned above, the existing literature seems to ignore the potentially negative consequences of corporate interventions which may affect the host country’s culturally specific social and economic relationships. When investing abroad businesses frequently carry and diffuse certain norms, values and expectations which are typical or taken for granted in their home country markets. Hence, it would be very interesting to investigate if CSR-labelled activities alter the social order of the developing country and to what extent it is perceived as desirable by the local community. The current chapter offers important contributions to the academic literature dealing with corporate social responsibility. First, it reveals a significant knowledge gap in research concerning CSR outcomes and impacts. Despite the fact that it has been more than three decades since Wood (1991) published her seminal paper presenting the model for business and society research and calling for more in-depth investigation in the regard, it seems that her call has not been taken up so far. Secondly, the chapter depicts areas where corporate engagement in CSR might potentially improve social welfare (e.g. employment and working conditions, corporate tax obligations towards society and state, mobilizing local development in developing economies) and the quality of the natural environment (reduction of air pollution and GHG emissions). Although this chapter does not profess to offer a complete picture of CSR-related impacts and is burdened with certain limitations (such as its limited temporal scope restricted time framework), it nevertheless represents an important contribution for drawing scholars’ attention to the deficit of knowledge concerning this increasingly prevalent practice and thereby renewing the impetus to investigate CSR impacts.

38

Robert Kudłak

Takeaways for the society-level impacts of CSR The findings of the current chapter confirm the rationale behind the book. The evidence of CSR contribution for society at large is very limited and the identified publications neither provide strong proof nor are they free from methodological limitations. The reviewed studies are not only sparse but they also bring into the light some negative impacts of CSR such as violation of the norms and expectations of the affected communities. In addition, the review showed that out of convenience, data availability or research interests, scholars prefer to scrutinise intentions and organisational performance (activities, outputs), while the social consequences of CSR engagement remain outside of the mainstream research. Furthermore, in order to determine the actual role of corporate voluntary activities in tackling some of the contemporary social and environmental challenges, we need to significantly shift our focus from organisations themselves to their environment. Clearly, the CSR scholarship would benefit from joining forces or learning from other disciplines such as development studies, public health or third sector studies because they have a longer and richer tradition of separating and measuring impacts of different kinds of interventions (e.g. aid programs in developing economies). Somehow disappointing findings of this chapter lead to another conclusion related to public CSR policies and expectations that private businesses will take over some of the state responsibilities. It seems that these expectations are too premature, have very little foundation in empirical research and might even further distort the balance of power between states and private corporations.

References Afsar, B., & Umrani, W. A. (2020). Corporate social responsibility and pro‐ environmental behaviour at workplace: The role of moral reflectiveness, coworker advocacy, and environmental commitment. Corporate Social Responsibility and Environmental Management, 27(1), 109–125. Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968. Ahmed, M., Zehou, S., Raza, S. A., Qureshi, M. A., & Yousufi, S. Q. (2020). Impact of CSR and environmental triggers on employee green behavior: The mediating effect of employee well‐being. Corporate Social Responsibility and Environmental Management, 27(5), 2225–2239. Albareda, L., Lozano, J. M., & Ysa, T. (2007). Public policies on corporate social responsibility: The role of governments in Europe. Journal of Business Ethics, 74(4), 391–407. Banerjee, S. B. (2008). Corporate social responsibility: The good, the bad and the ugly. Critical Sociology, 34(1), 51–79. Barnett, M. L., Henriques, I., & Husted, B. W. (2020). Beyond good intentions: Designing CSR initiatives for greater social impact. Journal of Management, 46(6), 937–964.

Social and Environmental Impacts of CSR

39

Bird, R., & Davis-Nozemack, K. (2018). Tax avoidance as a sustainability problem. Journal of Business Ethics, 151(4), 1009–1025. Blowfield, M. E., & Dolan, C. (2010). Fairtrade facts and fancies: What Kenyan Fairtrade tea tells us about business’ role as development agent. Journal of Business Ethics, 93(2), 143–162. Boulouta, I., & Pitelis, C. N. (2014). Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of Business Ethics, 119(3), 349–364. Bowen, Howard R. (1953). Social responsibilities of the businessman. New York: Harper & Row. Brieger, S. A., Anderer, S., Fröhlich, A., Bäro, A., & Meynhardt, T. (2020). Too much of a good thing? On the relationship between CSR and employee work addiction. Journal of Business Ethics, 166(2), 311–329. Broadstock, D. C., Managi, S., Matousek, R., & Tzeremes, N. G. (2019). Does doing “good” always translate into doing “well”? An eco‐efficiency perspective. Business Strategy and the Environment, 28(6), 1199–1217. Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497–505. Carroll, A. B. (1999). Corporate social responsibility evolution of a definitional construct. Business & Society, 38(3), 268–295. Carroll, A. B. (2008). A history of corporate social responsibility: Concepts and practices. The Oxford Handbook of Corporate Social Responsibility, 19–46. Cheema, S., Afsar, B., Al‐Ghazali, B. M., & Maqsoom, A. (2020). How employee’s perceived corporate social responsibility affects employee’s pro‐environmental behaviour? The influence of organizational identification, corporate entrepreneurship, and environmental consciousness. Corporate Social Responsibility and Environmental Management, 27(2), 616–629. Crane, A., Henriques, I., Husted, B. W., & Matten, D. (2017). Measuring corporate social responsibility and impact: Enhancing quantitative research design and methods in business and society research, Business & Society, 56(6), 787–795. Devin, B., & Richards, C. (2018). Food waste, power, and corporate social responsibility in the Australian food supply chain. Journal of Business Ethics, 150(1), 199–210. Davis, K. (1960). Can business afford to ignore social responsibilities? California Management Review, 2, spring: 70–76. Davis, K. (1973). The case for and against business assumption of social responsibilities. Academy of Management Journal, 16(2), 312–322. De Roeck, K., & Farooq, O. (2018). Corporate social responsibility and ethical leadership: Investigating their interactive effect on employees’ socially responsible behaviors. Journal of Business Ethics, 151(4), 923–939. Devenin, V., & Bianchi, C. (2018). Soccer fields? What for? Effectiveness of corporate social responsibility initiatives in the mining industry. Corporate Social Responsibility and Environmental Management, 25(5), 866–879. Devinney, T. (2009). Is the socially responsible corporation a myth? The good, the bad, and the ugly of Corporate Social Responsibility. Academy of Management Perspectives, 23(2), 44–56. Dixon-Woods, M., Bonas, S., Booth, A., Jones, D. R., Miller, T., Sutton, A. J., Shaw, R. L., Smith, J. A., & Young, B. (2006). How can systematic reviews incorporate qualitative research? A critical perspective. Qualitative Research, 6, 27–44.

40

Robert Kudłak

Egri, C. P., & Ralston, D. A. (2008). Corporate responsibility: A review of international management research from 1998 to 2007. Journal of International Management, 14(4), 319–339. El Ghoul, S., Guedhami, O., Kwok, C. C., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital?. Journal of Banking & Finance, 35(9), 2388–2406. Epstein, Edwin M. (1987). The Corporate Social Policy Process: Beyond Business Ethics, Corporate Social Responsibility, and Corporate Social Responsiveness. California Management Review, 29, 99–114. Fieseler, C. (2011). On the corporate social responsibility perceptions of equity analysts. Business Ethics: A European Review, 20(2), 131–147. Frynas, J. G., & Stephens, S. (2015). Political corporate social responsibility: Reviewing theories and setting new agendas. International Journal of Management Reviews, 17(4), 483–509. García‐Rodríguez, F. J., García‐Rodríguez, J. L., Castilla‐Gutiérrez, C., & Major, S. A. (2013). Corporate social responsibility of oil companies in developing countries: From altruism to business strategy. Corporate Social Responsibility and Environmental Management, 20(6), 371–384. Glavas, A., & Kelley, K. (2014). The effects of perceived corporate social responsibility on employee attitudes. Business Ethics Quarterly, 24(2), 165–202. Graafland, J., & Smid, H. (2016). Environmental impacts of SMEs and the effects of formal management tools: Evidence from EU’s largest survey. Corporate Social Responsibility and Environmental Management, 23(5), 297–307. Guerci, M., Decramer, A., Van Waeyenberg, T., & Aust, I. (2019). Moving beyond the link between HRM and economic performance: A study on the individual reactions of HR managers and professionals to sustainable HRM. Journal of Business Ethics, 160(3), 783–800. Haffar, M. & Searcy, C. (2018). Target‐setting for ecological resilience: Are companies setting environmental sustainability targets in line with planetary thresholds?. Business Strategy and the Environment, 27(7), 1079–1092. Halme, M., Rintamäki, J., Knudsen, J. S., Lankoski, L., & Kuisma, M. (2020). When is there a sustainability case for CSR? Pathways to environmental and social performance improvements. Business & Society, 59(6), 1181–1227. Hennchen, E. (2015). Royal Dutch shell in Nigeria: Where do responsibilities end? Journal of Business Ethics, 129(1), 1–25. Hosoda, M., & Suzuki, K. (2015). Using management control systems to implement CSR activities: An empirical analysis of 12 Japanese companies. Business Strategy and the Environment, 24(7), 628–642. Jackson, G., Bartosch, J., Avetisyan, E., Kinderman, D., & Knudsen, J. S. (2020). Mandatory non-financial disclosure and its influence on CSR: An international comparison. Journal of Business Ethics, 162(2), 323–342. Jamali, D., & Karam, C. (2018). Corporate social responsibility in developing countries as an emerging field of study. International Journal of Management Reviews, 20(1), 32–61. Jamali, D., Karam, C., Yin, J., & Soundararajan, V. (2017). CSR logics in developing countries: Translation, adaptation and stalled development. Journal of World Business, 52(3), 343–359. Jamali, D., Lund-Thomsen, P., & Khara, N. (2017). CSR institutionalized myths in developing countries: An imminent threat of selective decoupling. Business & Society, 56(3), 454–486.

Social and Environmental Impacts of CSR

41

Jiménez‐Parra, B., Alonso‐Martínez, D., & Godos‐Díez, J. L. (2018). The influence of corporate social responsibility on air pollution: Analysis of environmental regulation and eco‐innovation effects. Corporate Social Responsibility and Environmental Management, 25(6), 1363–1375. Kaplan, R., & Kinderman, D. (2020). The business-led globalization of CSR: Channels of diffusion from the United States into Venezuela and Britain, 1962–1981. Business & Society, 59(3), 439–488. Khandker, S. R., Koolwal, G. B., & Samad, H. A. (2010). Handbook on Impact Evaluation. Qualitative Methods and Practices. (World Bank Training Series). Washington, DC: The International Bank for Reconstruction and Development, The World Bank. eISBN, 978, 0‐8213. Klassen, R. D., & McLaughlin, C. P. (1996). The impact of environmental management on firm performance. Management Science, 42(8), 1199–1214. Knudsen, J. S., Moon, J., & Slager, R. (2015). Government policies for corporate social responsibility in Europe: A comparative analysis of institutionalisation. Policy & Politics, 43(1), 81–99. Konar, S., & Cohen, M. A. (2001). Does the market value environmental performance?. Review of Economics and Statistics, 83(2), 281–289. Kudłak, R. (2019). The role of corporate social responsibility in predicting CO2 emission: An institutional approach. Ecological Economics, 163(C), 169–176. Lai, C. S., Chiu, C. J., Yang, C. F., & Pai, D. C. (2010). The effects of corporate social responsibility on brand performance: The mediating effect of industrial brand equity and corporate reputation. Journal of Business Ethics, 95(3), 457–469. Lanis, R., & Richardson, G. (2015). Is corporate social responsibility performance associated with tax avoidance? Journal of Business Ethics, 127(2), 439–457. Li, J., & Wu, D. (2020). Do corporate social responsibility engagements lead to real environmental, social, and governance impact? Management Science, 66(6), 2564–2588. Lim, A., & Tsutsui, K. (2012). Globalization and commitment in corporate social responsibility: Cross-national analyses of institutional and political-economy effects. American Sociological Review, 77(1), 69–98. Lockett, A., Moon, J., & Visser, W. (2006). Corporate social responsibility in management research: Focus, nature, salience and sources of influence. Journal of Management Studies, 43(1), 115–136. López‐González, E., Martínez‐Ferrero, J., & García‐Meca, E. (2019). Does corporate social responsibility affect tax avoidance: Evidence from family firms. Corporate Social Responsibility and Environmental Management, 26(4), 819–831. Margolis, J. D., Elfenbein, H. A., Walsh, J. (2007). Does it pay to be good? A meta-analysis and redirection of research on the relationship between corporate social and financial performance. Ann Arbor: University of Michigan. Margolis, J. D., Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48(2), 268–305. Mazboudi, M., Sidani, Y. M., & Al Ariss, A. (2020). Harmonization of firm CSR policies across national contexts: Evidence from Brazil & Sweden. International Business Review, 29(5), 101711. McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127. Medina‐Muñoz, R. D., & Medina‐Muñoz, D. R. (2020). Corporate social responsibility for poverty alleviation: An integrated research framework. Business Ethics: A European Review, 29(1), 3–19.

42

Robert Kudłak

Melo, T., & Galan, J. I. (2011). Effects of corporate social responsibility on brand value. Journal of Brand Management, 18(6), 423–437. Mohr, L. A., Webb, D. J., & Harris, K. E. (2001). Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior. Journal of Consumer Affairs, 35(1), 45–72. Moon, J. (2007). The contribution of corporate social responsibility to sustainable development. Sustainable Development, 15(5), 296–306. Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization Studies, 24(3), 403–441. Palazzo, G., & Scherer, A. G. (2008). Corporate social responsibility, democracy, and the politicization of the corporation. Academy of Management Review, 33(3), 773–775. Pellegrini, C., Rizzi, F., & Frey, M. (2018). The role of sustainable human resource practices in influencing employee behavior for corporate sustainability. Business Strategy and the Environment, 27(8), 1221–1232. Popay, J., Roberts, H., Sowden, A., Petticrew, M., Arai, L., Rodgers, M., Britten, N., Roen K., & Duffy, S. (2006). Guidance on the conduct of narrative synthesis in systematic reviews. A product from the ESRC methods programme Version, 1, 1–92. Reinecke, J., & Donaghey, J. (2021). Political CSR at the coalface – The roles and contradictions of multinational corporations in developing workplace dialogue. Journal of Management Studies, 58(2), 457–486. Romani, S., Grappi, S., & Bagozzi, R. P. (2016). Corporate socially responsible initiatives and their effects on consumption of green products. Journal of Business Ethics, 135(2), 253–264. Salazar, J., Husted, B. W., & Biehl, M. (2012). Thoughts on the evaluation of corporate social performance through projects. Journal of Business Ethics, 105(2), 175–186. Schrempf-Stirling, J., & Palazzo, G. (2016). Upstream corporate social responsibility: The evolution from contract responsibility to full producer responsibility. Business & Society, 55(4), 491–527. Stites, J. P., & Michael, J. H. (2011). Organizational commitment in manufacturing employees: Relationships with corporate social performance. Business & Society, 50(1), 50–70. Tian, Q., & Robertson, J. L. (2019). How and when does perceived CSR affect employees’ engagement in voluntary pro-environmental behavior? Journal of Business Ethics, 155(2), 399–412. Vestergaard, A., Murphy, L., Morsing, M., & Langevang, T. (2019). Cross-sector partnerships as capitalism’s new development agents: Reconceiving impact as empowerment. Business & Society, 59(7), 1339–1376. Viveros, H. (2016). Examining stakeholders’ perceptions of mining impacts and corporate social responsibility. Corporate Social Responsibility and Environmental Management, 23(1), 50–64. Walker, M., Hills, S., & Heere, B. (2017). Evaluating a socially responsible employment program: Beneficiary impacts and stakeholder perceptions. Journal of Business Ethics, 143(1), 53–70. Wartick, S. L., & Cochran, P. L. (1985). The evolution of the corporate social performance model. Academy of Management Review, 10(4), 758–769. Whiteman, G., Walker, B., & Perego, P. (2013). Planetary boundaries: Ecological foundations for corporate sustainability. Journal of Management Studies, 50(2), 307–336.

Social and Environmental Impacts of CSR

43

Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 691–718. Yawar, S. A., & Seuring, S. (2017). Management of social issues in supply chains: A literature review exploring social issues, actions and performance outcomes. Journal of Business Ethics, 141(3), 621–643. Zhou, Z., Luo, B. N., & Tang, T. L.-P. (2017). Corporate social responsibility excites ‘exponential’ positive employee engagement: The Matthew effect in CSR and sustainable policy. Corporate Social Responsibility and Environmental Management, 25(4), 339–354.

3

The Societal Case for Small Business Social Responsibility: A Review of the Evidence of Societal Impact Types and Their Relevance to Stakeholders Johan Lindeque and Olga Samuel

Introduction This chapter explores the evidence for the societal case for corporate social responsibility (CSR) (Kudłak et al., 2020), through a systematic review of the small business social responsibility (SBSR) literature (Soundararajan et al., 2018; Avram et al., 2018; Lindeque et al., 2022). Societal impact can at a macro-level be understood as outcomes of CSR that contribute to addressing societal challenges, such as for example environmental degradation, loss of biodiversity, climate change, poverty and the protection of human rights, arguably the most complete articulation of these challenges today is in the UN Sustainable Development Goals (UN, 2021). The societal case for CSR from a micro-level perspective, if conceptualised more generally, is well captured by the contributions that individual CSR initiatives/activities of firms make, contributing inputs for CSR, the manner of firm participation in and influence on the nature of CSR initiatives’ processes, and the nature of the benefits to society that are realised from specific initiatives (Drews, 2010; Weber, 2008). While such societal impacts can include environmental, economic and social impacts, for the purposes of this paper the environmental dimension of societal impact is not considered. It is the thesis of this chapter that a societal case for CSR is highly likely to be supported in the SBSR body of research, due to the significant economic importance, as well as local and regional embeddedness of small- and medium-sized businesses (Clark et al., 2004; Cooke, 2007; Cooke et al., 2005; Greenberg et al., 2018; Kalantaridis, 2009; Keeble et al., 1998; Mackinnon et al., 2004). Small and medium-sized enterprises (SMEs) are considered the backbone of any national or regional economy, making critical contributions to social and economic development (Drucker, 2014). In the European Union (EU), SMEs (firms with less than 250 employees) represented 99.8% of all enterprises, employed 65.2% of all employees and added 53% of EU total value added in 2020 (European Commission, 2021). “Across most OECD DOI: 10.4324/9781003182276-3

The Societal Case for SBSR

45

economies, SMEs account for nearly all firms (over 99%), provide over half of all business sector employment, employing on average five workers, and generate over half of all business sector GDP” (Organisation for Economic Cooperation and Development OECD, 2019, np). At the same time SMEs, as opposed to large corporations, are usually more likely to face resource constraints, have smaller senior management teams, be more strongly embedded in local communities and be more dependent on their immediate environment (Soundararajan et al., 2018). These factors have an impact on how SMEs invest in society-at-large, and we expect that SBSR is indeed likely to have a positive societal impact, especially locally. To evaluate this relationship, we reviewed a database of 226 SBSR articles, primarily published between 1980 and 2020, updating the 115 SBSR papers identified in Soundararajan et al. (2018). The papers we reviewed were identified via a systematic search of over 40 top business and management journals publishing SBSR research (Lindeque et al., 2022). The results, generated from thematic coding of the 226 papers, were organised into seven time periods, in analytical tables, allowing the nature of the societal impacts associated with small business CSR to be identified; a three-part organising categorisation of social input, process and benefit impacts was used (Drews, 2010; Weber, 2008). Furthermore, the nature of the evidence for these three types of societal impact was evaluated by considering the type of research design and whether an impact is associated with empirical evidence. Finally, the review identified the stakeholders associated with the different SBSR societal impacts identified.

Approach to review In order to achieve a better understanding of the societal impact of SBSR, we conducted a systematic review (Rousseau et al., 2008) of the SBSR literature, drawing on Soundararajan et al. (2018) and Avram et al. (2018) as comparative reviews. In a related paper (Lindeque et al., 2022), the same five-step approach to the review was adopted to focus on survey research of SBSR. First, ‘top journals’ for the review were identified. Table 3.1 gives an overview of the search by journal category and number of relevant

Table 3.1 Overview of search by journal category and number of papers Journal Category

No. of Journals

No. of Papers

Small Business Journals Nonmarket Journals General Management Journals Strategy Journals Practice Journals Other and Entrepreneurship J.

9 6 13 8 4 n.a.

56 136 19 2 6 6

46

Johan Lindeque and Olga Samuel

journals included and papers identified. These journals were selected based on their ranking in the Chartered Association of Business Schools (2020) 2018 journal rankings guide, using journal categories associated with CSR and SME research. Next, suitable search terms for identifying SBSR articles were selected, requiring the specification of search terms that would identify publications focused on SMEs and CSR. To identify these terms, we first decided on our definitions of an SME and SBSR. The formal definition of SMEs is challenging, with the EU and OECD adopting a definition based on fewer than 250 employees, as well as criteria for turnover and capital (European Commission, 2021; Organisation for Economic Cooperation and Development OECD, 2019, np), while the United States uses less than 500 employees (Small Business and Entrepreneurship Council, 2021). Emerging market economies such as India again have definitions appropriate to their economic circumstances (Indian Ministry of Micro, Small and Medium Enterprises, 2018). Such nuances have been noted in Soundararajan et al. (2018) and Avram et al. (2018) as well. It is thus common practice in reviews of the SME and small business literature to include all papers that identified the focal firms as small businesses or SMEs, thereby accommodating such national differences in the accepted characteristics of small businesses. The focal businesses also need to be “generally independent, multi-tasking, cash-limited, based on personal relationships and informality, actively managed by owners, highly personalized, largely local in their area of operation, and largely dependent on internal sources to finance growth” (Soundararajan et al., 2018, p. 935). Defining SBSR is no less challenging (Soundararajan et al., 2018), as it reflects the complex general CSR concept (Sheehy, 2015), but with a “sensitiv[ity] to the small-business context and idiosyncrasies” and can thus be understood as “as those activities of smaller organizations that result in positive social change” (Soundararajan et al., 2018, p. 935). Our understanding of CSR aligns with the more open definition of Matten and Moon (2008; 2020, p. 12): “CSR (and its synonyms) empirically consists of policies and practices of corporations that reflect business responsibility for some wider societal good. Yet the precise manifestation and direction of the responsibility lie at the discretion of the corporation”. This reflects a societal case for SBSR, in keeping with the overarching theme of the book, broadly understood as positive impacts of SBSR on society-at-large (Kudłak et al., 2020). An illustrative example of such SBSR is an SME sponsoring local sport activities or offering pro-bono consultancy for their employees’ families. In a third step, by connecting the variations of SME descriptions with Booleans (see Table 3.2), we purposefully searched the selected journals using academic databases (e.g. Business Source Premier) and journal home pages for a small number of journals, to identify all articles on SMEs in these journals. Fourth, these results were then searched for CSR keywords to

The Societal Case for SBSR

47

identify the relevant articles (see Table 3.2), in a database created with our search results from step 3, using the reference management software Mendeley (2021). Fifth, studies dealing with very technical solutions concerning environmental issues were excluded. Finally, duplications were removed and the search resulted in 226 unique articles that were included in this review. To validate our search results, we compared our results with the publications of Soundararajan et al. (2018) and Avram et al. (2018); we added a number of new studies to the identified SBSR publications reviewed in these articles, see Lindeque et al. (under review). This set of articles was subsequently analysed using the coding software Atlas.ti 9 (Atlas.ti, 2021). In this study we thematically analysed the 226 SBSR articles using the analytical categories in Figure 3.1, focusing on those in bold; these are the

Table 3.2 Search terms for SBSR articles SME

Small Business Small Enterprises Small and Medium Enterprises Small and Medium Business CSR (Corporate) Social Responsibility Corporate Citizenship Social Alliance Cross-sector Social Enterprise

CSR

Time Period of Publication Impact (Non-Financial) CSR Type Theoretical Foundation

SME Impact Stakeholders

Societal Impact

Geographic Research Design Locus

Nature of Evidence Ownership Type

Primary Analytical Categories

Secondary Analytical Categories

Figure 3.1 Analytical categories for systematic review.

Tertiary Analytical Categories

48

Johan Lindeque and Olga Samuel

initial deductively derived code categories for our review’s codebook (Saldaña, 2015). The primary analytical categories, bolded in Figure 3.1, allowed the analysis to identify and accurately define the nature of the evidence for positive societal impacts of SBSR. We focus on CSR types, the nature of any evidence for societal impacts and the stakeholders associated with the impacts. These primary categories are intended to capture the nature of the societal impact and the strength of the evidence for the societal impact as captured in both qualitative and quantitative studies of SBSR. The secondary analytical categories provide additional structure and insights on the core analysis, with a strong interest in changing patterns over time, as well as to some extent on SME impact, ownership type and geographic locus of the impacts. The tertiary categories cover the research design as well as the theoretical foundations of all included papers, but have received less attention in this chapter. Based on these categories and after analysing an initial 20 articles, the authors developed a more detailed coding system, which was then discussed by the authors and further developed by analysing a further 20 studies. All codes were discussed among the authors and developed during the analysis, in an iterative inductive process suited to our definition of CSR (Matten and Moon, 2008; 2020), that built on the initial deductive analytical categories (Mayring, 2004). Once saturation was reached and no new codes emerged, Atlas.ti’s auto-coding was used to identify all relevant content, which was then systematically reviewed and further coded to ensure accuracy and completeness. The analysis resulted in 108 unique codes for describing the societal impact of SBSR and these were applied over 3,303 times across the 226 articles reviewed. Representing this analysis in analytical tables using seven time periods, with an open period for work before 1980, five roughly equally long main periods and a two year most recent period, allows trends over time and the most current insights about SME CSR societal impacts to be identified, without getting lost in excessive detail of annual data.

Definition of societal impact Building on the idea of positive social change (Soundararajan et al., 2018), we adopt a three-part definition of SBSR societal impacts, drawing on the work of Drews (2010) and Weber (2008): social inputs, processes and benefits. The approach described in Drews (2010, p. 421) is uniquely suited to identifying societal impacts, due to its focus on the development of a “measurement and a governance model to evaluate and manage the business as well as the societal benefits of CSR”, that should be applicable in business practice. Importantly the approach of Drews (2010) is focused on the identification and evaluations of individual CSR initiatives/activities, which contrasts with more aggregate assessments of the benefits from firms’

The Societal Case for SBSR

49

CSR activities common in the literature. Figge and Hahn’s (2006) ‘sustainable value added’, Hubbard’s (2009) ‘sustainable balanced scorecard’ and Porter and Kramer’s (2011) ‘shared value creation’ represent such alternative firm-level conceptualisations of CSR impact. The first type of societal impact focuses on social inputs, which can be defined as the “value of CSR support in terms of cash, invested volunteering time, in-kind contributions, and management hours; and outside leverage referring to the contributions by other parties” (Drews, 2010, p. 426). The second type of societal impact focuses on the nature of the process through which a societal impact is pursued, in terms of “company and recipient performance, e.g. measured by the contributions and commitment to the project and the inclusion of societal partners; resource use and innovation; and public dialogue” (Drews, 2010, p. 426). The third type of societal impact concentrates on benefits for society, which can be defined as “outcomes in terms of effectiveness (e.g. measured by societal reach, problem reduction, stakeholder effects), efficiency, and their relevance to society; sustainability in terms of the long-term effects on society; institutional and structural effects; and significance in the broader context” (Drews, 2010, p. 426).

Societal impacts, evidence for the impact and stakeholders The goal is to assess the frequency with which the topic of societal impacts is addressed in each time period for the 226 publications we reviewed. Figure 3.2 provides an overview of the frequency of coding for three code 300

250

200

150

100

50

0 1958-1979

1980-1998 CSR Type

1999-2003

2004-2008

CSR Impact

2009-2013

2014-2018

2019-2020

SME Societal Stakeholders

Figure 3.2 Frequency of coding for coding categories CSR type, societal impact and stakeholders.

50

Johan Lindeque and Olga Samuel

groups: CSR type, SBSR societal impact and SME societal stakeholders. Notably across all three these dimensions there are significant increases in the frequency of coding from one time period to the next, see Figure 3.2. The most current time period should be treated with caution as it includes only two years of articles, compared to on average five years for the other time periods, earlier time periods are slightly longer due to the lower number of publications on SBSR before 1998. Table 3.3 presents a subset of the 226 articles reviewed, showing the frequency of empirically supported evidence for a societal impact(s) associated with SBSR, compared to all instances of the type of impact identified in the reviewed articles. We took the most conservative approach possible, to ensure a critical review of the evidence by focusing on uniquely clear findings, supported by stated empirical results in all reviewed studies. The first empirical support for evidence of societal impact is in quantitative studies, as early as the 1999–2003 time period, while qualitative papers starting from 2004 onwards most consistently provide evidence for societal impact of SBSR. An explanation for the significant growth since 2004, seen in Table 3.3, could be the numerous significant international events, that contributed to the creation of “international bodies and the adoption of international agreements represented international efforts for setting higher standards with regards to climate-related issues and, indirectly to corporate behavior” (Agudelo et al., 2019, p. 7). After the initial studies, a rapid increase in quantitatively based findings providing evidence in support of different types of societal impacts is observed. By the time period 2014–2018 the quantitative empirically supported evidence for societal impact is on a par with that in qualitative studies. This potentially suggests a degree of maturation in the study of SBSR societal impacts, as a degree of consensus emerges around how to operationalise the quantitative study of the phenomenon. Additionally, mixed method and review papers provide further sources of empirical supported evidence of societal impact starting in 2004. In the time span from 2019 to 2020 evidence for societal impact is rather dominant in qualitative study designs, compared to quantitative studies, which we argue is related to the emergence of a new phenomenon, the social enterprise, which initially required more exploratory qualitative studies to develop an understanding of this new organisational type. In this time period, mixed methods findings could not be identified. As in the previous time periods, both qualitative and quantitative findings are focused on social inputs, while social processes received less attention and no empirically supported evidence can be reported for social benefits. The predominant societal impact is of a social input type, followed by on average slightly greater empirical support for social process over social benefit type societal impacts. However, it is noteworthy that a relatively small number of papers provides most of the empirically supported evidence for societal impacts by small businesses. Listed in the order of their contribution, Gautier and Pache (2015), Chahal et al. (2014),

Empirical Evidence

Social Social Social Quantitative Social Social Social Other Designs Social Social Social

Qualitative

Inputs Process Benefit Inputs Process Benefit Inputs Process Benefit

1980–1998

1999–2003

2004–2008

2009–2013

2014–2018

2019–2020

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 − − −

0 0 0 0 0 0 0 0 0

0 0 0 4 1 0 − − −

1 0 0 2 2 2 0 0 0

1 0 0 6 5 2 − − −

6 5 2 0 0 0 7 3 2

12 7 6 11 4 3 − − −

18 9 8 1 1 1 2 1 0

21 12 4 26 15 8 − − −

17 9 11 15 11 9 11 4 4

18 10 8 43 22 24 − − −

27 8 0 5 0 0 0 0 0

35 12 0 16 0 0 − − −

Empirical Total Empirical Total Empirical Total Empirical Total Empirical Total Empirical Total Empirical Total

Pre-1980

Table 3.3 Frequency of empirically supported evidence for societal impact 1958–2020

The Societal Case for SBSR 51

52

Johan Lindeque and Olga Samuel

Park & Campbell (2017), Amaeshi et al. (2016) and Fowler et al. (2019) together contributed 25% to social inputs, 28% to social processes and 40% to social benefits. Gautier and Pache (2015) focus their paper on corporate philanthropy in academic research dating back 30 years. For this purpose, they identified and analysed 162 papers. Their study contributes 10% of all findings concerning social inputs, which might lead to a bias in the analysis in this chapter. Chahal et al. (2014) developed a model by focusing on SBSR in emerging countries, applying a mixed-method design, and collecting data from 156 SME owners/managers. This study covers 12% of all findings concerning social benefits. Park and Campbell (2017) analysed how corporate citizenship can be transferred to SMEs and which antecedents lead to relational benefits from SMEs’ local communities, based on an online survey of 393 SME owners/managers. Park and Campell’s (2017) study contributes 14% of all findings concerning social benefits. Amaeshi et al. (2016) collected qualitative data from Nigerian and Tanzanian SME owners/managers and analysed their CSR practices. Their study contributed 6% of all findings related to social benefit impacts. Fowler et al. (2019) describe a process model applied in a social enterprise, which provides clean water to communities, using qualitative semi-structured interviews, observations and archival methods. Their study did not speak to social benefit impacts, but contributed 7% of all findings related to social process impacts. Thus the influence of these papers should be carefully considered when interpreting the findings of the analysis. Having analysed the 226 identified papers and identified sources of potential bias in the findings, due to the over representation of the papers discussed above, we come to two conclusions: Authors write about the importance of positive societal impact of SBSR, but their studies do not try to gain an in-depth understanding of these impacts. Furthermore, the SBSR literature is rather focused on benefits for SMEs and not necessarily on societal benefits. Although societal impacts are not high on the agenda, in the next section we take a closer look at the evidence for societal impact types, as reported in the reviewed studies.

Linking SBSR to categories of societal impact To identify specific societal impacts, we coded 24 different CSR activities/ initiatives. We did not seek to achieve definitional certainty for the CSR types, but instead use the different CSR types as stated by the respective authors and thereby acknowledge and seek to accommodate differences across cultures, industries and geographic regions. The identification of the degree to which the literature links specific CSR types to societal impacts is shown in Tables 3.4, 3.5, and 3.6. A scale is used to represent the degree of attention each CSR type received in a specific time span. In the last two years, a new type of small business emerged in the reviewed SBSR literature, the social enterprise, which will be further discussed at the end of this chapter.

− − − − − − − − − − − − − − − −

Occasional Occasional Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal

− − − Minimal − − − − − − − − − − − −

Minimal − − − − − − − − − Minimal Minimal − − − − − − − − − − − −

Minimal Minimal Minimal Minimal − − Minimal − Minimal − Minimal − Minimal Minimal Minimal − Minimal Minimal − − − − Minimal −

Occasional Minimal Minimal Minimal Minimal − Minimal − Minimal − Minimal Minimal − − Minimal Minimal − Minimal − − Minimal − − −

Regular Occasional Minimal Occasional Minimal − Minimal −

Note: Categories for coding co-occurrence scale: 0 -; 1–10 Minimal; 11–20 Occasional; 21–30 Some; 31–40 Regular; >40 Significant.

Minimal − − − − − − −

Significant Significant Significant Some Some Occasional Occasional Occasional

Philanthropy Community Involvement Sustainable Employment Sponsorship Responding to Customer Needs Serving Disadvantaged Population Volunteering Product and Service Transparency/ Quality Advocacy/Cause-related Marketing Customer Welfare Corporate Citizenship In-kind Donations Ethical Advertising Employee Welfare Direct Investments Taxation Compliance Supporting Education Good-will Initiatives Community Governance Filling Institutional Voids Employee Development Gender Equality Reducing Noise Pollution Anti-corruption Efforts Minimal − Minimal Minimal Minimal Minimal − Minimal Minimal − Minimal Minimal Minimal Minimal − Minimal

Significant Occasional Occasional Minimal Minimal − Minimal Minimal

− Occasional − Minimal Minimal Minimal − Minimal Minimal Minimal Minimal Minimal − Minimal − −

Minimal Occasional Occasional Minimal Occasional Occasional Minimal Minimal

1958–1979 1980–1998 1999–2003 2004–2008 2009–2013 2014–2018 2019–2020

All Years

Impact – Social Inputs

Table 3.4 Degree of attention to social inputs 1958–2020

The Societal Case for SBSR 53

− − − − − − − − − − − − −

Minimal Minimal Minimal Minimal Minimal − − − − − − − −

− − − − − − − − − − − − −

Minimal Minimal − − − − − − Minimal − − − − − − − − − − − − − − −

Minimal Minimal Minimal Minimal − − Minimal Minimal Minimal − − − − − − Minimal − − − − − − − −

Minimal Minimal Minimal Minimal Minimal − Minimal − − Minimal − Minimal Minimal − Minimal Minimal − − − − − − − −

Occasional Occasional Minimal Minimal Minimal − Minimal Minimal Minimal − −

Note: Categories for coding co-occurrence scale: 0 -; 1–10 Minimal; 11–20 Occasional; 21–30 Some; 31–40 Regular; >40 Significant.

Minimal − − − − − − − − − −

Significant Some Some Occasional Occasional Minimal Minimal Minimal Minimal Minimal Minimal

Philanthropy Sustainable Employment Community Involvement Sponsorship Corporate Citizenship Serving Disadvantaged Population Responding to Customer Needs Volunteering In-kind Donations Ethical Advertising Product and Service Transparency/ Quality Gender Equality Advocacy/Cause-related Marketing Employee Welfare Employee Development Good-will Initiatives Taxation Compliance Reducing Noise Pollution Community Governance Supporting Education Customer Welfare Anti-corruption Efforts Filling Institutional Voids Direct Investments Minimal Minimal Minimal Minimal − − − − − − − − −

Some Occasional Occasional Minimal Minimal − Minimal Minimal Minimal Minimal Minimal

− − − − − − − − − − − − −

− − Minimal − − Minimal − Minimal − − Minimal

1958–1979 1980–1998 1999–2003 2004–2008 2009–2013 2014–2018 2019–2020

All Years

Impact – Social Process

Table 3.5 Degree of attention to social process 1958–2020

54 Johan Lindeque and Olga Samuel

Minimal − − − − − − − − − − − − − − − − −

− − − − Minimal − Minimal − Minimal − − − − − − − − −

Minimal Minimal Minimal Minimal − − − Minimal − − − − − − − − − −

Note: Categories for coding co-occurrence scale: 0 -; 1–10 Minimal; 11–20 Occasional; 21–30 Some; 31–40 Regular; >40 Significant.

− − − − − − − − − − − − − − − − − −

Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal − Minimal − − − − − − − − − − − −

Occasional Occasional Minimal Minimal Minimal Minimal

− − − − − − − − − − − − − − − − − −

− − − − − −

− − − − − − − − − − − − − − − − − −

Minimal Minimal Minimal Minimal Minimal −

Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal Minimal − − − − − − − − −

Minimal Minimal − Minimal Minimal −

− − − − − −

Regular Some Minimal Minimal Minimal Minimal

Philanthropy Sustainable Employment Responding to Customer Needs Sponsorship Corporate Citizenship Product and Service Transparency/ Quality Volunteering Ethical Advertising Gender Equality Employee Development Community Involvement Employee Welfare Good-will Initiatives In-kind Donations Reducing Noise Pollution Advocacy/Cause-related Marketing Taxation Compliance Direct Investments Supporting Education Filling Institutional Voids Anti-corruption Efforts Customer Welfare Community Governance Serving Disadvantaged Population

− Minimal − − − −

All Years 1958–1979 1980–1998 1999–2003 2004–2008 2009–2013 2014–2018 2019–2020

Impact – Social Benefits

Table 3.6 Degree of attention to social benefits 1958–2020

The Societal Case for SBSR 55

56

Johan Lindeque and Olga Samuel

Starting with social inputs, the following CSR types dominate philanthropy, community involvement, sustainable employment, sponsorship and responding to customer needs (see Table 3.4). These CSR types receive the most meaningful and greatest increase in attention over time. The major distinction between philanthropy and sponsorship of businesses can be best described as “the non-reciprocity condition” (Godfrey, 2005, p. 778) in philanthropy. It is considered a more or less selfless firm action (Gautier & Pache, 2015). By contrast, in sponsorship activities, firms have an expectation of receiving a benefit from their action. Community involvement can be considered to have a direct impact on social inputs, while sustainable employment and responding to customer needs rather focus on SMEs’ indirect contribution of benefits that affect social inputs. Since 2004 the range of CSR types that are associated with social inputs has increased in scope. Interestingly, during the time period 2019–2020 additional topics such as responding to customer needs, serving disadvantaged populations or customer welfare received greater academic attention in the SBSR literature. The increased interest in customer welfare is clearly linked to the emergence of social enterprises. Illustratively, a social enterprise might afford to sell products to customers with a lower income for a more considerate price (Bhattarai et al., 2019). Similarly to sponsorship, philanthropy seems to have peaked and is currently becoming a less important CSR type with respect to social inputs, as far as attention in the academic literature is concerned. An interpretation of the observed patterns is that the CSR types have become understood better and can be studied more specifically as a result. This allows them to be labelled more clearly, allowing greater differentiation of the types of CSR undertaken by SMEs. The question remains if the more detailed understanding of CSR types and their impacts is driven by academics or increasing firm awareness/engagement. Social process related findings show a similar picture as social inputs, but with a lower degree of frequency (see Table 3.5). The predominant CSR types for social process impacts, or how to achieve societal impact through social processes, are philanthropy, sustainable employment, community involvement, sponsorship and corporate citizenship. Again, these CSR types received increased attention over time and additional CSR types emerged over time, thereby broadening the scope of CSR types associated with social process societal impacts. As mentioned above, philanthropy and sponsorship are not to be confused. As opposed to social inputs, for social process type societal impacts, sustainable employment received slightly higher attention than community involvement in the reviewed studies. This might be due to the additional beneficial advantage perceived by SME managers from undertaking this type of CSR in a thought-through manner. Corporate citizenship as a CSR type associated with social processes is a rather surprising result. A possible explanation might be derived from the concept itself (cf. Matten & Crane, 2005), which may have been adapted by

The Societal Case for SBSR

57

SMEs and converted to a potential SME citizenship. Given the locally embedded nature of SMEs it might be argued that a SME citizenship theme in the study of social processes is not as surprising as it might seem initially. The findings from the time period 2019–2020 and specifically our understanding of the role of social enterprises in social processes remain unclear. We would expect an increasing attention on philanthropy and sustainable employment. However, this might not match the inherent logic of social enterprises. The third part of societal impact are social benefits. This category received – in comparison with social inputs and social process impacts – the least attention (see Table 3.6). Philanthropy remains number one for SBSR social benefits, followed by sustainable employment. Again, over time a broader range of CSR types emerged, but compared to philanthropy and sustainable employment they have not received continuing attention. Interestingly in the last time period from 2019 to 2020 no findings can be reported on social benefits. Taking the increasing amount of studies on social enterprises into account this is indeed surprising and raises questions about why this is the case. Overall, looking at all three types of societal impact, philanthropy is clearly the leading CSR type that is linked to social benefit impacts. Followed by sustainable employment and community involvement, sponsorship, and responding to customer needs. Based on this study, we can establish that social benefit impacts based on CSR types in the SBSR literature are not receiving a lot of attention. Interestingly, societal impact in the SBSR literature is discussed, but evidence for societal impacts, especially for social benefits, remains understudied. One potential explanation for the lack of strong evidence for societal impact linked to the identified CSR types might be that the researchers focus their studies on beneficial effects from an SME perspective, while the societal perspective of SBSR is neglected. The more recent emergence of social enterprises in the SBSR literature is in this respect a very interesting development. This shift in attention in research focus away from what might be called the more traditional SME’s CSR activities, towards the social enterprise as a ‘new phenomenon’, notwithstanding the long-established social entrepreneurship literature (Dacin et al., 2011), is however challenging to evaluate with respect to its societal impact as a small business, as arguably our understanding of the maturity of a social enterprise is not sufficient at this stage. At the same time, there is an implicit assumption that social enterprises must be providing a clear social benefit, due to their hybrid nature, and thus it could be that this impact is being assumed, as researchers first seek to understand the inherent nature of this new small business type. Clearly the limited degree of attention that social benefit impacts receive in the literature represents an important and interesting finding, given that this is arguably the most important outcome to study if one is interested in promoting the positive impact of SBSR on society.

58

Johan Lindeque and Olga Samuel

Linking stakeholders in SBSR to categories of societal impact Stakeholders of an SME can formally be defined as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984, p. 46). SMEs, just like larger firms, are today expected to be responsive to their stakeholders (Amaeshi et al., 2016; Carroll, 1991; Gautier & Pache, 2015) and in multi-stakeholder situations SMEs may even need to strategically assess how best to manage competing stakeholder demands (Gautier & Pache, 2015). For SMEs that face significant stakeholder interest over a longer time period, it may be necessary to build a stakeholder management competence (Park & Campbell, 2017), to effectively and efficiently manage the often contradictory stakeholder interests. Prior research makes clear that there are five main stakeholders in the most common SBSR type, corporate philanthropy; the local community, employees, consumers, shareholders and government (Gautier & Pache, 2015). Thus, it is possible in keeping with our chapter to assess stakeholders at the CSR activity/initiative level. Table 3.7 shows that the analysis in this chapter largely reflects Gautier & Pache’s (2015) view, with some distinct differences. This review, focusing on societal impact, does not show as strong an emphasis on shareholders as a key stakeholder. Instead, charitable and non-profit organisations and civil society more broadly are more important stakeholders in realising the societal impact of SBSR, indeed non-profit organisations emerge as a key stakeholder for implementing SBSR such as philanthropy. Additionally, the papers we reviewed tend to refer to multiple stakeholders in a non-specific manner on a frequent basis, suggesting an awareness and sensitivity to stakeholders, but that often the published work is not able to concretely specify SME-stakeholder relationships for a given form of societal impact. This reflects the tendency to assess CSR impact in the aggregate, rather than for specific CSR initiatives/projects (Drews, 2010). At the same time, the review reveals a strong link between SMEs, the local community and employees, as key stakeholders, and philanthropy, sustainable employment and a more general community involvement as important forms of CSR types. By contrast, consumers and customers as a stakeholder category have received some attention in association with CSR types focused on responding to customers, and product and service transparency/quality, especially with respect to social enterprises. Clearly and entirely expectedly, the local community and employees are the main SME stakeholders identified in general and for SBSR societal impact. It is important to note that a societal impact with regards to employees is primarily about contributing to employment of individuals. The stakeholder focused paper by Perrigot et al. (2015), addressing SBSR and franchises, emerges as a further important study, with respect to stakeholder association with societal impact and its three societal impacts

Regular Regular Some Occasional Occasional Minimal Minimal

Some

Significant

Some Some

Minimal

Minimal

Regular

3 Consumer (B2C)/ Customer (B2B)

Significant Significant

2 Employees

Stakeholder Types

Some

Some

Some

Minimal Occasional

Occasional

Some Minimal

Minimal

−

−

Occasional Minimal

Minimal

Regular Minimal

4 Charitable and Non- 5 Civil Society Profit Organisations

Occasional

Minimal

Minimal

Minimal Occasional

−

Some Minimal

6 Government

Occasional

−

−

Minimal Minimal

−

Occasional Minimal

7 Multiple (Indirect)

Note: Categories for coding co-occurrence scale, 0 -; 1–5 Minimal; 6–10 Occasional; 11–20 Some; 21–30 Regular; > 30 Significant.

CSR Types 1 Philanthropy 2 Sustainable Employment 3 Community Involvement 4 Sponsorship 5 Corporate Citizenship 6 Responding to Customer 7 Product and Service Transparency/Quality • All Other CSR Types

1 Community

Ranked Order of Stakeholder and CSR Types

Table 3.7 Degree of association between stakeholders and CSR types

Minimal

−

−

Minimal Minimal

Minimal

Occasional Minimal

• All Other Stakeholders

−

Minimal

Minimal

Minimal Minimal

Some

Regular Occasional

The Societal Case for SBSR 59

60

Johan Lindeque and Olga Samuel

Table 3.8 Degree of association between stakeholder types and societal impacts from SBSR for 6 most coded articles Societal Impact from SBSR

Community Employees Consumer (B2C)/Customer (B2B) Charitable and Non-Profit Organisations Natural Environment Shareholders Multiple (Indirect) All Others

Social Inputs

Social Process

Social Benefit

Significant Regular Regular Some

Significant Some Some Occasional

Significant Some Minimal Occasional

Occasional Occasional Minimal Some

Occasional Minimal Minimal Minimal

Minimal Minimal Minimal Occasional

Note: Categories for coding co-occurrence scale, 0 -; 1–5 Minimal; 6–10 Occasional; 11–20 Some; 21–30 Regular; > 30 Significant.

subdimensions. Looking at the six most coded articles (Amaeshi et al., 2016; Chahal et al., 2014; Fowler et al., 2019; Gautier & Pache, 2015; Park and Campbell, 2017; Perrigot et al., 2015), there is a clear pattern showing that the local community is very much associated with all three societal impacts (see Table 3.8). While employees and consumers/customers are regularly associated with the social input dimension, but only have some association with respect to the social process and social benefit analytical categories. Interestingly while Fowler et al. (2019) is relevant to discussing societal impact, the paper makes few observations about stakeholders in specific focal firms.

Additional observations We also coded whether the reviewed studies focused on social or business benefits. The focus of the SBSR literature is on why SMEs should or should not invest in socially responsible activities and how they can benefit as an entity from that decision. While one stream of research focuses on corporate citizenship, which considers a firm as part of the society, another stream focuses on social capital and how SME can benefit from that. Furthermore, the effect of the ownership (e.g. family-owned, minorityowned) on SBSR has been researched quite often. Overall, the business case seems to receive greatest attention from scholars, while the social case has been rather neglected. Several aspects still play an unclear role in SBSR. It is most likely, that different countries’ governments, regulations and their current states of economy lead to differing practices and outcomes of SBSR. There are countries, such as Norway, with a very low level of SBSR, because the government is clearly in charge of the society’s well-being and fulfilling

The Societal Case for SBSR

61

their task to the society’s expectation (Fassin et al., 2015). Thus, SMEs might not feel obliged to further invest into the society. In other countries, the awareness of SMEs practising SBSR might be low due to limited awareness on the part of managers, who when asked about their socially responsible practices, do not consider their actions as such (Vancheswaran & Gautam, 2011). Linked to this is a clearly dominant Western perspective in the SBSR literature, which might approach the topic from a culturally influenced perspective (Friedman’s (1970) “The Social Responsibility of Business is to Increase its Profits” and Levitt’s (1958) “the business of business is profits”. The potential negative impacts and risks of being a socially responsible SME are also addressed in the research of Besser & Miller (2004) and Hamann et al. (2017). Different government forms, levels of corruption, societal beliefs and religion, but also personal experience will clearly lead to very different types of SBSR. While the (non-)financial impacts of SBSR, the importance of ownership type, the specific geographic locus of the societal impact and the impact on the SME itself were originally considered as potentially important, reflecting the previous understandings of the uniqueness of SBSR (Soundararajan et al., 2018), these analytical categories remained peripheral to the analysis in this chapter. While the geographical locus of societal impact is indirectly integrated into the analysis, via the local community stakeholder category, the remaining foci may prove of interest for future research, despite not emerging as central themes in this chapter. The activity-based orientation of the analysis arguably confirms the usefulness of adopting the three-part categorisation of Drews (2010), as it allows a far more evaluative analysis of SBSR to be pursued in future.

Conclusion While SBSR has received increasing academic attention, the societal impact of SBSR is not a focal interest, with previous research on the topic typically more general in nature. Nevertheless, in this chapter we identify the degree to which three subdimensions of societal impact are addressed in the SBSR literature; social input, social process and social benefits. Adopting the approach of Drews (2010) has allowed specific SBSR initiatives to be identified, allowing their evaluation and management with respect to the three types of societal impact adopted in this study. The results show that the CSR types philanthropy, community involvement, sustainable employment, sponsorship and responding to customer needs contribute the most to social inputs. In the last two years serving disadvantaged populations and customer welfare gained importance and research attention. Concerning social processes, these impacts are associated with philanthropy, sustainable employment and community involvement CSR types. The most crucial part in terms of societal impact are social benefits, however, social benefits received the least attention

62

Johan Lindeque and Olga Samuel

overall. Again, philanthropy and sustainable employment are the predominant CSR types linked to social benefits. SME are said to be the backbone in many economies. Although in the short term a profit orientation might be necessary to survive as an SME, in the long-term no business can survive without being part of the society at large. Supporting local NGOs, supporting employees and their families, donating money for education, health or the environment, all these activities support the society at large, and thereby create a thriving environment for (small) businesses. If SMEs are the backbone of the economy, they need to adapt a more circular way of thinking, as investments in society at large will ultimately create better business opportunities. A combination of making profits and adopting socially responsible behaviour is not mutually exclusive, only a merger of the business case with the social case will ultimately lead to a sustainable society and a healthy business environment (Porter & Kramer, 2011). The current trend in doing sustainable business by considering the triple bottom line (people, profit, planet) clearly points into this direction. However, neither the circular economy (De Angelis, 2021) nor the triple bottom line (Depken & Zeman, 2018) emerged as major themes in the SBSR literature. The rise of the social enterprise, conceptualised as a hybrid organisation (Battilana & Lee, 2014), as a focus of research interest in small business journals (Chell, 2007; Davies et al., 2019), raises some important questions. Not least there is a question around whether social and hybrid enterprises should be considered SMEs or small businesses, when their origins are arguably in the non-profit and voluntary sectors (Bagnoli & Megali, 2011). The emergence of this new type of firm – social enterprises – raises the question about if this hybrid form might be a development in favour of higher societal impact of SBSR. While traditional SMEs clearly follow a strict business logic, social enterprises have the dual goal of generating benefits for the SME, but also for society. The SBSR literature has been argued to develop reactively (Soundararajan et al., 2018) and we see the inclusion of this new organisational form in our review as a recognition that in terms of size and approach to activities there are many similarities between the attributes traditionally associated with SMEs/small businesses and those of social enterprises. In Figure 3.3 we visualise the different organisations, all assumed to have fewer than 250 employees, on a continuum based around their primary value creation logic, from the business case to

Traditional SME

Social Enterprise

Non-Profit /NGO

Business Case

Figure 3.3 Organisation type and orientations related to value creation.

Social Case

The Societal Case for SBSR

63

the social case. While SMEs traditionally have a market orientation and non-profit organisations have a societal focus, social enterprises can be placed in the middle of the continuum. SME managers have the potential to significantly increase the positive impact of their firms CSR activities, by raising their awareness and understanding of the concrete nature of the SBSR activities and their impact on specific stakeholders (Drews, 2010). There is a need for a far more focused and purposeful attempt by academic researchers to capture the nature and degree of positive societal impacts resulting from SBSR, reflecting the need for more active management and evaluation of the societal impact of specific CSR initiatives/activities (Drews, 2010). For future research it would be useful to further explore which theoretical perspectives and research designs are most effective at revealing concrete positive societal impacts resulting from specific SBSR initiatives. The results of this review suggest that there is significant potential for both qualitative and quantitative studies that are focused on specific CSR initiatives by SMEs and their societal impact. Qualitative research would be exceptionally well-positioned to understand how specific types of CSR create societal impacts, thereby showing the underlying mechanisms associated with social input, process and benefit impacts. Qualitative research could also provide very important insights into why SME (owner-) managers choose to focus on the CSR initiatives they do, in relation to specific types of societal impact, as understood within the local context of the focal SME. At the same time, quantitative research would be needed to assess the degree to which there are general patterns in the link between specific CSR initiatives and the three types of societal impact explored in this study. The point here is that there is evidence that SME (owner-) managers in different countries (Spence et al., 2000; Fassin et al., 2015; Baz et al., 2016) and cultural groups within a country (Lorenz et al., 2016) can be expected to take very different views on the necessity for and ideal type of CSR to which to contribute/participate in. The increasing transition to a circular economy (Ciulli et al., 2020; Geissdoerfer et al., 2017) and the topics surrounding the triple bottom line (Depken & Zeman, 2018), as expanded and specified in the UN Sustainable Development Goals (UN, 2021), may prove rich contexts within which to conduct further empirical research on the societal impact of SBSR. This chapter in keeping with the work of Drews (2010) encourages future research that would focus on specific SBSR activities/initiatives and seek to understand how their societal impact might be effectively measured, evaluated and managed. Making progress requires researchers to carefully consider the design of their studies, so that it is possible to link specific CSR initiatives and activities to concrete societal impacts, such as those identified in the UN Sustainable Development Goals (UN, 2021). Only when this is done will

64

Johan Lindeque and Olga Samuel

it be possible to assess the societal impact of SME CSR and thereby enable SME (owner-) managers to take a more managerial approach to managing their CSR activities in pursuit of specific societal impacts (Drews, 2010).

Takeaways for the society-level impacts of CSR The findings of this review suggest that there is a need for CSR researchers to far more actively focus on specific CSR initiatives of SMEs in different national or subnational contexts that represent coherent institutional contexts. Research that takes this approach will be able to far more effectively identify the impact of specific types of CSR initiatives on society. This would help address the lack of clarity about the effectiveness with which specific CSR activities contribute to impact in relation to specific societal challenges. Currently SME CSR is understood as primarily contributing social input impacts through philanthropy, community involvement, providing sustainable employment, sponsorships and increasing responding to customer needs. At the same time SME CSR activities to a lesser degree are impacting social processes through philanthropy, providing sustainable employment and community involvement. While the impact through societal benefits is primarily driven by philanthropy and providing sustainable employment. The stakeholders that benefit most from these impacts are the local community, employees and consumers/customers of the SMEs, as well as favoured charitable organisations. This confirms the local nature of SME CSR activities and as a result the local impact of SME CSR initiatives. This suggests that future research on SME CSR needs to be designed in such a manner to capture specific local CSR activities and the associated local impacts of these efforts. Returning to the observation that the UN Sustainable Development Goals (UN, 2021) represent the most detailed specification of societal challenges that SME CSR could seek to impact, this means that local interpretation of the 17 Sustainable Development Goals will be needed if impacts across national and sub-national contexts are to be assessed collectively.

Note Please note that references for all the literature included in this review are available via Lindeque, Samuel and Kraft (2022), published as supplementary material online.

Acknowledgements We would like to thank the editors, especially Prof. Ralf Barkemeyer, and our anonymous reviewer for their constructive feedback and suggestions on earlier drafts of the chapter.

The Societal Case for SBSR

65

References Agudelo, M. A. L., Jóhannsdóttir, L., & Davídsdóttir, B. (2019). A literature review of the history and evolution of corporate social responsibility. International Journal of Corporate Social Responsibility, 4(1), 1–23. Amaeshi, K., Adegbite, E., Ogbechie, C., Idemudia, U., Kan, K., Issa, M., & Anakwue, O. (2016). Corporate social responsibility in SMEs: A shift from philanthropy to institutional works? Journal of Business Ethics, 138(2), 385–400. Atlas.ti (2021). Home Page. Available at https://atlasti.com Avram, D. O., Domnanovich, J., Kronenberg, C., & Scholz, M. (2018). Exploring the integration of corporate social responsibility into the strategies of small-and mediumsized enterprises: A systematic literature review. Journal of Cleaner Production, 201(10), 254–271. Baz, J., Laguir, I., Marais, M., & Staglianò, R. (2016). Influence of national institutions on the corporate social responsibility practices of small- and medium-sized enterprises in the food-processing industry: Differences between France and Morocco. Journal of Business Ethics, 134(1), 117–133. Bagnoli, L., & Megali, C. (2011). Measuring performance in social enterprises. Nonprofit and Voluntary Sector Quarterly, 40(1), 149–165. Battilana, J., & Lee, M. (2014). Advancing research on hybrid organizing – Insights from the study of social enterprises. Academy of Management Annals, 8(1), 397–441. Bhattarai, C. R., Kwong, C. C., & Tasavori, M. (2019). Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom. Journal of Business Research, 96, 47–60. Besser, T. L., & Miller, N. J. (2004). The risks of enlightened self-interest: Small businesses and support for community. Business & Society, 43(4), 398–425. Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48. Chahal, H., Mishra, S., Raina, S., & Soni, T. (2014). A comprehensive model of business social responsibility (BSR) for small scale enterprises in Indian context. Journal of Small Business and Enterprise Development, 21(4), 716–739. Chartered Association of Business Schools. (2020). Chartered Association of Business Schools Academic Journal Guide 2018. Chell, E. (2007). Social enterprise and entrepreneurship: Towards a convergent theory of the entrepreneurial process. International Small Business Journal, 25(1), 5–26. Ciulli, F., Kolk, A., & Boe-Lillegraven, S. (2020). Circularity brokers: Digital platform organizations and waste recovery in food supply chains. Journal of Business Ethics, 167(2), 299–331. Clark, G.L., Palaskas, T., Tracey, P., & Tsampra, M. (2004). Market revenue and the scope and scale of SME networks in Europe’s vulnerable regions. Environment and Planning A, 36(7), 1305–1326. Cooke, P., 2007. Social capital, embeddedness, and market interactions: An analysis of firm performance in UK regions. Review of Social Economy, 65(1), 79–106. Cooke, P., Clifton, N., & Oleaga, M. 2005. Social capital, firm embeddedness and regional development. Regional Studies, 39(8), 1065–1077. Dacin, M. T., Dacin, P. A., & Tracey, P. 2011. Social entrepreneurship: A critique and future directions. Organization Science, 22(5), 1203–1213. Davies, I. A., Haugh, H., & Chambers, L. (2019). Barriers to social enterprise growth. Journal of Small Business Management, 57(4), 1616–1636.

66

Johan Lindeque and Olga Samuel

De Angelis, R. (2021). Circular economy: Laying the foundations for conceptual and theoretical development in management studies. Management Decision, 59(6), 1209–1227. Depken, D., & Zeman, C. (2018). Small business challenges and the triple bottom line, TBL: Needs assessment in a Midwest State, USA. Technological Forecasting and Social Change, 135, 44–50. Drews, M. 2010. Measuring the business and societal benefits of corporate responsibility. Corporate Governance: The International Journal of Business in Society, 10(4), 421–431. Drucker, P. (2014). Innovation and entrepreneurship. Routledge: New York. European Commission. (2021). SME Performance Review. https://ec.europa.eu/ growth/smes/sme-strategy/performance-review_en Fassin, Y., Werner, A., Rossem, A., Signori, S., Garriga, E., Weltzien Hoivik, H., & Schlierer, H.-J. (2015). CSR and related terms in SME owner-managers’ mental models in six European countries: National context matters. Journal of Business Ethics, 128(2), 433–456. Figge, F., & Hahn, T. (2006). Sustainable value added: A new approach to measuring corporate sustainable performance, in Schaltegger, S. and Wagner, M. (Eds), Managing the business case for sustainability: The integration of social, environmental and economic performance. Greenleaf: Sheffield, 146–164. Fowler, E. A., Coffey, B. S., & Dixon-Fowler, H. R. (2019). Transforming good intentions into social impact: A case on the creation and evolution of a social enterprise. Journal of Business Ethics, 159(3), 665–678. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman Publishing. Friedman, M. (1970). The social responsibility of business is to increase its profits. New York Times Magazine, Sept. 13. Gautier, A., & Pache, A. C. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343–369. Geissdoerfer, M., Savaget, P., Bocken, N. M., & Hultink, E. J. (2017). The circular economy – A new sustainability paradigm? Journal of Cleaner Production, (143), 757–768. Godfrey, P. C. (2005). The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Academy of Management Review, 30(4), 777–798. Greenberg, Z., Farja, Y., & Gimmon, E. (2018). Embeddedness and growth of small businesses in rural regions. Journal of Rural Studies, 62, 174–182. Hamann, R., Smith, J., Tashman, P., & Marshall, R.S. (2017). Why do SMEs go green? An analysis of wine firms in South Africa. Business & Society, 56(1), 23–56. Hubbard, G. (2009). Measuring organizational performance: Beyond the triple bottom line. Business Strategy and the Environment, 18(3), 177–191. Indian Ministry of Micro, Small and Medium Enterprises. (2018). Parliamentary Standing Committee on Commerce and Industry: Discussion on Demand for Grants. https://msme. gov.in/sites/default/files/Performance-of-under-various-scheme-of-MSME.pdf Kalantaridis, C. (2009). SME strategy, embeddedness and performance in East Cleveland, North East England. International Small Business Journal, 27(4), 496–521. Keeble, D., Lawson, C., Smith, H. L., Moore, B., & Wilkinson, F. (1998). Internationalisation processes, networking and local embeddedness in technologyintensive small firms. Small Business Economics, 11(4), 327–342.

The Societal Case for SBSR

67

Kudłak, R., Barkemeyer, R., Preuss, L., & Heikkinen, A. (2020). Exploring the societal and environmental impacts of corporate social responsibility. Call for Book Chapters, Taylor & Frances: Routledge. Levitt, T. (1958). The dangers of social-responsibility. Harvard Business Review, 36(5), 41–50. Lindeque, J. P., Samuel, O., & Kraft, C. (2022). Small businesses’ social responsibility and political activity survey studies: A review, synthesis and research agenda. SAGE Open. https://doi.org/10.1177/21582440221085020 Lorenz, C., Gentile, G. C., & Wehner, T. (2016). Exploring corporate community engagement in Switzerland: Activities, motivations, and processes. Business & Society, 55(4), 594–631. Mackinnon, D., Chapman, K., & Cumbers, A. (2004). Networking, trust and embeddedness amongst SMEs in the Aberdeen oil complex. Entrepreneurship & Regional Development, 16(2), 87–106. Matten, D., & Crane, A. (2005). Corporate citizenship: Toward an extended theoretical conceptualization. Academy of Management Review, 30(1), 166–179. Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33(2), 404–424. Matten, D., & Moon, J. (2020). Reflections on the 2018 decade award: The meaning and dynamics of corporate social responsibility. Academy of Management Review, 45(1), 7–28. Mayring, P. (2004). Qualitative content analysis, in Flick, U. von Kardoff, E. and Steinke, I. (Eds), A Companion to Qualitative Research, SAGE Publications: Thousand Oaks, CA, 266–269. Mendeley (2021). Home Page. Available at https://www.mendeley.com Organisation for Economic Co-operation and Development (OECD). (2019). OECD SME and Entrepreneurship Outlook 2019. Park, J., & Campbell, J. M. (2017). US SMEs’ corporate citizenship: Collectivism, market orientation, and reciprocity. Journal of Small Business & Entrepreneurship, 29(2), 120–139. Perrigot, R., Oxibar, B., & Déjean, F. (2015). Corporate social disclosure in the franchising sector: Insights from French franchisors’ websites. Journal of Small Business Management, 53(2), 321–339. Porter M. E., & Kramer, M. R. (2011). The big idea: Creating shared value. Harvard Business Review, 89(1), 62–77. Rousseau, D. M., Manning, J., & Denyer, D. (2008). Evidence in management and organizational science: Assembling the field’s full weight of scientific knowledge through syntheses. Academy of Management Annals, 2(1), 475–515. Saldaña, J., (2015). The coding manual for qualitative researchers. Sage: Thousand Oaks, CA. Sheehy, B., (2015). Defining CSR: Problems and solutions. Journal of Business Ethics, 131(3), 625–648. Soundararajan, V., Jamali, D., & Spence, L.J. (2018). Small business social responsibility: A critical multilevel review, synthesis and research agenda. International Journal of Management Reviews, 20(4), 934–956. Small Business and Entrepreneurship Council. (2021). Facts & Data on Small Business and Entrepreneurship. Spence, L. J., Jeurissen, R., & Rutherfoord, R. (2000). Small business and the environment in the UK and the Netherlands: Toward stakeholder cooperation. Business Ethics Quarterly, 10(4), 945–965.

68

Johan Lindeque and Olga Samuel

United Nations (UN). (2021). Sustainable Development Goals Home Page. UN Department of Economic and Social Affairs: Sustainable Development. Available at https://sdgs.un.org. Accessed 26 November 2021. Vancheswaran, A., & Gautam, V. (2011). CSR in SMEs: Exploring a marketing correlation in Indian SMEs. Journal of Small Business & Entrepreneurship, 24(1), 85–98. Weber, M. 2008. The business case for corporate social responsibility: A company-level measurement approach for CSR. European Management Journal, 26(4), 247–261.

Appendix A: Summary of codebook for project Table 3.9 Summary codebook for study organised by code categories CSR Types SME Specificity Philanthropy Sponsorship Taxation Compliance Sustainable Employment Responding to Customer Needs Product & Service Transparency/Quality Ethical Advertising Corporate Citizenship Reducing Noise Pollution Community Governance Supporting Education Volunteering Employee Welfare Gender Equality Customer Welfare Employee Development Anti-corruption Efforts Filling Institutional Voids In-kind Donations Advocacy/Cause-related Marketing Community Involvement Good-will Initiatives Direct Investments Serving Disadvantaged Population Research Design Qualitative Research • Interview-based • Documentary Evidence Quantitative Research • Regression Analysis • Structural Equation Modelling • Econometric Model Research Design (continued) • Database Data

Stakeholders Civil Society Community Employees Consumer (B2C)/Customer (B2B) Suppliers Multiple (Indirect reference) Charitable and Non-Profit Organisations (Senior/Owner) Managers Natural Environment Shareholders Government Family Owners Retailers and Distributors Undefined (Indirect reference) Impact Source SME SME (Owner-) Manager Impact Types Societal • Social Inputs • Social Process-related Criteria • Social Benefit Criteria Environmental Economic Development Social Capital Financial Nonfinancial Evidence for Impact Qualitative Quantitative Theoretical Foundation Stewardship Theory Enlightened Self-Interest Model Theoretical Foundation (continued) Ethical Responsibility Theory (Continued)

The Societal Case for SBSR

69

Table 3.9 (Continued) Mixed Method Designs • Survey/Questionnaire • Interview-based • Repertory Grid Technique • Communication (Conversations, Email, Telephone Calls, etc.) • Mediated Data (Documents, Media Articles, Websites, etc.) • Focus Groups Conceptual/Theoretical Review Paper Opinion Commentary Paper Section Conceptual Foundation Research Design Findings Discussion Knowledge Claims Time Period 1950–1979 1980–1998 1999–2003 2004–2008 2009–2013 2014–2018 2019–2020

Queen Theory Strategic Management Theoretical Good Management Theory Slack Resource Theory Stakeholder Theory Socioemotional Wealth Theory Social Network Theory Institutional Theory Resource-based View Governance Theory Corporate Citizenship Economic Responsibility Theory SME Ownership Type Black/Minority Owned Family Nonfamily Sole Proprietor/SIE Industry Type Manufacturing Services Geographic Locus of Impact Local Regional National International Unclear

4

Is This the Road Forward for CSR? How Fortune “Change the World” Firms Emphasise Activities over Impact Maria Bustos, Warren A. Kaplan, Markus Taussig, and Veronika J. Wirtz

Introduction Leading firms are widely seen as critical to addressing important societal challenges that connect to their business operations (Christensen et al., 2006; George et al., 2016; Luo & Kaul, 2019; Porter & Kramer, 2006; Wang et al., 2016). Relatedly, corporate social responsibility (CSR) spending by Fortune Global 500 companies is rising, estimated to have passed $20 billion in 2013 (Dattani et al., 2015). The strong case for the societal benefits of CSR is informed by not only top firms’ wealth of resources and capabilities, but also their powers of efficiency (Taylor, 1911) and innovation (Hamel, 2006; Romer, 1990). A fundamental basis upon which the efficiency and innovation capability advantages of private firms are built is these same organisation’s reliance on corporate governance structures that emphasise intensive internal monitoring and reporting (Bartlett & Ghoshal, 1990; Kogut & Zander, 1992; Zahra, 1999). While CSR reporting is now well-established as an industry norm (Fortanier et al., 2011), the information that most firms make publicly available remains largely limited to descriptions of activities and intentions (Aguinis & Glavas, 2012; Global Reporting Initiative, 2018; Halme et al., 2020; Margolis & Walsh, 2003; Rockers et al., 2017),thus constraining external efforts at impact analysis (for a review of exceptions, see Barnett et al., 2019). This is particularly meaningful, given the clear dangers of manipulation and deception (Akerlof & Shiller, 2015) and the possibilities of wasted resources from a CSR program having none of its intended impact – or even negative impact – on society (Luo et al., 2018). None of the major accepted explanations for why firms engage in CSR focus primarily on an internal desire to “do good”. The least cynical of these explanations is that firms aim instead to establish a “license to operate” (Kolk & Pinkse, 2010; Morrison, 2014), thereby reducing the risk of conflict with stakeholders, including employees (Jo & Harjoto, 2012; Scherer et al., 2006) and possibly gaining financial performance benefits (Barnett & Salomon, 2012; Eccles et al., 2014; Henisz et al., 2014). All of DOI: 10.4324/9781003182276-4

Is This the Road Forward for CSR?

71

this research assumes some level of external stakeholder ability to introduce costs and benefits to firms’ bottom lines based on knowledge of their societal impact. But does typical CSR reporting provide external stakeholders the information they need to meaningfully judge societal impact? Decades of research indicate that the answer is clearly no (Gray et al., 1995; Milne & Gray, 2013). Instead, firms seem to be getting credit from society without demonstrating that their CSR activities actually make a difference, leading to charges of “greenwashing” (Gelles, 2015; Lyon & Montgomery, 2013; Parguel et al., 2011) and “CSR-washing” (Mattis, 2015; Pope & Wæraas, 2016). This status quo is surprising if there is anything at all to the idea that doing good is favourable for business; or even if just some share of firms simply believes this to be true. Transparency in reporting the societal impacts of CSR would, in principle, allow stakeholders to reward pioneers and motivate other firms to follow suit (Kaul & Luo, 2018). In 2017, Business & Society dedicated an entire issue to the topic of measuring CSRs and impact (Crane et al., 2017). In April 2021, the ESG Group published a White Paper “Amplifying the ‘S’ in ESG: Investor Myth Buster”, which further emphasised the fundamental importance of clearly measured and reported social indicators for understanding and improving on CSR activities (ESG, 2021). With a health and economic development perspective in mind, this chapter is motivated by the growing chorus of voices in favour of reporting on the outcomes and impacts of CSR rather than just the inputs. It explores the degree to which there is reason for optimism, based on evidence that firms being held up as global exemplars of CSR practice are taking this first step of publicly reporting on rigorous monitoring and outcome or impact evaluation of their own CSR activities in the areas of education, health and safety, nutrition and poverty alleviation. In particular, we critically assess the kind and quality of evidence presented and emphasised within the CSR reports of the leaders atop the 2017 Fortune list of firms that “Change the World”. The “Change the World” list recognises firms judged by experts to have had the most positive social impact through activities that are part of their core business strategy (Fortune, 2020). Based on consultations with outside experts, Fortune and their partner, the Shared Value Initiative, ranked firms with annual revenues of at least $1 billion by the following three factors: measurable social impact, business results and degree of innovation. In the end, we find that firms lauded as CSR leaders overwhelmingly stress activities and intentions, rather than evidence connecting activities to meeting clearly defined and measurable social goals. In particular, only six out of the 73 CSR programs by the top 10 Fortune “Change the World” firms that we analyse in this chapter reported any social impact data at all. Instead, typical reporting is narrative in form, buttressed only by data that is limited, low in granularity and unclearly attributed. Even the data on the six

72

Maria Bustos et al.

relative standouts leaves ample room for improvement if meaningful program-level evaluation is a true goal. In short, we find very limited initiative towards meaningful CSR reporting, even among purported leaders. We present this evidence not in the spirit of waving a white flag of surrender, but as a call for a redoubling of efforts and focus, aimed at underlining the need for action over rhetoric.

Background: The “theory of change” perspective on CSR impact evaluation The United Nations Industrial Development Organization (UNIDO) defines CSR as “the way through which a company achieves a balance of economic, environmental and social imperatives (’Triple-Bottom-LineApproach’ (TBL)), while at the same time addressing the expectations of shareholders and stakeholders” (UNIDO, 2021). CSR initiatives often focus on promoting social development and sustainability through interventions directed at the community in which the corporations operate. For instance, CSR initiatives can provide education scholarships for children (Nikon, 2021) or bed nets for malaria control (ExxonMobil, 2019). The CSR initiatives may be part of the company’s core business activities or add-on philanthropic activities. When it comes to measurement of CSR, UNIDO highlights that the TBL approach is used as a framework for measuring and reporting CSR against economic, social and environmental performance (UNIDO, 2021). Disciplines such as development economics and public health can contribute substantially to develop methods to measure the economic, social, environmental outcomes and the impact of such CSR interventions. In these disciplines, measuring the achievements of an intervention usually starts with mapping a causal framework that describes what needs to happen to achieve the desired outcomes or impact (White, 2009). Such causal frameworks are commonly called the “theory of change” (Center for Disease Control and Prevention, 2021). Figure 4.1 shows the general elements of a logic model which depicts a generic theory of change and Figure 4.2 shows an example of the visual depiction of logic model based on the theory of change using the example of a CSR philanthropic activity of bed nets distribution to prevent malaria in children. The first step in the chain of events that leads to an outcome or impact is identifying the inputs that are required. Frequently these inputs include financial and human resources and supplies. The second step is mapping the actions that the intervention would include, for instance, the distribution of bed nets (see Figure 4.2). These activities would lead to the immediate results of the intervention, also called the “outputs” of the intervention. In the CSR examples mentioned, outputs might be number of bed nets distributed. Outputs should not be confused with outcomes which are accomplishments or changes that show directionality towards reaching the objective of the intervention. In our example, the bed nets distributed

Is This the Road Forward for CSR?

Inputs

Activities

Outputs

Outcome Short-term Intermediate

73

Long-term (impact)

Figure 4.1 General elements of a logic model.

would result in the short-term outcome of protecting children during their sleep from mosquitos and other potentially disease-bearing insects. A medium-term outcome would be the number of cases of children with malaria and an effective intervention would show the number of cases decreasing over time. Long-term outcomes, sometimes also called impact, would include child mortality due to malaria. An effective intervention – all other factors equal – would lower the number of children dying from malaria. Although some interventions have the ultimate goal to lower child mortality or increase the number of children graduating from high school through early childhood education, this does not mean that every program evaluation takes years. For instance, short-term outcomes are often chosen as the primary indicators of interest to be measured. In our previous example this would be the number of children sleeping under a bed net instead of only focusing on the mortality due to malaria. As in the logic model described above, many evaluations identify short-term outcomes as indicators that will be measured in a matter of months rather than decades. This theory of change is then tested via an impact evaluation using an experimental or quasi-experimental design that compares the status quo (counterfactual) with the intervention. The use of a counterfactual is important to demonstrate causality – in order words, that the intervention caused the measured changes in the expected outcomes or impact. The recent awarding of the Nobel Prize in Economics to development economists Duflo, Banerjee, Kremer and their team for the application of these methods to evaluation of social programs’ impact on poverty speaks to the growing acceptance of their effectiveness (The Conversation, 2019). There is also increasing integration of rigorous evaluation into the programmatic work of leading international development organisations. The World Bank, for instance, requires that all projects have an evaluation plan and collect and report data on implementation and outcomes or impact (World Bank Independent Evaluation Group, 2020). Similarly, in 2019, The Foundations for Evidence-Based Policy Act (Evidence Act) was signed into law (Congress, 2018), requiring federal agencies in the US, such as USAID, to evaluate the impact of their programs. A key question that all such projects need to answer is whether they achieved their intended results. Hence, given its growing recognition within the social science and development economist community, we look

Communication about the use of bed nets to population • Population exposed to communication activities

• Households receiving bed nets

Bed net distribution

Population awareness of bed nets

Children sleeping under bed nets

Community workers encouraging bed net use for children

Short

Outcomes

Figure 4.2 Example of a logic model of a program distributing bed nets to prevent malaria in children.

• Staff time

• Value of resources

• Community heathcare workers trained on use of bed nets

Outputs

Training of community healthcare workers in bed net use

Activities

Training

Input

Delivery

Communication

Less malaria cases in children

Medium/Long

Lower mortality from malaria in children

Impact

74 Maria Bustos et al.

Is This the Road Forward for CSR?

75

for evidence of the described theory of change approach in the CSR reporting by the leaders atop the 2017 Fortune list of firms that “Change the World”. We assessed whether the companies provided any information on outputs, outcomes and impact, as well as their methods or measurement (e.g. baseline measurement, time-series measurement or use of control group) which would allow to distinguish outcomes or impact of their programs from other counterfactuals and contingencies. Expectations for robust data on aid effectiveness may also be growing in the private sector. For instance, Effective Altruism is a global organisation that advocates for better evidence on the impact of aid (Effective Altruism, 2020). The movement argues that it is necessary to rigorously measure the effects of social programs to determine the most effective ones, their return on investment and invest only in those that have demonstrated the desired outcomes or impact. Additionally, measurement of CSR initiatives improves the company’s communication with external stakeholders, including the communication of the company’s values. This applies to the communication with the general public as well as with investors. The demand for accountability has also included the private for-profit sector. Organisations such as the Access-to-Medicines (ATM) Foundation measure the commitment of leading pharmaceutical companies based on a series of indicators related to access to medicines in low- and middleincome countries (Access to Medicines Foundation, 2020). The ATM Index assesses the presence of outcome and impact data of access programs (ATM Foundation, 2020). The Sustainable Development Goals (SDGs), particularly Goal 17, clearly establish the need for the private sector to contribute to achieve these goals. CSR initiatives can contribute directly through a variety of interventions to health and well-being of its employees, their dependents, the community in which they are located or to the wider local or global community.

Methods Data collection

We searched the websites of the top 10 2017 “Change the World” firms1 for all of their CSR information. All firms published reports for 2016 or 2017. Reports were labelled in different ways, but most used generic terms such as “corporate responsibility”, “social contribution” and “Global Reporting Initiative” (GRI). We took a pragmatic approach of following how firms themselves defined CSR, whether it be as part of their core business activity or add-on activities. We constrained our data collection efforts to CSR programs with explicitly stated program objectives related to education, health and safety, nutrition and poverty alleviation. All these are considered to be interventions with the greatest potential public health impact, i.e. efforts to address

76

Maria Bustos et al.

socioeconomic determinants of health (Frieden, 2010). The result was a final dataset that covers seven companies and the 73 CSR programs that these firms publicly report on. We excluded programs focused on the environment, which are better captured in existing CSR indices and rankings2 than is the case for our areas of focus. As a result, our analysis complements the larger existing body of work on environmental CSR (Reynolds & Yuthas, 2008; Delmas et al., 2013). We extracted the following information about each of the 73 programs: (1) broad thematic objectives; (2) programmatic focus (i.e. education, health and safety, nutrition and poverty alleviation); (3) beneficiary population; (4) geographic locations; (5) partner companies; (6) partner nonprofit organisations; (7) non-industry co-funders; (8) reported outputs; (9) reported outcomes and impact; (10) evaluation method; (11) information quality (i.e. how data was presented and its completeness); (12) data sources; and (12) third-party data validation. Use of the “theory of change” approach

For our study analysis we use the “theory of change” which is a knowledgebased framework focusing on what is known, this knowledge being derived completely from observation and from the relations and properties of this knowledge. To answer the question of whether any observed change is due to a CSR intervention or program, it is first necessary, to describe how the intervention or program is meant to cause the change. As presented previously, the theory of change is a standard part of impact evaluations where the pathways – i.e. activities, outputs and outcomes or impact – by which the CSR intervention is meant to influence the environment are described (Center for Disease Control and Prevention, 2021) (see also Figure 4.1). We define outputs as direct results of program activities and evidence that the program activities have been carried out (e.g. number of scholarships awarded, the number of bed nets distributed). In contrast, we see outcomes including impact as changes, caused by the program, that have the potential to positively impact the program’s target beneficiary population (e.g. number of students who graduated, number of children contracting malaria) (Community Tool Box, 2018). Second, to determine causality, i.e. whether outcomes and impact are a result of a particular CSR intervention, as opposed to the result of other confounding factors, the observation would need to adhere to basic experimental or quasi-experimental designs (e.g. baseline measurement, timeseries measurement or use of control group) (Gertler et al., 2016). To judge the quality of evidence on outputs and outcomes of each CSR intervention – whether it legitimately demonstrates causality – we used the Grading of Recommendations Assessment, Development and Evaluation (GRADE) methodology (GRADE Working Group, 2018; Malmivaara, 2015). The GRADE methodology is widely used to assess evidence on outcomes including impact (Guyatt et al., 2011; Movsisyan et al., 2018).

Is This the Road Forward for CSR?

77

Coding involved three key steps. First, outputs and outcomes were classified as quantitative or qualitative. Second, quality was adjudicated as high (i.e. further research is very unlikely to change our confidence in the estimate of effect), moderate (i.e. further research is likely to have an important impact on our confidence in the estimate of effect and may change the estimate), low (i.e. further research is very likely to have an important impact on our confidence in the estimate of effect and is likely to change the estimate) or very low (i.e. very uncertain about the estimate of effect). Because several reports linked programs to footnotes describing the time when outcome information would be available, we also created a third category for aspirational programs, i.e. those that explicitly commit to future outcome reporting. Third, data was coded for its transparency. Following Michener and Bersch (2013), we based our evaluation of transparency on two necessary conditions: (1) visibility, the degree to which information is complete and can be easily located; and (2) inferability, the degree to which information can be used to draw verifiable inferences. Inferability chiefly depends on the information supplier’s incentives and how much or how often the information is reviewed or otherwise “mediated” and/or manipulated along the way. Raw information is more conducive to inferability, especially when it is verified by a third party and simplified by some type of label or score (Michener & Bersch, 2013). Transparently visible and inferable information includes raw, verified and simplified information. As such, an ideal report includes (a) raw information; (b) third party verification; and (c) a simplifying heuristic (graphs, charts, etc.).

Results General overview of programs

Table 4.1 summarises key characteristics of the CSR programs we analysed. Of the 73 programs, 70 (95.9%) targeted community groups, with the remainder targeting the focal firm’s workforce. Only Yara reported exclusively on programs focused on its employees. Duration

Although all programs had started or were in process during the year of the report, many seemed to be executed on a periodic or ongoing basis dating back several years. For example, Novartis’ medicine donation program dated back to 2001. Few initiatives specified a predefined timeline with an expected completion date. Exceptions were Johnson & Johnson (J&J) programs, which were all included under the firm’s five-year company strategic plan (2015–2020). The J&J programs were also classified based on their progress status, including as “on track” if clearly expected to meet the

Novartis

Walmart

Toyota

Johnson & Johnson

Yara

6

7

8

9

10

2

8

1

18

25

2

17

n

Programs

Education & human resource development Improving health care access, health system strengthening and sustainability Become the healthiest workforce Work safety

Career development Traffic safety

Equal society and inclusive economy Expanding access to healthcare Hunger relief

Workforce readiness

Main Themes in Specific Objective(s)

1 (100%)

1 (5.6%)

15 (83.3%)

14 (56%)

17 (100%)

Health & Safety n (%)

2 (11.1%)

11 (44%)

1 (50%)

5 (29.4%)

8 (100%)

Education n (%)

Areas of Intervention

2 (100%)

Poverty n (%)

1 (50%)

Lo

Ch; Ad

Group Id

Population Groups Targeted ∗∗

US; Global; Asia; Europe Asia

Region

Geographic Location ∗∗∗

Workforce (1)

Workforce (1)

Ad

Ad Global

Community (17) Ch; Ad; Lo; Gen; US; Asia; South Am; Wo; Dis North Am; Africa; Global; Unspecified

Community (17) Ad; Lo; Gen; Dis US; Global; Asia; South Am; Africa Community (1) Ad US; North Am; South Am; Central Am Workforce (1) Gen Community (25) Ch; Ad; Lo; Gen; US; Asia; South Am; Wo; Dis Africa; Australia; Global

Community (1)

Community (8)

Nutrition n (%) (n)

Beneficiary Population

Note: ‘Main themes in specific objective(s)’ denote overarching initiatives in which discrete programs were developed. The number of programs is noted in columns under ‘Areas of Intervention’. ∗∗ Key abbreviations in this column include: Ch = children; Ad = adults; Lo = low income and rural populations; Gen = general population; Dis = disadvantaged population; Wo = women; ∗∗∗ Global = 2 or more regions.

5

JP Morgan & Chase Ant Financial

1

Rank Company Name

Table 4.1 General overview of CSR reports by the Seven Evaluated Firms Atop Fortune’s 2017 “Change the World”

78 Maria Bustos et al.

Is This the Road Forward for CSR?

79

goal by 2020, “in progress” if progressing slow but still expected to meet the goal by 2020, and “off track” if at risk of missing the 2020 deadline. Areas of intervention

Among programs focused on community groups, most related to the areas of Health & Safety (65.75%) and Education (35.62%). Only Ant Financial targeted poverty alleviation (2 programs) and only Walmart targeted Nutrition. Most firms placed these areas of focus under a larger overarching theme. For example, JP Morgan’s core initiative is “Inclusive growth: to enable more people to share in the rewards of a growing economy”. Within this vision, “Workforce readiness” was the only one of four priority areas selected for this study, as it included programs focusing on Education. These promoted career development for high school students and adults across different geographic locations. In keeping with the key recommendation of Porter and Kramer (2006), most programs directly linked to the firm’s core operational expertise. For example, the two global pharmaceutical companies (Novartis and J&J) aimed most of their CSR projects at expanding access to medicines or strengthening health systems, while Toyota focused most of theirs on training about the auto industry and traffic safety. Target populations

We counted 79 target populations across the 70 programs directed to the community, with the most frequent defined as children and adolescents (26.58%), the general population (21.5%) and adults (20.3%). We created an additional category for cases where program descriptions specified implementation in low income countries (17.7% of the sample). Other notable groups included populations with specific medical conditions (8.9%) and women (5.1%). Firms with the largest program count, e.g. Toyota, J&J and Novartis, also exhibited higher diversity in their areas of focus and their target populations. Geographic locations

We identified 80 target locations. This number is greater than the total number of programs since several programs were implemented in multiple locations. Asia (30%) was the most common location, followed by “global” locations (21.25%), Africa (13.75%) and the US (13.75%). Canada, Mexico, South America and unspecified areas made up the remainder of locations. Among the 17 (12.25%) programs that reported they were global in scope, the true geographic reach was unclear for more than half (9), because no specification of geographic regions and/or number of countries targeted was given. Programs implemented in Asia and the US were frequently

80

Maria Bustos et al.

directed towards communities surrounding firm headquarters, as in the cases of Ant Financial and Toyota in Asia and JP Morgan in the US. Funding and implementing partners

Programs were funded and implemented by the company itself or through non-profit branch of the company (i.e. a foundation). An additional funding partner was disclosed for only seven programs. As for implementing partners, some reports described each of them and their responsibilities, while others just listed their names. Quality of information

Reporting style. Most reports had their own unique organisation and formatting style. In broad terms, reports followed a “magazine” format, using case or storytelling techniques and a variety of visual designs to help readers navigate the program descriptions. The predominant mode of program evaluation was a narrative. JP Morgan’s report provided descriptions of the same programs across several sections from different stakeholder perspectives. This inevitably required paraphrasing of information, causing dispersion, overlap or repetition of data and requiring active and detailed reading to avoid missing data or duplication. This style frequently also made the boundaries between programs unclear. For example, the Novartis Oncology Access program contains within it the Glivec International Patient Access Program (GIPAP). Yet, both are reported in the same paragraph as separate “programs”, contributing to potential data collection errors or duplication. JP Morgan, which Fortune placed number one in its 2017 ranking, reported its “Chase New Skills at Work Initiative” program in one place as being Detroit-specific and elsewhere as targeting a global population. Such varied reporting can make it seem that more programs exist than actually do (a problem of over representation). Likewise, program data may be reported cumulatively with other programs or initiatives, potentially dissolving or enhancing performance (either under or over-representation). More frequently, there was an underreporting of program information, as narrated descriptions varied considerably in their level of granularity. Again, in the case of JP Morgan’s “Chase new Skills at Work Initiative”, information regarding outputs and size of population reached was reported only for Detroit. Some firms’ reporting was clearer than others. Toyota and J&J’s reports had discrete sections separating general descriptions from program data. Program data was systematically provided through either a table or columns listing specific program information, making data search easier and offering greater confidence regarding its completeness. Ant Financial’s report had the merit of being relatively linear, with its first half consisting of chapters sharing individual anecdotes related to important aspects of the CSR vision

Is This the Road Forward for CSR?

81

and the more-abbreviated second half containing chapters for GRI required contents and program information. Output reporting

The majority of programs were described in terms of the monetary value of inputs, not outputs or outcomes. For example, a “$75 million global initiative to expand high-quality career-focused education programs that lead to well-paying jobs and long-term careers”. Only 48 of the 73 programs (65.8%) reported output information that was linked to program aims. Of these 48, 43 (89.6%) included quantitative information, 13 (27%) qualitative information and 13 (27%) aspirational information. Of the 48 program descriptions with information on outputs, six (12.5%) did not allow for clear distinction between outputs and original program goals. For example, one JP Morgan program was described as providing grants to “dramatically increase the number of students who graduate from high school prepared for careers”. While this sounds aspirational, it is also a simple restatement of the core project goal. In contrast, another JP Morgan program describes a more distinct aspirational output involving: “expansion of CareerConnect in Colorado to reach 9,000 students over the next three years”. Here, the reader gets a specific quantitative idea of what success would look like. Knowing whether CSR programs are making a difference: Outcomes

Reporting on outcomes including impact was generally much more limited than reporting on outputs. Only six (8.2%) of all 73 CSR programs reported any information on outcomes. Table 4.2 presents information on these six standout programs, three of which included qualitative outcomes, four included quantitative information and three mentioned aspirational outcomes. An example of reporting outcomes is Yara’s worker safety initiative, which reduced the combined rate of recorded injuries for both employees and contractors significantly from 4.3 in 2013 to 3.4 by 2015 (Yara, 2018). Some reports seemed to acknowledge the limitations of their evidence. For example, the outcome and impact for Novartis’ Malaria Initiative were relatively modestly described as “contributing to a reduction in the death toll from Malaria […] from almost 50 million in 2016 to 44 million in 2017” (Novartis, 2018), instead of taking full credit for the change. There was a striking lack of descriptive information on the methods surrounding output and outcome data. Only Novartis referred to evaluation methods of the CSR activities and even it did so only tangentially by naming the party responsible for outcome and output analysis for one of their programs. The actual methodology to measure outcomes was not reported. Other than this one instance, there was a complete absence of

Novartis Malaria Initiative

2

Yes

No

Yes

Yes

Quantitative Qualitative Aspirational

685,000 treatments Expanding access to 8000 patients reached in Yes healthcare offering a delivered in 2017, each 2016; 386,000 in 2017. providing a one-month portfolio of Lessons from roll-out and medicines for supply of medicine. Since implementation chronic diseases. the launch in 2015, more described for program than 800 000 treatments improvement. were delivered to select African countries. No Expanding access to 43,675,000 patients reached Contributing to reduce healthcare by in 2017 mortality from malaria. In 2017, patient reach donating anticontinued to decline malaria medication (from almost 50 million in 2016 to 44 million in 2017), largely due to the increasing availability of other artemisinin-based combination therapies from generic manufacturers, also prequalified by the World Health Organization and eligible for international donor-funded procurement.

Type of Outcome Report

Novartis Access

Outcome

1

Output

Objective

No. Program Name

Table 4.2 The six programs including outcome reporting

82 Maria Bustos et al.

5

4

3

Compared to traditional No commercial models, this approach enables to reach from three to five times more patients in low- to middle-income countries. Walmart Opportunity Great job training for Since 2014, 7,185 associates In 2017, 20,000 associates Yes strategy: training career development enrolled in high school completed academy and advancement of of associates programs, and 74,000 training programs and associates. associates enrolled to 250,000 expect to learn languages since graduate in 2018. 2014. Another 8,500 associates have started college since 2011. In FY2017, more than 1,700 scholarships were awarded to associates and their dependents. Yes Since 2011, cumulative Cumulatively since 2011, Toyota Technological International 864 general students Institute postgraduate number of adult students gained employment education with who have graduated: 1,471 showing a 100% student research exchange employment rate. in the field of information science.

Novartis Affordability Local brand strategies Launched more than 35 – Generics for affordability in local brands as of emerging markets to November 2017. expand timely access of innovative products.

No

No

(Continued)

Yes

Yes

No

Yes

Is This the Road Forward for CSR? 83

6

Objective

Yara’s Safe by Choice Worker safety

No. Program Name

Table 4.2 (Continued) Outcome

No

No

Quantitative Qualitative Aspirational

Type of Outcome Report

Yes Progressive reduction in the 2013 concluded with a combined rate of total recordable incident accidents at work of 4.3, rate (TRI) both for 2014 delivered an employees and improved rate of 3.9 and contractors. During 2015 a further reduction 2015, there was one more case classified as down to 3.4. severity 1 (most severe level). There were no process safety incidents leading to serious personal injuries, environmental impacts or international media coverage.

Output

84 Maria Bustos et al.

Is This the Road Forward for CSR?

85

descriptions of how outputs and outcomes were measured, as well as the sources and availability of data. As a result, we could not use GRADE to judge the quality of evidence for any of the 73 CSR initiative programs. Around half of the 73 programs (56%) provided some generalised form of data but only three companies (Ant Financial, Toyota and Walmart) consistently provided numerical data capable of providing inferences as to social impact. Toyota reported data on outputs of their programs specific to the latest time period as well as cumulative numbers, including all preceding years. For example, for a program for road safety education for children in Argentina, outputs were reported for specific sites and then cumulatively (“1360 children in Baradero; 1050 in Zarate; 960 in Campana; cumulative participants: 11,500”). In contrast, programs with less detailed data used approximate numbers such as “every year more than 50,000 school students participate in a one-day hands on experience program”. From a transparency perspective, the reasons for reporting on some programs and not others were unclear. Underreporting was common across the sample, but this was not only due to high-level narrative descriptions. It was common to find that some programs were emphasised over others, including repeated mention of some and an absence of specific data on others. For example, while J&J’s report described outputs and outcomes for some programs in an initial “Engagement Efforts in 2016” section, other sections describing programs, including one titled “Progress & Reporting”, made no mention of either outputs or outcomes. Finally, information on third party verification was provided by only three firms. Of these three, two firms published the whole auditing company statement, one of which focused on GRI components only.3 The third firm produced a third-party confirmation that the CSR report followed international assurance standard ISAE 3000 (Yara 2018).

Discussion The lens through which we comment on CSR reporting is well established as the gold standard for evaluating how governments and development aid organisations impact poverty, education and health around the world. CSR researchers should pay more attention to, and consider the relevance of, developments in monitoring and evaluation of social impact in other realms. For example, improving global supply chains in the garment industry and the need for governments funding international development agencies to have them report outcomes (see Recommendations below) are two examples of how CSR impacts could be monitored. Nevertheless, our analysis indicates that multinational firms atop Fortune’s “Change the World” list were able to achieve elite-level global acclaim without providing rigorous evidence relating to the actual outcomes and impact of their CSR activities. The disappointing findings for this prestigious group contrast with prominent claims by industry and the popular

86

Maria Bustos et al.

press that leading firms are now taking far more seriously questions about their social impact (BlackRock, 2019; Hackenberg, 2019). They are also surprising, given the extensive evidence on CSR’s effectiveness in achieving internal firm objectives, including reduced conflict with external stakeholders (Dorobantu et al., 2017) and employees (Flammer & Luo, 2017), as well as, ultimately, superior financial performance (Barnett & Salomon, 2012; Eccles et al., 2014; Henisz et al., 2014). In essence, what we know about the actual impact of CSR comes from three main sources: (1) case studies of the impact of business in particular locations and industries by companies, NGOs, academics and others; (2) CSR reports by individual companies; (3) Ratings and codes of companies using various indices (Blowfield 2007). In this regard, Barrientos and Smith (2007), attempted to investigate the impact of corporate codes of good labor practice by drawing on empirical evidence from South Africa, India, Vietnam and Costa Rica. The authors questioned the assessment techniques used by the business community to investigate the societal impact of CSR initiatives, including social auditing and self-assessment, doubting the efficacy of the tools used to monitor CSR performance. Indeed, the impact of CSR on firm profitability can be assayed in a straightforward manner using current methodologies. However, as the purpose of CSR must, in our view, include economic developmental goals, health indicators, educational indicators and the like, then the methods evaluated even by “Change the World” companies are inadequate. Surely it is in a firm’s best interest to have objective data to demonstrate any societal benefits from CSR. Such tools already exist in development schools and the public sector. Based on the extensive CSR literature, it appears that what we know about CSR impact relates primarily to its impact on the business case and on company attitudes, awareness and practices as opposed to how CSR affects the major areas of social and environmental change where its proponents claim it has an impact (Blowfield, 2007). It may well be that most social forces are outside corporate control but if firms do not acknowledge and understand the part that business plays in influencing its external environment, very complex social problems cannot be addressed (Frynas, 2008). To deal with alleviation of poverty, surely one needs to know what multiple roles corporate activities play in influencing the economic well-being of society. Certain types of economic activity by international firms may displace local employment or prevent development of a country’s nonextractive industries (Frynas, 2008). Such possibly negative consequences of CSR need to be understood if CSR is to deal with a developmental challenge like poverty.

Conclusions We suggest four key strategies for promoting greater emphasis on the value of measuring and reporting on the outcomes and impacts of

Is This the Road Forward for CSR?

87

CSR initiatives: (1) set up clear standards for measurement and reporting; (2) strengthen the capacity of corporations in CSR evaluation; (3) investing in measurement and reporting infrastructure for internal and external reporting; and (4) promote independent accountability of CSR initiatives. We view (2) and (3) as goals and responsibilities of corporations themselves, whereas (1) and (4) are relevant to all stakeholders and, in fact, likely to benefit from involvement of public and/or private regulatory authorities. We discuss each of these below. With respect to setting standards, two examples could serve as guidance: First, there has been more robust discussion around impact measurement are global supply chains in labour-intensive industries such as garments and electronics (Gereffi & Lee, 2016; Lund-Thomsen & Lindgreen, 2014). In such cases, compliance standards including measurement and reporting have been agreed upon, with sustained and organised stakeholder pressure on companies such as Nike and Apple. This has led to major investments into staff and technology overseeing compliance by suppliers that are far more systematic than seen in CSR operations (Wolf, 2014). The second example is in the area of international development agencies which define standards for measurement and reporting on their program outcomes. These agencies have faced substantial pressure and oversight from the governments that fund them, which themselves are under pressure from their citizenries, resulting in a substantially increased attention to reporting outcomes related to impact on the beneficiary population.4 It has also accelerated the development of a range of methods to study the impact as well as the development of measurement infrastructure. People well informed on either case would emphasise the persistence of significant shortcomings in these still evolving systems, but greater stakeholder pressure has clearly had far greater results than seen in CSR. The implication for managers and investors of the questions raised here about sustainability of the status quo is relatively straightforward. Clearly, there could be advantages in being an early mover on more rigorous reporting. Novartis has been an early mover as shown in the results with its GIPAP program, which started in 2001, and Novartis Access, which started in 2016 (Novartis, 2018). Another prominent example from beyond our study of a firm that has taken some steps in this direction is Unilever, which has engaged in partnerships with Oxfam on monitoring and evaluations of the social impact of its operations in both Indonesia and Vietnam (Clay, 2005; Wilshaw et al., 2013). With respect to strengthening the capacity of corporations in CSR evaluation, in many organisations, CSR initiatives have been led by communication teams with little expertise in implementation and evaluation of social initiatives. Collaboration between firms and academics around the measurement of CSR initiatives is one promising path for facilitating social impact measurement. Part of the limited transparency exhibited by firms around their CSR is sure to be a genuine uncertainty about how to

88

Maria Bustos et al.

effectively conduct CSR, leading to fear of failure and the short-term marketing consequences. Regarding investing in measurement and reporting infrastructure for internal and external reporting, corporations have very sophisticated systems of financial accounting, market analysis, and research and development initiatives. Data from these systems is constantly fed into the business decision-making processes of the corporation. In contrast, data systems for CSR initiatives are clearly lacking, including with respect to ways to incorporate relevant information into business operations. As in other operational realms, improved CSR measurement and reporting require more robust data infrastructure, including routine data transfer, quality management and analysis. The need for good systems is increased by the fact that many corporations do not directly implement their own CSR initiatives, instead contracting them out to in-country partners. That said, an advantage of this setup is that many of these in-country partners also work with international development agencies (Umeh et al., 2020) and so are already familiar with higher standards of data collection and accountability. With respect to the independent accountability of CSR initiatives, it is noteworthy that measurement and reporting requires proper incentive. As mentioned earlier, organisations such as the ATM Foundation provide independent accountability, manifested as reviewing the data and producing a ranking that provides corporations with an incentive. Clear expectations for what is expected in terms of monitoring and evaluation are a requisite in order to enable independent accountability. There is an increased demand from stakeholders, amongst citizens and investors, that firms exhibit a more serious approach to CSR that more closely resembles the rigorous monitoring and evaluation that they engage in operational activities such as moving into a new technology or geographic market. Just as a thorough analysis of market size and shares is required for any business creation, knowledgeable stakeholders should demand a clear description of the baseline situation prior to any CSR intervention. Under conditions of increased stakeholder pressure, recognition of the CSR website analysis as evidenced herein and more enlightened, long-term-oriented investors and managers, increasing measurement and reporting examples in different industry sectors may be able to play a constructive role in assisting firms to move the needle on their CSR reporting. Takeaways for the society-level impacts of CSR: without measuring the outcomes of CSRs society will not know whether firms’ activities harm or help social goals. If firms are indeed responsible in their social interventions, they will need to demonstrate that the interventions achieve the goals that they are intended to fulfil. If they are not achieving their goals or cause unintended, negative consequences, firms should consider modifying their interventions or stop them. Otherwise, CSR activities would be wasteful to them and their communities. By transparently reporting on their measurement and the results of their efforts, societies including firms can learn

Is This the Road Forward for CSR?

89

from such interventions. Setting standards on how to measure and report CSR activities, strengthening capacity building in firms to conduct measurement and investing in infrastructure of measurement and reporting are all important requisites to promote effective CSR that achieves the desired impact.

Notes 1 JPMorgan, DSM, Apple, Novartis, LeapFrog Investments, Ant Financial, Walmart, Toyota Motor, Johnson & Johnson, Yara. 2 See, for example, https://www.cdp.net/en/scores; https://database.globalreporting. org/about-this-site. 3 For more on GRI reporting standards, see: https://www.globalreporting.org/ information/sustainability-reporting/Pages/gri-standards.aspx. 4 See, for example, detailed description of the World Bank’s focused approach to monitoring and evaluation at: https://ieg.worldbankgroup.org/what-monitoringand-evaluation.

References Access to Medicines Foundation. (2020). Access to Medicines Index. Available at: https://accesstomedicinefoundation.org/access‐to‐medicine‐index [accessed May 6, 2022]. Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968. Akerlof, G. A., & Shiller, R. J. (2015). Phishing for phools: The economics of manipulation and deception. Princeton, NJ: Princeton University Press. Barnett, M. L., Henriques, I., Husted, B. W., & Layrisse Villamizar, F. A. (2019). Beyond good intentions: How much does CSR really help society? Academy of Management Proceedings. https://doi.org/10.5465/AMBPP.2019.17580abstract Barnett, M. L., & Salomon, R. M. (2012). Does it pay to be really good? Addressing the shape of the relationship between social and financial performance. Strategic Management Journal, 33(11), 1304–1320. Barrientos, S., & Smith, S. (2007). Do workers benefit from ethical trade? Assessing codes of labour practice in global production systems. Third World Quarterly, 28(4), 713–729. Bartlett, C. A., & Ghoshal, S. (1990). Managing innovation in the transnational corporation. Managing the global firm, 215–255. BlackRock. (2019). Sustainability as BlackRock’s New Standard for Investing. https://www. blackrock.com/corporate/investor-relations/blackrock-client-letter Blowfield, M. (2007). Reasons to be cheerful? What we know about CSR’s impact. Third World Quarterly, 28, 683–695. Center for Disease Control and Prevention. (2021). Developing and Using Logic Model. Available at: https://www.cdc.gov/dhdsp/docs/logic_model.pdf [accessed May 6, 2022]. Christensen, C. M., Baumann, H., Ruggles, R., & Sadtler, T. M. (2006). Disruptive innovation for social change. Harvard Business Review, 84(12), 94.

90

Maria Bustos et al.

Clay, J. (2005). Exploring the links between international business and poverty reduction: A case study of Unilever in Indonesia. Oxfam Policy and Practice: Private Sector, 2(1), 1–67. Community Tool Box. (2018). Develop a Theory of Change. https://ctb.ku.edu/en/ table-of-contents/overview/models-for-community-health-and-development/logicmodel-development/main Crane, A., Henriques, I., Husted, B. W., & Matten, D. (2017). Measuring corporate social responsibility and impact: Enhancing quantitative research design and methods in business and society research. Business & Society, 56(6), 787–795. Dattani, P., Still, A., & Pota, V. (2015). Business backs education. Corporate CSR Spend on Global Education Initiatives: Report on Findings. Delmas, M. A., Etzion, D., & Nairn-Birch, N. (2013). Triangulating environmental performance: What do corporate social responsibility ratings really capture? Academy of Management Perspectives, 27(3), 255–267. Dorobantu, S., Henisz, W. J., & Nartey, L. (2017). Not all sparks light a fire: Stakeholder and shareholder reactions to critical events in contested markets. Administrative Science Quarterly, 62(3), 561–597. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. Effective Altruism. (2020). Effective altruism is about doing good better. Available at: https://www.effectivealtruism.org/ [accessed May 6, 2022]. ESG Trust (2021). Amplifying the ‘S’ in ESG: Investor Myth Buster. Available at: https://esg.trust.org/application/velocity/_newgen/assets/InvestorMythBuster. pdf [accessed May 6, 2022]. Exxon Mobile. (2019). Exxon Mobile continues support for fight against malaria. Available at: https://corporate.exxonmobil.com/News/Newsroom/News‐releases/ 2019/0425_ExxonMobil‐continues‐support‐for‐fight‐against‐malaria [accessed May 6, 2022]. Flammer, C., & Luo, J. (2017). Corporate social responsibility as an employee governance tool: Evidence from a quasi‐experiment. Strategic Management Journal, 38(2), 163–183. Fortanier, F., Kolk, A., & Pinkse, J. (2011). Harmonization in CSR reporting. Management International Review, 51(5), 665. Fortune. (2020). “Change the World”. https://fortune.com/change-the-world/2017/ Frieden, T. R. (2010). A framework for public health action: The health impact pyramid. American Journal of Public Health, 100(4), 590–595. Frynas, J. G. (2008). Corporate social responsibility and international development: Critical assessment. Corporate Governance: An International Review, 16, 274–281. Gelles, D. (2015). Social responsibility that rubs right off. The New York Times. George, G., Howard-Grenville, J., Joshi, A., & Tihanyi, L. (2016). Understanding and tackling societal grand challenges through management research. Academy of Management Journal, 59(6), 1880–1895. Gereffi, G., & Lee, J. (2016). Economic and social upgrading in global value chains and industrial clusters: Why governance matters. Journal of Business Ethics, 133(1), 25–38. Gertler, P. J., Martinez, S., Premand, P., Rawlings, L. B., & Vermeersch, C. M. J. (2016). Impact Evaluation in Practice. Second Edition. Washington, DC: Inter‐American Development Bank and World Bank. Available at: https://openknowledge.worldbank. org/handle/10986/25030 [accessed May 6, 2022].

Is This the Road Forward for CSR?

91

Global Reporting Initiative. (2018). GRI and Sustainability Reporting. Global Reporting Initiatives. GRADE Working Group. (2018). Grading of Recommendations Assessment, Development and Evaluation. http://www.gradeworkinggroup.org/ Gray, R., Kouhy, R., & Lavers, S. (1995). Corporate social and environmental reporting. Accounting, Auditing & Accountability Journal, 8(2), 47–77. Guyatt, G. H., Oxman, A. D., Schünemann, H. J., Tugwell, P., & Knottnerus, A. (2011). GRADE guidelines: A new series of articles in the Journal of Clinical Epidemiology. Journal of Clinical Epidemiology, 64(4), 380–382. Hackenberg, J. (2019, November 28). Will be the year of sustainable business: Here’s why. Forbes. https://www.forbes.com/sites/jonquilhackenberg/2019/11/28/2020-willbe-the-year-of-sustainable-business/#378ed2e761af Halme, M., Rintamäki, J., Knudsen, J. S., Lankoski, L., & Kuisma, M. (2020). When is there a sustainability case for CSR? Pathways to environmental and social performance improvements. Business & Society, 59(6), 1181–1227. Hamel, G. (2006). The why, what, and how of management innovation. Harvard Business Review, 84(2), 72. Henisz, W. J., Dorobantu, S., & Nartey, L. J. (2014). Spinning gold: The financial returns to stakeholder engagement. Strategic Management Journal, 35(12), 1727–1748. Jo, H., & Harjoto, M. A. (2012). The causal effect of corporate governance on corporate social responsibility. Journal of Business Ethics, 106(1), 53–72. Kaul, A., & Luo, J. (2018). An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods. Strategic Management Journal, 39(6), 1650–1677. Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 383–397. Kolk, A., & Pinkse, J. (2010). The integration of corporate governance in corporate social responsibility disclosures. Corporate Social Responsibility and Environmental Management, 17(1), 15–26. Lund-Thomsen, P., & Lindgreen, A. (2014). Corporate social responsibility in global value chains: Where are we now and where are we going? Journal of Business Ethics, 123(1), 11–22. Luo, J., & Kaul, A. (2019). Private action in public interest: The comparative governance of social issues. Strategic Management Journal, 40(4), 476–502. Luo, J., Kaul, A., & Seo, H. (2018). Winning us with trifles: Adverse selection in the use of philanthropy as insurance. Strategic Management Journal, 39(10), 2591–2617. Lyon, T. P., & Montgomery, A. W. (2013). Tweetjacked: The impact of social media on corporate greenwash. Journal of Business Ethics, 118(4), 747–757. Malmivaara, A. (2015). Methodological considerations of the GRADE method. Annals of Medicine, 47(1), 1–5. Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48(2), 268–305. Mattis, M. (2015). Money Watch: CSR-washing is the new greenwashing. CBS News. https://www.cbsnews.com/news/csr-washing-is-the-new-greenwashing/ Michener, G., & Bersch, K. (2013). Identifying transparency. Information Polity, 18(3), 233–242. Milne, M. J., & Gray, R. (2013). W (h) ither ecology? The triple bottom line, the global reporting initiative, and corporate sustainability reporting. Journal of Business Ethics, 118(1), 13–29.

92

Maria Bustos et al.

Morrison, J. (2014). The Social License: How to KeepYourOrganization Legitimate (pp. 12–28). London, UK: Palgrave Macmillan. Movsisyan, A., Dennis, J., Rehfuess, E., Grant, S., & Montgomery, P. (2018). Rating the quality of a body of evidence on the effectiveness of health and social interventions: A systematic review and mapping of evidence domains. Research synthesis methods, 9(2), 224–242. Nikon. (2021). Supporting children with schooling. Available at: https://www.nikon. com/about/sustainability/citizenship/encourage‐enrollment/ [accessed May 6, 2022]. Novartis. (2018). Annual Report. Novartis. Parguel, B., Benoît-Moreau, F., & Larceneux, F. (2011). How sustainability ratings might deter “greenwashing”: A closer look at ethical corporate communication. Journal of Business Ethics, 102(1), 15. Pope, S., & Wæraas, A. (2016). CSR-washing is rare: A conceptual framework, literature review, and critique. Journal of Business Ethics, 137(1), 173–193. Porter, M. E., & Kramer, M. R. (2006). Strategy and society: The link between corporate social responsibility and competitive advantage. Harvard Business Review, 84(12), 78–92. Reynolds, M., & Yuthas, K. (2008). Moral discourse and corporate social responsibility reporting. Journal of Business Ethics, 78, 47–64. Rockers, P. C., Wirtz, V. J., Umeh, C. A., Swamy, P. M., & Laing, R. O. (2017). Industry-led access-to-medicines initiatives in low-and middle-income countries: Strategies and evidence. Health Affairs, 36(4), 706–713. Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5, Part 2), S71–S102. Scherer, A. G., Palazzo, G., & Baumann, D. (2006). Global rules and private actors: Toward a new role of the transnational corporation in global governance. Business Ethics Quarterly, 16(4), 505–532. Taylor, F. W. (1911). The principles of scientific management. New York, 2022. The Conversation (2019). 2019 Nobel Price in Economics: The limits of the clinical trial method. Availability at: https://theconversation.com/2019‐nobel‐prize‐in‐economics‐ the‐limits‐of‐the‐clinical‐trial‐method‐125888 [accessed May 6, 2022]. Umeh, C. A., Rockers, P. C., Laing, R., Wagh, O., & Wirtz, V. J. (2020). Public reporting on pharmaceutical industry-led access programs: Alignment with the WHO medicine programs evaluation checklist. Journal of Pharmaceutical Policy and Practice, 13, 5. United Nations Industrial Development Organization (UNIDO). (2021). What is CSR? Available at: https://www.unido.org/our‐focus/advancing‐economic‐competitiveness/ competitive‐trade‐capacities‐and‐corporate‐responsibility/corporate‐social‐responsibi lity‐market‐integration/what‐csr [accessed May 6, 2022]. Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility. In: Academy of Management Briarcliff Manor, NY. Wilshaw, R., Unger, L., Quynh, C. D., & Thu, T. P. (2013). Labour Rights in Unilever’s Supply Chain: From compliance to good practice. An Oxfam study of labour issues in Unilever’s Viet Nam operations and supply chain. Oxfam Policy and Practice: Private Sector, 10(1), 1–108. White, H. (2009). Theory‐based impact evaluation: Principles and Practice. New Delhi: International Initiative for Impact Evaluation. Available at: https://gwbweb.wustl.edu/ Resources‐and‐Initiatives/Professional‐Development/Documents/White‐3ie‐2009.pdf

Is This the Road Forward for CSR?

93

Wolf, J. (2014). The relationship between sustainable supply chain management, stakeholder pressure and corporate sustainability performance. Journal of Business Ethics, 119(3), 317–328. World Bank Independent Evaluation Group. IEG Methodology. Available at: https://ieg. worldbankgroup.org/methodology [accessed May 30, 2022] Yara. (2018). Yara’s GRI Report 2017. https://www.yara.com/siteassets/sustainability/ gri-reports/yara-gri-report-2017.pdf/ Zahra, S. A. (1999). The changing rules of global competitiveness in the 21st century. Academy of Management Perspectives, 13(1), 36–42.

5

How Does CSR Impact the Austrian Welfare State? An Analysis of Opposing CSR Discourses and Their Implications on Labour and Work-Related Welfare Arrangements Julia Domnanovich

Introduction The rise of neoliberalism as a dominant paradigm of economic policy fundamentally transformed power relations between governmental agencies, trade unions and business organisations, placing ever more responsibility for labour and employment issues on the business firm (Bryson et al., 2011; Kinderman, 2012). During recent decades and particularly in the aftermath of the financial crisis of 2008/09, public attention has increasingly turned to the social responsibility of companies – mainly under the label of corporate social responsibility (CSR), i.e. the idea that companies are voluntarily going beyond the law to contribute to social and environmental objectives (Gjølberg, 2010; Kinderman, 2012). The promotion of socially responsible working conditions, such as adequate material rewards and social security, was driven, among others, by the increasing diffusion of voluntary transnational standards (e.g. ISO 26000, UN Global Compact). Besides state and international regulations, CSR emerged as a regulatory regime for addressing labour and employment conditions at the workplace (Brammer et al., 2012; Gold, Preuss, & Rees, 2020). Existing conversations in management studies have been primarily concerned with the business case of CSR. This research stream examines the relationship between ethical business and financial performance (Orlitzky, 2008; Porter & Kramer, 2011). Corporate responsible behaviour is viewed as a strategic choice of managers that is premised on and shaped by instrumental motivations. Socially responsible labour and employment issues, such as workers’ health and safety, are framed as purely economic issues that are antecedent to improving worker productivity, in an attempt to increase profits (Jackson et al., 2018, p. 4). These conversations, however, tend to neglect the wider socio-economic context of CSR and favour DOI: 10.4324/9781003182276-5

CSR impact on the Austrian Welfare State 95

the individual firm as unit of analysis (de Bakker et al., 2020; Hoffman & Jennings, 2018). Other conversations in industrial and employee relations associate the diffusion of CSR with the rise of neoliberalism and the deregulation of labour and financial markets which would lead to the global erosion of socially responsible labour standards (e.g. Jackson et al., 2018; Kinderman, 2012). On the one hand, scholars in this field argue that “the predominantly business driven CSR agenda is antithetical to the politically driven welfare state tradition” (Midttun, 2018, p. 187). Originated in a neoliberal Anglo-American context, this CSR agenda pursues corporate discretion and market-based policy solutions. On the other hand, the welfare state tradition mitigates the negative effects of labour commodification and emphasises an extensive state engagement in the economy (e.g. Esping-Andersen, 1990; Jackson & Apostolakou, 2010). Although research on socially responsible labour and employment relations has flourished in the past decades, the ways of how CSR might affect the welfare state remain unclear. Recent studies thus call to step beyond the profitmaximisation imperatives of businesses and to develop a more integrative understanding of the relationship between businesses and their political environment, by simultaneously considering the multitude of actors and regulatory instruments that shape the business-society nexus within the employment relations context (Bartley, 2007; de Bakker et al., 2020). This study thus aims to contribute to a more nuanced understanding of the ambiguous relationship between CSR and welfare state arrangements. Drawing on institutional theory, particularly on the notion of translation processes (Czarniawska & Joerges, 1996; Sahlin & Wedlin, 2008), I ask how localised interpretations of CSR influence labour and work-related welfare arrangements. The research context represents the rise of CSR in the Austrian welfare state – a country characterised by strong trade unions and comprehensive welfare state arrangements since the Second World War (“country of corporatism”, see Traxler, 1998). Informed by a social constructivist view, I use discourse analyses to examine how traditional welfare state actors, i.e. trade unions, employers and the state, translate the meaning of CSR and thereby influence negotiations on welfare policies regarding labour and employment issues. Discourse analysis studies language as social interaction, manifested in various forms of text (Phillips & Hardy, 2002; Phillips et al., 2004). In order to empirically reconstruct the negotiation process on the division of responsibility between firms and the state in the context of socially responsible working conditions, I draw on a longitudinal research design using archival data (e.g. government programmes, reports produced by parliament and its committees). The study focuses on the years 2000 to 2019, thus departing from the emergence of more ‘explicit’ manifestations of CSR (Matten & Moon, 2008) in Austria (Höllerer, 2012; Steurer, 2010). The chapter is organised as follows: The next section describes the literature on the relationship between CSR and welfare state traditions with a

96

Julia Domnanovich

particular focus on the specifics of the Austrian welfare state. In the empirical part, I describe the methods and data first, and then present my insights by focusing on the voices of traditional welfare state actors, i.e. trade unions, employers and the state in the negotiation process on business responsibilities in welfare provision. Given the overarching goal of analysing the impacts that CSR has on society-at-large, at the end, I draw conclusions on the extent to which localised CSR interpretations influence welfare arrangements regarding labour and employment issues.

National varieties between welfare state arrangements and CSR There is a growing body of literature on the relationship between national institutions and CSR, emphasising the cultural embeddedness and socio-political drivers of CSR in different countries (e.g. Jackson & Apostolakou, 2010; Jackson et al., 2020). By applying the varieties of capitalism perspective (Hall & Soskice, 2001) and the national business systems approach (Whitley, 1999), this stream of research examines crossnational variations of CSR practices. Based on differences in political and economic institutions, the varieties of capitalism approach delineate a liberal market economy, focusing on competitive market arrangements, and a coordinated market economy emphasising “that firms depend more heavily on non-market relationships to coordinate their endeavours with other actors” (Hall & Soskice, 2001, p. 8). Similarly, Whitley (1999, p. 33) compares national business systems as “distinctive patterns of economic organization that vary in their degree and mode of authoritative co-ordination of economic activities, and in the organization, and interconnections between owners, managers, experts and other employees”. In their seminal article, Matten and Moon (2008) focus on institutional differences between Anglo-American and continental European countries. They propose, based on insights from the varieties of capitalism perspective and the national business systems perspective, that historically grown institutional frameworks affect CSR and therefore suggest to cluster CSR into an explicit and an implicit dimension. Explicit CSR reflects a liberal market economy and national institutions encouraging individualism and corporate discretion. Implicit CSR denotes a coordinated market economy and “consists of values, norms, and rules that result in (mandatory and customary) requirements for corporations to address stakeholder issues” (Matten & Moon, 2008, p. 409). Within this conceptual framework of explicit and implicit CSR (Matten & Moon, 2008), two seemingly opposing positions on the relationship between the emergence of CSR and national institutional arrangements evolved: On the one hand, it has been argued that corporate responsible behaviour is more likely to occur in coordinated market economies characterised by strong trade unions and comprehensive

CSR impact on the Austrian Welfare State 97

welfare state arrangements (e.g. Campbell, 2007). Campbell (2007, p. 955) suggests that companies are acting in a socially responsible way “if there are strong and well enforced state regulations in place […] particularly if the process by which these regulations and enforcement capacities were developed was based on negotiation and consensus building among corporations, government, and the other relevant stakeholders”. In line with this reasoning, existing research suggests that CSR policies and practices reflect the institutional setting in coordinated market economies; thus, social regulations of the company are enforcing more extensive corporate responsible behaviour (CSR as institutional mirror, e.g. Jackson & Apostolakou, 2010; Koos, 2012). On the other hand, scholars argue that in less regulated institutional environments social activities of business firms substitute for welfare policies. Corporations adopt voluntarily explicit policies and practices related to CSR and thereby compensate for missing institutional arrangements (CSR as institutional substitute, e.g. Jackson & Apostolakou, 2010; Kinderman, 2012; Matten & Moon, 2008). While these approaches to CSR can be regarded as mitigating the negative effects of labour commodification (Schneider, 2014, p. 299), scholars argue that explicit policies and practices related to CSR aim to increase the reach of market forces by focusing on corporate discretion and market-based policy solutions (Jackson & Apostolakou, 2010; Kinderman, 2012). As concluded by Midttun (2018, p. 187), “the predominantly business driven CSR agenda is antithetical to the politically driven welfare state tradition”. While there is undoubtedly a growing amount of literature concerning this relationship and building on macro-comparative datasets to highlight cross-national differences (e.g. Gjølberg, 2009; Kinderman, 2012; Midttun et al., 2015), more comprehensive studies of individual countries are lacking (for an exception see de Geer, Borglund, & Frostenson, 2009). Moreover, recent studies challenge the static perspective of the varieties of capitalism approach and the national business systems literature which would neglect “developments of economic restructuring that are required when national political economies encounter globalisation pressures” (Knudsen & Moon, 2017, p. 19). Given the multifaced nature of CSR, a number of authors observe what has been labelled a translation process in which – dependent on idiosyncratic institutional features – locally and temporarily contingent interpretations of CSR emerge (Czarniawska & Joerges, 1996; Sahlin & Wedlin, 2008). The current book chapter aims to contribute to a more nuanced understanding of the ambiguous relationship between CSR and welfare state arrangements. It offers a novel perspective on the question of how CSR and its different interpretations might affect welfare arrangements in regard to labour and working conditions. Towards this end, a discourse analytic approach is used to examine how traditional welfare state actors, representing different economic, ideological and political stances, interpret

98

Julia Domnanovich

and reformulate CSR, and thereby influence the political decision-making process on Austrian labour and work-related welfare arrangements over time. The key characteristics of the Austrian welfare state will be outlined in the following section.

Business and social responsibility in the Austrian welfare state Since the Second World War Austria has been perceived as a corporatist/ conservative welfare state, characterised by strong trade unions and comprehensive welfare state arrangements (Esping-Andersen, 1990; Hall & Soskice, 2001). Welfare state benefits are closely linked with occupational status, delineating a strong family orientation (“male bread-winner model”, Preglau, 2010, p. 276). Trade unions negotiate labour-related issues with employers who are organised in business associations and federations by enacting the taken-for-granted construct of social partnership (Austrocorporatism, Bischof & Pelinka, 1996) at a national rather than at corporate level (Lehmbruch & Schmitter, 1982; Molina & Rhodes, 2002). This specific model of political governance is characterised by a high degree of informality, integrating the government, major employer associations and employee interest groups into policy-making processes (Tálos & Kittel, 1999). Employers and businesses are represented through mandatory membership by the Chamber of Commerce (WKÖ) and self-employed farmers by the Chamber of Agriculture (LWK). Formally dependent employees are represented through mandatory membership by the Austrian Chamber of Labour (AK) and through voluntary membership by the Austrian Trade Union Federation (ÖGB). The WKÖ and the LWK are closely interlocked with the conservative party (ÖVP), whereas the AK and ÖGB are closely affiliated with the social democratic party (SPÖ) (see also Lehner, 2017; Tálos & Kittel, 1999). In line with European welfare state traditions, Austrian welfare services are mainly provided or financed by the state; this results in a nationalised insurance system for unemployment benefits, health and pensions, as well as other social commodities (Tálos & Obinger, 2020). Since the late 1980s trade union density has been falling. As a consequence, its influence in the policy-making process regarding the regulation of employment relations, such as wages and working conditions, has significantly declined. With the increasing importance of internationalisation and the preparation of Austria’s EU accession in 1995, the grand coalition governments intensified their adoption of neoliberal policies. Alongside a comprehensive liberalisation and privatisation of public services, publicly owned companies were gradually removed from state administration and partly transferred to private ownership (Armingeon & Fill, 2016). In general, the influence of the social partnership on political decision-making was decreasing (“farewell to corporatism”, Gerlich, 1992). This path of moderate liberalisation policies was pursued until the financial crisis of 2008/09, when the grand coalition

CSR impact on the Austrian Welfare State 99

government under chancellor Faymann “emphasized de-liberalising policies […] and undertook steps against the dominant trend of liberalisation, deregulation and privatisation” (Lehner, 2017, p. 212). Governmental organisations assumed an increasingly important role regarding the promotion and implementation of socially responsible working conditions, by triggering efforts towards a re-regulation of the economic system and the social responsibility of companies (Steurer, 2010, p. 66 f ). In parallel, research indicates a rise of explicit commitments to CSR in Austrian corporations (e.g. Höllerer, 2012; Steurer, 2010). Since the publication of the EU Green Paper (European Commission, 2001), CSR has been gaining momentum, leading to the foundation of the first initiative in Austria called “CSR Austria Initiative” in 2002. Whereas the corporatist tradition in Austria builds on institutionalised coordination among stakeholders at the national level and strong government engagement in the area of work and welfare policies, the explicit CSR agenda originated in a neoliberal, Anglo-American context and relies on corporate discretion and market-based policy solutions (de Geer et al., 2009; Midttun et al., 2015). Thus, Austria represents a unique empirical setting to study the extent to which the rise of explicit CSR might challenge traditional corporatist structures.

Methodological approach In accordance with Austria’s corporatist structures, tripartite negotiations between traditional welfare state actors, i.e. trade unions, employers and the state, dominate political decision-making processes regarding welfare state benefits. Since explicit forms of CSR are gaining importance, CSR interpretations might find their way into tripartite negotiation processes and thereby shape the introduction of new or modifications of existing labour and work-related welfare arrangements. By applying a discourse analytic approach, this study aims to uncover how traditional welfare state actors interpret and reformulate CSR and to show, how these localised CSR interpretations influence labour and work-related welfare arrangements. Following Czarniawska and Joerges (1996), I argue that the meaning of CSR is mediated by national governance systems and institutions, involving processes of translation. Traditional welfare state actors take the roles of local interpreters, “themselves shaped by local contexts and situations, and their interests and motives” (Sahlin & Wedlin, 2008, p. 117). In order to empirically reconstruct how CSR has been translated and given a particular meaning in the context of tripartite negotiation processes on welfare benefits over time, I draw on a longitudinal research design. I conducted an inductive analysis of archival data published between 2000 and 2019 (e.g. government programmes, reports produced by parliament and its committees), in order to uncover the locally and temporarily contingent discursive constructions of CSR by traditional welfare state actors. Such an observation period is appropriate given that explicit activities and

100

Julia Domnanovich

Table 5.1 Data inventory Original Data Source

Quantity

Data Specifics

Government programmes and reports, policy documents by federal ministries, parliamentary questions and written answers

63 documents

Official reports and statements by employer organisations and employee representatives

74 documents

Official reports and statements by respACT and NeSoVe

18 documents

Government documents including coalition agreements, National action plans, as well as parliamentary questions in the area of CSR and/or labour and workrelated welfare policies Policy position papers regarding specific measures of CSR and labour and work-related welfare policies Policy position papers and brochures in the area of CSR implementation and/or socially responsible working conditions

policies that led to an increased institutionalisation of CSR gained momentum in early 2000s after the publication of the EU Green Paper by the European Commission in 2001, promoting a European framework for CSR (see also Höllerer, 2012; Steurer, 2010). Table 5.1 provides an overview of the data used for the analysis. According to Phillips et al. (2004, p. 836) the exploration of the relationship between discourse and social reality involves the systematic study of texts, requiring iterative rounds of data analysis. In a first step, I therefore familiarised with the data by reading through the documents multiple times and making notes about recurrent themes and issues emerging from the data. The texts were coded to identify explicit CSR initiatives and welfare measures in the area of work and welfare policies. To separate CSR policies from general public policies related to social issues, I only used empirical material that specifically refers to “CSR” (see also Midttun et al., 2015). In a second step, I coded descriptions and identified themes regarding business responsibilities in the context of labour and employment issues, involving a more detailed analysis of the different positions and arguments as well as rhetorical schemes (e.g. metaphors) that contributed to the influence of locally and temporarily contingent CSR interpretations on labour and work-related welfare arrangements.

Uncovering the nuances of CSR impacts in the context of the Austrian welfare state The following section presents the ways of how social responsibilities of business firms towards employees were perceived and given meaning to in

CSR impact on the Austrian Welfare State 101

the Austrian welfare state context. The first part gives a brief overview of identified CSR interpretations by traditional welfare state actors, revealing two opposing CSR discourses (i.e. voluntary CSR and mandatory CSR). The second part examines to which extent these two CSR discourses influence labour and work-related welfare arrangements. The emergence of two opposing CSR discourses

The empirical analysis revealed two opposing CSR discourses by Austrian welfare state actors, a voluntary and a mandatory CSR discourse. In line with previous research (de Geer et al., 2009; Mark-Ungericht & Weiskopf, 2006), employer organisations drive a voluntary CSR discourse, whereas labour organisations and civil society actors promote a mandatory CSR discourse. Governmental organisations act rather as political intermediaries between the two distinct positions, i.e. voluntary versus mandatory CSR (see Figure 5.1). The voluntary CSR discourse, as identified in the data, pursues a businessdriven CSR agenda and promotes corporate discretion and market-based policy solutions. Three central themes constitute this discourse: (1) business firms as essential contributors to the community, (2) CSR as a win-win scenario and (3) CSR as a management tool to (re-)gain public trust. In (1), business firms are considered as essential contributors to the community by creating jobs and prosperity (Austrian Chamber of Commerce, 2017). Economic success is framed as essential to secure social cohesion. “It is successful companies that provide people with the goods and services they need to live in security, prosperity and dignity” (respACT – Austrian business council for sustainable development, 2007, p. 6). In this theme, the role of innovation is emphasised; responsible companies strive to find solutions to societal problems as part of their core business as “they increase their innovation potential and future viability. Companies that address the demands of markets and society earlier than others receive new impetus and achieve a leading position in technology competition” (respACT – Austrian business council for sustainable development, 2010, p. 7). Moreover, corporate activities are linked to societal concerns, resulting in a win-win scenario for the company and employees. (2) Here, business firms provide measures in the area of work-life balance to facilitate compatibility of family and career. Thereby, companies improve the quality of life of their employees, and their families and friends. Also, companies are framed to serve as role models for supporting female, foreign or older employees, thereby eliminating disadvantage. Socially responsible employment practices are introduced to increase employee motivation and performance. Moreover, sustainable value chains, transparent corporate communications and the efficient use of resources are considered as improving the reputation of companies and strengthening their market position: “Because responsible companies meet the information requirements

Figure 5.1 Welfare state actors in the discursive construction of two opposing CSR approaches.

102 Julia Domnanovich

CSR impact on the Austrian Welfare State 103

of their stakeholders and investors quickly and comprehensively, they become attractive partners for them” (respACT – Austrian business council for sustainable development, 2010, p. 7). Especially in the aftermath of the financial crisis of 2008/09, CSR has been framed as a management tool to (re-)gain public trust. (3) Corporate voluntary programmes and activities are considered to signal transparency and participation: “Responsibility works. Responsible action reduces prejudices and creates positive conditions for entrepreneurship. It strengthens trust between business and society” (respACT – Austrian business council for sustainable development, 2007, p. 5). Employer organisations and federal ministries responsible for CSR, at the forefront the Federal Ministry of Economics and Labour (BMWA), relied on voluntary CSR discourse constructions. Together with the main Austrian employer organisations, i.e. WKÖ and IV, the BMWA founded the first main initiative “CSR Austria Initiative”, which since then served as an essential channel for the voluntary CSR discourse (see also Strigl, 2005; Mark-Ungericht & Weiskopf, 2006). In 2007, the initiative merged with the Austrian Business Council for Sustainable Development and has since then operated as the so-called respACT – Austrian business council for sustainable development. Supported and financed by the BMWA, the Federal Ministry for Transport, Innovation and Technology, the Federal Ministry of European and International Affairs as well as by the employer organisations WKÖ and IV, respACT has been supporting more than 300 member companies in Austria. Moreover, the association is also partner of the UN Global Compact (UNGC), the initiative CSR Europe, the World Business Council for Sustainable Development (WBCSD) and Gold Community Member of the Global Reporting Initiative (GRI). The mandatory CSR discourse focuses on the necessity of governing responsible business practices by establishing mandatory social standards; three central themes characterise this discourse: (1) critique of CSR as a neoliberal concept, (2) democratic governance of business conduct and (3) the necessity of CSR control/monitoring mechanisms. The first theme (1) stems from an explicit critique of contemporary capitalism and identifies CSR as part of a neoliberal concept. Therein, employee organisations reject the idea of CSR as being a substitute for regulation (Austrian Federal Chamber of Labour, 2014). Particularly in the context of austerity policies after the financial crisis, the dismantling of welfare state measures was intensified. CSR measures were perceived as drivers of the competitiveness of companies and oriented towards profit maximisation rather than the common good. In this sense, the mandatory CSR discourse relies on a claim for a change of the current capitalist orientation: “Here a radical course correction is required. Restricting the unrestricted market forces can only be a first step towards a postcapitalistic order which does not place profit maximisation in its centre but orientation towards the common good” (Network Social

104

Julia Domnanovich

Responsibility NeSoVe, 2012, p. 25). Employee associations and civil society organisations advocate a post-capitalist era focusing on the common good: “Not going beyond law, but beyond market economy rationality – that is real social responsibility!” (Network Social Responsibility NeSoVe, 2013, p. 4). Moreover, especially labour organisations demand the involvement of stakeholders (i.e. employees, customers, suppliers, neighbours) into CSR measures and decisions. (2) “If we have to bear the consequences of corporate conduct we should also be in the position to stipulate the paradigms of corporate behaviour in a democratically legitimized process” (Network Social Responsibility NeSoVe, 2012, p. 3). In this sense, regulatory efforts should cover how much information stakeholders receive about the implementation of measures that affect them (Austrian Federal Chamber of Labour, 2014). The third theme of the mandatory CSR discourse focuses on adequate control/monitoring mechanisms for CSR implementation processes and outcomes. (3) While the voluntary CSR discourse mainly emphasises rewards to enforce and promote CSR initiatives by companies, the mandatory discourse rather relies on demands for restrictive measures (sanctions): “Socially responsible conduct does not only need to be backed by sets of rules and incentives, it also needs sanctions in case of misconduct (‘carrots and sticks’)” (Network Social Responsibility NeSoVe, 2012, p. 31). In addition to the liability of companies for the negative effects of their business activities on society, it should also be easier to sue for legal violations (Austrian Federal Chamber of Labour, 2014). The mandatory CSR discourse is primarily constructed in policy documents and position papers by employee representatives. The actors behind this perspective are labour organisations (i.e. the Austrian Federal Chamber of Labour and the Austrian Trade Union Federation), NGOs such as Amnesty International and other civil society actors who together published a position paper entitled “CSR from a civil society perspective”. As a reaction to the business-led CSR Austria Initiative, this position paper addressed ecological, social and human rights issues beyond economic considerations. In 2006, this perspective was institutionalised by the founding of the so-called Austrian Network Social Responsibility (Netzwerk Soziale Verantwortung, NeSoVe). In contrast to the initiative CSR Austria, NeSoVe aims to represent a wider civil society perspective and promotes the establishment of legal standards for voluntary CSR policies. Supported and financed by the Federal Ministry of Social Affairs, Health, Care and Consumer Protection, the Federal Ministry of European and International Affairs and the Chamber of Labour Vienna and Styria, NeSoVe has been representing 21 NGOs as members. Taken together, the findings reveal that employer representatives, on the one side, and labour organisations, on the other side, drive opposing CSR interpretations (voluntary vs. mandatory discourse), implying different

CSR impact on the Austrian Welfare State 105

impacts on the existing welfare arrangements. Employer representatives interpret CSR as a private regulatory regime, which allows to challenge corporatist welfare institutions. By promoting a voluntary CSR approach that puts emphasis on regional competitiveness and innovativeness, legal regulations for corporate responsibilities related to labour and working conditions might be weakened. In contrast, employee representatives perceive CSR as a threat to the existing corporatist structures. Hence, they aim at promoting a CSR narrative which sustains the existing status quo and thereby secures high levels of employment protection (i.e. mandatory CSR). CSR implications for welfare state arrangements in the context of labour and employment issues

In addition to delineating contradictory interpretations of CSR by traditional welfare state actors, my analysis also focused on their implications on welfare arrangements in the area of labour and employment issues. Previous research established two contradictory positions regarding the relationship between the emergence of CSR and national institutional arrangements: CSR as institutional mirror versus substitute (see e.g. Jackson & Apostolakou, 2010). This chapter contributes to this discussion by explicating how the relationship between CSR and welfare state arrangements plays out in the specific welfare context of labour and employment issues. To capture localised interpretations and their influence, the following section presents the political decision-making processes on labour and work-related welfare measures by focussing on the voices of traditional welfare state actors over time (see Appendix for an overview of CSR activities and welfare measures in the area of labour and employment issues). Three distinct periods of how CSR interpretations by traditional welfare state actors shaped negotiation processes on labour and work-related welfare measures emerged from the data: (1) the first period covers the early years of explicit CSR activities (2000–2007), until the beginning of the financial crisis 2008/09; (2) the second period covers the years from 2008 through 2016, characterised by grand coalition governments; (3) the third period from 2017 to 2019 is marked by the centre-right coalition, pushing for liberalisation. 1

Introduction of CSR as a source of competitive advantage of the nation

In the first period, the centre-right coalition between the conservative party (ÖVP) and the right-wing party (FPÖ) advocated a change of political course in the area of economic and social policy, based on a “neoliberal agenda” (Preglau, 2010, p. 269). Among others, specific measures were taken to weaken the social partnership (e.g. reduction of financial resources for the Austrian Chamber of Labour). In particular, the aim was to reduce

106

Julia Domnanovich

the power of employee organisations, while employer organisations continued to play a significant role in the policy-making process (see also Tàlos & Obinger, 2020). In the area of work and employment issues, this government period was characterised by a substantial decline in public expenditures for unemployment insurance and the pension system; at the same time, in addition to private retirement schemes, the retirement age was increased and occupational pension schemes were promoted (Österreichische Bundesregierung, 2000). In parallel, based on the EU Lisbon Strategy, the Austrian government promoted an instrumental conceptualisation of CSR in the context of a political program called “Austrian Strategy on Sustainable Development”. This program encompassed different fields of action “to ensure a better quality of life in Austria, more economic dynamism, an intact living space and an active role in Europe and the world” (BMLFUW, 2002). Key indicators of this program were focusing on the promotion of innovative structures and competitiveness of Austrian companies as well as on the area of environmental protection, while employee concerns remained unaddressed. To raise awareness and to build capacities for CSR, the federal ministries supported corporate platforms and civil society organisations, as well as different research studies and projects (e.g. by universities and different research institutes). Although several ministries were involved in the founding of and financial support for the CSR initiatives respACT and NeSoVe, the Austrian government did not issue any dedicated CSR policy instrument. CSR related debates on business responsibilities were primarily reduced to position papers of respACT and NeSoVe, but were not incorporated in negotiations on welfare policies in the area of labour and employment issues. The discourse arena surrounding CSR was just emerging. This period shows that policy decision-making in the area of labour and work-related welfare arrangements was guided by the government’s neoliberal course (as evident in, for example, the privatisation of state pension funds), while the introduction of the concept of CSR focused on aspects of regional competitiveness and innovativeness. Therefore, it can be argued that at the early stage of CSR emergence in Austria, this particular CSR interpretation had very little or no effect on the welfare arrangements in the area of labour and employment issues. 2

Reconciling mandatory and voluntary CSR approaches through social partnership

The second period – the period of the grand coalitions (2007–2016) – was characterised by a strong social partnership. In tripartite negotiations with the social partners, the grand coalition governments, consisting of the social democratic party (SPÖ) and the conservative party (ÖVP), implemented a

CSR impact on the Austrian Welfare State 107

range of measures to address the negative effects of the financial crisis. Besides two economic stimulus packages, three labour market packages have been implemented, focusing on the area of active labour market policy. Specifically, labour market policy measures were taken to reduce, for instance, youth unemployment. In cooperation with the social partners, the government agreed on financially supporting companies for providing apprenticeship training on a voluntary basis. Beyond immediate crisis management, the grand coalitions between 2008 und 2016 introduced measures to reduce gender inequality and to integrate older employees and immigrants as well as persons with disabilities in the labour market. The aim has been to eliminate hidden discrimination in all collective agreements (e.g. removal of stereotypes; securing incomes that guarantee a minimal quality of life; recognition of parental leave periods in collective agreements as periods of service). For example, to address income differences between female and male employees, the government introduced biannual compulsory equal pay reports for companies with more than 150 employees (Österreichische Bundesregierung, 2008). The analysis of governmental programmes and parliamentary reports also showed that policy formulation and implementation were not exclusively reserved to the government and social partners anymore; the CSR agenda increasingly began to involve NGOs and civil society actors in the negotiation process. Especially respACT, who argued for a voluntary CSR approach, and NeSoVe, promoting a mandatory CSR approach, began to actively shape political decision-making processes (e.g. ONR 19250, NaDiVeG). Thus, both the voluntary and the mandatory CSR discourse were gaining traction. One source of arguments for the voluntary discourse was the reference to the Lisbon Agenda and the EU Green Paper and accordingly the usage of CSR as a framing for strengthening Austria’s attractiveness for financial investments (“the linking of economic success with social responsibility (CSR)”, Government Programme, 2007). Confronted by the consequences of the financial crisis in 2008, the Austrian government was even more oriented towards measures for stimulating economic growth and employment. CSR was seen as an important mean in the course of increasing business success, while it should also strengthen the public’s trust in the economy: The further development and improvement of the international competitiveness of the business and labour location within the framework of the European partnership for growth and employment (Lisbon process) is a declared goal of the government. In this context, the government also supports the concept of corporate social responsibility (CSR), which contributes significantly to the success of companies and the public’s trust in business, and supports companies in continuing or developing a proactive CSR strategy. (Österreischische Bundesregierung, 2008, p. 9)

108

Julia Domnanovich

In response to a request by a new European CSR strategy (European Commission, 2011), the Federal Ministry of Economy, Family and Youth (BMWFJ), the Federal Ministry of Labour, Social Affairs and Consumer Protection (BMASK), and the Federal Ministry of Agriculture, Forestry, Environment and Water Management (BMLFUW) were assigned as central governmental actors in the elaboration and implementation of a National Action Plan for CSR. Regarding the transparency and comparability of CSR measures, the development and application of concrete criteria/indicators as well as (legally) regulated reporting by companies on substantively defined social and environmental aspects was considered to be essential. The transfer of the ISO 26000 led to the Austrian ONR 192500 standard; emphasising the voluntary nature of implementing and reporting socially responsible working conditions. Whereas employer organisations have been actively promoting the ONR 192500 as well as other international standards and guidelines (e.g. UNGC, ISO 260000, GRI), labour organisations criticised their low impact: “It seems to be a fundamental principle of CSR to primarily rely on a general set of rules or guidance documents without substance which are written in such a manner that almost all enterprises can comply with them” (Network Social Responsibility NeSoVe, 2012, p. 12). Furthermore, and in contrast to respACT, Network Social Responsibility NeSoVe (2015) called for an extension of the reporting obligation of companies with regard to the implementation of the Law for the Improvement of Sustainability and Diversity (NaDiVeG) in 2016. As the examples above illustrate, this period was marked by negotiation processes that attempted to balance and reconcile voluntary and mandatory interpretations of CSR. Besides implementing mandatory measures (e.g. through NaDiVeG which explicitly covers labour and work-related issues), initiatives focusing on CSR as a source of competitive advantage and innovation (voluntary CSR) were also promoted. An interesting insight here is that the emergence of CSR brings forth new actors in the discourse arena (in particular respACT and NeSoVe) who significantly engaged in negotiation processes, by representing and arguing for contradictory CSR interpretations. These actors dynamised the influence of CSR on negotiation processes regarding welfare state arrangements in the context of labour and employment issues. 3

Leveraging CSR to achieve SDGs: a new roadmap towards competitive advantage and innovation

Whereas the period of grand coalition governments (2008–2016) was marked by a relatively broad range of measures in the area of work and welfare policies, the centre-right coalition under Federal Chancellor Kurz pushed for liberalisation and permanently retrenched the influence of the social partners in general, and employee organisations in particular (Tálos & Obinger, 2020).

CSR impact on the Austrian Welfare State 109

Accordingly, when drafting new measures in the area of labour and employment issues, the government regularly overlooked the stances of both the Austrian Trade Union Federation (ÖGB) and the Chamber of Labour (AK) (e.g. extension of working hours; financial cuts in the area of health and safety for employees). Since legislative initiatives and amendments regarding different areas in work and welfare policy were broadly perceived as employerfriendly, the positions of the Austrian Federal Economic Chamber (WKÖ) and the Federation of Austrian Industry (IV) proved often to be congruent with the government’s intentions. The analysis of government programmes and parliamentary documents indicated that legally binding measures for companies have been gradually removed. In parallel, international voluntary guidelines in the field of CSR became increasingly important. With the introduction of the SDGs in 2016, a new framework for CSR was promoted by the centre-right government to increase competitiveness and innovation for Austrian companies. The Federal Ministry for Digital and Economic Affairs introduced the governance initiative “SDG Business Forum” to raise awareness among companies and guide them “to make the best possible use of SDGs, the global trend towards sustainability and the innovation potentials of sustainable development to achieve economic success” (Austrian Federal Chancellery, 2020, p. 18). Moreover, the Federal Chancellery and the Federal Ministry of European and International Affairs established a working group consisting of various ministries, social partners and stakeholders from civil society, business and scientific community to establish instruments and processes that would promote the implementation of the SDGs. Interestingly, only respACT who “furnishes companies with a platform for sharing views and for networking, a place to transfer knowledge, and fertile ground for innovative approaches and solutions” (Austrian Federal Chancellery, 2020, p. 27) (and not NeSoVe) was part of this working group. This period shows that it is political forces (i.e. the respective governments and their ideological stances) that moderate the influence of different CSR interpretations on welfare state arrangements. By promoting a voluntary CSR approach, emphasising regional competitiveness and innovativeness, the centre-right government (traditionally related to the employers’ organisations) has been attempting to weaken legal regulation for corporate responsibilities related to labour and working conditions. As a consequence, respACT, by being supported by employer organisations, was directly involved in the national SDG working group, whereas NeSoVe, as being supported by employee organisations, lost ground. The introduction of the SDGs thereby served as a new framework of a voluntary CSR interpretation emphasising aspects of economic performance and competitiveness, whereas labour and work-related welfare arrangements, such as measures in the area of adequate material rewards and social security, remained unaddressed.

110

Julia Domnanovich

Discussion and conclusions The current book chapter examined how CSR was interpreted by traditional welfare state actors, i.e. trade unions, employers and the state, and how these interpretations were used to modify the welfare state arrangements in the context of labour and employment issues. While research established two contradictory positions with regard to the relationship between the emergence of CSR and national institutional arrangements – CSR as either an institutional mirror or as substitute (see e.g. Jackson & Apostolakou, 2010), this chapter adds a more nuanced understanding on this ambiguous relationship by examining to which extent localised interpretations of CSR might influence welfare state institutions. One interesting finding is that the impact of CSR depends, at least to some extent, on the predominant CSR discourse and the power of the actors who create and promote the discourse. In line with previous research (de Geer et al., 2009; Mark-Ungericht & Weiskopf, 2006), employer organisations, on the one hand, and employee representatives, on the other hand, interpret CSR in different ways, i.e. either as voluntary or as mandatory. Whereas the voluntary CSR discourse promotes corporate discretion and market-based policy solutions, the mandatory CSR discourse focuses on establishing legal regulations for corporate conduct. In order to achieve their economic, social or political goals, traditional welfare state actors instrumentalise CSR to weaken or strengthen welfare arrangements. The results indicate that especially in the centre-right government coalitions (2000–2006; 2017–2019) employer representatives tend to dominate the decision-making process, forcing a voluntary CSR approach. While the CSR impact in the first period (2000–2006) was marginal – given that explicit CSR was just emerging in that time, in the second period (2016–2019), the centre-right coalition under Federal Chancellor Kurz has been promoting a voluntary CSR approach emphasising regional competitiveness and innovativeness, accompanied by a decline of legal regulations for corporate responsibilities related to labour and working conditions. In contrast, the period of the grand coalitions (2007–2016) is characterised by a relatively strong social partnership and therein by balanced negotiations of CSR and concrete CSR implications in the area of labour and work-related welfare arrangements (e.g. reporting requirements). In line with the corporatist tradition, the concept of social partnership ensures that employer organisations as well as employee representatives are participating in the policy-making process, so that different perspectives on corporate voluntary programs and activities in the area of welfare policies can be considered and included. Taken together, regardless of the ideological positions and intentions of different political actors, it can be concluded that traditional corporatist welfare institutions in the context of labour and employment issues were to some extent opposed to the notion of explicit CSR. Since CSR measures

CSR impact on the Austrian Welfare State 111

focused on regional competitiveness and innovativeness in the first place, labour and work-related welfare measures remained largely unaddressed – at least in the Austrian welfare state, which, due to its corporatist tradition, could preserve high levels of employment protection. This implies that national institutions responsible for welfare provision are relatively sticky and inert. This is evident in a slow adoption process of the CSR concept, whereby local actors react sceptical and treat it with some degree of distrust or instrumentalise it to support their political stances. However, in the case of other countries with weaker or missing welfare institutions, such as in developing and emerging economies, CSR might be used as a mean to provide society with welfare benefits and thus show a more substantial impact on labour and work-related welfare arrangements, thereby substituting for institutionalised forms of social solidarity (CSR as institutional substitute, e.g. Jackson & Apostolakou, 2010; Kinderman, 2012; Matten & Moon, 2008). In conclusion, the current chapter illustrates the ambiguity of the CSR concept, being susceptible to (temporarily) influences of certain dominant actors. The relationship between welfare state arrangements and CSR changes over time in dependence of who drives the discourse. The implications of CSR on corporatist policy-making are thus locally and temporarily contingent, resulting in the introduction of new or modification of existing labour and work-related welfare arrangements.

Takeaway for the society-level impacts of CSR The current chapter offers the following implications with regard to society-level impacts of CSR: First, the study’s findings point to the important role of discourses (more precisely, interpretations of CSR) that moderate the impacts of CSR on society at large. Discourses have the power to either emphasise or deemphasise particular CSR aspects in political decision-making. For example, CSR discourses can maintain prevailing policy measures to strengthen innovative structures and competitiveness of companies and at the same time weaken legal regulations for corporate responsibilities related to labour and working conditions. Second, the findings of this study highlight the role of power to create and promote a particular discourse – what dominates the discourse is moderated by the question of who drives it. It is here that the ambiguity of the CSR concept enables political actors to frame their agendas, by shaping and driving unique interpretations of CSR. Political forces (i.e. the respective governments) favour and thus moderate which discourses gain traction and ultimately lead to distinct outcomes, e.g. in the context of labour and employment issues. Third, this study illustrates how a discourse lens helps to detach CSR from individual organisations and to illuminate how CSR as a concept structures and guides political decisionmaking over time.

112

Julia Domnanovich

References Armingeon, K., & Fill, A. (2016). Trajectories of liberalization and de‐liberalization: Actors matter. The Case of Germany, Switzerland and Austria. Doctoral Seminar of the European Institute, LSE, London. 1–55. Austrian Chamber of Commerce. (2017). Verantwortung in der Außenwirtschaft – ein Leitfaden der Außenwirtschaft Austria. Vienna: Austrian Chamber of Commerce. Austrian Federal Chamber of Labour. (2014). Strategie der Europäischen Kommission für die soziale Verantwortung der Unternehmen (CSR) 2011–2014: Erfolge, Schwachstellen und künftige Herausforderungen. Retrieved from https://www.arbeiterkammer.at/ infopool/wien/Soziale_Verantwortung_der_Unternehmen.pdf Austrian Federal Chancellery. (2020). Austria and the 2030 Agenda. Vienna: Austrian Federal Chancellery. Bartley, T. (2007). Institutional emergence in an era of globalization: The rise of transnational private regulation of labor and environmental conditions. American Journal of Sociology, 113, 297–351. Bischof, G., & Pelinka, A. (1995). Austro-corporatism. Past, present, future. London: Routledge. Bischof, G., & Pelinka, A. (1996). Austro‐Corporatism. Past‐Present‐Future. New York: Routledge. BMLFUW. (2002). Die österreichische Strategie zur Nachhaltigen Entwicklung. Eine Initiative der Bundesregierung. Vienna: BMLFUW. Brammer, S., Jackson, G., & Matten, D. (2012). Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-Economic Review, 10(1), 3–28. Bryson, A., Ebbinghaus, B., & Visser, J. (2011). Introduction. Causes, consequences and cures of union decline. European Journal of Industrial Relations, 17(2), 97–105. Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32, 946–967. Crouch, C. (2009). Privatised Keynesianism: An unacknowledged policy regime. The British Journal of Politics and International Relations, 11, 382–399. Crouch, C. (2013). From markets versus states to corporations versus civil society. In S. Armin & W. Streeck (Eds.), Politics in an age of austerity (pp. 219–238). Cambridge: Polity Press. Czarniawska, B., & Joerges, B. (1996). Travel of ideas. In B. Czarniawska & G. Sevón (Eds.), Translating organisational change (pp. 13–48). Berlin et al.: de Gruyter. de Bakker, F. G. A., Matten, D., Spence, L. J., & Wickert, C. M. J. (2020). The elephant in the room: The nascent research agenda on corporations, social responsibility, and capitalism. Business & Society, 59(7), 1295–1302. de Geer, H., Borglund, T., & Frostenson, M. (2009). Reconciling CSR with the role of the corporation in welfare states: The problematic Swedish example. Journal of Business Ethics, 89, 269–283. Esping-Andersen, G. (1990). The three worlds of welfare capitalism. Princeton: Princeton University Press. European Commission. (2001). Promoting a European framework for corporate social responsibility. Green Paper. Luxembourg: Office for official publications of the European Communities. European Commission. (2011). A renewed EU strategy 2011–14 for corporate social responsibility. Communication from the Commission to the European Parliament, the Council,

CSR impact on the Austrian Welfare State 113 the European Economic and Social Committee and the Committee of the Regions. Brussels: European Commission. Gerlich, P. (1992). A farewell to corporatism. West European Politics, 15, 132–146. Gjølberg, M. (2009). The origin of corporate social responsibility: Global forces or national legacies? Socio-Economic Review, 7(4), 605–637. Gjølberg, M. (2010). Varieties of corporate social responsibility (CSR): CSR meets the “Nordic Model”. Regulation & Governance, 4, 203–229. Gold, M., Preuss, L., & Rees, C. (2020). Moving out of the comfort zone? Trade union revitalization and corporate social responsibility. Journal of Industrial Relations, 62, 132–155. Habisch, A., & Wegner, M. (2005). Overcoming the heritage of corporatism. In A. Habisch, J. Jonker, M. Wegner, & R. Schmidpeter (Eds.), Corporate social responsibility across Europe (pp. 111–124). Berlin: Springer. Hall, P. A., & Soskice, D. (2001). Varieties of capitalism. The institutional foundations of comparative advantage. Oxford: Oxford University Press. Hoffman, A. J., & Jennings, P. D. (2018). Re-engaging with sustainability in the anthropocene era: An institutional approach. Elements in organization theory. Cambridge: Cambridge University Press. Höllerer, M. A. (2012). Between creed, rhetoric façade, and disregard. Dissemination and theorization of corporate social responsibility in Austria. Frankfurt a. M.: Peter Lang International Academic Publishers. Jackson, G., & Apostolakou, A. (2010). Corporate social responsibility in Western Europe: An institutional mirror or substitute? Journal of Business Ethics, 94, 371–394. Jackson, G., Bartosch, J., Avetisyan, E., Kinderman, D., & Knudsen, J. S. (2020). Mandatory non-financial disclosure and its influences on CSR: An international comparison. Journal of Business Ethics, 162, 323–342. Jackson, G., Doellgast, V., & Baccaro, L. (2018). Corporate social responsibility and labour standards: Bridging business management and employment relations perspectives. British Journal of Industrial Relations, 56(1), 3–13. Kinderman, D. (2012). “Free us up se we can be responsible!” The co-evolution of corporate social responsibility and neo-liberalism in the UK, 1977–2010. SocioEconomic Review, 10(1), 29–57. Knudsen, J., & Moon, J. (2017). Visible hands: Government regulation and international business responsibility. Cambridge: Cambridge University Press. Koos, S. (2012). The institutional embeddedness of social responsibility: A multilevel analysis of smaller firms’ civic engagement in Western Europe. Socio-Economic Review, 10(1), 135–162. Lehmbruch, G., & Schmitter, P. C. (1982). Patterns of corporatist policy-making. London: Sage Publications. Lehner, L. (2017). A Reversing case within trajectories of liberalisation: The revival of Neo-corporatism in Austria since 2008. Momentum Quarterly, 6(4), 210–229. Mark-Ungericht, B., & Weiskopf, R. (2006). Filling the empty shell: The public debate on CSR in Austria as a paradigmatic example of political discourse. Journal of Business Ethics, 70(3), 285–297. Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33, 404–424.

114

Julia Domnanovich

Meyer, R. E., & Höllerer, M. A. (2010). Meaning structures in a contested issue field: A topographic map of shareholder value in Austria. Academy of Management Journal, 53(6), 1241–1262. Midttun, A. (2018). Civilising global capitalism: Aligning CSR and the welfare state. In Witoszek, N. & A. Midttun (Eds.), Sustainable modernity: The Nordic model and beyond (pp. 187–203). London: Routledge. Midttun, A., Gjølberg, M., Kourula, A., Sweet, S., & Vallentin, S. (2015). Public policies for corporate social responsibility in four Nordic countries: Harmony of coals and conflict of means. Business and Society, 54(4), 464–500. Molina, O., & Rhodes, M. (2002). Corporatism: The past, present, and future of a concept. Annual Review of Political Science, 5, 305–331. Network Social Responsibility (NeSoVe). (2012). Preciousness or speciousness – That is the question! Vienna: NeSoVe. Network Social Responsibility (NeSoVe). (2013). Für verbindliche gesellschaftliche Verantwortung statt freiwillige (CSR)Geschäftemacherei! Vienna: NeSoVe. Network Social Responsibility (NeSoVe). (2015). Die Sorgfaltspflichten von Unternehmen im Hinblick auf die Einhaltung von Menschenrechten bei Auslandsaktivitäten. Vienna: NeSoVe. Orlitzky, M. (2008). Corporate social performance and financial performance: A research synthesis. In A. Crane, A. McWilliams, D. Matten, J. Moon, & D. S. Siegel (Eds.), The Oxford handbook of corporate social responsibility (pp. 113–134). New York: Oxford University Press. Österreichische Bundesregierung. (2000). Regierungsprogramm für die XXIII. Gesetzgebungsperiode. Vienna, February. Österreichische Bundesregierung. (2008). Regierungsprogramm für die XXIV. Gesetzgebungsperiode. Vienna, December. Phillips, N., Lawrence, T. B., & Hardy, C. (2004). Discourse and institutions. Academy of Management Review, 29(4), 635–652. Phillips, N., & Hardy, N. (2002). Discourse Analysis. Investigating processes of social construction. Thousand Oaks, CA: SAGE Publications. Polanyi, K. (1957). The great transformation. Boston: Beacon Press. Porter, M., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1–2), 62–77. Preglau, M. (2010). Schüssel and the welfare state. In G. Bischof, & F. Plasser (Eds.), The Schüssel era in Austria (pp. 262–282). New Orleans, LA: University of New Orleans Press. respACT – Austrian business council for sustainable development. (2007). Das CSRLeitbild der österreichischen Wirtschaft. Vienna: respACT. respACT – Austrian business council for sustainable development. (2010). Erfolg mit Verantwortung. Ein Leitbild für zukunftsfähiges Wirtschaften. Vienna: respACT. Sahlin, K., & Wedlin, L. (2008). Circulating ideas: Imitation, translation and editing. In R. Greenwood, C. Oliver, & R. Suddaby (Eds.), The SAGE handbook of organizational institutionalism (pp. 218–242). London: SAGE Publications. Schneider, A. (2014). Embracing ambiguity: Lessons from the study of corporate social responsibility throughout the rise and decline of the modern welfare state. Business Ethics: A European Review, 23, 293–308. Steurer, R. (2010). The role of governments in corporate social responsibility: Characterizing public policies on CSR in Europe. Policy Sciences, 43(1), 49–72.

CSR impact on the Austrian Welfare State 115 Streeck, W. (2011). Taking capitalism seriously: Towards an institutionalist approach to contemporary political economy. Socio-Economic Review, 9, 137–167. Strigl, A. (2005). Concerted action towards sustainable development. In A. Habisch, J. Jonker, M. Wegner, & R. Schmidpeter (Eds.), Corporate social responsibility across Europe (pp. 125–140). Berlin: Springer. Tálos, E., & Kittel, B. (1999). Austria in the 1990s: The routine of social partnership in question? In S. Berger & H. Compston (Eds.), Social partnership in Europe (pp. 35–50). Oxford: Berghahn. Tálos, E., & Obinger, H. (2020). Sozialstaat Österreich (1945-2020). Entwicklung – Maßnahmen – internationale Verortung. Vienna: Studienverlag. Traxler, F. (1998). Austria -Still the country of corporatism. In A. Ferner & R. Hyman (Eds.), Changing industrial relations in Europe (pp. 239–261). Oxford: Blackwell. Whitley, R. (1999). Divergent capitalisms: The social structuring and change of business systems. Oxford, UK: Oxford University Press.

Appendix See table on next page

2004. TRIGOS Award for Responsible Business 2006. NeSoVe 2006. Austrian Occupational Safety and Health Strategy

2003. Initiative CSR Austria

Specific CSR activities

Political programmes and measures in the area of work and welfare policy

2003–2007 ÖVP-FPÖ/BZÖ Schüssel II

2000 – 2003 ÖVP – FPÖ Schüssel I

Government parties at the federal level 2011. ONR 192500 Guideline 2013. First Draft National Action Plan CSR

2008–2013 SPÖ-ÖVP Faymann I

2013–2016 SPÖ-ÖVP Faymann II

2008. Youth 2009. Short-time work 2016. Care Guarantee and allowance (Kurzarbeit) leave/part Youth 2010. NAP Gender time work Employment Equality in the Labour for carers Initiative (up to MarketPart-time the age of 18) employment for older employeesNESTOR Gold award for agefriendly workplace design and organisation 2011. Anti-wage and social dumping lawCompulsory biannual income report 2012. fit2work programme advising and supporting on health problems at work NAP Disability 2012–2020

2007–2008 SPÖ-ÖVP Gusenbauer I

2017–2019 ÖVP-FPÖ Kurz I

Leveraging CSR to achieve SDGs

2016. Law for the Improvement of Sustainability and Diversity (NaDiVeG) 2016. Mandatory 2018. Extension education and of maximum training working hours (Ausbildungspflicht) from 10 to for 15 to 12 hours per 18-year-oldsAct to day, 50 to 60 combat wage hours per dumping and social week dumping 2017. Apprenticeship training guarantee for young people (up to the age of 24) 2016. Family allowance (increased involvement of fathers in childcare)

2016–2017 SPÖ-ÖVP Kern I

CSR as a source of competitive advantage of Reconciling mandatory and voluntary CSR approaches through social partnership the nation

116 Julia Domnanovich

6

Capturing CSR Impact on Suppliers through Social Accounting: A Case Study of an Apparel Retailer Silvia Ayuso

Introduction As supply chains are becoming increasingly global, the rising level of outsourcing to developing countries has strengthened the focus on corporate social responsibility (CSR) of retailing companies. There is a large amount of literature on CSR in the supply chain under the names of sustainable supply chain management, responsible supply chain management or socially responsible sourcing. One of the industries that has attracted the most attention from researchers is the textile and clothing industry since companies operating in this sector are increasingly exposed to the occurrence of social and environmental problems along their supply chains (Chiesa & Przychodzen, 2019; Lis et al., 2020). Of special relevance in the textile and clothing sector are the social issues linked to its labourintensive practices and its outsourcing activities to low-wage developing countries (Köksal et al., 2017). In an effort to extend CSR to suppliers, many branded apparel companies are adopting different responsible supply chain actions and strategies (Köksal et al., 2017; Gimenez et al., 2012; Yawar & Seuring, 2017). One can basically differentiate three buying firm strategies to address social concerns in the supply chain: compliance strategies, communication strategies and supplier development strategies (Yawar & Seuring, 2017). The most common approach is the adoption of compliance strategies based on firm-specific or general codes of conduct or standards, auditing and monitoring (Köksal et al., 2017; Yawar & Seuring, 2017). This approach relies on codes and standards which offer a baseline and define minimum requirements for health and safety, fair treatment and working conditions. To ensure compliance with these codes and standards, buying firms assess supplier performance through mechanisms such as auditing and monitoring programmes. Otherwise, communication strategies such as reporting and labelling help in disseminating the information on codes of conduct and standards taken up by firms, and supplier development strategies endeavour to build trust and collaborative relationships with suppliers to stimulate performance improvements in the supply chain. DOI: 10.4324/9781003182276-6

118

Silvia Ayuso

Although one important aim of implementing CSR strategies in the supply chain is to achieve a better social performance of the suppliers, the literature has focused mostly on performance outcomes for the individual buyer firm and only limited empirical research has analysed the impact of responsible supply chain management on suppliers (Najjar et al., 2018; Yawar & Seuring, 2017). Regarding textile supply chains, qualitative studies have provided some case evidence on how buyer firms’ compliance programmes lead to positive social impacts for suppliers (e.g. Locke et al., 2009; Perry et al., 2015). Quantitative studies have relied on diverse indicators, such as self-reported measures, number of codes of conduct violations and audit scores, to explore whether compliance programmes bring about improvements (e.g. Egels-Zandén & Lindholm, 2015; Locke et al., 2007, Sanders et al., 2018). However, despite the widespread adoption of CSR compliance programmes by textile companies, there is no common approach to systematically measure its impact on suppliers and other stakeholders. The purpose of this chapter is to examine how a social accounting method can be applied to assess the impact resulting from CSR compliance programmes in the supply chain. Specifically, I provide a case study of a large apparel retail company which intends to identify and quantify the impacts of the adopted CSR compliance programme by using Integrated Social Value (ISV) analysis. ISV analysis is a social accounting methodology that considers the social value created for all the organisation’s stakeholders holistically (Ayuso et al., 2020; Retolaza et al., 2016). The chapter is structured as follows. The first section introduces social accounting in organisations and the chosen approach of ISV. The following section describes the case study of a large apparel retail company, including the qualitative and quantitative analysis of the social value created by its CSR compliance programme. Finally, discussion of the results and conclusions drawn from the study are presented.

Social accounting in organisations Accounting is a discipline traditionally used in the economic field to collect, analyse and synthesise financial information for different uses. The first proposals for complementing financial information with social and environmental issues emerged in the 1970s and 1980s (Gray et al., 1996). The research developed since then in the field of social and environmental accounting has been based on a critique of the limitations of financial accounting, particularly the limited range of the considered elements and its focus on shareholders and other financing providers. There is not a consensus on the definition of social accounting, and it is often used as an umbrella term to include any approach to taking the social (and environmental) effects of an organisation into consideration. Most definitions emphasise the broadening of the domain of items under consideration

Capturing CSR Impact on Suppliers 119

(financial and non-financial information) and the inclusion of wider stakeholder groups beyond shareholders such as employees, users or clients, community, public administrations, etc. (Richmond et al., 2003). Although there are different proposals for the systematisation of social accounting, several authors have highlighted three essential aspects shared by social accounting systems: engagement and prioritisation of affected stakeholders (e.g. Costa & Pesci, 2016; Hall et al., 2015), search for evidence on the social value generated (e.g. Arvidson et al., 2013; Millar & Hall, 2013) and quantification and monetisation of this social value (e.g. Gibbon & Dey, 2011; Mook et al., 2003). Social accounting is thus not only linked to the wider field of social impact measurement or social impact assessment (Corvo et al., 2021), but also focuses on the preparation and publication of an account about an organisation’s stakeholder interactions and adheres to generally accepted accounting principles (Retolaza & San-Jose, 2021). Social accounting processes are especially useful for non-profit and third sector organisations, since their missions are targeted at improving socially relevant activities (Ebrahim & Rangan, 2014; Sawhill & Williamson, 2001). Hence, the measurement of social effects is both interesting for committed managers to evaluate compliance with stakeholder expectations and for the financial backers to assess if their funds are making a difference. Nevertheless, social accounting is receiving increasing attention from businesses as well as initiatives such as the Impact-Weighted Accounts Project and the Value Balancing Alliance show (Nicholls, 2020). Corporate examples of applying social accounting have focused on CSR domains such as occupational health and safety, employee training and product impact (Impact-Weighted Accounts, 2021; Krlev et al., 2013; Value Balancing Alliance, 2021). However, to my knowledge, the social accounting approach has not been applied to CSR in the supply chain so far.

Integrated social value analysis The methodology of ISV analysis, developed by Retolaza et al. (2016), is based on the perspective of stakeholder theory (Freeman, 1984; Freeman et al., 2010). In line with other broad value approaches (Elkington, 1997; Emerson et al., 2003; Porter & Kramer, 2011), it employs a more comprehensive conception of value than the conventional shareholder value. On the one hand, it considers the value created by an organisation for all its stakeholders and, on the other hand, it includes positive and negative effects that might not be directly economic. The ISV is made up of the social value created by economic activity – captured by financial accounting indicators – and the social value that the organisation created specifically for its various stakeholders through nonmarket relationships. The calculation of this specific social value or nonmarket value combines a qualitative and quantitative analysis. The

120

Silvia Ayuso

qualitative analysis aims to identify the value that is perceived by the organisation’s stakeholders by actively involving them in the research; the quantitative analysis centres on quantifying this perceived value by developing indicators and financial proxies to monetise it. Accordingly, the ISV analysis process comprises four basic phases: (1) Identify the stakeholders; (2) Identify the value variables; (3) Monetise the indicators; (4) Calculate and visualise the value created (Retolaza et al., 2016). The first phase aims to identify the stakeholders for which the analysed organisation creates some kind of value, be it monetary or non-monetary, e.g. employees, customers, suppliers, local community, etc. The second phase intends to identify the perceived value dimensions or variables, that is, how the organisation creates value for third parties, e.g. work satisfaction, increased health, fostering innovation, etc. The third phase involves quantifying and monetising the value of the variables identified. Once the measurable indicators and financial proxies are agreed upon, the monetary value of each variable can be calculated using the corresponding formulae or algorithms. A detailed explanation of the application of the method to the case of a university can be found in Ayuso et al. (2020). Although ISV analysis is a recently proposed novel method, it has been empirically applied to more than 90 organisations of different sizes and industries, both profit and non-profit (Retolaza & San-Jose, 2021). The required qualitative analysis is characterised by a customised approach that considers the specific context of the organisation under study and follows an action research process in close collaboration with the organisation’s members and stakeholder representatives. As a consequence, classical criteria of reliability and validity are not fully adequate for judging the quality of conducted social accounting analyses (Maier et al., 2015). Instead, to assess the soundness of the analysis, it is more appropriate to use criteria of interpretative social research such as the intersubjective transparency of the process, indication and suitability of procedures, clarification of limitations and reflected subjectivity (Steinke, 2004).

Social value analysis of an apparel retailer compliance programme Case study

The company under study is a large European fashion apparel retailer that works with suppliers of 21 countries, mainly China, India, Vietnam and Morocco. The company has defined a code of conduct for its clothing and accessories manufacturers which is mandatory and included in the commercial contract. This code intends to ensure good social and environmental practices in the supply chain. Specifically, it aims at guaranteeing the human rights of workers involved in the production process and establishes clauses relative to forced and child labour, health and safety at work,

Capturing CSR Impact on Suppliers 121

freedom of association, non-discrimination, working hours and salaries, among others. The code of conduct is based on the principles of the United Nations Global Compact, as well as the principles stipulated in the Universal Declaration of Human Rights and the United Nations Convention on the Rights of the Child and the applicable conventions and recommendations of the International Labour Organisation (ILO). The required compliance with the firm-specific code of conduct is periodically audited at the different factories of the suppliers. Such audits are conducted by external auditors and may be initial audits (in the case of a new production site), follow-up audits (for the inspection of specific non-compliances) or maintenance audits (every one or two years, depending on the result). In 2017, the company joined the Amfori Business Social Compliance Initiative (BSCI), and Sedex Global in 2018 to optimise efforts in conducting the social audits, since many of the manufacturing factories are already members of the Amfori BSCI/Sedex Global system. Furthermore, the increase in the number of factories adhering to the Amfori and Sedex Global programmes contributes to reducing audit fatigue for both factories and the retailer, as the management of new audits is considerably reduced. This time optimisation allows more attention to be focused on developing corrective action plans and conducting a more exhaustive monitoring of the progress achieved. The BSCI Code of Conduct and the SMETA (Sedex Members Ethical Trade Audit) framework are informed by ILO conventions regarding, e.g. child labour, harassment and abuse, non-discrimination, forced labour, wages and benefits, working hours, disciplinary practices, and the right to freedom of association, health and safety; and thus, rely on the same principles as the firm-specific code of conduct. In addition, the CSR department of the apparel retailer holds training sessions on the implementation and monitoring of the code of conduct for new suppliers, and alternates training programmes at source for suppliers in different countries to build their capacity to improve working conditions and raise awareness in human rights and environmental aspects. Qualitative analysis and findings

The ISV analysis starts with the premise that the result of an activity only transforms into value when there is someone to value it, which is why it adopts a phenomenological approach to analysis (Moustakas, 1994). This means that the phenomenon of social value is approached through the perceptions of the people who receive this value, that is, the organisation’s different stakeholders. Instead of defining the value dimensions based on a prior categorisation of the expected social benefits or harm, the phenomenon is addressed without interpretative criteria and allows the stakeholders themselves to express the value generation they perceive from the organisation.1

122

Silvia Ayuso

The main stakeholder group affected by the apparel company’s compliance programme is obviously the suppliers (both employers and employees). Thus, under the phenomenological perspective, the analysis of the value elements of the compliance actions was conducted in collaboration with the CSR department of the company and in liaison with representatives of its suppliers. To address the complexity resulting from the fact that suppliers were located in multiple countries, I decided to first hold in-depth interviews with a group of supplier representatives from Morocco (the country with the longest established supplier relationships), and later on expand the interviews to suppliers from other countries (China, Vietnam and India). Whereas the CSR manager and I conducted the interviews with Moroccan supplier representatives and some auditors who have been involved in the company’s social audits activities for many years, I trained the company’s CSR contacts in China, Vietnam and India to do the interviews with supplier representatives from those countries. In total, 17 interviews were conducted between March and December 2019 to suppliers and auditors (see Table 6.1). The purpose of these interviews was to gather spontaneous and simple answers on the value provided by the relationship with the apparel company. Therefore, I adapted the interview protocol from Retolaza et al. (2016) to a set of open questions on interviewees’ perception of positive and/or negative changes produced by the apparel company’s compliance actions, both regarding the supplier organisations and society in general. Face-to-face interviews lasted between 15 and 30 minutes, and information gathered during the interviews was documented in the form of post-interview notes in a common template. In some countries, it was not possible to reach supplier representatives and they had to be interviewed by email. Those interviewed held the position of factory audit supervisor, social responsibility/quality/ compliance manager or sales manager. The information gathered during the interviews was analysed following the steps of the phenomenological approach: delineation of “meaning units” expressed by the interviewees, re-expression of the meaning units in the third person and transformation into scientific language

Table 6.1 Interviews held with supplier representatives March 2019 May 2019 October 2019 December 2019

Face-to-face interviews with four supplier representatives and one experienced auditor in Morocco Face-to-face interviews with six supplier representatives in China Written interviews with three supplier representatives in India and one supplier representative in Vietnam Face-to-face interviews with two experienced auditors in Europe

Source: Author’s own development.

Capturing CSR Impact on Suppliers 123

(Giorgi Smith 2003). As a result, I identified 11 so-called value variables that appear to be common to suppliers from different countries such as “increase in compliance with legislation”, “increase in awareness of the importance of working conditions” and “improvement of working conditions” (see Table 6.2). To ensure the soundness of this qualitative research phase, I triangulated the resulting value variables with empirical

Table 6.2 Identified value variables No. Value Variable 1 2

Increase in awareness of the importance of working conditions Improvement of working conditions

3

Improvement of the factory management system

4

Improvement of factories’ facilities and equipment

5

Improvement in relations between employers and employees Improvement in worker satisfaction

6

7

Increase in management standardisation

8

Increase in competitive and social positioning

9

Reduction of operational risks Reduction of regulatory risks Increase in compliance with legislation

10 11

Description

Affected Stakeholder

Increase in familiarisation with Suppliers code of conduct content by employers and employees Improvements in current health and safety standards, wages, working times, etc. Improvement of efficiency in management, documentation and planning systems Improvement in the “hardware” of the factories (firefighting equipment, safety marks, exit doors, etc.) Improvement of hierarchical structure due to greater transparency Improvement in employees’ feelings concerning protection, stability and sense of belonging Increase in adjustment of the factory management to standards of buying firms Increase of competitive advantages linked to improved image: long-term contracts, attraction of new customers, new suppliers and skilled workers Reduction of risks and better preparation for accidents Reduction of penalties and fines Increase in ensuring Public administrations compliance with applicable national legislation and international treaties

Source: Author’s own development.

124

Silvia Ayuso

evidence from the literature on suppliers’ social performance (e.g. Barrientos & Smith, 2007; Egels-Zandén & Lindholm, 2015). Most of the identified value variables can be related to the value creation for suppliers, but “increase in compliance with legislation” can be regarded as a benefit for public administrations. In addition, I identified a series of aspects that can be considered as indirectly triggered by social compliance actions of the apparel company, such as the ripple effect of the code of conduct requirements on surrounding companies and second-level suppliers, and the consequences on women’s empowerment. Quantitative analysis and findings

The ISV quantitative analysis aims to assess and value in monetary terms the set of value variables identified in the qualitative phase of stakeholder consultation (Retolaza et al., 2016). After agreeing on the list of value variables with the CSR department of the case company, I searched for one or more indicators related to each of these variables, which were capable of measuring the tangible products and services resulting from social compliance actions. I realised that the apparel company had limited information available about most of the impacts captured in the identified value variables. Hence, I was only able to quantify five value variables with company-controlled data: increase in awareness of the importance of working conditions, improvement of working conditions, improvement of the factory management system, reduction of regulatory risks and increase in compliance with legislation. For measuring the increase in awareness of the importance of working conditions, I used the number of CSR training hours given by the case company’s CSR department to suppliers and the number of attendees to these courses. For quantifying the improvement of the factory management system, I used the number of complete audits (initial and maintenance audits) and considered that the recommendations and advice resulting from the audits were equivalent to two hours of consultancy. For quantifying the increase in compliance with legislation, I employed the number of complete and follow-up audits and regarded the devoted person-hours as a measure for investigating and enforcing compliance, in a similar way as a labour inspector would do. To measure the value variables “improvement of working conditions” and “reduction of regulatory risks”, I relied on the number of noncompliances detected during audits and afterwards remediated by suppliers. Since all audit frameworks consider issues of regulatory risks (legal compliance), I could use the corresponding number of detected and remediated non-compliances. For assessing the improvement of working conditions, I used the areas in which non-compliances detected by the case company have been concentrated in the last five years: health and

Capturing CSR Impact on Suppliers 125

safety (33%), working hours (30%), remuneration (21%) and freedom of association (3%). Non-compliances in other areas, including critical issues such as child and forced labour, have been under 1% in the last five years, and breaches found were due to the lack of an explicit policy for dealing with these issues.2 To monetise the five value variables, I looked for possible financial proxies to estimate the monetary value of the company’s indicators under consideration. For the selection of the most suitable monetary proxies, I used different approaches such as average market prices of the services provided by the company (or comparable alternative services) and avoided costs for the suppliers. In the latter case, I consider avoided costs to be the so-called retribution costs, i.e. the cost associated with fines, sanctions or penalties imposed by governments for certain violations of legal or widely accepted obligations and which represent the harm caused to society through non-compliance with the law. These retribution costs can be regarded as avoided costs for the suppliers since the conducted audits undertaken help to avoid legal violations and subsequent fines. The proxy values for the retribution costs under consideration are global values based on research on laws in different countries (True Price, 2020). The market price proxies (average price of CSR training, CSR consultancy and social audit) are based on the European monetary values of the corporate home country and adjusted to the different countries with GDP per capita factors. I calculated the monetary value of each variable for the reference period (the year 2019) by using the corresponding formulae and making generally conservative assumptions. Table 6.3 shows the chosen indicators, proxies, formulae and attribution assumptions. Attribution (normally expressed as a percentage) relates to the understanding of how much of the measured impact is the result of the organisation’s actions and not the result of the actions of others and is important for not over-claiming the contribution of an intervention (Arvidson et al., 2013). Whereas most of the considered impacts can be judged to be attributable fully to the activities of the apparel company (100%), I estimated that the audits conducted by Amfori BSCI and Sedex Global auditors are only 50% attributable to the case company as a member of these organisations (the other 50% would be attributable to these business associations themselves). Finally, the monetary values can be aggregated resulting in a total of €996,615 for the social value created by the compliance actions of the apparel company in 2019 using the European monetary values. The calculation with adjusted values for the respective countries leads to a result of €885,925, an 11% lower result. Most of this value (86%) is created for the company’s suppliers and a lesser part (14%) for the public administrations of the countries where the suppliers are located. The monetisation of the social value also allows a breakdown by the value generated for the different countries, with China accounting for the highest proportion of value (24%).

2

1

Indicator

Increase in awareness No. of CSR training of the importance hours received by of working suppliers × No. of conditions attendees Improvement of No. of non-compliances working in health and safety conditions detected and remediated × No. of affected workers Number of noncompliances in working hours detected and remediated × No. of affected workers Number of noncompliances in remuneration detected and remediated × No. of affected workers No. of non-compliances in freedom of association detected and remediated (including incidents/ complaints)

No. Value Variable

Table 6.3 Quantified and monetised value variables Proxy Value

Retribution costs for work performed in violation of H&S standards (global average of penalties) Retribution costs for workers performing illegal/underpaid overtime (global average of penalties) Retribution costs for workers without legal social security (global average of penalties) Retribution costs for instances of denied freedom of association (global average of penalties)

Formula

Attribution

Asociación No. hours × No. 100% Española para la attendees × Price per Calidad (2020) hour

Proxy Source

980 EUR True Price (2020) No. non-compliances × 50/100% Retribution costs

True Price (2020) No. non-compliances × 50/100% 2,520 No. workers × EUR/ worker Retribution costs

118 True Price (2020) No. non-compliances × 50/100% No. workers × EUR/ Retribution costs worker

2,740 True Price (2020) No. non-compliances × 50/100% EUR/ No. workers × worker Retribution costs

Average price per hour 25 EUR of CSR training course

Proxy

126 Silvia Ayuso

Increase in compliance with legislation

11

No. of complete audits (equivalent to 2 auditors × 8 hours) and follow-up audits (equivalent to 1 auditor × 1 hour)

No. of non-compliances in legal compliance detected and remediated × No. of affected workers

No. of complete audits (equivalent to 2 hours of consultancy)

Source: Author’s own development.

10

Improvement of the factory management system Reduction of regulatory risks

3

Own estimation

No. audits × equivalent 50/100% hours × Price per hour

Retribution costs for 1,650 True Price (2020) No. non-compliances × 50/100% instances of legal EUR/ No. workers × non-compliance worker Retribution costs (global average of penalties for infringement of labour rights) Average price per hour 50 EUR Own estimation No. audits × equivalent 50/100% of social audit auditors × equivalent hours × Price per hour

Average price per hour 50 EUR of CSR consultancy

Capturing CSR Impact on Suppliers 127

128

Silvia Ayuso

Discussion and conclusions

In this chapter, I assessed the social value of a CSR compliance programme of a large apparel retail company by applying an ISV analysis. The case study shows that ISV analysis can be a useful tool to assess the impacts of CSR actions. In contrast to common CSR reporting metrics based on predefined categories or indicators, the qualitative analysis considered the legitimate perspective of the main stakeholder group affected by the apparel company’s compliance actions, i.e. suppliers. By capturing the impacts of codes of conduct implementation from the perception of those who experience them, the ISV approach ensured a focus on the relevant value variables or dimensions. Interestingly, the resulting value variables do not only relate to avoid cases of violations of workers’ rights and improve working conditions, but also to generate several positive effects that benefit employers and employees of suppliers (increase in awareness of the importance of working conditions, improvement of the factory management system, reduction of regulatory risks, etc.). The obtained set of value variables was then quantified and valued in monetary terms. Thus, the quantitative analysis provided a first partial estimate of the social value created by the company’s compliance programme, based on existing company-controlled data (training provided, audits conducted and non-compliances detected). Whereas usual non-financial CSR indicators are expressed in diverse units (e.g. number of hours, number of attendees, number of non-compliances), monetary proxies make it possible to convert these measures into a common unit (in this case, euros). This fact not only allows the data to be compared and aggregated into a final result but also to relate it to other financial measures such as the compliance programme budget (cost of the training personnel, cost of audits and fees paid to Amfori BSCI and Sedex Global). Completion of the quantitative analysis would require collecting data from suppliers such as the percentage of workers affiliated to the social security system, accidents’ rate, turnover, absenteeism, etc., that could appropriately measure the value variables that were not quantified. The current measurement of the value variables “improvement of working conditions” and “reduction of regulatory risks” through detected and remediated non-compliances could also be refined and complemented with information about observed improvements in the supplier factories. In this sense, more research is needed about which kind of working conditions can be substantially improved with social audits or are only occasionally corrected (Barrientos & Smith, 2007; Egels-Zandén & Lindholm, 2015). In addition, consultation with supplier representatives could be expanded to other countries to see if there are cultural or national differences in the benefits perceived and experienced (Sanders et al., 2018; Short et al., 2020). Like all methodologies, ISV analysis suffers from some limitations. Like other forms of social accounting, ISV analysis relies on elements of

Capturing CSR Impact on Suppliers 129

discretion and subjective judgement, especially in the monetisation of the identified value variables. To deal with this issue, I used conservative estimates and provided a transparent list of the monetary proxies used (Table 6.3). Furthermore, it should be noted that the ISV approach focuses on the effects experienced by immediate stakeholders, in this case, first-tier suppliers and the public administration, and, in the short term (accounting period of one year). In this regard, the ISV analysis does not consider possible medium- and long-term effects, such as suppliers’ learning process over a longer time period, and leaves aside indirect impacts on the full value chain and the wider society such as education opportunities, access to quality essential health-care services or gender equality (Mani et al., 2016; Sudusinghe & Seuring, 2020). Likewise, the ISV model focuses on the effects directly attributable to the organisation that add value to the stakeholder in the reference period and generally relies on internal organisational data for that measurement. Other social impact methodologies try to capture the chain of results in which inputs and activities lead to a series of outputs, outcomes and ultimately to a set of societal impacts (Ebrahim & Rangan, 2014). Although this procedure aspires to determine the significant changes experienced by the main stakeholders affected by a project or organisation, it requires the difficult task of establishing a clear link between the organisational activity and the reported changes and, in the end, requires adopting a series of assumptions to isolate the effects caused by the analysed activity from other initiatives (Arvidson et al., 2013; Cooney & Lynch-Cerullo, 2014). Nevertheless, the present case study shows that an improved measurement of the value variables would require collecting external organisational data directly from suppliers (or other relevant sources) about the benefits resulting from the CSR compliance programme. The challenge will be to justify the causality between the CSR actions of the case company and the reported improvements and compare them to a counterfactual scenario (what would have happened in the absence of the organisation’s activities) (Barnett et al., 2020). The presented research contributes to the literature on CSR impacts in the supply chain by applying a social accounting perspective. By capturing the impacts of a compliance programme through the first-hand experience of those stakeholders that experience it, i.e. first-tier suppliers, the ISV approach complements the usual CSR monitoring and reporting practices. Companies generally determine by themselves the social improvements they wish to bring about and the involved organisational inputs and outputs to be measured (Turker & Altuntas, 2014). ISV analysis turns this logic on its head as the affected stakeholders assess which variables are relevant from their perspective, and thus point to a wider range of social aspects and performance indicators – beyond the strategic benefits for the buying firm (Govindan et al., 2021). The monetary valuation of the measured company’s outputs of the CSR compliance programme makes it possible to

130

Silvia Ayuso

reduce the complexity of social issues to quantitative figures, which can help in decision making and external communication. Through linking CSR with social accounting, the research increases the understanding of the factors that drive value creation of responsible supply chain management and generates insights about the possible tensions between addressing the needs of stakeholders (efficacy) and achieving it with the optimal use of resources (efficiency) (Ayuso et al., 2022). Although the resulting social metrics will always depend on the specific characteristics and context (stakeholders’ perceptions) of the analysed organisation, the identified value variables, indicators and proxy values could be used as a starting point to assess the societal impact of other retail companies or the overall contribution of the sector. Takeaways for the society-level impacts of CSR

The present case study of a large apparel retail company shows the application of a social accounting method to assess the impact resulting from its CSR compliance programmes on first-tier suppliers. Whereas the literature on CSR impacts in the supply chain has focused mostly on performance outcomes for the individual buyer firm, the applied ISV approach points to the need of considering the perspective of the main stakeholder group affected by the focal firm’s compliance actions, i.e. suppliers located in different countries of the global supply chain. Their involvement in identifying the important value variables helps to explore the impacts of CSR beyond the individual company. This is an interesting novelty as usually companies determine themselves what their relevant social impacts are and how they measure them based on pre-defined categories or indicators such as the number of social audits undertaken or number of breaches of codes of conduct detected. The findings of the case study reveal that first-tier suppliers do not only value the utility of compliance strategies to avoid negative effects (worker rights’ violations), but also to generate several positive effects that benefit employers and employees of suppliers (increase in awareness of the importance of working conditions, improvement of the factory management system, reduction of regulatory risks, etc.). The monetary valuation of the value variables enables the calculation of an estimation of the different contributions made by the CSR compliance programme in a common unit.

Notes 1 It should be stressed that the phenomenological approach applies only to the qualitative part of social value analysis, and the subsequent quantitative analysis uses a pragmatic accounting approach. 2 Exceptions are non-compliances related to legal compliance (3%) and environmental aspects (9%), of which the latter are not considered in this research.

Capturing CSR Impact on Suppliers 131

References Arvidson, M., Lyon, F., McKay, S., & Moro, D. (2013). Valuing the social? The nature and controversies of measuring social return on investment (SROI). Voluntary Sector Review, 4(1), 3–18. Asociación Española para la Calidad (Spanish Quality Association) (2020). Catálogo 2020 (Catalogue 2020). Retrieved from https://www.aec.es/formacion/catalogocursos Ayuso, S., Carbonell, X., & Serradell, L. (2022). Assessing universities’ social sustainability: Accounting for stakeholder value, International Journal of Sustainability in Higher Education, 23(2), 443–457. Ayuso, S., Sánchez, P., Retolaza, J.L., & Figueras-Maz, M. (2020). Social value analysis: The case of Pompeu Fabra University , Sustainability Accounting Management and Policy Journal, 11(1), 233–252. Barnett, M. L., Henriques, I., & Husted, B. W. (2020). Beyond good intentions: Designing CSR initiatives for greater social impact. Journal of Management, 46(6), 937–964. Barrientos, S., & Smith, S. (2007). Do workers benefit from ethical trade? Assessing codes of labour practice in global production systems. Third World Quarterly, 28(4), 713–729. Chiesa, P. J., & Przychodzen, W. (2019). Social sustainability in supply chains: A review, Social Responsibility Journal, 16(8), 1125–1148. Cooney, K., & Lynch-Cerullo, K. (2014). Measuring the social returns of nonprofits and social enterprises: The promise and perils of the SROI. Nonprofit Policy Forum, 5(2), 1–27. Corvo, L., Pastore, L., Manti, A., & Iannaci, D. (2021). Mapping social impact assessment models: A literature overview for a future research agenda. Sustainability, 13(9), 4750. Costa, E., & Pesci, C. (2016). Social impact measurement: Why do stakeholders matter? Sustainability Accounting, Management and Policy Journal, 7(1), 99–124. Ebrahim, A., & Rangan, V. K. (2014). What impact? A framework for measuring the scale and scope of social performance. California Management Review, 56(3), 118–141. Egels-Zandén, N., & Lindholm, H. (2015). Do codes of conduct improve worker rights in supply chains? A study of Fair Wear Foundation. Journal of Cleaner Production, 107, 31–40. Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Capstone: Oxford. Emerson, J., Bonini, S., & Brehm, K. (2003). The blended value map: Tracking the intersects and opportunities of economic, social and environmental value creation. Menlo Park: William and Flora Hewlett Foundation. Freeman, R.E. (1984). Strategic management: A stakeholder approach. Boston: Pitman. Freeman, R.E., Harrison, J.S., Wicks, A.C., Parmar, B.L. and de Colle, S. (2010). Stakeholder theory: The state of the art. Cambridge: Cambridge University Press. Gibbon, J., & Dey, C. (2011). Developments in social impact measurement in the third sector: Scaling up or dumbing down? Social and Environmental Accountability Journal, 31(1), 63–72. Gimenez, C., Sierra, V., & Rodon, J. (2012). Sustainable operations: Their impact on the triple bottom line. International Journal of Production Economics, 140(1), 149–159.

132

Silvia Ayuso

Giorgi, A., & Giorgi, B. (2003). “Phenomenology” in Smith, J. A. (Ed.) Qualitative Psychology: A Practical Guide to Research Methods, 2nd edition. London: Sage, pp. 27–52. Govindan, K., Shaw, M., & Majumdar, A. (2021). Social sustainability tensions in multi-tier supply chain: A systematic literature review towards conceptual framework development. Journal of Cleaner Production, 279, 123075. Gray, R., Owen, D. L., & Adams, C. A. (1996). Accounting and accountability: Changes and challenges in corporate social and environmental reporting. London: Prentice Hall. Hall, M., Millo, Y., & Barman, E. (2015). Who and what really counts? Stakeholder prioritization and accounting for social value. Journal of Management Studies, 52(7), 907–934. Impact-Weighted Accounts (2021). Web page: https://www.hbs.edu/impact-weightedaccounts/Pages/default.aspx Köksal, D., Strähle, J., Müller, M., & Freise, M. (2017). Social sustainable supply chain management in the textile and apparel industry – A literature review. Sustainability, 9(1), 100. Krlev, G., Münscher, R., & Mülbert, K. (2013). Social Return on Investment (SROI): StateSof-the-art and perspectives-a meta-analysis of practice in Social Return on Investment (SROI) studies published 2002–2012. Retrieved from https://archiv.ub.uni-heidelberg.de/ volltextserver/18758/1/CSI_SROI_Meta_Analysis_2013.pdf Lis, A., Sudolska, A., & Tomanek, M. (2020). Mapping research on sustainable supplychain management. Sustainability, 12(10), 3987. Locke, R., Qin, F., & Brause, A. (2007). Does monitoring improve labor standards? Lessons from Nike. Industrial and Labor Relations Review, 61(1), 3–31. Locke, R., Amengual, M., & Mangla, A. (2009). Virtue out of necessity? Compliance, commitment, and the improvement of labor conditions in global supply chains. Politics & Society, 37(3), 319–351. Maier, F., Schober, C., Simsa, R., & Millner, R. (2015). SROI as a method for evaluation research: Understanding merits and limitations. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 26(5), 1805–1830. Mani, V., Gunasekaran, A., Papadopoulos, T., Hazen, B., & Dubey, R. (2016). Supply chain social sustainability for developing nations: Evidence from India. Resources, Conservation and Recycling, 111, 42–52. Millar, R., & Hall, K. (2013). Social return on investment (SROI) and performance measurement: The opportunities and barriers for social enterprises in health and social care. Public Management Review, 15(6), 923–941. Mook, L., Richmond, B. J. and Quarter, J. (2003). Integrated social accounting for nonprofits: A case from Canada. International Journal of Voluntary and Nonprofit Organizations, 14(3), 283–297. Moustakas, C. (1994). Phenomenological research methods. Thousand Oaks, CA: Sage. Najjar, M., Shahwan, R. M. M., & Yasin, M. M. (2018). Exploring social responsibility across the supply chain: A supplier’s perspective. Journal of Competitiveness Studies, 26(1), 10–23. Nicholls, J. A. (2020). Integrating financial, social and environmental accounting, Sustainability Accounting, Management and Policy Journal, 11(4), 745–769. Perry, P., Wood, S., & Fernie, J. (2015). Corporate social responsibility in garment sourcing networks: factory management perspectives on ethical trade in Sri Lanka. Journal of Business Ethics, 130(3), 737–752.

Capturing CSR Impact on Suppliers 133 Porter, M. E., & Kramer, M. R. (2011). Creating shared value, Harvard Business Review, 89(1/2), 62–77. Retolaza, J. L., San-Jose, L., & Ruiz-Roqueñi, M. (2016). Social accounting for sustainability: Monetizing the social value. Berlin/Heidelberg: Springer. Retolaza, J. L., & San-Jose, L. (2021). Understanding social accounting based on evidence. SAGE Open, 11(2), 1–14. Richmond, B. J., Mook, L., & Jack, Q. (2003). Social accounting for nonprofits: Two models, Nonprofit Management and Leadership, 13(4), 308–324. Sanders, S. R., Cope, M. R., & Pulsipher, E. R. (2018). Do factory audits improve international labor standards? An examination of voluntary corporate labor regulations in global production networks. Social Sciences, 7(6), 84–95. Sawhill, J. C., & Williamson, D. (2001). Mission impossible? Measuring success in nonprofit organizations. Nonprofit Management & Leadership, 11(3), 371–386. Short, J. L., Toffel, M. W., & Hugill, A. R. (2020). Improving working conditions in global supply chains: The role of institutional environments and monitoring program design. ILR Review, 73(4), 873–912. Steinke, I. (2004). ‘Quality criteria in qualitative research’ in Flick, U., Kardoff, E. and Steinke, I. (eds.) A Companion to Qualitative Research (pp. 184–190). London: Sage. Sudusinghe, J. I., & Seuring, S. (2020). Social sustainability empowering the economic sustainability in the global apparel supply chain. Sustainability, 12, 2595. True Price (2020). Monetisation factors for true pricing, Version 2020.1 – March 2020. Retrieved from https://trueprice.org/monetisation-factors-for-true-pricing/ Turker, D., & Altuntas, C. (2014). Sustainable supply chain management in the fast fashion industry: An analysis of corporate reports. European Management Journal, 32(5), 837–849. Value Balancing Alliance (2021). Web page: https://www.value-balancing.com Yawar, S. A., & Seuring, S. (2017). Management of social issues in supply chains: A literature review exploring social issues, actions and performance outcomes. Journal of Business Ethics, 141(3), 621–643.

7

Considering the Social and Economic Implications of Infrastructure Megaprojects: Theoretical Contributions, Practical Challenges and Managerial Implications Laura Corazza, Daniel Torchia, Dario Cottafava, and Giuseppe Tipaldo

Introduction The United Nations, as part of their 2030 agenda, are promoting 17 Sustainable Development Goals (SDGs). Goal 9 encourages relevant actors in industry and beyond to “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation” (United Nations, 2021). This point is further reinforced by the Green Deal of the European Commission (European Commission, 2019), with its focus on several interconnected areas, like Sustainable Industry, to ‘ensure more sustainable, more environmentally-friendly production cycles’, Building and Renovating, ‘for a cleaner construction sector’, and Sustainable Mobility, ‘promoting more sustainable means of transport’. The Urban Infrastructure Initiative, led by the World Business Council for Sustainable Development, emphasises the need for cities and businesses to work collaboratively to “navigate these (sustainability) challenges and turn a high-level vision into practical and implementable action plans” (World Business Council for Sustainable Development, 2014). In this scenario, it would be myopic not to focus on the challenges posed by megaprojects such as those concerning infrastructure. Megaprojects have seen their biggest growth in history, and captured the attention of scholars and practitioners alike (Ma et al., 2019). Given their magnitude, the challenges they pose are of a different nature and, very often, scale to those of an individual organisation, whether a company or a government. The intricate network of stakeholders involved greatly complicates the distribution of responsibilities and calls for a greater need for accountability. However, as the concept of Megaproject Social Responsibility (MSR) (Lin et al., 2017; Ma et al., 2017) suggests, attention must be paid broadly to the planning, monitoring and measurement of social, economic and environmental impact of megaprojects. This systemic view of sustainability, which DOI: 10.4324/9781003182276-7

Social and Economic Implications 135

follows the different stages of development in an integrated way, is considered an essential condition for any social and environmental impact analysis. Megaprojects are no exceptions to this and should also follow this holistic view of sustainability. In light of this, recent studies focus on the interconnections among SDGs, affirming that it would not be wise to address one SDG without considering the potentially deep interactions with other goals (Griggs et al., 2017; Weitz et al., 2018; Nilsson, 2017; Nilsson et al., 2018). As Weitz et al. (2018) argue, although governments may well have understood SDGs and their individual goals, a systemic view from practitioners is currently lacking. Therefore, scholars criticise that often when SDGs are implemented within policies or projects, they are almost always considered individually and not with respect to the interactions between them. Also, the interconnections between SDGs are not always positive, which means that a progressive improvement in one of them could potentially imply a worsening in another (Nilsson et al., 2018). By contrast, we consider the interactions among SDGs as an essential planning element, echoing Scharlemann et al., (2020), who emphasise how those interactions are a prerequisite for any impact assessment of the sustainable development of an area. It is important to highlight that, despite some national differences, in Europe, the impacts of megaprojects are regulated through norms that apply to two specific contexts only, Environmental Impact Assessment and the Assessment on Health and Safety. By contrast, providing a full account of the socio-economic impacts is usually not required by law. Especially in the case of megaprojects run by private companies, the MSR concept calls for scrutiny that goes beyond simply abiding by regulations. As Littau et al. (2015) argue, understanding how to manage and minimise negative economic and social impacts is a proactive way for those who execute a megaproject to take on social responsibilities. A first step towards this could be joining the Global Compact initiative by the United Nations. Despite being far from unproblematic, as we will explain later, this should, at least in principle, bind a company to operate in more sustainable ways, by conforming to the ten guiding principles (United Nations Global Compact, 2021). Given the popularity of the initiative, an increasing number of big players in the construction and engineering industry have indeed joined the Global Compact, but this should be seen as only a first step from Corporate Social Responsibility (CSR, therefore at organisational level) to an integrated, systemic MSR, (hence at project level) aimed at sustainable development. Although adherence to the Global Compact may represent a first step, it is certainly not sufficient to guarantee a concrete and effective commitment to the adoption of social responsibilities, which requires much more concrete management methods and tools. Hence, the rationale for this chapter is to discuss how a comprehensive evaluation of the socio-economic impacts of a megaproject can be undertaken, based on a pilot project that the authors are involved in. The research

136

Laura Corazza et al.

takes advantage of the multidisciplinary background of the authors, rooted in sustainability accounting, critical organisation studies and sociology of cultural and communicative processes, to build a framework for the assessment of socio-economic impacts of megaprojects. The case analysed in this chapter is the Turin-Lyon Tunnel, a rail megaproject undertaken by the European Union as part of the trans-European transport network. The project, which has been discussed since the 1990s, has seen vehement opposition (at least on the Italian side) by local communities, civil society organisations and even governments over the years. The chapter is structured as follows: firstly, we define megaprojects and MSR and discuss how this concept relates to and differs from organisational CSR. Then we introduce the case study of the Turin-Lyon tunnel, followed by the research framework and methodological considerations of our research. We then present research findings, and the chapter ends with a discussion and some concluding remarks, including some takeaways for the society-level impacts of CSR.

Megaprojects and MSR Defining megaprojects

In the last 30 years, megaprojects have enjoyed their “biggest boom in history” (Ma et al., 2019). Conventionally, the word ‘megaproject’ is used to indicate big works that can be public, private or resulting from private/public partnerships, usually with an international and/or transnational character, and a long-term perspective, which can last decades. Megaprojects are defined primarily in terms of major infrastructural endeavours, both fixed infrastructure and non-fixed complex technologies in sectors such as tunnels, aerospace and IT (van Fenema et al., 2016). Megaprojects are characterised, as Flyvbjerg (2014) points out, by four main aspects: technological, political, economic and aesthetic. Besides the Turin-Lyon tunnel, recent examples of megaprojects include the Genoa-Saint George Bridge (Italy), the Hong Kong–Zhuhai–Macau Bridge (China, Hong Kong, Macau) or the Western Europe-Western China International Transit Corridor (Kazakhstan). From an organisational point of view, megaprojects are complex, dynamic and in some cases temporary (think, for instance, of the World Expo, or the Olympics, which also require infrastructural efforts and management policies for the post-event stage). They also display “more ambiguous roles and boundaries, and more informal coordination activities between teams” (Wang et al., 2017). Within the different definitions of megaprojects, there are nuances regarding the investment thresholds required, as well as the different phases of project management. Hu et al. (2015) argue that it would not be correct to assign to megaprojects an absolute cost threshold (usually $1bln), but rather to use the megaproject cost-GDP ratio, stating

Social and Economic Implications 137

that most megaprojects ratios are between 0.01% and 0.02% of the respective country’s GDP. During the different phases of development, megaprojects may affect the interests of several categories of stakeholders, among which there are contractors, sub-contractors, investors, governments, local communities, but also supra-national organisations and regulatory bodies. Gellert and Lynch (2003) point out that megaprojects could potentially displace resources, physical, human as well as natural resources, and these displacements could result in large-scale physical and social effects. Furthermore, megaprojects often carry a high degree of uncertainty and risk, which usually relate to both the costs involved and the expected social benefits (Fischhendler et al., 2015), many of which, as Van de Graaf & Sovacool (2014) contend, are imposed on local communities and on society as a whole. Megaproject Social Responsibility: Key aspects

To summarise, several definitions agree that megaprojects are mostly related to the realisation of complex and often controversial works, not only in terms of their environmental impact, which is a key challenge for sustainable development (Wang et al., 2017), but from a social, political and economic point of view too (Oliomogbe and Smith, 2012; Van Marrewijk et al., 2008; Flyvbjerg, 2017, 2014). This is not to neglect the benefits that megaprojects can give to modern societies in terms of economics (Flyvbjerg, 2014), but to fully consider their impacts, defined as potentially “dramatic and permanent” (Lin et al., 2017), on the project performance as a whole (He et al., 2019; Lin et al., 2018). The concept of MSR, defined by Zeng et al. (2015) as “the policies and practices of the stakeholders through the whole project life cycle that reflect responsibilities for the well-being of the wider society”, comes into play as an important approach to integrate several dimensions of social responsibilities into a holistic framework. For instance, one could think of themes such as corruption, land appropriation, supply chain issues, human rights issues, respect for the community, tracking of raw materials, etc. More specifically, the authors identify a specific dynamism at the different stages of the lifespan of an infrastructural megaproject: the dynamic evolution of social and environmental issues during the megaproject life cycle, including changes in primary participants over time (Ma et al., 2017); the changes in the heterogeneity of the stakeholders as bearers of needs manifested by the impacts; finally, the existence of networked interactions between partners and instances during time. As Lin et al. (2017) point out, social responsibility issues in the implementation of megaprojects have been analysed from several perspectives, such as organisational sustainability, project and stakeholder management, labour market, economic growth and regional health, financial and non-financial performance as well as catalysts

138

Laura Corazza et al.

for innovation, which can affect project performance directly and indirectly (He et al., 2019; Zeng et al., 2015). They argue, however, that MSR should adopt a more holistic perspective, which takes into account not only the main firms responsible for the projects but the multitude of stakeholders involved, more generally focusing on the project’s sustainability performance at both macro- and micro-level. Similarly, Ma et al. (2019) argue that MSR involves project, organisational and industrial concerns; they go on to build an integrated framework for the evaluation of the effects of MSR in the construction industry, which considers MSR, stakeholders and sustainability improvements. The interplay between MSR and CSR

The nexus between MSR and CSR poses several questions. As clarified above, when it comes to identifying social responsibilities in a megaproject, CSR – as organisation-level construct – needs to extend its boundaries to include partners, contractors and sub-contractors and also those responsible to design the necessary architectures, as well as those responsible for managing the infrastructure once realised. Consequently, there are multiple agency problems that could affect the allocation of social responsibility. Crucially, these problems concern the nature of the relationship between the political body, which started the new infrastructure project, and the firm, which oversees the project itself. For instance, a megaproject could be started by one government or through the joint initiative of multiple countries, which is different from a single company launching a megaproject (like Elon Musk’s Space X and its space centre). Furthermore, it can happen that private-public partnerships or special purpose entities (like in the case of business arrangements responsible for the execution of a project limited in time) oversee the management of the social responsibility linked to the entire project execution. The main difference is that usually a government (or governments) entrusts a company or a group of companies (profit-oriented) with the execution of a project or, as in the case that will be presented in this chapter, it can happen that a new hybrid organisation is created whose shareholders are the member states and the European Union itself. In the latter case, those who implement and manage the project in its various phases are the promoters themselves. In this case, therefore, the main shareholders are also responsible for guaranteeing the common good of the project. In this case, it is possible (if often only imperfectly) to apply Scherer and Palazzo’s (2011) model of political social responsibility, as the company in charge of leading a megaproject takes on agency for the project on behalf of the political body which has commissioned it (this could be a state or the European Commission, or a joint initiative between such parties). As a consequence, the realisation of a project represents the concretisation of a public policy which may have a geographical dimension that is wider than the territory

Social and Economic Implications 139

where the project will be located. Seen from another perspective, the populations most affected by the works may confuse the responsibilities of those who carry out a given mega-project with the political responsibilities of those who deliberated to carry it out. In this sense, there is a risk that those responsible for the execution of a project will – in the stakeholders’ eyes – also become the political decision-makers, although they often have neither the cognitive skills nor the authority to do so (Esposito et al., 2021). In other words, companies working on megaprojects – rather the public decision-maker – may get called upon to integrate the management of various issues, the management of stakeholder concerns (which may include opponents and Not In My Backyard movements), the creation of public value and the achievement of social performance. In practice, the managers responsible for implementing these megaprojects would need to possess engineering and technical skills as well as political and social ones, which would require the acquisition of social responsibility management skills that go beyond regulatory compliance and include moral concerns (Esposito et al., 2021). Therefore, acquiring the ability to account for one’s responsibilities through the adoption of accountability systems becomes one of the ways for megaproject funders and/or managers to be able to report on the achievement of planned objectives. Although there are different types of accountability, especially towards different stakeholders, to date, most of the required accountability techniques are technocratic and regulatory. In addition to reporting mechanisms to funders, there are mechanisms for assessing environmental impacts that are strictly regulated. This consideration is valid for Europe generally as well as for Italy in particular, where the case presented here is based. However, there are also differences in accountability methods even within the same continent. For example, in France, the construction of strategic works is regulated by a specific law called Demarche Gran Chantier, which gives the prefect of a given area the power to control the reporting of the social, environmental and economic impacts generated during the construction of a major work. In Italy, such a law and accompanying measures do not exist. Furthermore, the legislation on identifying thresholds for environmental pollution or the production of climate-changing gas emissions is also different, although we are talking about neighbouring European states. The presence of these regulatory disparities, in turn, generates increasing complexity in managing social responsibilities. Accountability systems can be a useful tool to combat this. Therefore, in the case of megaprojects, it is important to note that the adoption of proactive CSR strategies, such as the decision to monitor social and economic impacts, implies that the monitoring of environmental impacts is already required by law. Then, the presence or absence of specific regulations, or the presence of differences in regulation between different geographical areas, concerning the same project, can give powerful arguments to protest and opposition movements

140

Laura Corazza et al.

(Tipaldo, 2011). Differing regulations can therefore lead to democratic and power imbalances (Esposito et al., 2020).

The Turin-Lyon railway line The Turin-Lyon railway is a line designed for both goods and passengers, sitting at the centre of the Mediterranean Corridor of the TransEuropean Transport Network (TEN-T). The total length of the line will be 270 km, with a 65 km cross-border section whose main feature is a 57.5 km-long tunnel (12.5 km in Italy and 45 km in France) linking the stations of Saint-Jean-de-Maurienne (France) and Susa (Italy). Once completed, this tunnel, the Mont Cenis Base Tunnel, will be the longest railway tunnel in the world, just slightly longer than the Gotthard Base Tunnel. The company responsible for bringing this project to fruition, Tunnel Euralpin Lyon Turin (TELT), reports that the total cost of the cross-border section is €8.6 bn, 40% of which is funded by the European Union, whereas the rest is divided between the Franch (25%) and Italian (35%) governments. In Italy, high-speed rail (HSR) has been a hot topic since the early 1990s and the debate around it has often attracted a lot of attention among politicians and citizens alike, dividing those who believe it is a necessary step for the country’s development and those who think it is a heavy cost that should be avoided. In the early 1990s, major industrial and political players of the North-West of Italy joined forces to be the catalysts for a new railway line that would connect Italy and France. Their argument was that an HSR would be environmentally beneficial, if rail transport was to be preferred to other mass means of transportation, and that it would also have a positive socio-economic impact on the region, increasing employment and reducing traffic congestion. After a series of feasibility studies, the Italian and French governments signed an agreement in 2001 for the construction of the new railway line, and shortly after the binational company Lyon Turin Ferroviaire (LTF) was established as a 50-50 partnership between Rete Ferroviaria Italiana (RFI) and Réseau Ferré de France (RFF). In France, construction work started in 2002, while in Italy a series of compulsory purchases and the publication of LTF’s preliminary projects to realise an exploratory tunnel in Venaus saw a big mobilisation by the No TAV1 movement, a spontaneous movement born in the 1990s against the proposed railway line. The No TAV movement is very heterogeneous and initially concentrated its efforts on the potential environmental, technical and economic impacts of the project (Armano et al., 2013). In particular, the movement highlighted the negative trade-off between high costs, lack of advantages and the potential hazards connected to tunnel excavations, such as asbestos release, increasing pollution and interception of water reservoirs (Marincioni and Appiotti, 2009; Fornero et al., 2005). However, the resistance soon became

Social and Economic Implications 141

sociopolitical and cultural, a struggle for democracy and representation that found in the megaproject its raison d’etre. Activists occupied the Venaus site in December 2005, clashing with the police who removed them from the area; yet, just a couple of days later, 30,000 people marched towards Venaus, invaded the site and effectively blocked the operations (Leonardi, 2013, p. 34). This first wave of resistance led to the creation of the Italian Technical Observatory in 2006, a multistakeholder body aimed at improving relationships among the different parties involved via accountability measures. The Observatory was itself an admission of guilt for past mistakes in terms of representation and communication. Other protests took place in the following years. The biggest protest took place in 2011 when, following the selection of a new site for the exploratory tunnel, Maddalena di Chiomonte, No TAV activists occupied the site for over a month. Eventually, the protesters were evicted by the police, but this action resulted in a permanent militarisation and surveillance of the area, which has continued to the time of writing. In 2015, LTF was replaced by TELT, again owned 50-50 by the Italian and French governments, albeit with some differences: the French government owns it via the Ministry of the Economy and Finance, and the Italian government via the Ferrovie dello Stato Italiane group. Having received extra funding from the EU, 2020 marked the beginning of a crucial phase of the project for TELT, with works currently underway to reach completion by 2032. In the last few years, TELT joined the United Nations Global Compact and, in addition, has engaged in social reporting based on the Global Reporting Initiative (GRI) to address stakeholder concerns. However, the climate surrounding the megaproject is still very tense, as demonstrated by a new wave of conflicts of 2021 surrounding several construction sites.

Research framework The project of which this chapter is one part is, in its entirety, conceived as an example of Interventionist Research (Dumay, 2010; Dumay & Baard, 2017; Baard & Dumay, 2020). This approach to research goes beyond the case study method, because it is meant to help organisations develop solutions to problems (Dumay & Baard, 2017), sparking organisational change, instead of “becoming a forum for the exercise of academic indulgence” (Fournier and Grey, 2000). Baard and Dumay (2020) stress that for Interventionist Research to be effective, academics should work closely with managers in organisations, mobilise theory for the implementation of solutions and analyse results in both theoretical and practical terms. If well-executed, Interventionist Research can not only stimulate change but also realise emancipatory goals for its participants (Baard & Dumay, 2020).

142

Laura Corazza et al.

In this chapter, we report on one specific aspect of the overall research project, the development of indicators for a protocol to monitor the socioeconomic impacts of the Turin-Lyon megaproject. The evolution of European legislation on EIA (Environmental Impact Assessment) procedures2 has led to the development of a substantial amount of technicalscientific monitoring, compared to an exclusive focus on environmental issues in the past. However, we still lack an equally systematic tool for the evaluation of the social impact of these projects on the resident populations and local economies, as the monitoring of these impacts is not regulated equally across Europe. In the specific Italian case, the monitoring of impacts on societies and economies is a topic covered by law, but there is neither a common practice nor a shared standard to apply such measurement in an evidence-based way. This gap in regulation and professional practice has led companies in charge of executing megaprojects to present an incomparable and often superficial analysis. For this reason, our multi-disciplinary group of researchers, which includes accounting scholars, organisational sociologists, sociologists of communication and organisational ethnographers, came together to develop a set of indicators (qualitative and quantitative) that constitutes a protocol to monitor the socio-economic impacts of the Turin-Lyon megaproject during the entire length of the works, including, if possible, historical comparison of the past ten years of works. The protocol is, therefore, just the first step of a structured set of interventions within the organisation; however, it serves as the stepping-stone for the ongoing critical exploration of the phenomenon. Regarding the geographical parameters, the entire area qualifying as Val di Susa is defined as the area for the investigation, made up of 39 municipalities. Due to the absence of common practice and standards in social and economic impact evaluations in Italy, our research has focused just on the Italian side. In France, the Demarche Grand Chantier already regulates the management of social and economic impacts as well as their reporting. Our findings include the outcomes of the literature and documentary review in terms of areas of impact to be considered, which also became the basis for structuring and defining the macro-areas of our protocol of megaproject impact assessment. Therefore, the research can be divided into two specific but complementary sections, namely: •

Socio-economic section. The indicators for this part take into account the potential areas of impact that the megaproject can have on the territory and on the main internal and external stakeholders. The macro-areas of this part are health and safety at work and for the population; relational capital with the territory; governance of sustainability; economic effects on the territory; population mobility and the promotion of the territory with its cultural and identity capital. These indicators have been elaborated after an extensive review of megaproject management literature, an analysis of different

Social and Economic Implications 143

•

types of reports of megaprojects and construction companies involved as well as by benchmarking other recent and comparable megaprojects. The socio-communicative section, which arises from a review of sociological literature. It digs further into the social fabric of the territory affected by the megaproject to monitor civic attitudes and culture, information sources and needs, social representations of the phenomenon as well as the values the actors associated with the megaproject. These variables aim to capture the possible transformation of the image that different groups of stakeholders hold of the megaproject over time.

The proposed indicators, although presented within two specific sections, have many common points and must, by their nature, be read together. For example, a change in the perception of the quality of life of citizens residing in the area can be analysed through socio-communicative information as well as through socio-economic indicators. Therefore, the results should be read jointly, with the aim of strengthening the decision-making process, i.e. the choice of actions to compensate, the choice of actions to avoid and the changes to be implemented. As part of the wider interventionist aims of the research, the team will oversee the application of the framework for the remaining years of this project lifespan, especially in light of potential new societal issues, according to the evolution of stakeholder concerns, etc. In fact, one of the principles adopted by the researchers has been to involve stakeholders in making suggestions regarding the selection of specific indicators and data. Principles adopted in choosing the indicators include replicability, verifiability and easy retrieval of data. Striving for a systematic identification of the social and economic implications of the megaproject analysed, the researchers aimed to safeguard as much as possible the precision of information on the vast area, providing data for each of the 39 municipalities involved.

Methodology: Towards a systematic account of impact indicators Reporting the impacts of a megaproject is different from reporting the impacts of a company (Epstein & Buhovac, 2014), and for this reason, the identification of possible indicators has involved two phases: 1 2

Phase 1: Review of scientific literature on the monitoring of economic and social impacts related to megaprojects and the concept of MSR. Phase 2: Benchmark analysis of megaprojects and their socio-economic and socio-communicative impacts.

144

Laura Corazza et al.

Phase 1: Review of scientific literature

Examining literature on megaprojects, the theme of monitoring socioeconomic impacts has, until now, been primarily discussed by engineering and project management scholars. Our scoping review (Arksey & O’Malley, 2005) makes it clear that there has been a growing trend in the literature in this area since 2017. The academic articles were selected according to a criterion of relevance to the topic of social and economic impact of megaprojects; they were then divided into five non-exclusive macro-areas that allowed a more immediate identification and classification of possible KPIs. The articles were searched through the Scopus and ISI Web of Knowledge databases. The total number of relevant articles analysed is 44. Figure 7.1 shows the articles’ distribution by theme. The methodology this chapter followed for the analysis of the literature was based on an initial understanding of the issues addressed in the various articles, so that it was possible for each paper covering megaprojects to link the typology of infrastructure, the geographical context and the KPIs identified. Subsequently, potential indicators capable of measuring the performance and socio-economic impacts of a megaproject were identified, where we focussed on an integrated stakeholder-based strategy. Here, the aim was to develop indicators capable of representing multiple actors and multiple values, focusing on the main issues that each category of stakeholders has put forward during decades of debate. The vast majority of publications were found in the International Journal of Project Management (15), followed by Project Management Journal (4) and the International Journal of Information Systems and Project Management (3). As detailed in Figure 7.2, attention to this topic has led to a recent increase in publications, starting from 2017. In general, it can be argued that most publications fall within typical project management topics, while there is an almost complete lack of CSR, sustainability or sustainability accounting themes. Paper per year 14 12

N°

10 8 6 4 2 0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 year

Figure 7.1 Main topics related to MSR.

Social and Economic Implications 145 Paper per Topic Sustainability and Social Responsibility

Topic

Stakeholders’ value Resistance to Megaprojects Performance and Appraisal Megaprojects’ management 0

5

10

15

20

N°

Figure 7.2 Number of papers related to MSR per year of publication.

Phase 2: Benchmark analysis

In the next phase, we undertook a benchmark analysis of megaprojects and their assessment of economic and social impacts at several levels. Although finding similar megaprojects with a binational governance, management and other characteristics was not easy, we chose a sample of megaprojects at European and international level with a degree of similarity to the case analysed. In particular, we used studies produced under the European COST Megaproject (Brookes, Locatelli & Mikic, 2015), which features a series of benchmarks on megaprojects from which common traits can be inferred. For our case, we analysed 11 megaprojects geographically distributed mainly across Europe, with others being in North America as well as Central and East Asia, and one in Australia. The megaprojects have been selected as they share some basic characteristics of the TELT project: having a binational nature, relating to the railway sector and having a strong impact on the natural environment. The typology of projects analysed gives preference to rail transport; other infrastructure projects, such as highways, roads and bridges, subways and major highway projects were also considered, but only when they have a similar scale to the TELT project, or they operate in a binational context. Table 7.1 summarises the main characteristics of the megaprojects benchmarked. Once the sample was established, the documentation produced at an institutional level by the companies responsible for these projects was retrieved from their websites and analysed. The purpose of this analysis was to identify indicators that could reflect a commitment to the territory in the economic and social spheres, as well as the socio-communicative impacts of the project on communities (such as social media coverage or sentiment analysis). Finally, we used a report by the Global Commission on the Economy and Climate (New Climate Economy, 2016), a series of reports

Wuhan-Shiyan High-Speed Railway Line AlpTransit Gotthard and Monte Ceneri Base TunnelNew Rail Link Generale Costruzioni Ferroviarie through the Alps (NRLA) Salini Impregilo and CMT Metroselskabet/Cityringen Salini Impregilo Transport for New South Wales/Sydney Metro Northwest L&T Metro Rail Limited Hyderabad Metro Rail Network Advance Work Coordination Hong Kong-Zhuhai-Macau Group of HZMB Government Liaison Office/ Hong Kong–Zhuhai–Macau Bridge

China Railway & Autodesk

2019 2020 2019 2019 N/A 2018

2006 2013 2008 2017 2009

Hyderabad

Copenhagen Sydney

Subway

Subway Subway

Railway transportation Railway connection tunnel Railway transportation Railway connection tunnel

Highways, roads and bridges

Infrastructure Type

Arup Bridge over the sea China, and galleries Hong Kong, China Highway Macau Planning and Design Institute

India

Denmark Australia

Austria and Italy From Innsbruck to Fortezza China From Wuhan to Shiyan Switzerland Canton Ticino

2028

Dallas and Houston

USA, Texas

2026

Genova

Location

Italy

State

2020

2015

Special Commissioner for the 2019 rebuilding of Polcevera viaduct/Ponte “Per Genova” Texas Central/Texas 2020 High-Speed Rail Brenner Base Tunnel 2007

PERGENOVA: Consorzio Salini Impregilo e Fincantieri Salini Impregilo and Lane Construction Corporation BBT SE

Beginning End

Client/Infrastructure

Construction Company

Table 7.1 The megaprojects benchmarked for our analysis

146 Laura Corazza et al.

Salini Costruttori S.P.A. Southwest Roads Project: (Italia)/JV Akkord, OKAN Western Europe-Western (Azerbaidjan/Turchia); China International Transit Impresa S.p.A (Italia); Corridor Todini Costruzioni Generali S.p.A., (Italia), “Cengiz Insaat Sanayii Ve Ticaret A.s.” (Turchia); KCC Engineering and Construction; Akmola Kurylys Material LPP, Kazaskhtan, Azerkorpu, K-Dorstroi, КССЕ&C/ Zhambylzholkurylys, Kazakhdorstroi LLP, (Kazaskhtan) Ghella and Acciona Bane NOR/Follo Line 2021

2015

Norway

2015 (2021 Kazakhstan for the final project)

2009

Oslo and Ski

Aktobe, Kyzylorda, Zhambyl and Almaty

High-speed railway line

Refurbishment and upgrade of rural and interurban roads

Social and Economic Implications 147

148

Laura Corazza et al.

drawn up by the Observatory for the Turin-Lyon railway link, together with two reports on the state of health of the Alpine socio-economic environment edited by local research centres. By applying Lazarsfeld’s scheme (Boudon & Lazarsfeld, 1965), we arrived at a protocol that has been structured as follows: macro-areas, areas, (eventually) sub-areas, indicators of quantitative/qualitative nature. Furthermore, we have linked each indicator with applicable SDGs and principles of the United Nations Global Compact.

Findings The literature review included 44 scientific articles relating to megaproject management and another nine sociological articles specifically on megaprojects and conflict, while the benchmark analysis covered 11 megaprojects, the sustainability reports of 21 major companies participating in these projects and seven relevant UN Global Compact reports. The analysis of the institutional documentation of the actors involved in the realisation of megaprojects highlighted that, in general, there is a tendency to develop compensatory actions through the promotion of high social impact projects co-created with the community (e.g. the refurbishment of a local museum). The literature also highlights the importance of context when assessing the impacts of megaprojects and stresses that indicators must consider specific local factors. The main impact areas and corresponding indicators that emerged during the documentary research are detailed in Table 7.2. Building on this, and including the inputs provided by the academic literature on megaprojects, we came up with a taxonomy of macro-areas, areas and specific indicators of impact assessment. A detailed overview of its structure is given in Figure 7.3. Ten macro-areas are included in the Protocol: 1 Health and safety in the workplace and for the local population include indicators on measures to ensure the health and safety of workers employed in a megaproject, including suppliers, but also of the local population affected by construction sites in the local territory. Here the concept of health is extended to also include the psychological health of workers. 2 Relational capital with the territory includes a broad overview of (1) the relations that the main political and operational actors behind the megaproject establish with the territory and the local population (dialogue with the population, local institutions and actions aimed at the development of the human capital of the local territory), and (2) of local trends concerning, for example, socio-demographic indicators on levels of education and wealth of the population, local emergency systems and vulnerabilities.

Environmental Impacts

Sourcing food from local retailers

Improvement of local economies in connection with different regions

Circular use, reuse of abandoned areas within local communities during works, to be returned to the community afterwards Noise mitigation through replacement of windows in houses most prone to noise pollution, especially for poor people Circular use of the extracted Creation of an innovation material to produce shotcrete ecosystem around the sites, startups and spin-offs, collaboration with universities and polytechnics Improvement of the quality of local Establishment of an environmental infrastructure education observatory

Indirect contribution to the local economy through expenditure by workers and families located in the area Creation of jobs for local workers

Economic Impacts

Workplace accidents, fatalities and near misses

Adoption of recruitment policies in support of gender equality, also among business partners on the construction sites

Preventative actions to reduce citizens’ inconveniences and to improve the safety around the construction sites during the transportation of materials, such as construction of parking lots

On-site health care for non-resident staff, to avoid overloading local health facilities Involvement of unemployed local human capital

(Continued)

Analysis of traffic and the impact of the work on traffic in neighbouring communities

Promotion of a health and safety culture at worksites (training)

Update of the state of the art on the Worker accidents on the way to project website, with webcams on work the construction sites

Environmental, health, safety and human rights audits of suppliers

Health and Safety

Agreements with food bank for surpluses recovery in the canteens of larger sites

Social Impacts on Local Communities

Table 7.2 List of the main impact area emerging from literature review and documentary research

Social and Economic Implications 149

Direct support for the local economy through the involvement of local companies

Support for business creation and entrepreneurship

Economic stability of the territories in the post-operation phase

Economic Impacts

Table 7.2 (Continued)

Environmental Impacts

Reduction of traffic congestion Provision of pre-employment training courses through local training institutions (e.g. welders, carpenters, pipefitters) Open-door events and site visits Events to publicise the work to local residents, for the co-creation of co-designed social measures Interventions to support children in marginal communities Creation of internal academy-style training courses

(following the transfer of workers on site) Collaboration with training institutions in the area, to recruit local people as trainees Construction of kindergarten facilities as a result of the creation of a long-term construction site, which will then be donated to the municipality Creation of business information points for citizens

Social Impacts on Local Communities

Health and Safety

150 Laura Corazza et al.

Instances of dialogue and debate with the local community Total number of beneficiaries of implemented social impact projects Number of workdays lost due to sabotage or protest events by the citizenry Social impact projects co-created with the community Corporate volunteering projects in the community Recruitment of staff from vulnerable groups, such as refugees Availability of all documents on the corporate website Reassignment and retraining of temporary workers hired in the operational phase Restoration of archaeological sites following the discovery of any finds Respect for different ethnicities, cultures, religions and beliefs in the workplace Development of public policies

Social and Economic Implications 151

Figure 7.3 Structure of the protocol.

152 Laura Corazza et al.

Social and Economic Implications 153

3 Governance of sustainability focuses on how the megaproject’s main actors manage sustainability. In addition to the company’s sustainability strategy, important issues to be considered are construction site certifications, communication of work progress and the analysis of stakeholder communication. In our case, this includes also antimafia regulations for any company working on the megaproject (this is not an exclusively Italian concern, rather engineering and construction companies from all parts of the world must all abide to such regulations). 4 Economic impact on the territory is the broadest indicator. It analyses both site-centric and territory-centric views of the trends in the local economy. The extensive analysis also includes assessments of the impact of the project (including the potential impact of the presence of construction sites within the local territory) on real estate prices, tourism and technological innovation. When considering the TurinLyon megaproject, we cannot avoid taking into account its binationality as a fundamental characteristic, not only of TELT, but also of a valley that lies on the border between Italy and France, where tourism fuels the economy due to winter sports. 5 Impact on population mobility. Mobility is a key issue, and it can severely be affected by construction works, both in terms of daily practicality (usability of roads, lack of parking, traffic congestion) and in terms of sustainable mobility and connections with neighbouring territories. 6 Promotion of the territory and its cultural and identity capital. In light of a need to reduce the risk for a megaproject to negatively impact on the cultural identity of a specific territory, the identity and values of the geographical area in which it is placed need to be considered. Here we identify the cultural and landscape places of interest, capture actions to preserve and promote them and estimate the risks of potential negative impacts that the megaproject might have. In the case of the Turin-Lyon railway and TELT, this also means respecting its binational culture, which is the foundation for a European and pro-European culture. 7 Civic culture contains a variable mix of standardised questions addressing the level of attitudes with respect to a series of actions, behaviours, situations of civic culture (like trust in institution, respect/disrespect for civic values in cases of political agitation, clientelism, attitudes to joining political and other democratic organisations, etc.). This analysis helps us to determine the civic values of a population, to understand the predisposition that it might have or not have to accepting a megaproject in its territory. 8 Information sources relate to the awareness that people have of a megaproject, in terms of the degree of widespread knowledge of certain aspects relating to its presence in a given territory. These indicators depend on a multiplicity of factors such as media usage/ consumption, opinion leaders, political orientations, etc.

154

Laura Corazza et al.

9 Social representations refer to the analysis of social media content in relation to the megaproject, including not only personal media but also institutional accounts and press communication. 10 Values associated with the work include the reconstruction of people’s opinions about the megaproject, the risks associated with it, as well as attributions of possible blame or responsibility and the identification of those responsible. In our case, this macro-area assumes critical relevance, given the long-standing, widespread resistance that the Turin-Lyon railway has encountered over the years over a lack of a democratic deliberative process at the beginning of the project. This can certainly be extended to other megaprojects that suffer from a topdown decision-making approach that excludes a variety of stakeholders. As mentioned above, European and national-level regulations on environmental impacts are comparably strict and extensive, whereas the analysis of social and economic impacts of megaprojects is not so widespread, not even in professional practice. Given differences in national regulations here, our protocol has been developed with the intention of filling the existing gap specifically on the Italian side.

Discussion Accompanying the development of a megaproject with an impact detection plan that is all-encompassing, continuous as well as open to stakeholders is fundamental to the project’s ability to monitor and respond to a risk of negative impacts. One challenge here is that CSR tools, such as the Global Compact, or even sustainability reporting tools usually have an organisational focus; they do not have a focus on the entire project, nor on the changes brought about by its implementation. Upon closer examination, we also realise that companies that enter the Global Compact network are not necessarily committed to sustainable practices. As Orzes et al. (2018) point out, the act of joining the Global Compact is a political one, born out of internal and external pressures to improve their reputation and performance. On top of that, the authors stress that the entry requirements for the UNGC are not very high, and companies can join without actually fully implementing practices and processes set out in the ten principles. Moreover, if the adoption of monitoring of social and economic impact assumes a binding characteristic by law, it means that if negative impacts occur, the company responsible for the construction is called upon to respond with prevention, replacement or compensative actions. From the point of view of social responsibility, the difference is huge. It means that without a protocol for monitoring these components, it is legally impossible to hold the company responsible for social and economic impacts (except for requirements that are already covered by law). The voluntary adoption of this tool is the factual expression of a selfestablished intention to fill a regulatory gap with good management

Social and Economic Implications 155

practice that can be replicated at different levels. Our study aims to develop a best-practice tool for all major national and international projects, to be adapted to the different socio-ecological contexts of reference. A large project developed in the Alpine environment will have different peculiarities regarding its socio-ecological settings compared to another one built by the sea. It is therefore necessary to stimulate the development of a policy that can clearly recognise the validity of a holistic and widely applicable impact assessment model, as a reference for the development of new infrastructures. Specifically, in the case presented, the opposition movements see the impacts of the Turin-Lyon project as a real battlefield; it is therefore appropriate, especially in the future, that those who will be called upon to develop megaprojects should be equipped with skills that go beyond the technocratic sphere. Such skills should also be of a political and institutional nature, to move towards a democratic representation of requests and concerns from a broad range of stakeholders.

Conclusions In this chapter, we highlighted the need for implementing a socioeconomic impact measurement strategy for an infrastructure megaproject. With regard to social accounting, Gray (2001) sees some limitations in its ability to deal with systemic and large-scale problems, sometimes connected to a limited inclusion of stakeholder views or a lack of democracy. In fact, in the case presented here, we capitalised on Gray’s critique and tried to devise a framework that could, in future, be applicable in other megaprojects too. In this chapter, we looked at the construction of a railway megaproject that includes the excavation of a world-record 57 km-long tunnel, connecting the two European member states Italy and France, as a reference to develop a more general discussion on the social and economic impact evaluation of megaprojects. The project presented in this chapter, the High-Speed railway from Turin to Lyon has been one of the most contested projects in Europe, especially by local communities, due to its purported heavy impact on the environment and the local economy. In project management research, the measurement of environmental impact is a highly regulated field; consequently, it is one of the most researched aspects of project management worldwide. By contrast, social and economic impacts are usually less investigated by practitioners, because of the complexity of the intricate nets of variables that compose a social environment, with its history, its populations, its wealth, its social inclusion and all the economic settings characterising the ecosystem of a project. In the context of Turin-Lyon, due to political instability of the Italian government, and due to a particularly turbulent decade for the development of the work, which led to the creation and dissolution of several companies, no social impact assessment project was implemented before 2020.

156

Laura Corazza et al.

Another reason for this state of affairs is the project’s binational nature, where the project governance is undertaken jointly by the Italian state, the French state and the European Union. Contrary to what happened on the Italian side, on the French side the development of the works has instead been supported by the Demarche Gran Chantier, which can be described as a long multi-stakeholder discussion table for any issue and decision to be taken with a social, environmental and economic impact. Unfortunately, on the Italian side, there has never been such a strong political and legislative initiative, so it was only in 2020 that this impact assessment project actually started. The innovative scope of the project described here is therefore to be found in the design of an experimental impact assessment tool that seeks, indicator by indicator, to create dialogue with local stakeholders that should be included in the assessment process in order to arrive at a socially inclusive and collaborative view. Although at the time of writing this chapter there was still a strong fringe movement opposing the project, making it impossible to say that the project currently enjoys complete social acceptance, a number of considerations can be made. Firstly, this experimental project was designed to have a strong core of indicators, based on themes, which can be applied in any type of megaproject, as well as a series of indicators, which must be contextualised to the environment of reference, in this case the Susa Valley and the Alpine environment. Moreover, in the case investigated here, the governance of the project is binational, where none of the member states participates in the construction through profit-oriented companies, but through hybrid public enterprises. This aspect is crucial, since large international works for a public client almost always have a private contractor, so there is (almost always) an agency problem. In the case presented here, whoever carries out the project will also manage the railway line, so they will have to anticipate any management issues that are likely to happen in the future, as they will also be responsible for its future operation. This is not the case when the executor is an infrastructure company. Secondly, in this case study, the TELT company is also a signatory of the UN Global Compact so, at least in principle it must respect the principle of multi-stakeholder inclusion, something that for years was not understood neither by the Italian government, nor by the previous companies in charge (which were later transformed into TELT). Adopting a multi-stakeholder perspective in this concrete case also means accepting, incentivising and managing dialogue with opponents, and including all stakeholders upstream in the monitoring plan without prioritisation or exclusion. Therefore, this chapter provides an overview of the design phase of the monitoring protocol, as the first key moment in the process. This initial version of the impact assessment tool may therefore have its a limitation, as we are at the beginning of the construction process of a project that will only be completed in a decade. It will certainly be

Social and Economic Implications 157

necessary to update certain areas and indicators as the themes change and as the population itself changes. To do this, we believe it is appropriate to rely on structured literature reviews (Massaro, Dumay & Guthrie, 2016; Dumay et al., 2016) over time and then include new perspectives in the experimental protocol.

Takeaways for the society level impacts of CSR Concluding this chapter, we arrive at three main takeaways. First, the definition of MSR requires a transcendence of the organisational boundaries on which most CSR theories are based, to include a (systemic) project vision, which encompasses not only the focal organisation but also the network of internal and external partners and stakeholders. Second, the political decision on the implementation of a megaproject cannot fail to take account of a democratic-participatory decision-making process with local stakeholders. If this is lacking, then almost all decisions and actions in terms of social responsibility will always be subject to potential risks or potential and actual conflicts. In other words, key actors may not engage in proactive measures, but merely in political responses to past actions and omissions. To conclude, it is essential for the assessment of the impacts of an infrastructure megaproject that politicians and government move towards the adoption of an increasingly eco-systemic and integrated perspective of impact analysis that perceives people, places and the natural environment as an interconnected system of relationships. Consequently, social and political actors who are responsible for construction decisions should also adopt the same eco-systemic view.

Notes 1 TAV is the acronym for Treno Altà Velocità (High-Speed Rail), because the speed the trains would reach would classify as high speed. They no longer do, because in 2008 EU regulation changed the parameters. 2 Recently updated by Directive 2011/92/EU. At the time of writing, this was not yet adopted by Italy, where prior legislation, Legislative Decree no. 152/2006, still applies.

References Arksey, H., & O’Malley, L. (2005). Scoping studies: Towards a methodological framework. International Journal of Social Research Methodology, 8(1), 19–32. Armano, E., Pittavino, G. L., & Sciortino, R. (2013). Occupy in Valsusa: The No TAV movement. Capitalism, Nature, Socialism, 24(2), 14–26. Baard, V. C., & Dumay, J. (2020). Interventionist research in accounting: Reflections on the good, the bad and the ugly. Accounting & Finance, 60(3), 1979–2006. Boudon, R., & Lazarsfeld, P. F. (1965). Méthodes de La Sociologie. Paris-La Haye: Mouton.

158

Laura Corazza et al.

Brookes, N., Locatelli, G., & Mikic, M. (2015). Learning across megaprojects: The INNOMET working group report. Leeds, UK. Dumay, J., & Baard, V. (2017). An introduction to interventionist research in accounting. In: Haynes, K., Hoque, Z., Parker, L. D. & Covaleski, M. A. (Ed.), The Routledge companion to qualitative accounting research methods, New York, London: Routledge, Taylor and Francis Group, 265–283. Dumay, J., Bernardi, J. G., & Demartini, P. (2016). Integrated reporting: A structured literature review. Accounting Forum, 40(3), 166–185. Dumay, J. C. (2010). A critical reflective discourse of an interventionist research project. Qualitative Research in Accounting & Management, 7(1), 46–70. Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Oakland, CA: Berrett-Koehler Publishers. Esposito, G., Terlizzi A., & Crutzen, N. (2020). Policy narratives and megaprojects: The case of the Lyon-Turin high-speed railway. Public Management Review, 24(1), 55–79. Esposito, G., Nelson, T., Ferlie, E., & Crutzen, N. (2021). The institutional shaping of global megaprojects: The case of the Lyon-Turin high-speed railway. International Journal of Project Management, 39(6), 658–671. European Commission. (2019). A European Green Deal. https://ec.europa.eu/info/ strategy/priorities-2019-2024/european-green-deal_en. van Fenema, P. C., Rietjens, S., & van Baalen, P. (2016). Stability & reconstruction operations as mega projects: Drivers of temporary network effectiveness. International Journal of Project Management, 34(5), 839–861. Fischhendler, I., Cohen-Blankshtain, G., Shuali, Y., & Boykoff, M. (2015). Communicating mega-projects in the face of uncertainties: Israeli mass media treatment of the Dead Sea Water Canal. Public Understanding of Science, 24(7), 794–810. Flyvbjerg, B. (2017). The Oxford Handbook of Megaproject Management. Oxford Handbooks. Oxford University Press. Flyvbjerg, B. (2014). What you should know about megaprojects and why: An overview. Project Management Journal, 45(2), 6–19. Fornero, E. et al. (2005). A cattle model of environmental exposure to asbestos in Lanzo and Susa Valleys: possible fibre accumulation mechanism in cow’lungs. European Conference on Asbestos Monitoring and Analytical Methods. Ca’Foscari University of Venice, 69. Fournier, V., & Grey, C. (2000). At the critical moment: Conditions and prospects for critical management studies. Human Relations, 53(1), 7–32. Gellert, P. K., & Lynch, B. D. (2003). Mega‐projects as displacements. International Social Science Journal, 55(175), 15–25. Van de Graaf, T., & Sovacool, B. K. (2014). Thinking big: Politics, progress, and security in the management of Asian and European energy megaprojects. Energy Policy, 74, 16–27. Gray, R. (2001). Thirty years of social accounting, reporting and auditing: What (if anything) have we learnt? Business Ethics: A European Review, 10(1), 9–15. Griggs, D. J., Nilsson, M., Stevance, A., & McCollum, D. (2017). A guide to SDG interactions: from science to implementation. International Council for Science, Paris. He, Q., Chen, X., Wang, G., Zhu, J., Yang, D., Liu, X., & Li, Y. (2019). Managing

Social and Economic Implications 159 social responsibility for sustainability in megaprojects: An innovation transitions perspective on success. Journal of Cleaner Production, 241, 118395. Hu, Yi, Chan, Albert P. C., Le, Yun, & Jin, Run-zhi (2015). From construction megaproject management to complex project management: Bibliographic analysis. Journal of Management in Engineering, 31, 04014052. Leonardi, E. (2013). Foucault in the Susa Valley: The no TAV movement and struggles for subjectification. Capitalism, Nature, Socialism, 24(2), 27–40. Lin, H., Sui, Y., Ma, H., Wang, L., & Zeng, S. (2018). CEO narcissism, public concern, and megaproject social responsibility: Moderated mediating examination. Journal of Management in Engineering, 34(4), 04018018. Lin, H., Zeng, S., Ma, H., Zeng, R., & Tam, V. W. (2017). An indicator system for evaluating megaproject social responsibility. International Journal of Project Management, 35(7), 1415–1426. Littau, P. et al. (2015). Managing Stakeholders in Megaprojects. The MS Working Group Report. Ma, H., Liu, Z., Zeng, S., Lin, H., & Tam, V. W. (2019). Does megaproject social responsibility improve the sustainability of the construction industry? Engineering, Construction and Architectural Management. Ma, H., Zeng, S., Lin, H., Chen, H., & Shi, J. J. (2017). The societal governance of megaproject social responsibility. International Journal of Project Management, 35(7), 1365–1377. Marincioni, F., & Appiotti, F. (2009). The Lyon-Turin high-speed rail: The public debate and perception of environmental risk in Susa valley, Italy. Environmental Management, 43(5), 863–875. Van Marrewijk, A., Clegg, S. R., Pitsis, T. S., & Veenswijk, M. (2008). Managing public–private megaprojects: Paradoxes, complexity, and project design. International Journal of Project Management, 26(6), 591–600. Massaro, M., Dumay, J., & Guthrie, J. (2016). On the shoulders of giants: Undertaking a structured literature review in accounting. Accounting, Auditing & Accountability Journal, 29 (5), 767–801. New Climate Economy. (2016). The Sustainable Infrastructure Imperative, Financing for better Growth and Development. Technical Report, London, UK. Nilsson, M. (2017). Important interactions among the sustainable development goals under review at the high-level political forum 2017. Stockholm Environment Institute. Nilsson, M. et al. (2018). Mapping interactions between the sustainable development goals: Lessons learned and ways forward. Sustainability Science, 13(6), 1489–1503. Oliomogbe, G., & J Smith, N. (2012). Value in megaprojects. Organization, Technology & Management in Construction: An International Journal, 4 (Special Issue), 617–624. Orzes, G., Moretto, A. M., Ebrahimpour, M., Sartor, M., Moro, M., & Rossi, M. (2018). United Nations Global Compact: Literature review and theory-based research agenda. Journal of Cleaner Production, 177, 633–654. Scharlemann, J. P. et. al. (2020). Towards understanding interactions between Sustainable Development Goals: The role of environment–human linkages. Sustainability Science, 15(6), 1573–1584. Schausteck de Almeida, B., Bolsmann, C., Marchi Junior, W., & de Souza, J. (2015). Rationales, rhetoric and realities: FIFA’s World Cup in South Africa 2010 and Brazil 2014. International Review for the Sociology of Sport, 50(3), 265–282.

160

Laura Corazza et al.

Scherer, Andreas Georg, & Palazzo, Guido (2011). The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of Management Studies, 48, 899–931. Tipaldo, G. (2011). «Né qui né altrove!». Critica alle grandi opere: un problema di «cultura civica»? Rassegna Italiana di Sociologia, 52(4), 607–638. United Nations. (2021). Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. https://sdgs.un.org/goals/goal9 United Nations Global Compact. (2021). The Ten Principles of the UN Global Compact. Wang, G., He, Q., Meng, X., Locatelli, G., Yu, T., & Yan, X. (2017). Exploring the impact of megaproject environmental responsibility on organizational citizenship behaviors for the environment: A social identity perspective. International Journal of Project Management, 35(7), 1402–1414. Weitz, N., Carlsen, H., Nilsson, M., & Skånberg, K. (2018). Towards systemic and contextual priority setting for implementing the 2030 Agenda. Sustainability Science, 13(2), 531–548. World Business Council for Sustainable Development. (2014). The Urban Infrastructure Initiative (UII). Technical Report. Zeng, S. X., Ma, H. Y., Lin, H., Zeng, R. C., & Tam, V. W. (2015). Social responsibility of major infrastructure projects in China. International Journal of Project Management, 33(3), 537–548.

8

Towards a Relational Understanding of the Impact of Organisational Pro-Social Activities Sébastien Mena and Valeria Cavotta

Introduction There is increasing attention on the impact of organisational pro-social activities (for instance, alleviating poverty, fostering education, providing healthcare) in various areas of study such as CSR (Barnett et al., 2020), social entrepreneurship (Battilana & Dorado, 2010) and business sustainability (Halme et al., 2020; Mazutis et al., 2020). Yet, little is known about the consequences of pro-social activities beyond the immediate organisational context such as the broader community. By pro-social activity we mean the ‘solution’ elaborated by an organisation to a social issue – such as a program, policy or any other type of social action that can involve multiple different, concurrent or sequential activities. In particular, when pro-social activities’ effects are assessed in CSR research, the focus is overwhelmingly on the firm’s economic or financial performance (e.g. Eccles et al., 2014; Margolis & Walsh, 2003) and, only sometimes, on environmental effects (e.g. Henriques et al., 2013; Peloza & Yachnin, 2008). When the effects of pro-social activities are assessed in social entrepreneurship research – which usually balances social and economic objectives – most studies have focused on immediate outputs rather than longer-term impact and systemic change (Wry & Haugh, 2018). These streams of literature, therefore, provide surprisingly few insights on the social impact of pro-social activities (Barnett et al., 2020; Rawhouser et al., 2019), despite multiple calls for further consideration (e.g. Crane et al., 2017; Maon & Lindgreen, 2015; Pfeffer, 2010; Stephan et al., 2016). Parallelly, there are increasing calls for taking a broader, systemic perspective on pro-social activities by a variety of organisations such as nonprofits and social enterprises (e.g. Gold et al., 2018; Mair & Rathert, 2020; Schad & Bansal, 2018). Rather than assuming a linear cause and effect relationship between organisational activities and social change, such perspectives call for taking into account the system(s) in which these activities take place, the various formal and informal institutions at play – as well as the varied roles that actors play, particularly over time – in regard to a specific social problem (e.g. Mair, 2020; Seelos, 2019; Wry & Haugh, DOI: 10.4324/9781003182276-8

162

Sébastien Mena and Valeria Cavotta

2018). This is also relevant for CSR research, which often fails to recognise that the communities in which firms implement their programs are complex systems (Gold et al., 2018), and the effects of such programs on social relationships at play (Mena, 2017). So far, studies looking at relational aspects have mostly considered direct firm-stakeholder relationships, that is, how CSR initiatives have improved the relationships between firms and its primary stakeholders (Peloza & Shang, 2011). In this chapter, we advance a broader relational understanding of the impact of pro-social activities. In particular, we aim at furthering the currently lacking knowledge on how pro-social activities shape, and are shaped by, social relationships. How do pro-social activities affect the relational fabric of the social environment where they are implemented? How do people in these environments perceive, and react to, these activities? How do they contribute to the construction of the activities’ social impact? Our framework is a first step in focusing on these important questions. In our framework we rely on, and extend the notion of, relational work from economic sociology (Zelizer, 2005). Relational work places attention on how economic action affects an actor’s wider set of social relationships, and on how it generates both intended and unintended consequences (Tilly, 2008; Zelizer, 2012). We argue that drawing a parallel between relational work and a firm’s pro-social activities allows for understanding how pro-social activities affect social relationships and, more broadly, the social fabric of the environment in which they are undertaken. To accomplish this, we draw scholarly attention to the importance of assessing the impact of pro-social activities in light of their ability to create, reinforce, modify or disrupt social relationships. As mentioned, we illustrate our framework with two empirical case studies. One examines a corporate sustainability program: providing water filters to cocoa farmers in rural Côte d’Ivoire; the second examines a social enterprise’s experimentation with an innovative, socially-based, treatment model for mental health patients in Southern Italy. The two case studies showcase both the positive and negative relational consequences of pro-social activities. Overall, our framework, and these two illustrative cases, allow us to highlight the need to consider the relational impact of pro-social activities – moving beyond the narrow, ‘surfacelevel’ (Stephan et al., 2016) understanding of social impact currently present in most social impact assessment frameworks and theories. Hence, in this chapter, we transcend the obsession with measurement, and demonstrate the need to consider the breadth of the relational fabric in which pro-social activities are implemented.

On the impact of pro-social organisational activities The engagement of corporations in socially oriented activities (such as sustainability or CSR) is now firmly established as an area of enquiry in

A Relational Understanding of Impact 163

management and organisation studies (Bansal & Song, 2017; Montiel, 2008). Accordingly, academic interest on the impact of pro-social activities by a variety of organisations is rising (e.g. Barnett et al., 2020; Wry & Haugh, 2018). Yet, in practice, most tools for assessing social impact focus on ‘low hanging fruit’ indicators, that is, those that are easily measurable and, often, quite detached from actual outcomes that matter for stakeholders (Colantonio, 2009; Stephan et al., 2016; van Bommel, 2014). When the social impact of CSR activities is investigated, it is often captured in relation to the activities’ immediate results or outputs (Barnett et al., 2020), in particular those related to health and safety measures, working conditions (Kim & Davis, 2016; Levy et al., 2016), and diversity and inclusion measures such as gender equality (McCarthy, 2017). However, some of these social constructs are hard to quantify and, thus, measure (Nason et al., 2018) as they are often estimated with indicators that only poorly approximate the underlying constructs (Crane et al., 2017). For example, occupational health and safety is sometimes assessed by the number of workplace injuries and by whether information about injuries is reported by workers (GRI, 2017). There are emerging, more sophisticated frameworks to quantify and measure social impact. For example, the Poverty Footprint, developed by Oxfam and the UN Global Compact, is “a people centered approach to measuring business impacts on sustainable development” (Oxfam, 2015). Another example is the Accounting for Sustainability’s Essential Guide to Social and Human Capital Accounting that encompasses an accounting tool for reporting social impact. These examples highlight that, when social impact is assessed, it is mostly done in easily measurable terms – often to enable reporting on non-financial information or to attract socially responsible investors by way of demonstrable performance metrics (Colantonio, 2009; van Bommel, 2014). While some critical management studies have looked at how corporate sustainability or responsibility activities can negatively affect a firm’s stakeholders, such as employees (e.g. Costas & Kärreman, 2013), most of this research focuses on discourses associated with sustainability as a way to reify, or strengthen, corporate or managerial power (Levy, 1997), or to further marginalise fringe stakeholders (Banerjee, 2007). These critiques, therefore, typically, emphasise problems with the idea of corporate engagement in social activities (i.e. as part of a self-reproducing, exploitative capitalist system) rather than looking at the impact of specific corporate actions (for notable exceptions, see Khan et al., 2007, Whiteman & Cooper, 2016, although they examine industry-wide programs). Social impact is one of the key concerns of the literature on social entrepreneurship (Mair & Marti, 2006; Molecke & Pinkse, 2017). While it is true that some insights are idiosyncratic to (sometimes non-profit) social ventures, others are also translatable to purely commercial firms. For example, an accepted view in this literature maintains that, to achieve social impact, it is essential to be knowledgeable about the social issue

164

Sébastien Mena and Valeria Cavotta

being tackled, e.g. its root causes, its interrelations with other social issues and its manifestations in specific local contexts (Chahine, 2016; Ebrahim, 2019). Such view emphasises the importance of participatory approaches, i.e. involving local stakeholders or other stakeholders with knowledge of the context where the pro-social activities are being implemented. For instance, Pless and Appel (2012) study the case of Gram Vikas, an award-winning social enterprise, and discuss its key innovation which required that “all community members – regardless of gender, class, caste or religion (100% inclusion) – get access to the [water and sanitation] infrastructure, participate in the project and contribute to its implementation” (p. 389). In their studies on market exclusion, Mair et al. (2012) show the role of local intermediaries in working around institutional voids such as patriarchal norms that prevent women from accessing markets. While research in social entrepreneurship has yet to produce more substantial knowledge on how pro-social activities translate into longer-term or systemic impacts (Wry & Haugh, 2018), it has been suggested that technical solutions devoid of relational work are much less transformative (Mair et al., 2016).

Towards a framework for understanding the relational impact of pro-social activities Little is known about the long-term, relational impact of pro-social activities. Therefore, to assess the relational consequences of the social impact of pro-social activities we rely on the concept of relational work from economic sociology (Zelizer, 2005). Relational work is a concept that analyses how social action “creates, confirms, negotiates, or repairs”, intentionally or otherwise, an actor’s relationships (Tilly, 2008, p. 173). Relational work “goes on continuously, shaping boundaries that differentiate relations that might become confused with deleterious consequences for one party, both parties, or third parties” (Zelizer, 2012, p. 149). Relational work emphasises how parties in a relationship undertake meaning-making activities when they interact, and how such meaningmaking influences other aspects of their relationship (Bandelj, 2015; Block, 2012). Investigating the relational effects of pro-social activities, we argue, allows to paint a more comprehensive picture of the work carried out by organisations, and their impact on the communities where pro-social activities are implemented. Figure 8.1 depicts our conceptual framework of relational work and, accordingly, its impact. The top third of the figure (the horizontal sequence of arrows) depicts what most extant research has examined so far (e.g. Barnett et al., 2020; Wry & Haugh, 2018), relying on a ‘logic model’ for assessing social performance (Ebrahim & Rangan, 2014): how some social issues in the organisation’s environment are tackled through pro-social activities; the immediate, observable results or outputs they produce; the

A Relational Understanding of Impact 165 Outcomes

Relational work

Organizationcommunity relationships

Immediate results/outputs

Relational work

Pre-existing relationships:

Relational work

Social issue

Pro-social activity

Community relationships

‘Conventional’ social impact

Relational impact: Sustained/modified /disrupted relationships Sustained/modified /disrupted relationships

Figure 8.1 Relational work and impact of pro-social activities.

correlated outcomes they generate; and the broader social impact they create. As introduced earlier, most research and practice currently apply existing frameworks to approximate measurement of results, outcomes and impact of a pro-social activity. Beyond this conventional assessment of the social impact of a pro-social activity, all social actions also generate relational consequences usually not captured in conventional impact assessments. The bottom area of Figure 8.1 illustrates how pro-social activities penetrate the social fabric of the environment in which they are implemented and, in the process, affect preexisting relationships by generating forms of relational impact. That is, prosocial activities can sustain, modify or disrupt existing social relationships in a given environment in different ways which, together, amount to what we mean by relational impact. We argue that such impact is generated by relational work that is enacted, intentionally or otherwise, as a result of the pro-social activity (e.g. during the process of generating its results and outcomes). For instance, beyond the specificities of a pro-social activity (such as for instance, the selection process of a charity’s donation recipients for a community program): What does the activity involve in terms of interactions with the beneficiaries and local community members? How do these interactions unfold? Do they reify or challenge existing norms and beliefs? If so, do they lastingly change them? How do further interactions between the organisation and local community members shape existing relationships – both with the organisation and local community members, and among local community members? In particular, we envisage two main pre-existing types of relationships that may be affected by pro-social activities’ relational work. First, the organisation (or organisations) engaging in a pro-social activity has, typically, some existing prior relationship with the community in which the activity is to be implemented (middle horizontal arrow in Figure 8.1). Relational work can, therefore, serve to generate relational effects on the organisation’s relationships with local community members. In particular, pro-social activities are often directed to specific beneficiaries (e.g. a work

166

Sébastien Mena and Valeria Cavotta

integration social enterprise will target its activities to the unemployed in the community; a CSR program can tackle women’s health) that are part of the broader community. Yet, organisations also interact with, and can impact, other community members, aside from targeted beneficiaries. Second, organisational pro-social activities are usually carried out in contexts where established relationships already exist among community members (bottom horizontal arrow in Figure 8.1). These relationships encompass those between beneficiaries of the pro-social activity and other community members (e.g. how unemployed people are catered to in their community; the nature of gender relations), as well as broader community relationships that are not directly linked to the pro-social activity (for example, the levels of solidarity or trust within a community or specific norms of interaction between local community members). Below, we illustrate our model of relational impact with two empirical cases drawn from our ongoing research. Illustrative case 1: Providing access to clean water for cocoa farmers in rural Côte d’Ivoire and the unintended relational consequences among community members

Our first illustration draws from a sustainability program implemented in rural Côte d’Ivoire in 2015 by one of the largest worldwide (Western) chocolate manufacturers (which we will refer to as ChoCo). The program consisted in the distribution of manual, 5-litre capacity water filters to about 1,200 cocoa farmers and their families without, or with limited, access to clean water in 24 villages in rural areas of central Côte d’Ivoire. The filters were given to farmers at eight events dedicated to these areas. The program was then monitored, for about a year, by an expatriate project manager working locally. The data we draw on consist of field observations and related field notes, interviews and informal conversations with the farmers and other community members (e.g. their wives, who typically are not actively engaged in cocoa farming), and with ChoCo’s staff – as well as secondary data such as documents from ChoCo relating to the program. We collected data in two rounds of fieldwork in 2015, during the implementation and monitoring phases of the program, for a total of 4 weeks. Figure 8.2 illustrates how our framework helps understand this program’s relational impact (specifics in italics). A traditional, conventional impact assessment of a corporate sustainability program such as this, would focus, firstly, on increased access to clean water (as a stated desired and expected output of the program) and, secondly, on health improvements as a broader outcome. While a structured impact assessment was not carried out by ChoCo, the company collected data during the implementation and monitoring of the program. The data indicate that most farmers used the filters regularly: 92% of the filters were used daily, as of nine months after distribution. Based on comprehensive

A Relational Understanding of Impact 167

Mostly economic firm-farmer relationships

Outcomes

‘Conventional’ social impact

Improved access to clean water

Improved health

Community well-being

Relational work

Pre-existing relationships:

Water filter program

Immediate results/outputs

Relational work

Access to clean water

Relational work

Social issue

Pro-social activity

Patriarchal gender relations

Relational impact: Intensified economic and social firm-farmer relationships Reified patriarchal relations

Figure 8.2 Assessing the relational impact of a sustainability program.

qualitative evidence collected during the monitoring phase (by ChoCo and one of the authors), the widespread use improved the health of local farming communities, in particular that of the children who are among the most vulnerable to unsafe water. Villagers stated that the availability of clean water drastically reduced the prevalence of frequent water-borne diseases such as stomach ache or diarrhoea. Yet, in addition to these positive effects, our fieldwork indicated that there were also unintended effects concerning relationships – usually overlooked by conventional impact assessment frameworks. In line with our model, we identified two main drivers by which the program affected social relationships: it intensified pre-existing, mostly economic, relationships between the firm and the farmers (buyer-seller), but also reifying existing gender relationships between local community members. We examine both relational impacts and how they, in turn, stem from relational work. Intensifying pre-existing relationships between the firm and farmers

As expected, the water filter program strengthened the firm-beneficiary relationship by increasing their number of interactions, both quantitatively and qualitatively. First, the program intensified these existing relationships by widening the scope of the pre-existing, primarily economic, relationship (one of cocoa buyer-seller). By providing for the farmers beyond the typical economic relationship, ChoCo also raised farmers’ expectations on how future interactions would unfold. For instance, we observed one farmer, talking to a ChoCo’s project manager, saying: “Next time you come, care for our health. As we’re sick here, you can send drugs to facilitate our tasks … We also need tablets. We need drugs.” Second, the program also widened the existing, economic relationship by acting as a stepping stone for additional interactions between the firm and farmers. It served as an immediate and direct opportunity for farmers to interact with ChoCo’s employees on topics other than water or health, and

168

Sébastien Mena and Valeria Cavotta

to express concerns and their demands on the firm. Farmers leveraged ChoCo employees’ visits in the context of the water filter program to enquire about unrelated topics, such as business, education, transport issues and problems faced in their daily and working lives – a dynamic one of the authors observed every time visits took place. Finally, in some cases, the program also allowed for the possibility of engaging with previously unconnected farmers, thereby widening the extent of firm-farmer relationships. For instance, as the program was rolled out in the villages, it generated traction from farmers that were currently not selling their cocoa to ChoCo. For instance, an intermediary purchaser of cocoa in one village told one of the authors: “There are at least ten farmers in this village that didn’t sell cocoa to me before. They started supplying cocoa to me when the filters arrived.” These examples highlight that the widening of relationships between the firm and farmers stems from the extended interactions generated by the program, building on the pre-existing economic relationship. By interacting beyond the simple economic transaction (selling/buying cocoa), the sustainability program, and the span of interactions it generated, amounted to relational work that shaped the relationship beyond its initial, mostly economic, nature. The raised expectations opened up the existing relationship to other economic and social aspects and, with the engagement of other community members, the program impacted existing relationships by intensifying them. Reifying relationships within the community

Beyond intensifying relationships between the firm and local community members, the sustainability program also had an impact on the relationships among community members. Through relational work, the program either reinforced or downplayed the social status of some community members. While it did so in several ways, we will focus on how the program reified the patriarchal structure of rural Ivoirian communities. The sustainability program reified the existing status of men in the local community. Ivoirian rural society is patriarchal to start with, and the cocoa trade reflects such patriarchy. In the region studied, households have a clear division of income from farming: men receive higher revenues from so-called cash crops (such as cocoa), whereas women earn from the less lucrative, non-cash crops (annual crops, such as spinach or tomatoes). Revenues are not shared in households. Rather, men and women use their respective income for different types of expenses: day-to-day expenses are paid by women (e.g. food, schooling) and larger, one-off expenses (such as marriage gifts or house repairs) are covered by men – a strongly established division of roles. The sustainability program, unintentionally, reified the patriarchal gender relationships underpinning this division of income and expenses in

A Relational Understanding of Impact 169

the villages where it was implemented. Unexpectedly, men generally took ownership of the filters – though it was overwhelmingly the women who had been interested in the filters’ demonstration during ChoCo’s preliminary assessment (a year prior to the program rollout). Such early female interest is understandable in the patriarchal context of rural households: women take care of most household tasks, including fetching water, cooking and doing laundry. Once the water filters were distributed to households, however, it was the men who mainly showed interest and, sometimes tightfistedly, took ownership. For instance, we talked to a village woman who was not able to show us the water filter her household received because her husband had been travelling for two days and he had locked the filter in a room, preventing her from using it. This example, while one of the most extreme we observed, highlights how the program could serve to reify men’s status and pre-existing gender roles. This example also illustrates how filters could serve men to sometimes further exert the powers granted by existing patriarchal norms over their wives. This instance describes unintended relational effects triggered by the sustainability program: the water filters, introduced in households, reified existing local relational (here, gender) norms about who controls what and whom. Overall, this case highlights how a pro-social activity can unintentionally render support to social inequality. This reification of existing social norms (gender inequality in particular) is something that was not foreseen, nor intended, by ChoCo. The intent of the company was simply to improve access to clean water in the hope of achieving a strengthening of their existing economic relationship with farmers (e.g. to source more cocoa). Illustrative case 2: Reintegrating mental health patients in Southern Italy and fostering solidarity in the community at large

Our second illustration draws from a social enterprise committed to the social reintegration of people with mental health issues in Southern Italy. As typical of these programs, the beneficiaries are provided with employment opportunities, as well as other social services aimed at reintegrating the marginalised person into the community. This case draws from a variety of data, encompassing interviews, archival documents and field observations. The data were collected between 2013 and 2016 by one of the authors and refer to the social enterprise’s pro-social activities carried out between 2007 and 2012. Figure 8.3 highlights how our framework sheds light on the relational impact of this social enterprise (specifics in italics). In this second illustration, a social enterprise (New Organized Kitchen, Italian acronym NCO) decided to open a restaurant to give employment and social reintegration opportunities to people with mental health issues (of varying degrees of severity, from mild up to severe mental illnesses). Upon opening the restaurant, the social enterprise faced protests from

Sébastien Mena and Valeria Cavotta

Pre-existing relationships: Individualism & lack of solidarity Community stigmatization of beneficiaries

Immediate results/outputs

Outcomes

‘Conventional’ social impact

Work reintegration and socializing activities

Number of people hired

Improved mental health

Community well-being

Relational work

Social and work exclusion of people with mental health issues

Pro-social activity

Relational work

Social issue

Relational work

170

Relational impact: Collective engagement towards community issues Beneficiaries integrated in the community

Figure 8.3 Assessing the relational impact of a model of social reintegration.

neighbours who feared proximity with people with mental health issues. They claimed that “they did not want a madhouse in their garden” (member of NCO). The social enterprise could have chosen to ignore the protests, work hard on the food offerings for prospective clients and attend mainly to the social reintegration of its beneficiaries within the immediate reach of its organisation, i.e. improve relations among beneficiaries and between beneficiaries and their families. Instead, NCO decided to also work, more broadly, to ameliorate relationships in its community – as this work was deemed critical for the social reintegration of its beneficiaries. NCO did so also based on the profoundly embedded systems’ view that underpinned the model it was implementing whereby socio-economic contextual conditions are understood to affect mental health (Righetti, 2014). As reported by an NCO manager, working on community relations is necessary to sustainably help beneficiaries, as social programs intend to: When we started taking care of our beneficiaries, we noticed that, to take care of individuals, we had to take care of the territory where the person lives because the person is also part one of the community where they live. If I do not also take care of the community, the person will need to live protected by a golden bell … and what happens when the bell is removed? (NCO General Manager) Importantly, and in line with our framework, some of NCO’s activities performed relational work, shaping relationships between beneficiaries and community members, and among ‘regular’ community members. Of note, here, is that NCO’s work took place in a socio-economic context deteriorated by the presence of the Mafia, which thrives in environments characterised by mistrust, individualism and disengagement on issues of community well-being, encompassing also, among others, the care for disadvantaged people. Indeed, the Mafia is traditionally associated with

A Relational Understanding of Impact 171

weak community relations whose members have been socialised to disengage from matters of community interests (Gambetta, 1988; Putnam, 1993). Improving relationships among community members by fostering collective engagement towards community issues

In accordance with the systems’ view embraced, NCO launched several initiatives aimed at fostering both acceptance and integration of its beneficiaries in the community, as well as solidarity among community members at large and promoting the general well-being of the community beyond individualistic gains. For instance, NCO used a crumbling property confiscated from the Mafia to house its restaurant. Such properties were available to the community, but nobody had cared for them. NCO made them again accessible to the whole community and signalled the importance of taking responsibility for what was not being done in the community. NCO accomplished this by organising various cultural events on the confiscated properties, soliciting the community to participate in the redemption of Mafia assets, and by showing their willingness to engage with one of the root causes of the issues it was facing, i.e. lack of solidarity and engagement for solving community issues. NCO also decided to punch large holes in the surrounding walls of the confiscated property, allowing local children to enter, and safely play, in its garden – given the dearth of well-maintained public spaces in communities characterised by socioeconomic decay, as those plagued by the presence of the Mafia. Also vital, has been NCO’s willingness to work to help entrepreneurs who had denounced Mafia extortions, and who typically feared and experienced isolation after filing their complaints. NCO did so, among other things, by sourcing from these entrepreneurs and soliciting local community members to do the same. Finally, throughout its work, NCO engaged in the continuous promotion of a model of community welfare that praised legality and the support for the weakest members of the community. Therefore, NCO’s relational work helped accrue widespread support from community members at large, including local media and politicians. Such support was not only visible through the solidarity NCO received as it coped with a number of Mafia retaliatory intimidating tactics (such as death threats in the form of shots being fired at NCO’s restaurant door), but also through the support NCO received when it advocated for policy changes in the health sector to accommodate the model its was adopting. Improving relationships between community members and beneficiaries

These initiatives clearly improved the community’s well-being. Yet, in line with our framework, they also amounted to relational work that helped increase and strengthen relationships between community members and NCO’s beneficiaries. For instance, allowing local children to play in the

172

Sébastien Mena and Valeria Cavotta

garden favoured the socio-reintegration of NCO’s beneficiaries who were, then, perceived as less and less dangerous by the kids’ parents. As reported by a social worker in the region, the social reintegration of marginalised people only works if the beneficiaries are not confined to protective structures and can mingle with other community members. Moreover, NCO organised several events, commercial and social initiatives, where it placed beneficiaries at the forefront of the work being done to ameliorate community relations. For instance, NCO praised the beneficiaries’ contributions to the maintenance of the confiscated properties and portrayed them as primary actors willing to stand up to the Mafia. Once regarded as socially dangerous people, beneficiaries started being approached by local community members to spend time together, attending beneficiaries’ birthday celebrations, and mingling with them at the various NCOorganised events. As reported by a healthcare professional about a patient who had always been at the margin of society: “The stigmatized person was gone, there was only [name of the beneficiary]. If the tobacconist or the bartender didn’t see him for a week, they would call to ask how he was doing” (Healthcare professional, interview). As a result, these positive interactions led the social workers and healthcare professionals to witness significant improvements in beneficiaries’ mental health.

Discussion In this section we address, more extensively, our framework of relational work and related social impacts. As illustrated in the first case presented above, the relational work, expectedly, reinforced the pre-existing firmbeneficiary relationship. Yet it also, unintendedly, reified unequal (gender) norms among community members. This illustration highlights the complexities of assessing (much less measuring) the social impact of pro-social activities. As long acknowledged in sociology, any social action generates unanticipated consequences (Merton, 1936). Our relational framework points to the fact that, for pro-social activities, many of these unintended effects may be relational. Our second illustration highlights some of the positive consequences that can emerge from strategically executed relational work. The work of the social enterprise studied (NCO) helped improve relations within a community that had initially opposed the proximity of disadvantaged people, and that had been socialised to disengage from matters of public interest, among which, caring for disadvantaged people. The work of the social enterprise also fostered community support for the social enterprise itself, which is then built on to drive regulatory changes. This chapter, thus, illustrates the complex web of relationships that one needs to consider when working towards the well-being of a community – relationships that can also be unexpectedly affected, as in the first illustration. When one adopts a broader, systemic view, community well-being

A Relational Understanding of Impact 173

can also be a strategic goal, as highlighted in our second illustration. A central contribution of this chapter is showing that pro-social activities can generate often overlooked and unintended relational impacts. It is, therefore, helpful to assess the social impact of firms in a broader and more complex manner by paying greater and deliberate attention to the social relationships at play, and to how pro-social activities potentially interact with, and shape them. Our conceptual framework advances beyond a unitary understanding of unintended consequences, where the desired objectives are not attained, as some previous studies have found (e.g. Khan et al., 2007), or where these desired objectives are only positive and do not consider potential negative consequences, as some of the CSR literature assumes (e.g. Porter & Kramer, 2006). Hence the importance of integrating relational feedback into pro-social activities. If an organisation becomes aware of its relational consequences, both unintended, as well as those that could amplify the fulfilment of its goals, it could adjust its activities accordingly. Our framework also speaks to how to assess opportunities for pro-social interventions. For example, CSR activities are now often seen as a strategic concern for businesses. A strategic perspective is geared towards managing relationships with key stakeholders, such as suppliers for improving logistics (Sodhi & Tang, 2018), or other organisational processes, such as eco-efficiency (Linnenluecke & Griffiths, 2010). Strategic CSR in particular, is focused on identifying the so-called win-win situations, generating social and/or environmental and, above all, economic value (McWilliams & Siegel, 2011; Porter & Kramer, 2006). Yet, this overlooks the fact that positive social impact (win-win) is not immediate, in both time and space, and that unintended (relational) consequences may later emerge as a result of ongoing pro-social activity. To sum up, our contributions are relevant for CSR research, business sustainability (Halme et al., 2020), as well as for research on pro-social organising in general which investigates social impact (Barnett et al., 2020; Seelos & Mair, 2017). As highlighted by a few recent calls to action, most studies have focused on immediate outputs and results, rather than longerterm impacts and systemic change (Stephan et al., 2016; Wry & Haugh, 2018). Our framework is a step towards a more comprehensive understanding of the impact of CSR, and various social change activities, by firms and other organisations. Relational impact, we argue, is at the core of the longer-term social impact of these activities, as current discussions about (social) inequality underpin (Amis et al., 2020; Suddaby et al., 2018; Tomaskovic-Devey & Avent-Holt, 2019). A relational work approach can help more carefully parse out this impact than extant, mostly quantitative measure-based approaches. Finally, adding a relational dimension to the concept of social impact triggers interesting avenues for future research. For instance, who are the relationship-knowledgeable people – brokers – an organisation should

174

Sébastien Mena and Valeria Cavotta

turn to before, and during, the implementation of pro-social activities? Relying on these brokers would reduce corporations’ tendency towards ‘knowing all’ and imposing their views of what is right (and wrong) for local communities and relationships. Moreover, the CSR literature generally recommends that corporations engage with local stakeholders, e.g. NGOs (Selsky & Parker, 2005). Adding a relational dimension requires asking which relationships companies prioritise (strategically or otherwise) and which they (perhaps unintendedly) ignore and downplay. When and why do corporations prioritise firm-community relationships or relationships within the community at large? Given the unfolding (and to a certain extent, unpredictable) nature of social relationships, how shall we monitor and evaluate the progresses being made or the setbacks encountered? Another important overarching future research question relates to the normative underpinnings of the relational dimension of impact. While, by nature, pro-social activities aim to “do good”, considering relational consequences shows that, at the same time, they can also create some “bads”. Future research needs to apply different ethical and normative frameworks in order to understand how we can better guide the development and implementation of pro-social activities to ultimately promote sustainable development that is just and equitable for all – one that is not only Western-centric, but also driven by local and/or alternative values and frameworks.

Takeaways for the society-level impacts of CSR Social issues are complex and require a host of interventions, tackling the multiple facets of a social issue along a variety of pro-social activities. In this chapter, our main aim was to launch a conversation on the, often, underplayed relational impact that organisational pro-social activities can result in. Our main takeaway for the societal-level impacts of CSR is, thus, to more fully incorporate an explicit relational dimension to the understanding of impact (Barnett et al., 2020; Wry & Haugh, 2018). Specifically, we have defined relational impact as the long-term consequences of effecting (intensifying, sustaining, modifying or disrupting) social relationships at play within the context in which pro-social activities are implemented. We distinguished such consequences in terms of organisation-community relationships and relationships among community members. Finally, we illustrated that pro-social activities might, unintendedly, trigger relational consequences and could also be instrumentally directed at improving relations in a community – which would be a major social and economic improvement. We also argued that a relational work approach can more carefully parse out social impact than extant, mostly measure-based, approaches. This also helps moving beyond a unitary understanding of unintended consequences where the desired objectives are not attained (e.g. Khan et al., 2007), or are

A Relational Understanding of Impact 175

only positive, as some of the CSR literature assumes (e.g. Porter & Kramer, 2006) – pointing to the importance of integrating relational feedback into pro-social activities.

References Amis, J. M., Mair, J., & Munir, K. A. (2020). The organizational reproduction of inequality. Academy of Management Annals, 14(1), 195–230. Bandelj, N. (2015). Thinking about social relations in economy as relational work. In Patrik Aspers & Nigel Dodd (Eds.), Re-Imagining Economic Sociology, 227–251. Oxford: Oxford University Press. Banerjee, B. (2007). Corporate social responsibility: The good, the bad and the ugly. Cheltenham: Edward Elgar. Bansal, P., & Song, H.-C. (2017). Similar but not the same: Differentiating corporate responsibility from sustainability. Academy of Management Annals, 11(1), 105–149. Barnett, M. L., Henriques, I., & Husted, B. W. (2020). Beyond good intentions: Designing CSR initiatives for greater social impact. Journal of Management, 46(6), 937–964. Battilana, J., & Dorado, S. (2010). Building sustainable hybrid organizations: The case of commercial microfinance organizations. Academy of Management Journal, 53(6), 1419–1440. Block, F. (2012). Relational work in market economies: Introduction. Politics & Society, 40(2), 135–144. Chahine, T. (2016). Introduction to social entrepreneurship. Boca Raton: CRC Press. Colantonio, A. (2009). Social sustainability: A review and critique of traditional versus emerging themes and assessment methods. Paper presented at the SUE-Mot Conference 2009: Second International Conference on Whole Life Urban Sustainability and its Assessment, Loughborough University. Costas, J., & Kärreman, D. (2013). Conscience as control–managing employees through CSR. Organization, 20(3), 394–415. Crane, A., Henriques, I., Husted, B. W., & Matten, D. (2017). Measuring Corporate Social Responsibility and Impact: Enhancing quantitative research design and methods in business and society research. Business & Society, 56(6), 787–795. Ebrahim, A. (2019). Measuring social change: Performance and accountability in a complex world. Stanford: Stanford University Press. Ebrahim, A., & Rangan, V. K. (2014). What impact? A framework for measuring the scale and scope of social performance. California Management Review, 56(3), 118–141. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), 2835–2857. Gambetta, D. (1988). Trust: Making and breaking cooperative relations. Oxford: Blackwell. Gold, S., Muthuri, J. N., & Reiner, G. (2018). Collective action for tackling “wicked” social problems: A system dynamics model for corporate community involvement. Journal of Cleaner Production, 179, 662–673. GRI. (2017). Labor practices and decent work, Online: https://www.globalreporting.org/ information/g4/G3andG3-1/guidelines-online/G31Online/StandardDisclosures/ LaborPracticesAndDecentWork/Pages/default.aspx, accessed 19.10.2017. Halme, M., Rintamäki, J., Knudsen, J. S., Lankoski, L., & Kuisma, M. (2020). When is there a sustainability case for CSR? Pathways to environmental and social performance improvements. Business & Society, 59(6), 1181–1227.

176

Sébastien Mena and Valeria Cavotta

Henriques, I., Husted, B. W., & Montiel, I. (2013). Spillover effects of voluntary environmental programs on greenhouse gas emissions: Lessons from Mexico. Journal of Policy Analysis and Management, 32(2), 296–322. Khan, F. R., Munir, K. A., & Willmott, H. (2007). A dark side of institutional entrepreneurship: Soccer balls, child labour and postcolonial impoverishment. Organization Studies, 7, 1055–1077. Kim, Y. H., & Davis, G. F. (2016). Challenges for global supply chain sustainability: Evidence from conflict minerals reports. Academy of Management Journal, 59(6), 1896–1916. Levy, D. L. (1997). Environmental management as political sustainability. Organization & Environment, 10(2), 126–147. Levy, D., Reinecke, J., & Manning, S. (2016). The political dynamics of sustainable coffee: Contested value regimes and the transformation of sustainability. Journal of Management Studies, 53(3), 364–401. Linnenluecke, M. K., & Griffiths, A. (2010). Corporate sustainability and organizational culture. Journal of World Business, 45(4), 357–366. Mair, J. (2020). Social entrepreneurship: Research as disciplined exploration. In W. W. Powell & Bromley, P. (Eds.), The Nonprofit Sector: A Research Handbook (3rd ed.), 333–357. CA: Stanford University Press. Mair, J., & Marti, I. (2006). Social entrepreneurship research: A source of explanation, prediction, and delight. Journal of World Business, 41(1), 36–44. Mair, J., Marti, I., & Ventresca, M. J. (2012). Building inclusive markets in rural Bangladesh: How intermediaries work institutional voids. Academy of Management Journal, 55(4): 819–850. Mair, J., & Rathert, N. (2020). Let’s talk about problems: Advancing research on hybrid organizing, social enterprises, and institutional context. Organizational Hybridity: Perspectives, Processes, Promises. Emerald Publishing Limited. Mair, J., Wolf, M., & Seelos, C. (2016). Scaffolding: A process of transforming patterns of inequality in small-scale societies. Academy of Management Journal, 59(6), 2021–2044. Maon, F., & Lindgreen, A. (2015). Reclaiming the child left behind: The case for corporate cultural responsibility. Journal of Business Ethics, 130(4), 755–766. Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48(2), 268–305. Mazutis, D., Slawinski, N., & Palazzo, G. (2020). A time and place for sustainability: A spatiotemporal perspective on organizational sustainability frame development. Business & Society, 60(7), 1849–1890. McCarthy, L. (2017). Empowering women through corporate social responsibility: A feminist Foucauldian critique. Business Ethics Quarterly, 27(4), 603–631. McWilliams, A., & Siegel, D. S. (2011). Creating and capturing value: Strategic corporate social responsibility, resource-based theory, and sustainable competitive advantage. Journal of Management, 37(5), 1480–1495. Mena, S. (2017). Unintended consequences of corporate sustainability: Sustaining social inequality in Côte d’Ivoire. Academy of Management Proceedings, 2017(1). https:// doi.org/10.5465/AMBPP.2017.12243abstract Merton, R. K. (1936). The unanticipated consequences of purposive social action. American Sociological Review, 1(6), 894–904. Molecke, G., & Pinkse, J. (2017). Accountability for social impact: A bricolage perspective on impact measurement in social enterprises. Journal of Business Venturing, 32(5), 550–568.

A Relational Understanding of Impact 177 Montiel, I. (2008). Corporate social responsibility and corporate sustainability: Separate pasts, common futures. Organization & Environment, 21(3), 245–269. Nason, R. S., Bacq, S., & Gras, D. (2018). A behavioral theory of social performance: Social identity and stakeholder expectations. Academy of Management Review, 43(2), 259–283. Oxfam. (2015). Poverty Footprint, Online: https://www.oxfam.org/en/research/oxfampoverty-footprint, accessed May13, 2017. Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the Academy of Marketing Science, 39(1), 117–135. Peloza, J., & Yachnin, R. (2008). Valuing business sustainability: A systematic review. Research Network for Business Sustainability Knowledge Project Series. Pfeffer, J. (2010). Building sustainable organizations: The human factor. The Academy of Management Perspectives, 24(1), 34–45. Pless, N. M., & Appel, J. (2012). In pursuit of dignity and social justice: Changing lives through 100% inclusion – How Gram Vikas fosters sustainable rural development. Journal of Business Ethics, 111(3), 389–411. Porter, M., & Kramer, M. (2006). Strategy & society: The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–92. Putnam, R. (1993). The prosperous community: Social capital and public life. The American Prospect, 13(Spring), Vol. 4. Available online: http://www.prospect.org/ print/vol/13 (accessed 7 April 2003). Rawhouser, H., Cummings, M., & Newbert, S. L. (2019). Social impact measurement: Current approaches and future directions for social entrepreneurship research. Entrepreneurship Theory and Practice, 43(1), 82–115. Righetti, A. (2014). I budget di salute e il welfare di comunità: Metodi e pratiche. Gius. Laterza & Figli Spa. Schad, J., & Bansal, P. (2018). Seeing the forest and the trees: How a systems perspective informs paradox research. Journal of Management Studies, 55(8), 1490–1506. Seelos, C. (2019). Changing systems? Welcome to the slow movement. Stanford Social Innovation Review, 18(1), 40–47. Seelos, C., & Mair, J. (2017). Innovation and scaling for impact: How effective social enterprises do it. Stanford: Stanford University Press. Selsky, J. W., & Parker, B. (2005). Cross-sector partnerships to address social issues: Challenges to theory and practice. Journal of Management, 31(6), 849–873. Sodhi, M. S., & Tang, C. S. (2018). Corporate social sustainability in supply chains: A thematic analysis of the literature. International Journal of Production Research, forthcoming. Stephan, U., Patterson, M., Kelly, C., & Mair, J. (2016). Organizations driving positive social change: A review and an integrative framework of change processes. Journal of Management, 42(5), 1250–1281. Suddaby, R., Bruton, G. D., & Walsh, J. P. (2018). What we talk about when we talk about inequality: An introduction to the Journal of Management Studies special issue. Journal of Management Studies, 55(3), 381–393. Tilly, C. (2008). Why? What happens when people give reasons … And why. Princeton: Princeton University Press. Tomaskovic-Devey, D., & Avent-Holt, D. (2019). Relational inequalities: An organizational approach. New York: Oxford University Press.

178

Sébastien Mena and Valeria Cavotta

van Bommel, K. (2014). Towards a legitimate compromise? An exploration of integrated reporting in the Netherlands. Accounting, Auditing & Accountability Journal, 27(7), 1157–1189. Whiteman, G., & Cooper, W. H. (2016). Decoupling rape. Academy of Management Discoveries, 2(2), 115–154. Wry, T., & Haugh, H. (2018). Brace for impact: Uniting our diverse voices through a social impact frame. Journal of Business Venturing, 33(5), 566–574. Zelizer, V. A. (2005). The purchase of intimacy. Princeton: Princeton University Press. Zelizer, V. A. (2012). How I became a relational economic sociologist and what does that mean? Politics & Society, 40(2), 145–174.

9

The Ethical Dimension of Impact-Oriented Corporate Social Responsibility (CSR) Duane Windsor

Introductory remarks The volume in which this chapter appears explicitly shifts focus from the conventional business case for corporate social responsibility (CSR) to a case for impact-oriented CSR from the perspective of society-at-large (Academy of Business in Society ABIS, 2014). The shift in focus is from the supply side (business) to the demand side (society and non-investor stakeholders) of the economy. A business case, on the supply side, relies on whether the CSR initiative has positive effects for the firm in the form of short-term profitability or longer-term sustainable wealth creation. That is, the business case emphasises positive (or at least zero) effects for the firm. This firm comprises the financial stakeholders (or investors) and managers (the investors’ agents). There is a presumption of positive impacts or at least no negative impacts on society and non-investor stakeholders (“stakeholders” for simplicity). The impact-oriented case, on the demand side, relies on whether the CSR initiative does have positive effects for society and stakeholders. There is no presumption of effects on the firm, which may gain or lose from the shift in focus. The conventional business case for CSR depends on generating good for the business without generating bad for the society, whereas the society-atlarge case requires socially positive impacts. This chapter examines the ethical dimension of impact-oriented CSR. The theoretical framework emphasises ethical and CSR reasoning (Aguinis & Glavas, 2012). The method is to study the logic of the decision situation in a range of cases, namely the business case, the duty case, the stakeholder case and the society-at-large case. The business case emphasises the financial interest of the entity. The duty case focuses on the moral values of the managers. The stakeholder case combines the business case in the form of the entity’s dependence on its stakeholders and the duty case in the form of the moral view of the managers concerning multiple stakeholders. The society-at-large case concerns impactoriented CSR. The findings provide insights into the ethical dimension of impact-oriented CSR. The contribution of the chapter is to develop a DOI: 10.4324/9781003182276-9

180

Duane Windsor

definition of impact-oriented CSR and of society-at-large. The shift from business and stakeholder cases depends crucially on explicating the ethical dimension of the society-at-large case. For purposes of this chapter, society-at-large includes the perceived condition of the natural environment in relationship to society. Ethics is the assessment of whether specific actions are right or wrong and whether the consequences of those actions are good or bad. For this chapter, the concern is with impacts of actions rather than the actions themselves: the consequences are the impacts of business actions on social welfare and environmental sustainability. There are two ways of approaching the ethics of impact conceptualised as consequences of actions. One way is the approach taken in this chapter. This approach is that ideally negative impacts must be zero; and positive impacts must be either zero or desirably greater than zero (see Campbell, 2007; Freeman, 2017; Windsor, 2013). That is, wrong actions are prohibited. Good corporate citizenship is undertaking, in addition to zero negative impacts, to generate positive impacts greater than zero. That is, good corporate citizenship is making a positive contribution to social welfare and environmental sustainability. A second approach is that positive impacts should be greater than (or at least equal to) negative impacts. In this less preferred approach, a business can offset negative impacts with positive impacts so long as the sum is greater than zero. (In a weaker version, the sum might be zero: positive impacts exactly offset negative impacts.) In the first approach, however, preferred in this chapter, good corporate citizenship is not offsetting negative impacts with positive impacts. The fundamental point of impact ethics is that there is a normative assessment of negative impacts as bad and positive impacts as good. In the business case for CSR, the working assumption is that CSR contributes to the profitability or strategic positioning of the business. This case is strictly instrumental, evaluated from the perspective of the business. The ethical foundation for this perspective is that in a capitalist market economy profit signals efficient resource allocation and thus in principle increasing social welfare (but not necessarily increasing environmental sustainability). In the stakeholder theory of business, the firm satisfies its powerful (or influential) stakeholders; but this stakeholder approach rests on power and not necessarily on impact on social welfare and environmental sustainability (see Mitchell et al., 1997). There must be a further demonstration that stakeholder satisfaction results in social welfare and environmental sustainability improvements. An impact approach goes directly to the consequences for social welfare and environmental sustainability, independently of profitability or stakeholder satisfaction. The result is a shift from a (regulated) capitalist market economy towards a social market economy. The generic conception as defined in this chapter is a combination of free market capitalism and public policies providing a large welfare state. In this generic sense, the social market economy is more welfare-oriented than free market capitalism but still market oriented unlike

Ethical Dimension of Impact-Oriented CSR 181

state socialism. For example, in the European Union institutional context, there is emphasis on a much wider range of stakeholders and a mechanism of governmental guidance and coalition building.1 This conceptual proposal addresses two related issues in the shift from a conventional business case for CSR to a society-at-large perspective on impact-oriented CSR. First, there should be a definition or criterion for the “ethical dimension” of impact-oriented CSR. Ideally, there should be a social gain and no harm imposed other than on financial stakeholders. Impact-oriented CSR should rely on a definition of ethics in which there is ideally no loss (no harm) and some social gain. This reliance reflects the first approach to good corporate citizenship noted earlier in the chapter. The second less preferred approach discussed earlier relaxes the requirement against losses but is accordingly much more difficult to defend in specific instances. Second, there should be a definition of “society-at-large” (a beneficiary) as final judge of motives, actions and outcomes. The definition involves differentiating “society” from “stakeholders” of a business. Ideally, financial stakeholders should gain also – but if there must be some loss, then the financial stakeholders bear the burden rather than other stakeholders. That financial burden should be as low as feasible. The motivation for this study is as follows. Stakeholder and society-atlarge demands for and assessment of CSR could be different. Stakeholder impacts can be positive and negative and thus not aggregate to society-atlarge. A shift from prevailing business and stakeholder cases for CSR depends on explicating the ethical dimension of the society-at-large case to identify the moral basis for impact-oriented CSR. If there is no moral basis, then the shift simply results from the distribution of power in society. The method applied is to study the logic of the decision situation in business, duty, stakeholder and society-at-large cases. The intended contribution is to provide some insights into the ethical dimension of impact-oriented CSR and definition of the society-at-large case. There is a relationship between impact and impact measurement. One can measure positive impact as an increase and negative impact as a decrease in social welfare and environmental sustainability. (One needs specific definitions and units of measurement, but the basic principle is increase and decrease in social welfare and environmental sustainability.) There is a general presumption that right actions result in good consequences and wrong actions result in bad consequences. The essential argument, however, is that social welfare and environmental sustainability should increase and not decrease due to business actions: ideally an ethical impact is one that increases good without causing harm.

General cases The method of this study is to define, from literature, the relevant general cases. Table 9.1 summarises these general cases. The top horizontal stub of

Other Stakeholders (Action with Impact)

Source: Author’s own development.

ACCEPTED PROFIT ORIENTATIONS i. business case for CSR ( Carroll & Gain Shabana, 2010) ii. stakeholder purchase of desired Constant CSR ( McWilliams & Siegel, 2001) Gain iii. “creating shared value” (CSV) ( Porter & Kramer, 2011) Gain STAKEHOLDER THEORY “responsible capitalism” ( Freeman, 2017) MORAL OR CIVIC DUTY CSR Constant or small loss good citizenship contributions to society (Adam Smith, 1759) ETHICAL DIMENSON OF Gain can occur properly IMPACT-ORIENTED CSR under some approaches, but constant or small loss is not as suspect. Gain Gain Aggregate gain

Gain

Voluntary loss Gain Gain

Gain

Gain or constant outcome Overall, there must be a legitimate social gain for CSR to qualify as ethical and there cannot be loss for stakeholders are imposed on non-financial stakeholders. acceptable, but no stakeholder loss can occur.

Constant

While social outcome might be net gain or constant, such outcome is unethical: financial stakeholders gain improperly at the loss of other stakeholders and owe compensation to those stakeholders.

Society-at-Large (Aggregate Impact)

Constant

BAD PROFIT ORIENTATION Short-term financial gain Involuntary loss imposed corporate social irresponsibility (CSIR) on some stakeholders ( Windsor, 2013)

General Cases: Defined in terms of Financial Stakeholders Motive, Action and Impact ( Wood, 1991) (Motive)

Table 9.1 Three kinds of interests combined differently in proposed general cases

182 Duane Windsor

Ethical Dimension of Impact-Oriented CSR 183

the table draws on Wood’s (1991) theoretical framework for corporate social performance (CSP) to define motive, action and impact. The top horizontal stub distinguishes among financial stakeholders (investors, for whom managers are agents), other (meaning non-investor) stakeholders and society-at-large. In business, motive (gain) associates with financial stakeholders; action by the business impacts initially on other stakeholders; society-at-large is the aggregate impact of such action impacting other stakeholders. In a strictly business case, financial stakeholders make decisions from a profit orientation. Other stakeholders can include consumers, employees, vendors and distributors, as well as secondary stakeholders. The discussion below works down the left-side vertical stub of the table providing the general cases in a conceptual sequence. •

•

Corporate social irresponsibility (CSIR) results from a socially bad profit orientation (Windsor, 2013) defined as a short-term financial gain that depends strictly on involuntary loss imposed on some other stakeholders. Business causes a moral bad and from a social perspective the outcome of the involuntary loss is unethical. The standard for characterising this outcome as involuntary is normative in judging the involuntary loss on some stakeholder as wrong. The standard must be normative, because under some conditions society-at-large might gain from the loss imposed on some stakeholder. For example, employees (as well as owners) might gain from losses imposed on consumers, and in the aggregate employee gains might be larger than consumer losses. Several accepted profit orientations do not involve CSIR. i The conventional business case for CSR (Carroll & Shabana, 2010) is that the business can gain while holding impact on stakeholders and society-at-large constant: ideally, there is no loss occurring from the business gain. The conventional case arguably addresses stakeholder management only and not impacts on society-at-large (Barnett, 2019). ii A stakeholder purchase (in some financial form) of a desired CSR action holds business profit constant, while the purchasing stakeholder accepts a voluntary loss (McWilliams & Siegel, 2001). For example, customers may elect to pay more for green products; or employees may elect to put in greater effort without additional compensation. A firm also may invest in CSR to increase customer value (Noked, 2011). Society-at-large may gain from the CSR action. Stakeholder pressure and reputational issues are not so clear with respect to effect on business profit. Both pressure and reputation may compel a business to accept some loss, but these possibilities are excluded from the McWilliams and Siegal model and must be weighed outside that model.

184

Duane Windsor

iii “Creating shared value” (CSV) (Porter & Kramer, 2011) supports the merits of win-win solutions to social issues in which both the business and disadvantaged stakeholders gain simultaneously. Society-at-large gains from CSV (see Nestlé, n.d.). In the bad profit orientation and accepted profit orientation cases above, business either gains or holds constant with respect to profit: the managers do not accept profit reduction. The differentiation between bad and accepted cases is whether the business imposes involuntary losses on other stakeholders. The bad case is unethical; the accepted case is ethical. The accepted case then leads on further to an issue in social utility maximisation: this issue is whether society-at-large gains enough for its satisfaction or as much as it can. The welfare issue is whether society-at-large leaves too much profit with business. Non-conventional cases below separate into stakeholder theory and moral or civic duty cases. •

•

Stakeholder theorising (Freeman, 1984) can separate into three dimensions: descriptive, instrumental and normative (Donaldson & Preston, 1995). The descriptive dimension can concern whether stakeholders are powerful, and the conventional business case for CSR is instrumental. In a stakeholder case, other stakeholders in addition to shareholders hold power. Their utility is held constant or increased through action of financial stakeholders. Powerful stakeholders can extract value from the business, including in the form of impact-oriented CSR actions; such powerful stakeholders can in effect impose a loss on the financial stakeholders. This chapter examines the normative dimension. In Freeman’s (2017) exposition of “responsible capitalism” all stakeholders gain jointly through the entrepreneurial value creation actions of management. If all businesses act responsibly, Freeman’s approach eliminates both financial stakeholder loss and the need for CSR actions by the business. In effect, the responsible business generates no harms and needs to provide no CSR actions outside its stakeholder network. Social demand for greater CSR impacts than provided by the accepted profit orientation cases can result in a loss to the business. Ideally, of course, the CSV approach permits at least constant profit and social gain. The typical impact-oriented CSR action involves creating, at some loss to the business, a socially desired gain for other stakeholders, resulting in an acceptable gain to society-at-large. The business will seek to minimise its loss, ideally holding profit constant. Society-atlarge in effect expects a moral duty or a civic duty from the business. In a moral duty or civic duty case, managers and investors should make positive contributions to society (even if at some small loss). A constraint may be that stakeholders assess positive and negative impacts differently: “… although customers will not necessarily reward firms’

Ethical Dimension of Impact-Oriented CSR 185

CSR, they will severely punish what they perceive as unethical behavior” (Trudel & Cotte, 2009, p. 61). The ethical dimension of impact-oriented CSR

The last row of Table 9.1 summarises the ethical dimension of impactoriented CSR. Overall, from a society-at-large perspective there must be a legitimate social gain for CSR action to qualify as ethical; and there cannot be loss imposed on non-financial stakeholders. While financial stakeholders can gain properly under some approaches, those approaches cannot impose improper loss on other stakeholders. In the proposed “society-at-large” case, the controlling consideration is beyond one or more other stakeholders and involves social approval of the outcomes. A stakeholder group (say consumers or employees) might be satisfied by an action that is harmful elsewhere, or at least not helpful elsewhere. Society-at-large must approve of the action and the outcome – independently of the business, duty and stakeholder cases. Actions and outcomes in other cases might worsen climate change or poverty or inequality in socially unacceptable ways. A broader perspective must take account of such socially unacceptable impacts. A well-established perspective is the triple bottom line (3BL or TBL) framework. TBL encompasses people (social impacts), planet (environmental impacts) and profits (business financial performance) (Elkington, 1997). In an ideal win-win-win scenario, profits can increase with positive social and environmental impacts. In this framework, profits should not come at the cost of social or environmental damages. There is a potential conflict in sustainable development between social and environmental outcomes when the social improvements come at the cost of environmental damages. A view of the comprehensive case for sustainability expresses as follows: … we define sustainable practices as those that: 1) at minimum do not harm people or the planet and at best create value for stakeholders and 2) focus on improving environmental, social, and governance (ESG) performance in the areas in which the company or brand has a material environmental or social impact … (Whelan & Fink, 2016, p. 141) Theories of ethics and civic duty

There are several theories of ethics. Utilitarianism, a form of consequentialism, proposes the largest aggregate social welfare, estimated approximately as the greatest good for the greatest number. In a constitutional polity, there should be additionally protections for minority rights as a safeguard against self-interested majoritarian dictatorship. Utilitarianism is

186

Duane Windsor

the normative foundation for market economics (see varying views of Posner, 1979; Qizilbash, 2019; Sandel, 2013). The conventional business case for voluntary CSR rests on this conception. Kantianism, a form of social contract theory (Ellis, 2006), proposes rational moral rules for right and wrong behaviour in society (Wallace, 2021). Virtue theory, drawing on several roots (for example caring and religion) but especially Aristotle, supports education and experience as the sources of moral character development of individuals who will make proper choices (Chun, 2016; Cordner, 1994; Morris, 1997). “If we cannot imagine that society would be prosperous and happy if we all behaved decently, we have a problem on our hands …” (Ryan, 2002, p. 243). In impact investing, virtuous investors seek positive impacts even at some voluntarily accepted reduction in financial return. “Finance” should have “positive values embedded in it” to avoid a separation of “personal, moral selves from … work” (Desai, 2017, p. 11; cited by Tse, 2021). Adam Smith (1759, VI.ii.2, p. 210) expresses the ideal of civic virtue as follows. Obedience has the sense of compliance with laws and public policies, while social welfare has the sense of the common good or public interest. He is not a citizen who is not disposed to respect the laws and obey the civil magistrate; and he is certainly not a good citizen who does not wish to promote, by every means in his power, the welfare of the whole society of his fellow-citizens. Pareto gains

Net positive impact is not sufficient since it is not automatically permissible to add negative and positive impacts. Ideally, there must be no negative impacts and as much positive impacts as feasible given the constraint of acceptable financial return. The conceptual framework relies initially on Pareto improvements in conventional business and stakeholder cases and then shifts fully to a stakeholder focus. Pareto logic works through the general cases as follows. In the good business case, the financial stakeholders either gain or hold constant (but do not lose) by an action desirable to another stakeholder. In the moral or civic duty case, the business may take a small loss to respect democratic authority in the society-at-large case. A Pareto improvement is a change in the status quo by implied consent: at least one party gains without harming another party. This criterion presumes liberty of contact in a market economy. CSIR violates the Pareto criterion, because CSIR depends on harming someone without a social contribution (violating the Pareto principle but not the society-at-large perspective). In the stakeholder case, the other stakeholders gain without harming the financial stakeholders.

Ethical Dimension of Impact-Oriented CSR 187

Defining society-at-large The problem then is how to proceed when voluntary business actions are not sufficient to provide adequate impact-oriented CSR. The consideration moves from voluntary compliance to involuntary (or mandatory) compliance. The issue is to find a solution in which financial stakeholders are at least constant in return when there is no CSIR involved. The society-atlarge case directly involves authority and power. Society can compel compliance but may prefer voluntary action in the desired direction. Ideally, society decides, and everyone complies – realistically, power to compel compliance is available to influence actors. Society-at-large can also judge motives and actions in addition to outcomes. Society-at-large might arguably evolve towards expectations that businesses share wealth and power as distinct from not harming others. There may be two different ways to conceptualise society-at-large. •

•

One way is to include everyone who is not a powerful stakeholder of the specific firm. In effect, the numerically larger non-powerful stakeholder and non-stakeholder set jointly has a veto over the smaller powerful stakeholder set. The dividing line for secondary stakeholders is their lack of power to influence management decisions. The nonpowerful stakeholders and non-stakeholders are the ultimate judge of powerful stakeholders’ gains. In this conception, one cannot expect consumers and employees, like the financial stakeholders, of a firm to act against their economic self-interests: they benefit from the firm and do not make moral or civic judgments. A second way is to assume that virtually everyone is (however distantly and indirectly) a stakeholder. That is, the detailed differentiation of the first way is not feasible. Society-at-large is then the set of all stakeholders, and they must jointly approve the action and outcome. Whether the approval criterion is unanimous (Pareto principle), or majority (democratic principle), or super-majority (constitutional principle) may have ethical implications. In this approach, one must expect the direct consumers and employees to weigh the impacts on others from Adam Smith’s (1759, I.i.5, p. 19) idea of “the impartial spectator”. All stakeholders can make moral or civic judgments concerning the common good or public interest even though they benefit from the firm.

We can identify the ethical dimension of the conceptual framework as follows. The Pareto argument rests on voluntary recognition of mutual benefit: someone gains, and no one loses; and positions may change in future rounds. There is in effect voluntary contracting: no one agrees to a contract in which they lose. The stakeholder case may add relative power, in effect compelling the financial stakeholders in some way. The society-at-large case requires

188

Duane Windsor

specification of the moral basis for use of democratic governance backed by power to compel. The two models can work together if in effect everyone wins, and no one loses (constant is not a loss as such). This ethical dimension is not strictly utilitarian, as one can raise questions of motives and actions as well as of rights and duties. In this chapter’s approach to impact-oriented CSR, social and environmental impact is paramount and economic impact is subordinate in case of a conflict. No conflict exists if all three impacts are positive in a winwin-win outcome. However, if there must be a trade-off then economic impact is inferior to social and environmental impact. This position is more radical than the position of the editors of this volume. The editors see impact more conventionally as doing additional good while diminishing harm. If a business reduces (but does not eliminate) harm and increases good, the overall result is arguably an increase in net good.2 The chapter’s approach is somewhat like the argument in Montabon et al. (2016). Those authors point out, in the context of supply chain management, a fundamental difference between an “instrumental logic” and an “ecologically dominant logic”. In the instrumental logic, firms and their supply chain managers assign priority to economic interests. However, this instrumental logic permits negative impacts on society and environment. In the contrasting ecologically dominant logic, priority goes to social and environmental interests. The present chapter argues that this prioritisation involves imposing the perspective of society-atlarge on economic, social and environmental interests (in the terminology of Montabon et al., 2016). As Preuss and Fearne (in press) point out, the Montabon et al. approach subordinates the economic system to the social system that in turn is subordinated to the ecosystem essential to human survival. In sum, if the ecosystem fails, the social system fails, and in turn the economic system fails. Preuss and Fearne critique the position as being utopian in reversing the alignment among systems. The fundamental welfare theorem of market economics is that firm-level value maximisation maximises social welfare. However, this chapter argues that the welfare theorem assumes effectively that there are no social or environmental externalities sufficient to undermine the predicted maximisation of social welfare. A difference between this chapter and Montabon et al. is that the society-at-large perspective leaves the final choice to society to evaluate impacts rather than automatically imposing an ecological dominance.

Illustrative cases Table 9.1, along the left-hand vertical stub, takes the form of a logical continuum. This continuum begins with CSIR (what businesses should not do), proceeds through conventional CSR approaches (what businesses will do) and ends at good corporate citizenship and responsible capitalism

Ethical Dimension of Impact-Oriented CSR 189

(what businesses should do). The beginning and ending interpretations are normatively prescriptive: what not to do, and what to do. The middle of the continuum addresses what may be permissible: what can be done without practising CSIR or good corporate citizenship and responsible capitalism. The material below contrasts illustrative cases along the logical continuum. The DuPont pollution case illustrates bad profit orientation resulting in CSIR: society-at-large should discourage such wrong actions. For conventional CSR cases in the centre of the continuum, there is a discussion of companies announcing net-zero emissions targets. Society-atlarge must determine whether such announcements are serious and go far enough to reverse climate deterioration. Unilever illustrates good profit orientation resulting in good corporate citizenship and responsible capitalism: society-at-large should encourage such good actions. Within each illustrative case there is a stakeholder analysis dimension concerned with what stakeholders gain or lose from the business actions and what is the overall impact on society-at-large. CSIR: The DuPont pollution case

The DuPont pollution case illustrates bad profit orientation resulting in CSIR. DuPont’s production process in Parkersburg, West Virginia, discharging in the Ohio River at the boundary with the state of Ohio, was allegedly harmful to stakeholders suffering pollution (including health) effects and to employees suffering health effects; and the products (Teflon coating) may have harmed consumers’ health (Environmental Working Group EWG, 2002). Researchers at the University of Chicago studied revelations about DuPont’s pollution conduct (Shapira & Zingales, 2017). DuPont allegedly engaged in long-term pollution of waterways to make money for managers and investors. Consumers and employees possibly benefited in terms of better quality and higher compensation, although they may also have suffered from consumption and production risks. The study finds that management allegedly long knew about the West Virginia Teflon pollution problem (and associated problem with use of Teflon coated products) and infers management made a continuing calculation that it was profitable to pollute so long as odds of discovery remained relatively low (Dizik, 2018). A long legal battle by a persistent plaintiffs’ lawyer was involved (De la Garza, 2019). Society-at-large (in this instance working through legal institutions) determined that the pollution was wrong (ethically and legally). Society-at-large is in effect a philosopher-king (or absolute dictator), deciding both (1) right and wrong outcomes, actions, and motives; and (2) relative priorities among stakeholders. A study of a sample of US publicly traded businesses reports that firms involved more in CSIR correspondingly have more directors with legal expertise (Dharwadkar et al., 2021). The likely explanation is that such legal expertise on the board helps to reduce the negative stock value effects of

190

Duane Windsor

CSIR (Dharwadkar et al., 2021). Such an explanation might help explain how DuPont (which denies responsibility) viewed the matter. CSR: The conventional business case

Embedded in the conventional business case is the problem of collective action by businesses. In isolation, a business enterprise acts on self-interest to maximise a goal such as profit. Failure of collective action may undermine responsibility initiatives. For instance, companies may adopt net-zero carbon targets achieved through planting trees, preserving forests or carbon capture procedures – just offsetting rather than aiming to reduce their continuing emissions (Mackenzie, 2021). A UN source reports that about 42 companies announced such net-zero targets in 2019 and 2020: more than half will follow one or more of the options just listed while continuing emissions (Mackenzie, 2021). There may be limits to how much new forest can be planted, due to lack of available land – thus in aggregate the plans of all businesses acting independent arguably cannot be accommodated (Mackenzie, 2021). An article cited by Mackenzie (2021) criticises negative emissions, defined as removing carbon dioxide (CO2) from the atmosphere after emission (Anderson & Peters, 2016). The argument is that emissions should be reduced rather than offset subsequently. One can read an exchange with Anderson and Peters concerning whether negative emissions technologies remain necessary (Sills et al., 2016). One might observe that a combined approach would be to transition through negative emissions to zero emissions only: the question would be whether that combined approach will result in climate catastrophe relative to immediate cessation of emissions (which seems infeasible). For stakeholders, consumers and employees may gain in the short term from lower prices if companies engage in emissions, but they lose in the long term from climate deterioration in various ways. Society-at-large loses in the long term, as a result, and must decide in the short term whether companies are doing enough to control emissions and reverse climate damage. Impact-oriented CSR: Good citizenship and responsible capitalism

Unilever serves to illustrate commitment to social improvements conceived in terms of positive impacts for stakeholders, societies and the natural environment. This commitment comes from the office of the CEO from 2009 onward (Matsangou, 2016). Whether perfect or not since including profitability, this commitment reasonably reflects a process of moral wayfinding over time (Valentinov & Pérez-Valls, 2021). Fernando (2010) tests the genuineness of CSR initiatives for Unilever and Brandix in Sri Lanka in the aftermath of the Asian tsunami. For stakeholder analysis, the Unilever approach improves the lives of consumers without significant cost to employees. Indeed, Unilever tries to promote a living wage standard

Ethical Dimension of Impact-Oriented CSR 191

throughout its supply chain. Society-at-large should endorse this approach, a variant of CSV. The impact on environmental sustainability may remain unclear at this point. The official Unilever approach states: “We believe that business growth should not be at the expense of people and the planet. That’s why we’re changing the way we do business, and why we want to change the way business is done” (Unilever, 2020, Paragraph 1). “Businesses that thrive in the future will be those that serve society today. That’s why, in 2010, we launched the Unilever Sustainable Living Plan – our blueprint for sustainable growth. The Plan is helping us to drive more profitable growth for our brands, save costs, mitigate risk and build trust among our stakeholders” (Unilever, n.d., Sustainable, Paragraph 5). Unilever does expect to profit, sustainably over time, from its strategy. There is a variant of CSV, but the difference is that Unilever emphasises positive impacts for stakeholders. What separates CSV from impact-oriented CSR is intentional targeting of impacts to increase social welfare (Barnett et al., 2020). The company launched the Unilever Sustainable Living Plan (Jurietti et al., 2017). As explained in the “Our Sustainable Living Report 2019” (available at Unilever, 2020): “The Unilever Sustainable Living Plan sets out to decouple our growth from our environmental footprint, while increasing our positive social impact” (Paragraph 5). The plan included three “big goals” each with two or more sub-goals (for a total of nine sub-goals). One goal was health and well-being for over one billion people in 2020, targeted in terms of health and hygiene, and nutrition. A second goal was to reduce environmental impact by 50% by 2020 on a “‘per customer use’ basis” for greenhouse gases, water, waste and packaging, and sustainable sourcing. Water conservation targets seven water-scarce countries containing about 50% of the world’s population. A third goal was to enhance livelihoods by 2020 for millions of people in terms of enhancing workplace fairness, women’s opportunities and inclusive business. The plan addresses certain of the UN Sustainable Development Goals (SDGs) (Unilever, n.d., SDGs). Unilever (n.d., Our approach) reports using the GRI G4 guidelines and adheres to the UN Global Compact. The ten principles of the Global Compact concern human rights, labour rights, environmental protection and anti-corruption. Unilever (n.d., Our approach, Paragraph 1) states: “We are committed to communicating our performance regularly and transparently and have been reporting on our sustainability performance since 1996.” Alan Jope, the current Unilever CEO (succeeding Paul Polman in 2019), has explained that “The two biggest threats that the world currently faces are climate change and social inequality” (Unilever, 2021, Paragraph 3). The Unilever announcement was to achieve by 2020 a living wage throughout the company’s direct value chain, to spend by 2025 annually two billion euros on under-represented suppliers, and to develop by

192

Duane Windsor

2020 new employment models and to equip ten million young people with job skills.

Nature and future generations The prevailing definition of stakeholder “salience” is the presence of one or more of legitimacy, power and urgency (Mitchell et al., 1997). Legitimacy is a normatively justifiable claim on a business; power is the capacity to help or harm the business; and urgency is the immediate importance of the claim. A combination of all three dimensions would be the strongest salience; the absence of all three dimensions would be the weakest salience. These dimensions of salience are different from “voice” or “rights”. An issue of concern in stakeholder theorising is the status of nature (i.e. the natural environment). Nature is either a “stakeholder” of a business, or not. A similar analysis involves the status of future generations (Jacobs, 1997). A body of literature supports the view that nature is a stakeholder of the basis and should be treated as such by management (Driscoll & Starik, 2004; Jacobs, 1997; Starik, 1995). A parallel argument is that nature should have legal standing, in some way (Grear, 2012; Moore, 1974; Stone, 1972, 1974, 2010). I take a different view on several grounds (Windsor, 2001). Nature and future generations are morally legitimate (Phillips, 1999; Phillips & Reichart, 2000). Moral legitimacy means normative standing for consideration. However, nature and future generations have neither immediate power nor immediate urgency for any specific business. Nature and future generations do not have voice or rights: rather an advocate, whether management or activist, must speak for nature and future generations. Assignment of such role to an advocate redistributes power within a stakeholder network and redistributes rights in a legal framework. The ascription of stakeholder status to nature and future generations is problematic (Orts & Strudler, 2002, p. 215), as there are no direct human beings or transactions: Stakeholder theory runs into intractable philosophical difficulty in providing credible ethical principles for business managers in dealing with some topics, such as the natural environment, that do not directly involve human beings within a business firm or who engage in transactions with a firm. Corporate decision-making must include an appreciation of these ethical values even though they cannot be captured in stakeholder theory. The appropriate understanding of nature is that business is embedded within society which is embedded within the natural environment. Willard (2019a) expresses the relationship as “Mother Nature” is the “holding company” for a business; and that a business imposes high external costs on nature.

Ethical Dimension of Impact-Oriented CSR 193

However, I think the motivation for the stakeholder argument is that “Treating Mother Nature as a stakeholder legitimizes environmental risks within these [normal enterprise risk management (ERM) and scenario planning] processes” (Willard, 2019a). The purpose is both internal business legitimation, and legitimation of external advocates (Stafford & Hartman, 1997). An appropriate picture is that the natural environment surrounds the stakeholder network of a business (Laine, 2010, Figure 2). Willard (2019b) applies the same argument to future generations, and cites the Brundtland Report (1987, Ch. 2, No. 1, p. 41) definition that “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. This definition is widely quoted. However, the standard requires definition by the present generation, including advocates for future generations, as future generations have no voice.

Minimum acceptable scale An issue of concern is the minimum acceptable scale of a positive environmental or social impact. The idea behind the issue is that business initiatives to generate positive social and environmental impacts should strive to achieve significant contributions. In principle, any positive impact, however small in scale and scope, is better than any negative impact or zero positive contribution. One question is whether a quite small positive contribution is worth undertaking. The alternative would be aggregation of resources to achieve significantly larger positive contributions. This aggregation might need to occur across businesses. That is, the common good would be considerably greater through either more resources provided by a business or through aggregation of limited resources across multiple businesses collaborating and with nongovernmental organisations (NGOs). A meta-analysis of over 300 studies of the impacts of a proposed circular economy through 2050 considers the absolute and relative macroeconomic, social and environmental impacts of each proposal (Aguilar-Hernandez, Dias Rodrigues, & Tukker, 2021). Some proposals are better in terms of impacts than other proposals. The policy judgment is that it is more productive to support those proposals with greater impacts per dollar of investment – if there must be choices among the proposals. If all proposals are supportable, then the overall gain is arguably larger. However, it is also possible that various small activities aimed at the SDGs may interact in ways that strengthen the impacts in combination (Obura, 2020). The question is important. For instance, a study of “local nudge interventions” to encourage underrepresented and under-privileged students to apply for college financial aid through the Free Application for Federal Student Aid (FAFSA) found that local nudges do not appear to aggregate to state or national success (Bird, Castleman, Denning, Goodman, Lamberton, & Rosinger, 2021).

194

Duane Windsor

The study concluded that, for 800,000 students, there were no effects on aid receipt or college enrollment either overall or for any definable subgroups studied. There was no apparent variation in outcomes across variable approaches. Local successes did not scale to state or national outcomes in any discoverable way. In December 2020, the US Congress adopted a legislative package that included simplification and shortening of the FAFSA form. (The original form was eight pages with more than 100 questions.) The legislation also eliminated a specific provision in favour of multiple students from a household attending college simultaneously. The effect on required parent contribution rises with income, while the new formula considerably increases eligibility to federal Pell grants for lowincome students. (Pell grants, which do not have to be repaid, are the typical purpose of the FAFSA application.) There is a negative effect on aid for middle- to upper-income families relative to an overall positive effect on aid for lower-income families (Carrns, 2021). A second question is whether the small positive contribution is effectively just window dressing so that a business can claim to be socially responsible, at very low cost to the business. The general rubric is “greenwashing” applicable to either CSR or environmental sustainability claims (Lashitew, 2021; Seele & Gatti, 2017). Greenwashing is purely symbolic and does not involve substantive resource commitments (Schons & Steinmeier, 2016). Greenwashing may be widespread behaviour, as it seeks to obtain reputational advantage at very low cost (Delmas & Burbano, 2011). A study of a sample of Taiwanese listed companies during 2010–2016 finds that (1) CSR disclosure improves financial performance of small firms, while (2) large firms “just talk CSR” resulting in no impact on financial performance (Ting, 2021).

Conclusion This chapter defines the ethical dimension of impact-oriented CSR. A social impact orientation raises two broader questions. One question is the purpose of a business (Donaldson & Walsh, 2015). Depending on the perspective adopted, business can be a profit maximiser, or a minimalist CSR actor, or an impact-oriented CSR contributor. The issue becomes whether the impact orientation can be accommodated in a market-oriented business, or whether that organisation needs to become something like a B Corporation or hybrid business. Another question is how a business can best improve the positive impacts of its CSR actions (Barnett et al., 2020), assuming for this question that the business does not generate negative impacts (Ben-Amar et al., 2021). Once adopted, impact-oriented CSR from a society-at-large perspective will extend considerably beyond narrowly defined stakeholder and environmental effects. Professor Mickens (HBS, 2021) asks the key question: “Who are the stakeholders? Are we ensuring that we’re providing equity

Ethical Dimension of Impact-Oriented CSR 195

along multiple dimensions – gender, race, disability status?” The scope of impact-oriented CSR expands in identifying social issues. As noted above, this chapter adopts a more radical position than the overall perspective of the volume. I finish with observations about the practical challenges of implementing such a radical view of CSR impacts. A moderate view accepts that there may be both negative impacts and positive impacts and relies on the hope or expectation that the positive impacts will be larger than the negative impacts in the aggregate or that at least the positive and negative impacts will net out at zero. The more radical view explained here requires in practice that businesses generate no illegitimate negative impacts and seek to generate some legitimate positive impacts. Driving negative impacts to zero and generating some positive impacts must increase the aggregate outcome positively. There must be no environmental damages and there must be environmental improvements. For example, a business must not release any carbon or methane into the environment and must help with recapture of carbon or methane from the atmosphere as technology improvements permit. Obviously, business and society must move towards such outcomes – but speed and intensity are essential. The practical considerations are more difficult with respect to distribution of gains and losses among different kinds of stakeholders. Here, Freeman (2017) is instructive: his solution is entrepreneurial innovation that functions in such a way that no stakeholder suffers any harm, and all stakeholders gain. The practical difficulty, as highlighted here, concerns how to achieve this outcome. A step-by-step moderate approach of increasing positive impacts and reducing negative impacts may work; but the vital issue is whether, especially for environmental sustainability, there is sufficient time available.

Takeaways for the society-level impacts of CSR This chapter examines the ethical dimension of impact-oriented CSR. Impact involves a fundamental shift from a conventional business case for CSR to the perspective of society-at-large. The conventional case is concerned with why and how CSR is good for the business, whether in the short term or the long term. The society-at-large perspective is concerned with how and how CSR or CSIR impacts society more broadly, whether positively or negatively. The shift in focus is from the supply side (business) to the demand side (society and non-investor stakeholders) of the economy. The chapter explains an appropriate framework for the ethical dimension of impact-oriented CSR. Basically, business should not impose harms on society and should help improve society positively. This approach means that business impacts are positive, or at least not harmful. A Pareto criterion would suffice, in the sense that while someone gains (such as the business), no one is harmed as a result. However, impact-oriented CSR has a stronger meaning that everyone should be gaining. Table 9.1 delineates and explains

196

Duane Windsor

the general cases. These cases, defined in terms of motive, action and impact, comprise a continuum from bad profit orientation (CSIR) through several accepted profit orientations (business case for CSR, stakeholder purchase of desired CSR, CSV) to stakeholder theory (responsible capitalism) to moral or civic duty CSR (good citizenship contributions to society). For a society-at-large perspective, there must be a legitimate social gain for CSR to qualify as ethical, and there cannot be loss imposed on non-financial stakeholders. Harm imposed on non-financial stakeholders violates this criterion. The practical policy questions concern to what degree this criterion can be relaxed for real conditions and how the path from the status quo to the future ideal will work.

Notes 1 This chapter is not a critique of the editors’ position or of other authors in the volume, but rather an exploration of a stronger ethical requirement for elimination of harm and maximisation of good to the extent feasible consistent with a business making sufficient profit to continue operating. There is not necessarily a huge gap between the two positions, but rather there is a difference in emphasis. The editors would like to encourage businesses to do less harm and additional good; and this chapter examines a stronger expectation of businesses to eliminate harm and practice stronger good corporate citizenship. 2 The chapter is not commissioned and does not serve as the ethical underpinning of the volume. This exploration of the ethics of impact-oriented CSR is arguably more radical than the working conception for this volume. The editors intend to promote scholarship into how businesses can diminish harms and increase goods. The framework for doing so is governmental guidance and coalition building among a much wider range of stakeholders than might typically occur in say the US or UK. Capitalism comes in institutional varieties (Hall & Soskice, 2001). The chapter is not a critique of either the editors’ position or any of the other chapters in this volume. Rather the chapter draws attention to the logical extension of any impact-oriented CSR. This chapter also does not position as the ethical underpinning for the volume. The approach emphasised by the editors can function without this standalone exploration. Obviously, a decrease in harm and an increase in good is morally desirable in the sense of a Pareto improvement. The issue not addressed in that assessment is whether those changes from the status quo are sufficient from a social perspective. The chapter simply explores from a moral philosophy perspective the logical extreme of the volume’s interest in impact-oriented CSR.

References Academy of Business in Society (ABIS). (2014). CSR impact practitioners’ handbook – From CSR to CIAM: Corporate impact assessment and management – An illustrative guide for executives, managers and enterprise stakeholders seeking to enhance the positive impacts of responsible business in society. A publication under the IMPACT project funded by the European Community’s Seventh Framework Programme FP7/2007–2013 under grant agreement n 24461. https://www.abis-global.org/content/d9.8-practitionershandbook-final.pdf

Ethical Dimension of Impact-Oriented CSR 197 Aguilar-Hernandez, G. A., Dias Rodrigues, J. F., & Tukker, A. (2021). Macroeconomic, social and environmental impacts of a circular economy up to 2050: A meta-analysis of prospective studies. Journal of Cleaner Production, 278, Article 123421, 1–11. 10.1016/ j.jclepro.2020.123421 Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968. 10.1177/0149206311436079 Anderson, K., & Peters, G. (2016, October 14). The trouble with negative emissions: Reliance on negative-emission concepts locks in humankind’s carbon addiction. Science, 354(6309), 182–183. 10.1126/science.aah4567 Barnett, M. L. (2019). The business case for corporate social responsibility: A critique and an indirect path forward. Business & Society, 58(1), 167–190. 10.1177/000765031 6660044 Barnett, M. L., Henriques, I., & Husted, B. W. (2020). Beyond good intentions: Designing CSR initiatives for greater social impact. Journal of Management, 46(6), 937–964. 10.1177/0149206319900539 Ben-Amar, W., Francoeuer, C., Marsat, S., & Wahd, A. S. (2021). How do firms achieve corporate social performance? An integrated perspective. Corporate Social Responsibility and Environmental Management, 28(3), 1078–1090. 10.1002/csr.2107 Bird, K. A., Castleman, B. L., Denning, J. T., Goodman, J., Lamberton, C., & Rosinger, K. O. (2021). Nudging at scale: Experimental evidence from FAFSA completion campaigns. Journal of Economic Behavior & Organization, 183, 105–128. 10.1016/j.jebo.2020.12.022 Brundtland Report. (1987). Report of the World Commission on Environment and Development: Our Common Future. https://sustainabledevelopment.un.org/content/documents/ 5987our-common-future.pdf Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32(3), 946–967. 10.5465/amr.2007.25275684 Carrns, A. (2021, February 7). Changes in FAFSA may reduce college aid for some families. Houston Chronicle, 120(117), Sunday, p. B5 (Business). Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85–105. 10.1111/j.1468-2370.2009.00275.x Chun, R. (2016). What Aristotle can teach firms about CSR. Harvard Business Review, https://hbr.org/2016/09/what-aristotle-can-teach-firms-about-csr Cordner, C. (1994). Aristotelian virtue and its limitations. Philosophy, 69(269), 291–316. 10.1017/S0031819100047057 De la Garza, A. (2019, November 25). Dark Waters Tells the True Story of the Lawyer Who Took DuPont to Court and Won. But Rob Bilott’s Fight Is Far from Over. TIME. https://time.com/5737451/dark-waters-true-story-rob-bilott/ Delmas, M. A., & Burbano, V. C. (2011). The drivers of greenwashing. California Management Review, 54(1), 64–87. 10.1525/cmr.2011.54.1.64 Desai, M. (2017). The wisdom of finance: Discovering humanity in the world of risk and return. Boston, MA: Houghton Mifflin Harcourt. Dharwadkar, R., Guo, J., Shi, L., & Yang, R. (2021). Corporate social irresponsibility and boards: The implications of legal expertise. Journal of Business Research, 125, 143–154. 10.1016/j.jbusres.2020.12.003

198

Duane Windsor

Dizik, A. (2018, August 28). When it makes sense to pollute – and how to change the equation: A trove of documents reveals the corporate decision-making that led to an environmental disaster, and could lead to other bad behavior. Retrieved from https://review.chicagobooth.edu/economics/2018/article/when-it-makes-sensepollute-and-how-change-equation Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91. 10.5465/amr.1995.9503271992 Donaldson, T., & Walsh, J. P. (2015). Toward a theory of business. Research in Organizational Behavior, 35(1), 181–207. 10.1016/j.riob.2015.10.002 Driscoll, C., & Starik, M. (2004). The primordial stakeholder: Advancing the conceptual consideration of stakeholder status for the natural environment. Journal of Business Ethics, 49, 55–73. 10.1023/B:BUSI.0000013852.62017.0e Elkington, J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Oxford, UK: Capstone. Ellis, E. (2006). Citizenship and property rights: A new look at social contract theory. The Journal of Politics, 68(3), 544–555. 10.1111/j.1468-2508.2006.00444.x Environmental Working Group (EWG). (2002, December 13). DuPont Hid Teflon Pollution For Decades. https://www.ewg.org/research/dupont-hid-teflon-pollutiondecades European Commission. (2011, October 25). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A renewed EU strategy 2011–14 for Corporate Social Responsibility, COM(2011) 681 final, Brussels, Belgium, www. europarl.europa.eu/meetdocs/2009_2014/documents/com/com_com(2011)0681_/ com_com(2011)0681_en.pdf Fernando, M. (2010). Corporate social responsibility in the wake of the Asian tsunami: Effect of time on the genuineness of CSR initiatives. European Management Journal, 28(1), 68–79. 10.1016/j.emj.2009.08.002 Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston, MA: Pitman. Freeman, R. E. (2017). The new story of business: Towards a more responsible capitalism. Business and Society Review, 122(3), 449–465. 10.1111/basr.12123 Grear, A., ed. (2012, June). Should trees have standing: 40 years on. Journal of Human Rights and the Environment, 3(0), Special Issue, 1–120. Hall, P. A., & Soskice, D. (Eds.). (2001). Varieties of capitalism: The institutional foundations of comparative advantage. Oxford, UK: Oxford University Press. HBS Digital Institute. (2021, January 14). [Professor] James Mickens on why all data science is political. https://digital.hbs.edu/artificial-intelligence-machine-learning/ james-mickens-on-why-all-data-science-is-political/ Jacobs, M. (1997). The environment as stakeholder. Business Strategy Review, 8(2), 25–28. 10.1111/1467-8616.00017 Jurietti, E., Mandelli, A., & Fudurić, M. (2017). How do virtual corporate social responsibility dialogs generate value? A case study of The Unilever Sustainable Living Lab. Corporate Social Responsibility and Environmental Management, 24(5), 357–367. 10.1002/csr.1407 Laine, M. (2010). The nature of nature as a stakeholder. Journal of Business Ethics, 96(Suppl. 1), 73–78. 10.1007/s10551-011-0936-4

Ethical Dimension of Impact-Oriented CSR 199 Lashitew, A. A. (2021). Corporate uptake of the Sustainable Development Goals: Mere greenwashing or an advent of institutional change? Journal of International Business Policy, 4, 184–200. 10.1057/s42214-020-00092-4 McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127. 10.5465/amr. 2001.4011987 Mackenzie, K. (2021, January 18). Too many oil companies using carbon capture as a netzero crutch. TEXAS INC. (Houston Chronicle), 120(97), Monday, p. B16 (Business). Matsangou, E. (2016, April 15). Unilever CEO Paul Polman is redefining sustainable business. EuropeanCEO. https://www.europeanceo.com/business-and-management/ unilever-ceo-paul-polman-is-redefining-sustainable-business/ Mitchell, K., Agle, R., & Wood, D. (1997). Towards a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853–886. 10.5465/amr.1997.9711022105 Montabon, F., Pagell, M., & Wu, Z. (2016). Making sustainability sustainable. Journal of Supply Chain Management, 52(2), 11–27. 10.1111/jscm.12103 Moore, T. R. (1974). Should trees have standing? Toward legal rights for nature. Florida State University Law Review, 2(3), Article 12, 672–675. https://ir.law.fsu.edu/lr/vol2/ iss3/12 Morris, T. (1997). If Aristotle ran General Motors: The new soul of business. New York: Holt. Nestlé. (n.d.). Our approach: Our long-term success depends on creating value both for our shareholders and for society. https://www.nestle.com/csv/what-is-csv Noked, N. (2011, February 28). Investing in corporate social responsibility to enhance customer value. https://corpgov.law.harvard.edu/2011/02/28/investing-in-corporatesocial-responsibility-to-enhance-customer-value/ Obura, D. O. (2020). Getting to 2030 – Scaling effort to ambition through a narrative model of the SDGs. Marine Policy, 117, Article 103973, 1–12. 10.1016/j.marpol. 2020.103973 Orts, E. W., & Strudler, A. (2002). The ethical and environmental limits of stakeholder theory. Business Ethics Quarterly, 12(2), 215–233. 10.2307/3857811 Phillips, R. A. (1999). On stakeholder delimitation. Business & Society, 38(1), 32–34. In D. J. Wood (Ed.), Essay forum – Living stakeholder theory: A tribute to the life and works of Max Clarkson. 10.1177/000765039903800102 Phillips, R. A., & Reichart, J. (2000). The environment as a stakeholder? A fairness based approach. Journal of Business Ethics, 23, 185–197. 10.1023/A:1006041929249 Porter, M. E., & Kramer, M. R. (2011). Creating shared value: How to reinvent capitalism – and unleash a wave of innovation and growth. Harvard Business Review, 89(1/2), 62–77. https://hbr.org/2011/01/the-big-idea-creating-shared-value Posner, R. A. (1979). Utilitarianism, economics, and legal theory. The Journal of Legal Studies, 8(1), 103–140. https://www.jstor.org/stable/724048 Preuss, L., & Fearne, A. (in press). Cognitive frames held by supply chain managers: Implications for the management of sustainability in supply chains. Supply Chain Management: An International Journal (online first July 28, 2021). 10.1108/SCM-082020-0364 Qizilbash, M. (2019). The market, utilitarianism and the corruption argument. International Review of Economics, 66, 37–55. 10.1007/s12232-018-0302-2; https://link.springer. com/content/pdf/10.1007/s12232-018-0302-2.pdf

200

Duane Windsor

Ryan, A. (2002). Does inequality matter – For its own sake? Social Philosophy & Policy, 19(1), 225–243. 10.1017/S0265052502191102 Sandel, M. (2013). Market reasoning as moral reasoning: Why economists should reengage with political philosophy. Journal of Economic Perspectives, 27(4), 121–140. https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.4.121 Schons, L., & Steinmeier, M. (2016). Walk the talk? How symbolic and substantive CSR actions affect firm performance depending on stakeholder proximity. Corporate Social Responsibility and Environmental Management, 23(6), 358–372. 10.1002/csr.1381 Seele, P., & Gatti, L. (2017). Greenwashing revisited: In search of a typology and accusation-based definition incorporating legitimacy strategies. Business Strategy and the Environment, 26(2), 239–252. 10.1002/bse.1912 Shapira, R., & Zingales, L. (2017, September). Is pollution value-maximizing? The DuPont case. Retrieved from https://www.law.northwestern.edu/research-faculty/ colloquium/law-economics/documents/Spring18Zingales.pdf Sills, J., and Anderson, K., & Peters, G. (2016, November 14). Responses to: The trouble with negative emissions. Geoengineering Monitor [online]. https://www. geoengineeringmonitor.org/2016/11/responses-to-the-trouble-with-negativeemissions/ Smith, A. (1759). The theory of moral sentiments (6th ed. 1790). London, UK: Printed for A. Millar. https://www.ibiblio.org/ml/libri/s/SmithA_MoralSentiments_p.pdf Stafford, E. R., & Hartman, C. L. (1997). Green alliances: Strategic relations between businesses and environmental groups. Business Horizons, 39(2), 50–59. 10.1016/ S0007-6813(96)90023-3 Starik, M. (1995). Should trees have managerial standing? Toward stakeholder status for non-human nature. Journal of Business Ethics, 14, 204–217. 10.1007/BF00881435 Stone, C. D. (1972). Should trees have standing? – Toward legal rights for natural objects. Southern California Law Review, 45, 450–501. https://iseethics.files.wordpress. com/2013/02/stone-christopher-d-should-trees-have-standing.pdf Stone, C. D. (1974). Should trees have standing? Toward legal rights for natural objects. Los Altos, CA: William Kaufmann. Stone, C. D. (2010). Should trees have standing? Law, morality, and the environment. Oxford, UK: Oxford University Press (third ed. of Stone, 1974). Ting, P.-H. (2021). Do large firms just talk corporate social responsibility? The evidence from CSR report disclosure. Finance Research Letters, 38(January), Article 101476. 10.1016/j.frl.2020.101476 Trudel, R., & Cotte, J. (2009). Does it pay to be good? MIT Sloan Management Review, 50(2), 61–68. https://sloanreview.mit.edu/article/does-it-pay-to-be-good/ Tse, L. (2021, February 9). The ethics of impact investing. https://sevenpillarsinstitute. org/the-ethics-of-impact-investing/ Unilever. (n.d., Our approach). Our approach to reporting. https://www.unilever. com/sustainable-living/our-approach-to-reporting/ Unilever. (n.d., SDGs). UN sustainable development goals. https://www.unilever. com/sustainable-living/our-strategy/un-sustainable-development-goals/ Unilever. (n.d., Sustainable). https://www.unilever.com/sustainable-living/our-strategy/ Unilever. (2020, April). Our Sustainable Living Report Hub. https://www.unilever. com/sustainable-living/our-sustainable-living-report-hub/ Unilever. (2021, January 21). Unilever commits to help build a more inclusive society. https://www.unilever.com/news/press-releases/2021/unilever-commits-to-helpbuild-a-more-inclusive-society.html

Ethical Dimension of Impact-Oriented CSR 201 Valentinov, V., & Pérez-Valls, M. (2021). A conception of moral wayfinding for business managers: The obligation for a sustainable corporation. Journal of Cleaner Production, 284, Article 124771. 10.1016/j.jclepro.2020.124771 Wallace, K. (2021). A Kantian perspective on individual responsibility for sustainability. Ethics, Policy & Environment, 24(1), 44–59. 10.1080/21550085.2021.1904531 Whelan, T., & Fink, C. (2016, October 21). The comprehensive business case for sustainability. Harvard Business Review. https://hbr.org/2016/10/the-comprehensivebusiness-case-for-sustainability Willard, B. (2019a, February 28). 5 Reasons Why “Mother Nature” is a Key Stakeholder. https://sustainabilityadvantage.com/2019/02/28/5-reasons-why-mother-nature-is-akey-stakeholder/ Willard, B. (2019b, March 10). 7 Reasons Why “Future Generations” are Key Stakeholders. https://sustainabilityadvantage.com/2019/03/10/7-reasons-why-futuregenerations-are-key-stakeholders/ Windsor, D. (2001). Stakeholder theory: Developmental history and future directions. Proceedings of the Twelfth Annual Meeting of the International Association for Business and Society (Sedona, AZ), 12, 276–281 (original paper version), 527–538 (online version repagination). 10.5840/iabsproc20011251 Windsor, D. (2013). Corporate social responsibility and irresponsibility: A positive theory approach. Journal of Business Research, 66(10), 1937–1944. 10.1016/j.jbusres. 2013.02.016 Wood, D. J. (1991). Corporate social performance revisited. Academy of Management Review, 16(4), 693–718. 10.5465/amr.1991.427961

Index

NOTE: italics indicates a figure; boldface indicates a table. Academy of Business in Society 2 Access-to-Medicines (ATM) Foundation 75 Accounting for Sustainability 163 Aguinis, H. 35 Amfori Business Social Compliance Initiative (BSCI) 121 “Amplifying the ‘S’ in ESG” (ESG Group) 71 Angola 30 Ant Financial 79, 80, 85 Aristotle 186 Austria 6 Austrian welfare state 94–116 business and social responsibility 98–99 competitive advantage 105–106, 108–110, 116 CSR Austria Initiative 99, 103 data inventory 100 discussion 110–111 grand coalitions 106–108, 110 impacts of CSR 100–114 introduction 94–96 labour and employment context 105–109, 110–111 literature on national varieties 95–98 mandatory CSR discourse 102, 103–105, 110 methodology 99–100 social partnership 106–108, 116 Strategy on Sustainable Development 106 sustainable development goals 103, 108–110 voluntary CSR discourse 101–103, 102, 106–108, 110

Barnett, M. L. 16, 34, 36 Barrientos, S. 86 bed nets 72–73, 74 Besser, T. L. 61 Blowfield, M. E. 32 Brandix 190 Brundtland Report 193 Campbell, J. M. 52 “Change the World” companies 71, 75, 78, 85, 86 Chile 31 ChoCo 166–169 civic culture 153 civic virtue 186 communication strategies 117 community involvement 56 compliance strategies 117, 119–130 contract responsibility 15 conventional business case 190 corporate social irresponsibility (CSIR) 182, 183, 188–189 conventional business case 190 DuPont pollution case 189–190 corporate social performance (CSP) 183 corporate social responsibility (CSR) definition 1, 72 origins of 14 types of 56, 59 Corridor of the Trans-European Transport Network (TEN-T) 7 Côte d’Ivoire 166–169 CSR-washing 71 cultural capital 153 customer needs 56 Czarniawska, B. 99

Index 203 Davies, I. A. 62 demand side CSR 179 Demarche Gran Chantier 139, 141 developing and emerging economies 30–33 DuPont pollution case 189–190 Earth-system processes 29 economic impact 153 Effective Altruism 75 employee behaviour 29 employment and quality of jobs 32–33 environmental pollution 29–30 ESG Group 71 Essential Guide to Social and Human Capital Accounting 163 ethical dimension of CSR 179–201 approaches to 180 Brandix 190 business case 179, 180, 183 definition 181 duty case 179 impact-oriented CSR 190–192 minimum acceptable scale 193–194 nature and future generations 192–193 Pareto gains 186, 187 society-at-large case 179–180, 181, 185, 187–188, 195–196 stakeholder case 179, 180, 183, 184, 192–193 theories of ethics and civic duty 185–186 Unilever 190–192 ethics, definition 180 European CSR 44, 99, 100. See also Austrian welfare state extractive industries 30–31 Fortune “Change the World” list 71, 75, 78, 85, 86 Fortune Global 500 companies 70 Free Application for Federal Student Aid (FAFSA) 193–194 Freeman, R. E. 184, 195 Friedman, M. 61 full producer responsibility 15 Ghana 31 Glavas, A. 32, 35 Global Compact 2, 19, 135, 154, 156, 163, 191 Gray, R. 155

greenwashing 71, 194 health and safety 148 human resource management (HRM) 32 identity capital 153 impact evaluation 70–93, 73 logic model 73, 74 outcomes 81–85, 82–84 outputs 81 recommendations 86–88 reporting on CSR 70–71, 80–85, 82–84 theory of change perspective 72–75, 73, 76–77 impact-oriented CSR. See ethical dimension of CSR impacts of CSR. See also impact evaluation; societal impact categories of 4 definition 18 in developing and emerging economies 30–33 employment and quality of jobs 32–33 on environmental pollution 19, 29–30 negative 35 patterns 34–35 tax avoidance 33–34 Impact-Weighted Accounts Project 119 India 31 infrastructure megaprojects. See megaprojects integrated social value analysis 119–120 Integrated Social Value (ISV) 6 Interventionist Research 141 Italy 169–172 Jamali, D. 31 Johnson & Johnson (J&J) 77, 80 JP Morgan 79, 80 Kantianism 186 Kelley, K. 32 Kenya 32 legitimacy 192 Levitt, T. 61 logic model 73, 74, 164 malaria 72–73, 74 mandatory CSR discourse 102, 103–105, 106–108, 110

204

Index

manufacturing industry 31 Matten, D. 95 megaprojects 134–160. See also Megaproject Social Responsibility (MSR) benchmark analysis 145–148, 146–147 definition 136–137 impacts 149–151 protocol 141, 148, 152, 153–154 socio-communicative research 142 socio-economic research 141–142 Turin-Lyon Tunnel 136, 140–141, 155–156 Megaproject Social Responsibility (MSR) 7, 134–135 CSR and 138–140 definition 137, 157 minimum acceptable scale 193–194 mining industry 30–31 Moon, J. 95 nature 192–193 neoliberalism 95 “Net Positive” (Polman & Winston) 2 New Organized Kitchen 169–172 Nigeria 31 nongovernmental organisations (NGOs) 31–32 non-reciprocity condition 56 Novartis 5, 77, 80, 81 Ogoni crisis 31 oil industry 30 organisational pro-social activities 161–178 collective engagement 171 definition 161 improving relationship 171–172 intensifying relationships 167–168 reifying relationships 168–169 relational impact of 164–172, 167, 170 Palazzo, G. 15, 138 Pareto argument 186, 187, 195 philanthropy 56, 57 Planetary Boundaries (PB) 29 Polman, P. 2 population mobility 153 Porter, M. E. 49, 79 Poverty Footprint 163 power 192 pro-social activity. See organisational pro-social activities public policies 2

relational capital 148 relational work 7, 164–172 definition 174 impact of 165 sustainability program 167 reporting on CSR. See impact evaluation retailers 117–133 buying strategies 117–118 “safe limits” 29 salience 192 SBSR. See small business social responsibility (SBSR) Scherer, A. G. 138 Sedex Global 121 Shared Value Initiative 71 Shell 31 small and medium-sized enterprises (SMEs) 44–45, 61. See also small business social responsibility (SBSR) small business social responsibility (SBSR) 44–70 defining 46 stakeholders 49–52, 49 SMEs. See small and medium-sized enterprises (SMEs) Smith, A. 186, 187 social accounting 117–133 definition 118–119 integrated social value analysis 119–120 megaprojects and 155 in organisations 118–119 qualitative analysis and findings 121–124, 122, 123 social benefits 55, 57 social enterprise 50, 52, 56, 57, 62 social impact, defined 3, 5 social market economy 180 social process 54, 56–57 social representations 154 “Social Responsibility of Business is to Increase its Profits, The” (Friedman) 61 societal impact 52–57. See also impact evaluation definition 48–49 evidence for 49–52, 51 social benefits 55, 57 social inputs 53, 56 social process 54, 56–57 stakeholders 49–52, 49, 58–60, 59, 60 types of 49, 49, 50–52

Index 205 society-at-large perspective 179–180, 181, 185, 187–188, 195–196 socio-communicative research 142 socio-economic research 141–142 sponsorship 56 stakeholder perspective 179, 180, 183, 184, 192–193 stakeholders 49–52, 49, 58–60, 59, 60 strategic perspective 173 supplier development strategies 117 supply chain management 117–118 supply side CSR 179 sustainability definition 185, 193 governance of 153 megaprojects and 134–135 Sustainable Development Goals (SDGs) 1, 3, 75, 135 sustainable employment 56, 57 sustainable human resource management 32 tax avoidance 33–34 tea industry 32 theory of change perspective 72–75, 76–77

Toyota 79, 80, 85 triple bottom line 185 Triple-Bottom-Line-Approach (TBL) 72 Turin-Lyon railway 7 Turin-Lyon Tunnel 136, 140–141, 155–156 Unilever 189, 190–192 urgency 192 utilitarianism 185–186 Value Balancing Alliance 119 value creation 62, 184 values 154 virtue theory 186 voluntary CSR discourse 101–103, 102, 106–108, 110 Walmart 79, 85 Weber, M. 48 welfare state. See Austrian welfare state Wood, D. J. 183 workplace health and safety 148