Promoting corporate social responsibility

Recently, the corporate world has been changing through the evolution of time. Since the 2008 financial crisis, further impetus has been given to the promotion of transparency and accountability as well as corporate citizenship.

By Ju Chul-ki

Recently, the corporate world has been changing through the evolution of time. Since the 2008 financial crisis, further impetus has been given to the promotion of transparency and accountability as well as corporate citizenship.

In addition to corporate governance, corporate social responsibility (CSR) has added further importance as a factor permitting sustained growth of companies. “Doing well by doing good” is the new catch phrase. At a global level, the United Nations already initiated the U.N. Global Compact (UNGC), an initiative designed to promote CSR, focusing on human rights, labor rights, environmental causes and anti-corruption.

This initiative came from the belief that without engaging the corporate world, there is no genuine solution to world’s social problem. Stakeholders such as government, civil society and the private sector would have to combine their efforts to better address challenges of economic and social problems of today’s world and find proper remedies.

Eleven years after its foundation, the Global Compact has grown to be the largest initiative in the CSR field, enrolling more than 8,000 membership among which are some 6,300 companies, economic and social organizations and academic circles. The initiative is led by U.N. Secretary General Ban Ki-moon who gives particular care for this movement. The Global Compact promotes 10 principles covering issues on human rights, labor rights, environment, and anti-corruption.

Companies are encouraged to implement these 10 principles into their corporate management strategies and annually submit sustainability reports on their achievements in their business operations. Companies are also encouraged to take social contributions in the form of supporting the U.N. Millennium Development Goals (MDG) as they become key partners of the global cause for development. The U.N. is targeting to engage 20,000 enterprises by 2020 so that the Compact values can become truly a universal value supported by the business world.

Thus businesses become true forces for achieving the goals of the U.N. to achieve peace and stability, poverty eradication and economic progress, human rights and social wellbeing of the people. The U.N. has also created initiatives such as Principle for Responsible Investment (PRI) to enroll some 800 global investors and pension funds determined to invest only in companies which are ethically correct and environmentally sound. It also created a network of 300 businesses schools under Principles of Responsible Management of Education (PRME) to educate and groom future CEOs well versed in the cause of CSR.

In Asia, this global effort has also received a wide echo. The Global Compact Korea Network was launched in September 2007 in Korea and it has now grown into an entity of more than 190 memberships including many companies and institutions that are committed to implementing the UNGC’s 10 principles into their business management and operations. They have made considerable efforts for faithful implementation of these principles into their business policies.

They annually report their performance results to their stakeholders including the U.N. By doing this, companies can promote sustainability of their businesses which will permit sound growth of mid- and long-term periods besides gaining the brand image of a good company striving for right cause. Now, more Korean firms write their sustainability reports in addition to traditional financial reports.

The new trend is to combine both financial and non-financial reports. Korean companies are also using the UNGC to broaden global networks. At regional level, a trilateral roundtable conference of global compact networks is being held regularly amongst Korea, China and Japan.

In October 2010, the global community launched ISO 26000 to promote social responsibility to be assumed by all actors of society. ISO 26000 is a non-binding set of recommendations for all social players for responsible practices. Companies are bound by the same set of recommendations. ISO26000 is considered not to be regulatory instruments but it is generally conceived as an international governing tool for business transactions and products. Korean companies are sensitive to this and they are trying to upgrade their business strategy policies to meet these new challenges for change.

At government level, the G20 meeting was held last November under the chairmanship of Korea. This summit and the G20 business forum discussed CSR issues and adopted several action plans and recommendations in the field of anti-corruption, environment, and development. Follow-up actions must be taken by the G20 countries. We can conclude that CSR and responsible business practices are turning into a mainstream agenda of the world and all players including companies have to embrace this. Korean firms who are competing in the competitive world must prove themselves that they are responsible, transparent and accountable.

Korea is one unique country who made successful transformation to democracy, economic power house as well as culturally vibrant society. Korea slowly develops into an advanced country and wishes to assume further leadership based on its development experiences. If there is any lacking point, it certainly is the insufficient link of values. If Korean society and our companies prove themselves in excellence with global value, Korea can surely join the ranks of countries that may lead the world in the 21st century.

The traditional virtues of Northeast Asians were keeping silence in addressing issues relating to universal values such as human labor rights and anti-corruptions. But the era of silence is over and Asian countries must take their place in the world in terms of setting standards and promoting values. Asia has its own tradition and social values that could be shared with other parts of the international communities.

It is a high time for Korean society and businesses to embrace CSR values. We need to develop further habits and mechanisms to promote social dialogue linking all circles. Korean businesses can also develop dialogue with multinational enterprises here using platforms such as the Global Compact Network and other organizations to better promote the cause of social values in a harmonious manner working with the U.N. led by Secretary General Ban.

Ju Chul-ki, a former Korean ambassador to France, now serves as vice president and secretary-general of the Global Compact Korea Network. He can be reached at chulki-ju@hanmail.net.