Responsible Business Conduct

In Korea, Corporate Social Responsibility (CSR), has spread to most multinational corporations, as well as to large companies and small and medium-sized enterprises. Climate change has become another trigger for arousing interest in sustainable management. A specialist in development finances in the Diagnosis of Current Affairs column of the Peace Weekly gives her ideas on the subject.

Although CSR is used with different meanings which are confusing it has two main objectives: to mitigate costs and risks and to create new opportunities and values. It's fundamentally about how a company manages its business.

Effective CSR increases corporate transparency and collaboration among those concerned with the ecosystem, (business, government, investors, civil society, employees, and consumers). In the larger picture, it is a matter of leadership to set standards in markets and in society. It's a strategy that goes far beyond the norms of common philanthropy.

In the international community, there is now a 43-year-old OECD which proposes guidelines that serve as a relevant standard. This guideline does not use the term 'CSR', but rather the term "Responsible Business Conduct". When the Working Group Chairman finished a meeting in 2016, people asked him, "Are you the guy who killed CSR?", "CSR committed suicide!" is the answer handed down. It is now Corporate Responsibility.

In the past decades, CR has evolved with two distinct trends. One is about governance. Breaking away from the traditional 'compliance' method of setting rules and standards and reporting results through audits and investigations. Now, instead in a collaborative manner, jointly finding and correcting root causes and applying best practices. It has been changing in a way that promotes the use of capabilities, and shares risks and benefits.

The second is the evolution of capitalism and the expansion of boundaries. The policy in the past was to see society as a battleground for competition. GE, Google, IBM, Nestle, Unilever, and Wal-Mart are beginning to connect the areas of company performance with labor, human rights, and the environment. Four years ago, in an Economist survey, 83% (74% strongly) of the 853 corporate executives around the world said human rights were a problem.

Our writer concludes the article considering the interest in CSR currently spreading in Korea. First of all, CR is not a government-led agenda. It is an agenda for the private sector to lead with repeated innovations based on their capabilities. She hopes that CR will bring about Korean entrepreneurship that can embrace these new ideas in the world markets.