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September 28, 2005
GAO Finds Federal Corporate Social Responsibility Programs Widespread But Uncoordinated
    by William Baue

The Congressional Human Rights Caucus convenes a briefing today to discuss the findings of a Government Accountability Office report on US government initiatives on CSR.

Today, the Congressional Human Rights Caucus (CHRC) convened a briefing to discuss the findings of a new report by the Government Accountability Office (GAO), the investigative arm of Congress, on US government support and advancement of corporate social responsibility (CSR). The report was requested last year by Representatives David Price (D-NC), Sander Levin (D-MI), and Cass Ballenger (R-NC--since retired). Surprisingly, the report finds a broad array of CSR activity in the federal government.

"Although there is no broad federal CSR mandate, we identified 12 U.S. agencies with over 50 federal programs, policies, and activities that generally fall into four roles of endorsing, facilitating, partnering, or mandating CSR activities," states the GAO report.

The report cites examples of these four categories (as defined in a 2002 World Bank study) of CSR activities. Examples include, respectively: the State Department Award for Corporate Excellence; Commerce Department training on corporate stewardship; the US Agency for International Development (USAID) partnering with a company to help rebuild post-war Angola; and the Securities and Exchange Commission (SEC) rule for filing shareholder resolutions on social and environmental issues.

The idea for a GAO report originated as one of 18 recommendations made in the Kenan Consensus drafted by a study group assembled by the Kenan Institute of Private Enterprise, a unit of the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill. Several study group members are presenting at today's Congressional briefing, including Susan Aaronson, who co-authored a 2002 report that presaged the study group, Consensus recommendations, and GAO report.

"What is the chief problem of the US approach to CSR?" asked Dr. Aaronson, director of globalization studies at the Kenan Institute. "Incoherence."

"There is no one agency or individual in charge, despite the importance of multinational enterprise to global economic stability and growth," she said, pointing out the necessity of such coordination in the absence of the ability of markets to spur global corporate responsibility. "Although market forces are increasingly pressing companies to act responsibly, markets have not succeeded in prodding all corporations to 'do the right thing' everywhere they operate all of the time."

At the briefing, Dr. Aaronson expanded upon the original 18 recommendations listed in the Kenan Consensus. She advocated making CSR a coherent coordinated foreign policy goal housed at the White House or State Department; ascertaining if public policies--such as the World Trade Organization (WTO) undermine CSR; and mandating disclosure of the social and environmental impacts of investments.

Dr. Aaronson also advocates for the US government to take a lead role in promoting CSR and human rights, given its market power. She points out that other governments are currently leading the way.

"Britain has a coordinated approach to global CSR in the national interest, a minister who organizes and evaluates this effort and the British Parliament has a CSR caucus," Dr. Aaronson observed.

The European Union has enacted regulation on corporate social and environmental practices. Ironically though, this month the European Commission cancelled the tender it had issued a call in August for the creation of a database of CSR performance of European companies due to "political pressure," according to the website.

Fellow Kenan Consensus study group member Bennett Freeman, senior counselor on corporate responsibility at Burson-Marsteller and former US deputy assistant Secretary of State for the Bureau of Democracy, Human Rights and Labor (DRL), called for the depoliticization of CSR. He cited the success of the Voluntary Principles on Security and Human Rights, an initiative launched in 2000 by the US State Department and British Foreign Office to address allegations of complicity in human rights abuses by oil and mining companies operating in conflict zones.

"The fact that the Bush Administration, to its credit, has carried this late Clinton Administration initiative forward demonstrates not only the value of this particular initiative but also the bipartisan support that US government support of global CSR can and should command," said Mr. Freeman.

While the GAO report represents significant progress forward on US government action on CSR, Kenan Consensus study group Co-Chair Bruce Moats, chief strategist of Moats Associates and former vice president of Levi Straus, points out that much more work remains.

"For those keeping tally, there are only 17 more recommendations to go," he said.


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