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treaties or bilateral investment treaties between countries. There are
already a few examples of rewriting international rules; for instance,
the European Union has various rules protecting its citizens from
irresponsible corporate behaviour and a bilateral agreement between
the governments of the United States and Chile has a chapter on
˜corporate stewardship™.
Encouraging more responsible business also requires new models of
corporate governance. Recent evidence suggests that voluntary cor-
porate initiatives cannot succeed in advancing societal goals without
changes in corporate governance regimes, such as, for instance, the
mandatory inclusion of employee representatives on the boards of
trustees of pension funds, mandatory disclosure practices or
government-enforced freedom of association (Bonvin 2007; Deakin
and Hobbs 2007; Jones et al. 2007). Policy makers should make a
concerted effort to rewrite company law and other regulatory instru-
ments to increase the power of ˜non-traditional stakeholders™ and to
require companies to become more transparent about all of their
176 Beyond Corporate Social Responsibility
*




activities. Corporate governance reforms will help companies to
make better social and environmental choices and to justify these
choices in front of shareholders. Policy makers “ including national
governments, the World Bank and the UN “ will need to be involved
in these reform processes.
In the final analysis, this book has shown that CSR may bring
benefits for society, but there are many limitations to voluntary
activities. Too much focus on CSR may divert attention from broader
political and economic solutions to societal challenges. If we want
business to fulfil its potential for serving societal needs, the CSR
approach is not enough.
Glossary




Accountability. Corporate accountability refers to having to answer
for the consequences of a company™s behaviour. Measures of
accountability can range from social audits of a company and CSR
reporting, to the legal liability for a company™s actions. While there
is no consensus on what corporate accountability should encompass,
the term ˜accountability™ is usually understood to result in stricter
obligations by companies in comparison with ˜social responsibility™.
Civil society. Civil society is the sum of civic and social organisa-
tions and institutions, which form voluntarily to represent com-
mon interests. Civil society is not part of institutions of the state
and commercial organisations. Non-governmental organisations
such as Greenpeace and Amnesty International are considered
part of civil society.
Equator Principles. The Equator Principles provide a voluntary set
of guidelines for financial institutions to manage social and envi-
ronmental issues related to project financing with project capital
costs over US$10 million (see Box 3.1 for further information).
Website: www.equator-principles.com
Extractive Industries Transparency Initiative (EITI). The EITI
aims to improve governance in resource-rich countries through the

177
Glossary
*
178


full publication and verification of company payments and govern-
ment revenues from oil, gas and mining (see Box 6.1 for further
information). Website: www.eitransparency.org
Extractive Industries Transparency Initiative Plus Plus (EITI++).
The EITI++ was launched by the World Bank in 2008 to help
developing nations to manage their natural resource revenues. The
EITI++ goes beyond the EITI by offering resource-rich countries
World Bank assistance in designing natural resource contracts,
monitoring operations, collecting taxes and, above all, spending
natural resource revenues effectively.
Global Compact, see United Nations Global Compact.
Global Reporting Initiative (GRI). The GRI produces universal
guidelines for measuring and reporting economic, environmental
and social performance of organisations. The GRI Guidelines are
the most common framework used in the world for environmental
and social reporting, with over 1,500 companies having adopted the
Guidelines. The GRI is an independent institution, but it collab-
orates with the UN Environment Programme and the United
Nations Global Compact (see below). Website: www.globalreport-
ing.org
International Finance Corporation (IFC). The IFC is an arm of
the World Bank responsible for promoting the private sector in
developing countries. It funds private sector projects, helps com-
panies in the developing world to raise capital in international
financial markets and provides advice and technical assistance to
businesses and governments. The IFC directly funds many private
businesses, for instance, by providing loans to companies in devel-
oping countries such as India, which have the potential of success-
fully expanding in the global market. Website: www.ifc.org
International Monetary Fund (IMF). The IMF was established in
1944 by a conference of forty-four governments at Bretton Woods
in the United States. Its original aim was to supervise a system of
so-called ˜fixed™ exchange rates between the world™s currencies, but
Glossary * 179


this system had collapsed by the 1970s. Today, the IMF™s aims are to
promote international monetary cooperation and exchange rate
stability and to help member countries in dealing with temporary
balance of payments difficulties. In return for a loan to a member
country, the IMF can impose a set of conditions, including changes to
the country™s tax policy, changes to monetary policy, privatisation of
formerly state-owned enterprises, currency devaluation, government
spending cuts or removal of foreign investment restrictions. Website:
www.imf.org
International Organization for Standardization (ISO). The ISO is
a network of the national standards institutes of 157 countries (as of
June 2008) and the world™s largest developer of international stand-
ards. ISO standards are developed by technical committees of
experts and they provide rules for good practice for a specified
area. The ISO standards include the ISO 9000 series for quality
management, the ISO 14000 series for environmental management
and the ISO 26000 series for social responsibility (see below).
However, the ISO itself does not certify that a company conforms
to a specific standard. Website: www.iso.org
ISO 14000. ISO 14000 is a series of different environmental man-
agement standards developed by the International Organization
for Standardization (ISO). The ISO 14001 standard is the princi-
pal standard used by firms and it addresses environmental man-
agement systems in general. Other standards of the ISO 14000
series address specific environmental aspects such as ISO 14031
(environmental performance evaluation), ISO 14044 (life cycle
analysis) and ISO 14063 (environmental communication).
Website: www.iso.org
ISO 26000. ISO 26000 is a new standard that addresses what
companies need to do in order to operate in a socially responsible
way. In contrast to standards for quality management and environ-
mental management, the ISO 26000 contains guidelines “ not
requirements “ and therefore cannot be used for certification of a
Glossary
*
180


company in the same way as ISO 9001 or ISO 14001 standards.
Website: www.iso.org
Non-governmental organisation (NGO). An NGO is a not-for-
profit pressure group which is independent of government.
Philanthropy. Philanthropy is the use of financial donations and
expertise for the benefit of public causes. There is no consensus
on whether corporate philanthropy should be considered a part
of corporate social responsibility. There is a distinction between
charity, which refers to the alleviation of human suffering, and
philanthropy, which refers to a wider commitment to public
benefit that seeks to address the causes of social problems such
as poverty.
Sustainable development. According to the definition by the World
Commission on Environment and Development, sustainable devel-
opment means meeting the needs of the present without sacrificing
the ability of future generations to meet their own needs.
United Nations Global Compact. The Global Compact is a UN
initiative, which asks participating companies to subscribe to ten
core principles in the areas of human rights, labour rights and the
environment. The Global Compact network consists of several
hundred companies, dozens of non-governmental organisations,
major international labour federations and a number of UN agen-
cies. Website: www.unglobalcompact.org
Voluntary Principles on Security and Human Rights. The Voluntary
Principles were launched in 2000 by the governments of the
United States and the UK in order to address security and human
rights issues among extractive sector companies. The participating
companies promise to support a set of general voluntary principles,
which relate to three areas: (1) ˜risk assessment™ (e.g., identifying
potential for violence); (2) ˜interactions between companies and
public security™ (e.g., holding regular consultations with host gov-
ernments and local communities on the impact of security arrange-
ments); and (3) ˜interactions between companies and private
Glossary * 181


security™ (e.g., individuals implicated in human rights abuses not to
provide security protection for the company). Website: www.vol-
untaryprinciples.org
World Bank. Like the IMF, the World Bank was established in
1944 to help, principally, European nations recover from the dev-
astation of the Second World War of 1939“45. Today, the World
Bank is one of the world™s largest sources of overseas development
assistance, and its work focuses mainly on developing countries.
The World Bank consists of several distinct institutions, including
the International Finance Corporation (see above). It has initiated
research and policy guidelines on Corporate Social Responsibility
and sustainable development. In order to maximise the develop-
mental potential of extractive industries, it has launched the
Extractive Industries Transparency Initiative Plus Plus in 2008
(see above). Website: www.worldbank.org
World Business Council for Sustainable Development (WBCSD).
The WBCSD is a CEO-led, global business association of about
200 companies dealing exclusively with sustainable development.
The WBCSD provides a platform for companies to communicate
with each other on sustainable development, share knowledge,
experiences and best practices, and to represent common interests
on social and environmental issues in dialogue with governments,
non-governmental organisations and international organisations.
Website: www.wbcsd.org
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