Corporate social responsibility has grown intoa catch-phrase within the span of a few years.But the concept may easily be diverted into apublic relations exercise unless concernedgroups and individuals take concrete steps toensure that human rights become key consid-erations in core business operations.

Growth of corporate social responsibilityIn recent years, corporate social responsibility (CSR) hasgrown rapidly as major corporations have established CSRdepartments, the United Nations Global Compact has involvedthousands of companies in its roundtables and initiatives, andmainstream investors have begun evaluating companies notonly on financial performance, but on social and environmen-tal performance as well.While CSR policies and codes of con-duct are not a substitute for national laws, internationalstandards or collective bargaining agreements, they are impor-tant statements of a company’s vision, values and goals as itrecognizes and implements its responsibilities to society.

Faith-based and socially responsible investors have played amajor role in building the consensus that corporations have asocial and environmental responsibility to the communities inwhich they operate anywhere in the globe. Committed institu-tional investors—public pension funds, socially responsibleinvestment firms, foundations, religious organizations—haveheightened public awareness and challenged corporations todevelop comprehensive policies that are effectively monitored.Their action and corporate response have resulted in steps toimprove performance in such essential areas as human rights,the environment, health, labor rights, supply chain accounta-bility and financial responsibility.

The Interfaith Center on Corporate Responsibility (ICCR)actively supports corporate social responsibility and engagescorporations on a range of CSR issues. ICCR is a coalition of275 religious investors from the Catholic, Jewish and Protestantcommunities in the United States with a combined investmenttotal of over $110 billion.As shareholders in many largetransnational corporations, ICCR members have pressed corpo-

rations to adopt policies on a range of social issues, includinghuman rights, labor rights and the environment. In addition toreligious institutional members, ICCR has 25 associate mem-bers and 54 affiliate members who join in company actions topromote corporate social responsibility.These institutionsinclude socially responsible investment firms, public pensionfunds, union pension funds, foundations and universities.

Human rights and corporate accountabilitySince its founding in 1971, ICCR has included human rights asa central element of its mission. ICCR members have focusedon a number of human rights struggles, including apartheid inSouth Africa, calling on companies to withdraw until theapartheid system was dismantled; abuses of marketing infantformula to poor families in the developing world; egregioushuman rights violations by the military dictatorship of Burma;labor rights abuses in the Maquiladora sector in Mexico; laborrights violations in supplier factories around the world pro-ducing for U.S. retail companies; human rights violations inChina and the need for every company to adopt comprehen-sive, verifiable and transparent human rights policies and prac-tices.Through filing shareholder resolutions, meetings withtop management and public campaigns, ICCR members andassociates have put human rights on the agenda of corpora-tions as both a moral and business issue, using the Principles forGlobal Corporate Responsibility:Bench Marks for Measuring Business Perfor-mance, a document created by ICCR and its partners around theworld, to guide their corporate accountability work.1

Investors are increasingly aware of the potential risks to theirportfolios presented by corporate human rights violations,while a growing body of research suggests that higher stan-dards of corporate responsibility may correlate with improvedprofitability. Risks to shareholders associated with corporateviolations of human rights include damage to firms’ reputa-tions, lawsuits, interruptions of operations because of workstoppages, and general loss of public trust in corporations.

Examples of corporate engagementThrough the filing of shareholder resolutions (a 500-wordstatement included in the company’s proxy, which is thenvoted on by all shareholders) and dialogues with top manage-ment of companies, shareholders have been able to create

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changes in corporate policies and practices. Following aresome examples:

• Ford Motor Company adopted a human rights code thatincludes the International Labor Organization’s core laborstandards and is implementing its code throughout thecompany and among first-tier suppliers.

• The Gap includes basic workplace human rights in its Codeof Vendor Conduct and has put substantial resources intointernal and independent monitoring of supplier factories.The company recently issued its second public report onsocial responsibility performance working closely with reli-gious and socially responsible investors.

• Jones Apparel Group (JAG) is implementing an innovativepilot project in four countries along with labor and sociallyresponsible investors, and is working with local civil societygroups to identity and remediate labor violations in facto-ries producing for JAG.

• McDonald’s Corporation is implementing its code of conductthroughout its supply chain, emphasizing a systemsapproach that supports sustainable human rights compliance.

• Occidental Petroleum agreed in 2004 to adopt a formalhuman rights policy after ICCR members and associatesfiled a shareholder resolution calling for the developmentand implementation of such a policy.

• The Walt Disney Company has strengthened its code of con-duct, its monitoring of its vendors and licensees and itsstakeholder engagement, and is working to achieve agreater level of compliance with labor and environmentalstandards that can be maintained over time.

These companies continue to identify labor and humanrights violations at the factory level and struggle to find effectiveapproaches to address them in a systemic manner.A number ofother companies are addressing human rights issues in someform with varying levels of effectiveness and commitment.2

Challenges to be addressedImproving the performance of corporations as promoters andprotectors of human rights and contributors to the sustainabil-ity of communities requires facing and addressing specificcore challenges.

1. Corporate Social Responsibility needs to be embedded into reg-

ular business operations rather than being viewed as an “add-

on.”The content of CSR can become diluted to the point oflosing substance. Some corporations appear to turn CSRconcerns into public relations campaigns. Others confuseCSR with corporate philanthropy or reduce it to stake-holder dialogues. CSR public reports often fail to addresssuch key issues as the ability of employees to form unionsand bargain collectively, or efforts to rectify negative com-munity impacts. CSR should focus on core business opera-tions, not on peripheral activities. It should target thedecision-making and implementation processes that guideall company activities in the economic arena, as well asthose processes involved in protecting, promoting andcomplying with international human rights, labor andenvironmental standards and legal requirements in thecommunities where it operates. Substantive CSR includes acommitment to contributing to the sustainability of com-

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munities through the on-going engagement of local stake-holders, the active participation of communities impactedby company activities and the public reporting of companypolicies and performance.A core focus of ICCR’s work is toinvolve workers and community groups in CSR, and to findways to build the capacity of civil society.

2. Corporate human rights obligations need to be clearly defined

and applied globally.Voluntary corporate codes of conductcombined with effective monitoring, training and capacitybuilding have contributed to important changes in work-place conditions. However, we need to build on the experi-ence of voluntary codes to create broader mechanisms forcorporate accountability that go beyond company-by-com-pany approaches. Industry initiatives and global approachesare essential in the next phase of CSR.An important tool forbuilding a broad consensus on human rights obligations ofcompanies is the “Norms on the Responsibilities ofTransnational Corporations and other Business Enterpriseswith regard to Human Rights” (UN Norms), adopted in2003 by the Commission on Human Rights’ Sub-Commis-sion on the Promotion and Protection of Human Rights.3

The UN Norms provide a common template for allcompanies, establishing minimum standards for humanrights performance that can create a level playing field forall companies.As a concise distillation of internationalhuman rights instruments such as the Universal Declarationof Human Rights, the International Labour Organization’score conventions and a wide range of other internationalagreements related to human rights, this document helpsconnect the dots between international human rightsagreements and the obligations of companies.The UNNorms also provide concrete guidance for companiesadopting comprehensive human rights policies coveringsuch areas as equal opportunity, security, rights of workers,respect for national sovereignty, consumer and environ-mental protection and provisions for implementation.

In July this year, UN Secretary-General Kofi Annanappointed Dr. John Rugge as the Special Representative forbusiness and human rights. His mandate is to identify stan-dards for corporate accountability, clarify issues such as the“spheres of influence” of business and “complicity,” and de-velop assessment tools for measuring the human rights im-pact of business. It is critical for human rights organizationssuch as Human Rights in China to participate in consulta-tions with the Special Representative over the next two years.

Tools for corporate accountabilityA number of tools exist to help individuals and institutionsadvance the human rights agenda within the corporate socialresponsibility framework. Here are a few examples:

1. Shareholder resolution filing. Individuals and institutionsowning shares in a company can file a shareholder resolu-tion calling forthe company to take specific actions. Lastyear, ICCR members and associates filed 264 resolutionswith 182 companies on a range of social and environmentalissues.A number of resolutions called on companies toadopt comprehensive human rights policies, and some were

directly related to China.This tool brings human rightsissues to the attention of all of a company’s shareholders andoften leads to negotiations with top management. In addi-tion, individuals and institutions can show their support byvoting their proxies in favor of these shareholder resolu-tions. More information on shareholder activist resolutionsis available on ICCR’s Web site at www.iccr.org.

2. Corporate dialogues and collaboration. Resolution filing canlead to productive collaboration with companies wanting totake leadership on an issue. For example, resolutions onworkplace human rights filed with McDonald’s and Walt Dis-ney led to dialogues that culminated in a multi-stakeholderproject on sustainable labor compliance with ten factories inGuangdong Province.A full report of the project will beavailable on ICCR’s website in the first quarter of 2006.

3. Principles for Global Corporate Responsibility: Bench Marks for

Measuring Business Performance (Corporate Examiner, 2003).

This “Global Principles” document, created by ICCR and itspartners around the world, is a statement of expectations ofcorporate behavior on a range of issues, including humanrights.The Global Principles can be ordered through ICCRor downloaded at www.bench-marks.org. In addition a“Human Rights Evaluation Tool” based on the Global Prin-ciples has been developed to help identify what humanrights policies a company has in place, what the gaps areand how the company implements their policies. For anelectronic copy of this tool, go to www.iccr.org.

4. United Nations human rights norms. A copy of the UN Normsand information about the Special Representative on Busi-ness and Human Rights is available on the Web site of theBusiness & Human Rights Resource Centre at www.busi-ness-humanrights.org.The Web site of the Business LeadersInitiative on Human Rights, www.blihr.org, providesreports on how some companies are “road-testing” thecontent of the UN Norms.

5. Global Reporting Initiative (GRI).The GRI is a multi-stake-holder initiative focusing on creating a standardized report-ing framework for economic, environmental and socialperformance.The framework’s guidelines, which includehuman rights and labor indicators, are currently beingreviewed, and a third edition will be posted for commentsbefore being adopted in 2006. Details are available atwww.globalreporting.org.

The more groups and individuals take advantage of theseresources, the greater the likelihood that corporate socialresponsibility will eventually become an integral and mean-ingful element of normal business practice.

NOTES1. The Principles for Global Corporate Responsibility can be accessed at

www.bench-marks.org.

2. The Web site of the Business and Human Rights Resource Center,

www.business-humanrights.org, provides a list of more than ninety

companies that have adopted human rights policies.

3. See United Nations High Commissioner for Human Rights, Economic

and Social Council, E/CN.4/Sub.2/2003/12/Rev.2,August 26, 2003,

http://www.unhchr.ch/huridocda/huridoca.nsf/(Symbol)/E.CN.4.

Sub.2.2003.12.Rev.2.En?Opendocument.

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