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Jacobin - April 29, 2022

Corporate social responsibility is a mirage. There is no path to voluntary corporate action.

At the end of March, the UN announced that it was establishing a committee to study whether companies adhere to their promises to reduce greenhouse gas emissions. The UN won’t publicly name the ones that don’t, but we can guess that the answer is most of them. Net-zero pledges are the latest attempt by companies to distract from their role in the climate crisis. Even when fully implemented, they’re woefully insufficient, but that’s secondary to the fact that implementation is impossible to enforce.

Civil society continues to embrace the net-zero pledge concept, even though we’re surrounded by examples of corporate failures to adhere to the promises they’ve made. The Harkin–Engel Protocol was announced in 2000 for cocoa producers to stamp out the “worst forms” of child labor and human trafficking in their supply chains in West Africa. They failed in 2015 and again in 2020 to meet even those nebulous benchmarks. Apple’s supplier code of conduct did nothing to change labor conditions at Foxconn that were so awful that workers killed themselves in protest. Human Rights Watch asked corporations with operations in Xinjiang to abide by a code of ethics, but that hasn’t stopped companies like Hugo Boss from relying on cotton sourced from slave labor.

Despite all evidence to the contrary, many still believe that with the right balance of public pressure, incentives, and promises, companies might finally behave ethically. That hope is naive. Corporate social responsibility is a mirage. There is no path to voluntary corporate action. For a good illustration of the concept, we can simply look at the conditions that gave rise to the modern concept of corporate pledges: the fight against apartheid in South Africa and a resulting investor code called the Sullivan Principles.

Promise or Pretense?

For supporters of the anti-apartheid movement in the 1960s, finding ways to advance the cause of liberation proved very difficult. The US government was unwilling to consider meaningful sanctions against South Africa, in no small part because anti-communist South Africa was a Cold War ally. Consumer boycotts were not especially effective because most of South Africa’s exports to the United States were from mining. However, South Africa was also dependent on foreign capital and a foreign business presence, and this dependency created a weakness that activists could exploit. While activist shareholders demanded the exit of companies from South Africa, other opponents of apartheid began agitating for divestment, or the withdrawal of an investor’s funds from companies operating in South Africa. ...
Read the full report at Jacobin