Third World Quarterly

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csr and equality

Peter Utting

To cite this article: Peter Utting (2007) csr and equality, Third World Quarterly, 28:4, 697-712,
DOI: 10.1080/01436590701336572

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Published online: 19 May 2007.

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Third World Quarterly, Vol. 28, No. 4, 2007, pp 697 – 712

CSR and Equality

PETER UTTING
ABSTRACT Institutional reforms associated with neoliberalism and ‘good
governance’ have altered the roles and responsibilities of states and transna-
tional corporations (TNCs) in relation to social development. Increasingly such
firms are engaging more directly in social service provisioning through
privatisation, claiming to be more responsive to the concerns of multiple
‘stakeholders’ through ‘corporate social responsibility’ (CSR), positioning
themselves as ‘partners’ in poverty reduction, and becoming more proactive in
standard setting and ‘privatised governance’. Given the extent of anecdotal or
piecemeal ‘evidence’ regarding the impacts of CSR, attention has turned in
recent years to developing frameworks that identify a range of policies,
practices and effects that need to be examined to adequately assess social and
developmental aspects. This paper attempts to contribute to this discussion by
focusing on the contribution of CSR to equality and equity, understood here in
terms of minimising deprivation; enhancing equality of opportunity; correcting
gross imbalances in the distribution of income, wealth and power; and social
justice. While the primary responsibility for promoting equality belongs to state
and multilateral institutions, the CSR agenda, with is emphasis on such aspects
as improvements in working conditions, community support, labour and human
rights, and stakeholder participation, clearly has implications for equality and
equity. Four central components of equality are considered: social protection,
rights, empowerment and redistribution. It is argued that the contribution
of CSR in relation to these different elements varies considerably. Most
CSR initiatives focus on social (and environmental) protection. Belatedly CSR
discourse has embraced issues of labour and other human rights but CSR
practice associated with the realisation of rights lags well behind. Other
dimensions of equality related to empowerment and redistribution remain
relatively marginal in the CSR agenda.

Background
A key debate within academia and civil society relates to whether CSR is
simply a palliative for a model of capitalism that generates perverse social
and environmental effects, and an instrument for reinforcing corporate

Peter Utting is at the United Nations Research Institute for Social Development, Palais des Nations, 1211
Geneva 10, Switzerland. Email: Utting@unrisd.org.

ISSN 0143-6597 print/ISSN 1360-2241 online/07/040697–16 Ó 2007 Third World Quarterly

DOI: 10.1080/01436590701336572 697
 PETER UTTING

control over developmental processes and institutions,1 or a crucial element

of ‘embedded liberalism’. The latter is characterised by markets that facilitate
the mobilisation and allocation of resources for the benefit of humanity, and
by the presence of institutions that correct for the imbalances in corporate
rights and obligations that have been a feature of economic globalisation and
liberalisation.2
Assessments of CSR generally focus on discrete aspects such as envi-
ronmental management, working conditions, labour rights, business –
community relations, the so-called business case for CSR, and corporate
accountability structures and mechanisms. Increasing attention is now being
focused on sets of indicators that provide a more comprehensive framework
for assessment. Such frameworks often take as their point of departure the
economic, social and environmental components recognised in the concept of
‘sustainable development’. Some emphasise labour and human rights
dimensions. More recently attempts to examine the relationship of CSR to
poverty reduction have focused on various ‘micro’ and ‘macro’ impacts of
both individual firms and the global value chains with which they are
associated.3
This paper suggests that assessments of the social and developmental
implications of CSR could usefully consider another angle or set of issues
related to both equality, which involves levelling or minimising disparities,
and equity, with its implications of fairness and social justice. Equity and
equality have recently re-emerged as central concerns of the international
development community.4 Greater equality is both a goal in itself and a
means to economic and social development.5 The ‘intrinsic’ and ‘instru-
mental’ reasons for addressing inequality include innate concerns in society
for justice, the fact that principles of equality and equity are often integral to
legal traditions, including international human rights law, and the negative
impacts of inequality on efficiency, growth, poverty reduction and social
cohesion.6
Examining the connections between CSR and equality is not meant to imply
that corporations, or the private sector more generally, have a primary
responsibility for promoting equality. Historically, as today, the state and
multilateral institutions have played the key role in this regard. Nevertheless,
the CSR agenda,7 with its emphasis on improvements in working and supply
chain conditions, community assistance and development, labour and human
rights, and stakeholder dialogue and participation, has obvious implications
for equality and equity. While conceptualisations and definitions of these
terms, or points of emphasis regarding what elements are important from a
policy perspective, vary considerably, here attention is focused on how CSR
relates to four crucial aspects of equality and equity: social protection, rights,
empowerment and redistribution.

Social protection
What has been the contribution of CSR to social protection, defined here
broadly in terms of the welfare and well-being of workers and other groups,
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or ‘stakeholders’. Much of the CSR agenda has been directly concerned

with these aspects, focusing, for example, on improvements in working
conditions, assistance to communities where company operations are
located or support for international development and relief programmes.
Considerable attention has also been focused on specific social issues such as
HIV/AIDS and post-conflict rehabilitation. Recently there has been an attempt
to connect CSR more directly with the contemporary global poverty reduction
agenda, through what has been labelled the ‘bottom of the pyramid’
approach.8
While the range of CSR issues addressed by companies that are more
proactive in this field has tended to expand, many firms continue to
concentrate their CSR activities in arenas external to the company, via
philanthropy or corporate social investment in community initiatives. In the
USA it is estimated that large corporations allocate 77% of funding for
corporate charitable activities to local metropolitan areas which host the
corporation.9 These charitable grants averaged US$3.5 million per large
corporation in 2002 but could reach levels of $100 million per annum in
the case of companies like Wal-Mart.10 In the USA the number of
corporate foundations doubled from 1295 to 2549 between 1987 and 2003,
and their level of grant giving reached $3.5 billion. In real terms this
represented a doubling of the value of grants over the same period. Much
of this spending was channelled to traditional philanthropic outlets such as
educational, health, cultural, sporting and environmental activities and
institutions.
Relatively little went abroad. The World Economic Forum (WEF)
estimates that the Fortune Global 500 companies provide, annually, cash
donations in the region of $12 billion and roughly an equivalent amount
($10 – 15 billion) in kind. Approximately 10% – 15% of this amount is
thought to support activities related to low-income countries.11 Such figures
need to be put in context. This level of corporate ‘aid’ in support of
developing countries (roughly $3 billion) represents about 4% of
Overseas Development Assistance, which amounted to $80 billion in 2004.
Corporate philanthropy associated with developing countries is,
however, increasing, causing Business Week to declare in 2004, ‘global
philanthropy is one of the hottest US exports these days’.12 Such a
development reflects not only the mega-grant giving of a few billionaires
such as Bill Gates and Warren Buffet, particularly for global health
programmes, but also the ways in which corporations are adjusting to the
geographical and social realities of global value chains. The WEF notes that
total private philanthropic giving may exceed foreign direct investment (FDI)
inflows in the case of some poor countries,13 although this says as much
about the skewed nature of FDI inflows to developing countries—flows that
are heavily concentrated in just a few countries—as it does about corporate
generosity.
While the CSR movement and agenda have evolved and developed
in more socially inclusive ways, CSR discourse still runs well ahead of
reality. From the perspective of social protection the downside to CSR
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 PETER UTTING

centres on three main aspects. First, while the rhetoric surrounding CSR gives
the impression that much of big business has turned over a new leaf
as regards social responsibility, and that its supply chains are following
suit, the reality is that only a small percentage of the world’s 70 000 TNCs,
700 000 affiliates and millions of suppliers have seriously embraced CSR.
This is evident from the numbers of companies that engage actively
with leading multi-stakeholder initiatives, such as the UN Global
Compact, Global Reporting Initiative (GRI) and the Ethical Trading
Initiative (ETI).
Second, the quality of CSR interventions is often weak in the sense that
there is often a considerable gap between stated intentions and actual
implementation. This has been well documented in relation to certain basic
CSR tools. While the range of issues addressed under company codes of
conduct, for example, has expanded, procedures related to implementation
are often under-developed.14 This is also apparent in the case of interna-
tional codes or sets of principles, such as the Organisation for Economic
Co-operation and Development (OECD) Guidelines for Multinational
Enterprises, the UN Global Compact Principles, and the Equator Principles,
which have all expanded while implementation and compliance mechanisms
remain weak.15
An assessment of social auditing by the Clean Clothes Campaign (CCC)
noted some progress in relation to a few brand name companies, but major
limitations in the dominant approach, particularly in the retail sector.16
Company reports and audits are often short on meaningful indicators to
measure performance and impacts, and they are not particularly useful for
assessing how positive CSR initiatives are faring in relation to negative social
and environmental performance. Furthermore, far more attention is likely to
be focused on improvements in occupational health and safety as opposed to
industrial relations and labour rights.17 Other concerns about reporting and
social auditing systems relate to their cost and complexity, as well as to the
proliferation of different methods and institutions. Given the tremendous size
of global corporations, their geographical reach, their value chains that may
involve thousands of suppliers, and the increasing range of CSR issues, it
seems improbable that a third party can keep a tab on all this, and do so in a
meaningful way. Commercial auditors often have neither sufficient time,
autonomy nor skills to adequately assess the situation of workers and
industrial relations.18
A third basic weakness of the CSR agenda from the perspective of social
protection relates to issues that are marginalised or remain off-limits. Until
recently there was relatively little discussion within mainstream CSR circles of
negative trends associated with employers’ contributions to social insurance
and employee health schemes. While the range of CSR concerns related to
developing countries has broadened, priority issues are often those of
particular concern to activists and others in the North, for example child
labour, ‘sweatshops’ and environmental degradation associated with mining
and deforestation. Issues relevant to particular stakeholders in developing
countries, such as women workers, sometimes get short shrift. Potentially
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CSR has a crucial role to play in relation to women workers, not only because
of the state of their working conditions, but also because the rise in female
employment has, in contrast to the historical experience of male employment
in some sectors, often not been accompanied by access to work-related
welfare entitlements associated with social policy.19
Much of the literature and learning associated with CSR, particularly
within the field of business management, has also marginalised certain
developmental concerns of poorer countries related to issues like the cost and
impact of CSR initiatives and instruments on smaller enterprises, the situation
of informal sector workers, and whether TNCs or large retailers cut and run
when their suppliers come under the CSR spotlight.20 Many companies that
are proactive in the field of CSR have improved the working conditions of
their core workforce but simultaneously have laid off workers and relied
increasingly on sub-contracting, which often implies a deterioration of labour
standards. UNRISD studies in South Africa, India and Brazil, and the study
by Oxfam and Unilever of the national development impact of Unilever-
Indonesia, have highlighted this situation.21 The analysis of corporate social
spending in Brazil, carried out by the Instituto Brasileiro de Análises Sociais
e Econômicas, reveals the apparently contradictory situation where
companies are spending more per worker on health and safety in their core
enterprises, yet the number of workplace accidents and injuries per 1000
workers is increasing. A possible explanation relates to the increasing reliance
on sub-contracting.22
Many of the world’s largest corporations and business associations actively
promote CSR while simultaneously lobbying forcefully for macroeconomic,
labour market and other social policies associated with forms of labour
market flexibilisation, deregulation, and fiscal ‘reform’ that can result in the
weakening of institutions and systems of social protection.23 Others are
actively involved in privatisation schemes related to basic services, which in
some developing countries have had negative implications in terms of
affordability for low-income groups.24 In short, CSR generally attempts to
curb specific types of malpractice and improve selected aspects of social
performance without questioning various contradictory policies and practices
that can have perverse consequences in terms of equality and equity.

Rights
Equality depends crucially on the recognition and realisation of the rights of
workers, women, children, indigenous peoples and other groups that have
historically been oppressed, exploited and marginalised. To what extent does
the CSR agenda address these aspects?
The evolution or broadening of the CSR agenda through time has seen
‘rights’ emerge as an important component. The early emphasis within codes
of conduct and voluntary initiatives on improvements in working conditions
was later complemented by a focus on labour rights, particularly those
enshrined in the International Labour Organisation’s core conventions
associated with discrimination, forced labour, freedom of association and
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collective bargaining. Such standards now figure in numerous codes of

conduct and form a sub-set of the 10 principles of the UN Global Compact.
There have emerged a number of high profile non-governmental and multi-
stakeholder initiatives that actively promote labour rights, particularly in the
supply chains of certain industries, notably apparel and footwear.
Converting the emerging labour rights discourse into meaningful inter-
ventions has been more difficult. Companies often pick and choose which
labour rights they include in their codes of conduct. Large TNCs that project
themselves as CSR leaders often ignore standards related to freedom of
association and collective bargaining in their policy statements.25 Even
some of the more high profile CSR initiatives, such as the Global Compact,
which have emphasised issues of human rights appear to pay limited
attention to key aspects of rights, such as those relating to women and gender
equality.26
Where companies have collaborated with NGOs and multi-stakeholder
standard-setting initiatives that promote labour rights, the results have been
mixed. A recent evaluation of the ETI notes progress in relation to labour
rights as the weakest aspect of this scheme, which aims to promote and
improve the implementation of corporate codes of practice covering supply
chain activities.27 A study of labour rights in the sportswear industry notes
limited progress, even in the context where the World Federation of Sporting
Goods Industries and several leading companies are collaborating with the
Play Fair Alliance, a network of civil society organisations that promotes
labour rights. Some advances were apparent in relation to transparency, co-
operation with trade unions and NGOs, workers’ training and the prevention
of discrimination in certain factories. The report also notes, however, that
‘business practices frequently undermine and contradict their stated
commitment to respect trade union rights’. Such practices include cutting
contracts of suppliers that have respected labour rights, sourcing from
Export Processing Zones or China, where certain basic labour rights are not
respected, and turning a blind eye when suppliers employ workers on short-
term contracts, which act as a disincentive to unionisation.28
Several non-governmental or multi-stakeholder institutions promoting
labour rights dimensions of CSR have also adopted fairly weak procedures for
assessing compliance with agreed standards. Indeed, some of the most
vibrant certification activity, notably that associated with schemes such as
SA8000, takes place in China, where labour rights, such as freedom of
association and collective bargaining, are not even recognised. Schemes
that have adopted fairly rigorous assessment methods, such as the CCC
and the Worker Rights Consortium (WRC), tend to be limited in their
capacity to scale up their activities. Several Global Union Federations have
promoted their own variant of codes of conduct and CSR implementation
accords with TNCs via Global Framework Agreements. Such agreements
commit signature corporations to uphold an agreed set of labour standards
throughout their global corporate structure. This is potentially an important
development, in that it extends the arena of union-management negotiation
from the national to the global level. In practice, however, the quality of
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implementation and review procedures can vary considerably, and in the

absence of international arbitration and mediation institutions, as well as
human and financial resources, Global Union Federations have limited
options for seeking redress in cases of non-compliance.29
Through time the CSR agenda has expanded to embrace more explicitly the
broader set of rights enshrined in the Universal Declaration of Human
Rights. This has been in response to exposés of corporate complicity in
human rights abuses, particularly in the extractive industries and to related
pressures from activists and consumers. It is also a reaction to new CSR
institutions such as World Bank/International Finance Corporation (IFC)
guidelines related to indigenous peoples, the UN Global Compact, the
Financial Times/London Stock Exchange’s (FTSE) ethical indices
(FTSE4Good), the Voluntary Principles on Security and Human Rights,30
and the draft UN Norms on the Responsibilities of TNCs and other Business
Enterprises with Regard to Human Rights (hereafter referred to as the UN
Norms). The guidelines of the GRI have also been revised to strengthen, inter
alia, indicators related to human rights.
The incorporation of human rights in the CSR agenda is important not only
for socio-legal reasons but also because it can provide a framework for
operationalising CSR by invoking a range of issues that require action.
Potentially this can act as a corrective to the more piecemeal and fragmented
approach that is common among companies engaging with CSR. Furthermore,
since the human rights agenda is only deemed to be relevant to companies
when it applies to their ‘sphere of influence’ or ‘complicity’ in human rights
abuses, it necessarily focuses attention on a company’s relations with, and its
impacts on, multiple stakeholders, including governments, consumers,
workers, communities and future generations.
An increasing number of companies are incorporating references to human
rights in their policy statements. A recent survey of the Fortune Global 500
corporations found that 91% of the 102 companies that responded had an
explicit set of principles or management practices related to human rights,
and concluded that ‘no survey conducted a mere five years ago would have
yielded comparable results’.31 The survey also found that some rights figure
more prominently in official company policy than others. The right to health
and to an adequate standard of living generally received less attention,
especially among US firms.32
Policy statements, of course, do not necessarily translate into concrete
advances in relation to the realisation of human rights. The case of the oil
industry is a clear example of this, with most of the oil majors referencing
human rights in their principles and codes of conduct. At the same time
several corporations, such as BP, Unocal and Total, continue to be on the
receiving end of bad practice ‘awards’ (or nominations) for human and
labour rights abuses, while others, such as Shell and Chevron, figure
prominently in awards for environmental malpractice.33
The apparent gap between rhetoric and reality suggests the need for
periodic monitoring of corporate activities. In the case of the oil industry this
is extremely difficult given the remote and often dangerous locations where
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companies operate, and the highly limited capacities of both NGO watchdog
organisations and state inspection units in developing countries. The
alternative of corporate self-evaluation and reporting, which appears to be
on the increase, has obvious limitations, while the design and use of new tools
such as human rights impact assessments are still in their infancy.34
The process of ratcheting up the responsibilities of TNCs vis-à-vis human
rights is politically sensitive and provides a good example of the ongoing
tensions between voluntary and legal approaches to improving corporate
social and environmental performance. This is clearly seen in the case of the
UN Norms. These were drafted in an attempt to address some of the
weaknesses that characterise the UN Global Compact and voluntary
initiatives more generally, namely picking and choosing among standards,
weak compliance with agreed standards, and free-riding. Six of the Global
Compact’s 10 principles, which participating companies agree to adhere to,
relate directly to labour and human rights. While the Global Compact has
been successful in internationalising CSR discourse, relatively few of the over
2500 participating companies provide comprehensive evidence of compliance
with the 10 principles. Furthermore, a study conducted in 2004 found that
only 9% of participating companies were taking actions that they would not
otherwise have taken had they remained outside the initiative.35
The UN Norms pull together a wide range of standards derived from
international law that applies to states, but which are commonly found in
multi-stakeholder initiatives related to CSR. They state that all TNCs and
related companies have an obligation to uphold such standards, and propose
an implementation and monitoring mechanism. They push the envelope even
further by calling for ‘adequate reparation’ in cases where stakeholders are
affected by non-compliance. Some of these harder aspects were anathema to
certain business interests and governments, and the interim report of the UN
Secretary-General’s Special Representative on Business and Human Rights
suggested that the UN Norms were ‘a distraction’ and that the route forward
lay with ‘principled pragmatism’.36 A few large TNCs did, however, take a
proactive stance by joining the Business Leaders Initiative on Human Rights
which is trial testing the UN Norms.

Empowerment
Some interpretations of equality emphasise not only equality of opportunity
but also equality of outcomes. To achieve this it is necessary to challenge
structural dimensions of development that result in highly skewed patterns of
distribution of both resources and power.37 An important aspect in this
regard, which is emphasised by certain rights-based approaches to develop-
ment, is not only the recognition and realisation of rights, but also the idea
that inclusive and equitable development depends on the capacity of the
disempowered and disadvantaged to exert claims on the powerful. The
struggle for equity, therefore, is fundamentally a political struggle which
involves increasing the voice and influence of weaker groups in society and
reconfiguring the balance of social forces through accountability and other
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mechanisms that keep corporate power in check. To what extent has CSR
facilitated these aspects?
One of the most significant developments in relation to empowerment
relates to the fact that CSR has been a useful mobilising tool, particularly in
the North but also increasingly in the South. As Shamir points out ‘the more
the public domain is privatised, the more the private is politicised and
becomes a matter of public concern’.38 Activism associated with CSR issues
has rallied numerous civil society groups and organisations around a
common concern related to the negative impacts of large corporations in
relation to social and sustainable development, and the growing imbalances
between corporate rights and obligations under globalisation and liberal-
isation. CSR instruments and institutions are being used to defend and
enhance the interests of workers, communities and other groups and stake-
holders. This is apparent, for example, in relation to new social movements
and forms of transnational activism centred on such issues as ‘sweatshops’,
fair trade, corruption and environmental pollution,39 as well as in broad-
based groupings of civil society organisations that test and apply CSR instru-
ments. An example of the latter is OECD Watch, an international network of
47 NGOs, that monitors the application of the OECD Guidelines on
Multinational Enterprises.
Various multi-stakeholder initiatives such as the ETI and SA8000 have also
opened up some spaces for dialogue and negotiation where trade unions and
NGOs can speak on behalf of workers and communities. Concerns have arisen
regarding the question of who speaks for whom, with trade union
organisations, in particular, concerned that some NGOs that are unaccoun-
table to workers claim to speak on their behalf.40 Civil society organisations
that join such initiatives sometimes have to walk a tightrope, given the fine
line that exists between promoting subaltern interests and legitimising
institutions that may reinforce corporate power.
Some of the more effective institutional initiatives involving standard
setting, monitoring and/or certification appear to be those that are
organically linked to social movement activism,41 such as the WRC, the
CCC and the Forest Stewardship Council. Transnational links that enable
northern-based NGOs and trade union organisations to act as a conduit for
channelling grievances and negotiating solutions through CSR and other
institutions for groups engaged in struggles at the grassroots play a crucial
role in what has been called ‘counter-hegemonic globalisation’.42 From the
perspective of participation and empowerment, however, a major weakness
of the CSR ‘movement’ has been the limited participation of stakeholders
from developing countries in consultation and decision-making processes
associated with CSR and in the design of CSR instruments and institutions.43
Some initiatives, such as the CCC, the WRC and national monitoring
schemes like the Grupo de Monitoreo Independiente de El Salvador, attempt
to promote monitoring and verification methods that not only gather
information from workers but use the auditing process to channel infor-
mation to workers and encourage social dialogue. In the main what
predominates, however, are fairly conventional social auditing techniques
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that, at best, can only scratch the surface and, at worst, constitute policing
mechanisms.44 A study carried out in Costa Rica among banana plantation
workers, which examined the potential contribution of certification or multi-
stakeholder initiatives such as SA8000 and the ETI to workers’ empowerment,
found serious limitations with ‘rapid social auditing’. It proposed replicating
the methods of certain organisations that promote ‘participatory workplace
appraisal’, under which social auditing would not only check that spaces for
empowerment exist but also attempt to create such spaces.45
One of the areas of greatest weakness in relation to both social protection
and empowerment relates to the extremely limited attention within the CSR
agenda to the vast majority of workers, producers and enterprises in
developing countries that are associated with micro- and small enterprises,
small-scale agriculture and the so-called informal sector. As the Oxfam/
Unilever report referred to above points out, the question is how to use CSR
practices to strengthen the position of weaker stakeholders throughout the
value chain.46 While some large global corporations have responded to civil
society and consumer pressures to improve conditions in their supply chains,
such attention has yet to penetrate significantly beyond upper-tier suppliers.
As noted above, the CSR agenda has tended to ignore processes of sub-
contracting that involve more precarious forms of employment and the
casualisation of labour. Another concern is that conventional approaches to
CSR may be consolidating a ‘labour aristocracy’ and restricting the capacity
of firms in developing countries to absorb labour from the informal sector.47
When considering the issue of CSR and empowerment, it is also important
to examine the counter-side of the power equation, namely the power of TNCs
and corporate elites. Theoretically there are strong grounds for assuming that
CSR reinforces corporate power. This is implicit in the so-called business case
for CSR and the fact that it is many of the world’s largest TNCs that have
engaged more proactively with this agenda. It is explicit in a body of political
economy analysis that draws on Gramscian theory. The latter suggests that
the CSR agenda is an important feature of a mode of domination that has
enabled large corporations and business elites to fend off criticism and
regulatory threats, and to reinforce their power and influence by actually
accommodating certain oppositional demands, intervening proactively in the
48
CSR arena, and attempting to lead the CSR movement. It has also been sug-
gested that CSR is an important feature of ‘new ethicalism’, that is, the turn to
morals and ethical norms as a means of shoring up the neoliberal agenda in a
context where legal and other institutional arrangements have proved
insufficient.49 This type of analysis also points to the considerable spaces that
exist for social movements and some marginalised social groups to advance
in terms of articulating and realising specific demands, or in relation to
so-called ‘counter-hegemonic’ struggles.50 CSR is an important terrain
of struggle, one where organised business interests have proven to be
extremely adept and savvy.
While the CSR agenda is concerned with some aspects of corporate
accountability, it does not fundamentally question the economic power and
political influence of TNCs. While both aspects of power are difficult to
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measure,51 attempts to do so indicate the tremendous size of the largest CSRs,

which make up between 20 and 30 of the world’s largest 100 economic units
(national economies and corporations).52 According to UNCTAD, the value-
added of the top 100 non-financials increased as a percentage of global GDP
from 3.5% to 4.3% between 1990 and 2000.53 What is more significant is the
increasing control exercised by the largest corporations over global value
chains as a result of sub-contracting and other arrangements. According to
one estimate, the top 800 non-financial corporations (measured by stock
market capitalisation) may, in effect, directly and indirectly control up to
50% of global GDP, if one takes into account both upstream and downstream
activities of the company.54 From the perspective of CSR and equality the
worrying aspect of this analysis is that such issues remain largely off-limits in
the mainstream CSR agenda.

Redistribution
Perhaps the weakest aspect of both CSR discourse and practice relates to
redistribution. Before considering this aspect, it is important to identify what
the elements of a redistributive CSR agenda might be. Presumably they would
relate to progressive shifts in the distribution of income within enterprises
and value chains that favour labour, small producers and other low-income
stakeholders, and poorer countries; they would include fair and transparent
fiscal policies and practices conducive to progressive taxation, and lobbying
for redistributive policies or at least not lobbying for regressive policies that
have perverse social, environmental and developmental impacts.
While aggregate data on CSR spending are hard to come by, there is little to
suggest that it alters in any meaningful way the relative returns to capital and
labour. Indeed, the rise of CSR coincides with a phase of capitalist deve-
lopment where returns to capital have generally outpaced returns to labour,
with the share of profits in the national income of many countries having
increased and that of wages and salaries having declined. Data on income
distribution in the US indicate the dramatic changes that have occurred in
recent decades. The share of national income in the USA accounted for by the
top 1% of income earners, which had remained stable at around 8% from
the mid-1950s to the mid-1980s, increased to 15% by 1998.55 In a similar vein,
‘the ratio of the median compensation of workers to the salaries of CEOs [in
the USA] increased from just over thirty to one in 1970 to more than four
hundred to one by 2000’.56 Even the significant increase in the dollar value of
corporate giving noted earlier, which occurred in the USA during the 1990s,
appears less impressive when compared to the performance of profits.
Whereas corporate charitable contributions increased by 4.2% a year, the
annual increase in corporate profits was 5.6%. Furthermore, in relation to
pre-tax income there was a decline from a peak of 2% in 1986 to 1% in 1996.57
In the USA, in particular, corporate contributions to social insurance and
healthcare have declined, and employers have transferred more of the burden
of pension costs and health insurance to employees.58 Such contributions are
particularly low in the retail sector, where less than half of employees receive
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health benefits and part-time workers are usually ineligible. High-profile com-
panies like Wal-Mart and Starbucks have come under fire for their practices,
given the fact that only 47% and 42% of workers receive health benefits,
respectively,59 as well as the fact that many of their workers must continue to
rely on public assistance programmes, which imply large costs for taxpayers.60
Two of the most explicit CSR initiatives related to redistribution within the
enterprise or the value chain involve ‘living wages’ and ‘fair trade’, both of
which pay, in effect, premium (above-market) prices to labour and small
producers, respectively. While there has been much discussion about living
wages within CSR circles since the late 1990s, particularly in connection with
CSR reforms in the apparel and footwear sectors, there has been little progress
in practice, beyond compliance with minimum wage legislation.
The involvement of large companies in fair trade schemes has sparked a
heated debate regarding their developmental implications. Proponents see
this as, potentially, a crucial mechanism to ensure that fair-trade markets
break out of their very niche status. Critics see it as a dilution of fair-trade
standards and a means by which large companies can position themselves
competitively in a relatively small but growing market. In relation to
redistribution a key question is the premium price received by producers.
When the fair-trade system was introduced for products like coffee,
the premium price was nearly double the market price. This meant that the
increased prices paid by northern consumers, and the restructuring of
the value chain (both in terms of fewer intermediaries and improved margins
for small producers), potentially had significant redistributive implications.
Leaving aside the question as to how much of the premium price is actually
received by producers, it is important to note that the involvement of large
companies in sectors such as fair-trade coffee has occurred at a time when the
gap between the market and fair trade price has narrowed considerably. This
suggests that large firms may in effect be free-riding on a brand created under
very different circumstances and that their involvement has few, if any,
redistributive implications. Other benefits of fair trade, notably its role in
empowering small producers and their organisations, are also marginalised
by the larger firms that enter this arena.
Another key redistributive element relates to taxation and corporate fiscal
practices. Here there has been some positive movement via the growing
attention to issues of corruption and greater transparency as regards
corporate payments to governments. Anti-corruption is a core element of
the OECD Guidelines for Multinational Corporations, and was added as a
10th principle to the UN Global Compact in 2004. It is also a central concern
of activist campaigns such as Publish What You Pay, and the Extractive
Industries Transparency Initiative. While corruption has emerged as a CSR
issue, progressive taxation has not. There is little to suggest that the position
of the corporate CSR community is very different from that of organised
business interests that lobby for ongoing reductions in corporate taxation
and a lowering of tax rates for the highest income brackets in which CEOs find
themselves. CSR takes place against a backdrop where fiscal policy is
becoming increasingly regressive: as tax structures shift in favour of
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consumption taxes, the contribution of corporate taxation to total tax has

remained fairly stable at the relatively low level of 8% to 9% in the OECD
area, and corporate income tax rates continue to decline.61
Furthermore, transfer pricing and other mechanisms that result in the under-
reporting of profits and tax avoidance are not only rife but are reportedly
practised by companies projecting themselves as CSR leaders.62 The leading
auditing and certification firm, KPMG, has several executives facing prosecu-
tion for actively promoting tax evasion. Even more recently, in September
2006, another proactive CSR company, GlaxoSmithKline, had to pay the US
Internal Revenue Service (IRS) a $3.4 billion fine for transfer pricing, the largest
ever single payment made to the IRS to resolve a tax dispute.63

Conclusion
While states must assume primary responsibility for crafting institutions that
can deal with inequality, CSR discourse positions large corporations as actors
concerned with a variety of issues that have obvious implications for equality.
The above discussion suggests that the CSR agenda has focused mainly on
aspects of equality that have to do with social (and environmental)
protection. More recently it has broadened to embrace labour rights and
other human rights. Progress in terms of realising rights, however, lags well
behind the rhetoric. Aspects related to empowerment remain weak, while
redistribution still figures only marginally on the CSR radar.
Should we expect more progress in this regard? If CSR is to complement the
efforts of state institutions in promoting equality, there appear to be two
central challenges. The first involves filling major gaps that characterise the
CSR agenda, in particular the gulf that continues to exist between words and
deeds, and the fact that crucial components of equality related to
empowerment and redistribution still remain marginal. Second, if CSR, even
in its truncated form, complemented the efforts of government, civil society
and multilateral actors in areas of social protection and rights, then it could
play a constructive role in relation to equality. Where the CSR agenda is
particularly problematic, however, relates not only to limits regarding the
scale, scope and quality of CSR interventions and institutions, but the fact
that it is part and parcel of a broader ‘reform’ agenda that promotes both
market liberalisation and self-regulation, often at the cost of labour rights,
decent wages, employment security, corporate social welfare, universal social
provisioning, and both state and trade union regulatory capacity. Unless
these aspects are addressed, piecemeal additions and adjustments to the CSR
agenda are unlikely to do much to further its contribution to equality.

Notes
The author would like to thank Kate Ives, Anders Rafn, José Carlos Marques and Anita Tombez for
research and editorial assistance; Peter Newell, Jedrzej George Frynas, Rhys Jenkins, Shahra Razavi and
two anonymous reviewers for comments, as well as various participants at the conference ‘Beyond CSR:
Business, Poverty and Social Justice’ (London, 22 May 2006), where a draft of this paper was originally
presented.

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1 Judith Richter, Holding Corporations Accountable: Corporate Conduct, International Codes and Citizen
Action, London: Zed Books, 2001; and Ann Zammit, Development at Risk: Rethinking UN – Business
Partnerships, Geneva: South Centre/UNRISD, 2003.
2 John G Ruggie, ‘Taking embedded liberalism global: the corporate connection’, in David Held &
Mathias Koenig-Archibugi (eds), Taming Globalization: Frontiers of Governance, Cambridge: Polity
Press, 2003; Charles Holliday, Stephan Schmidheiny & Philip Watts, Walking the Talk: The Business
Case for Sustainable Development, Sheffield: Greenleaf Publishing, 2002; and Michael Hopkins, The
Planetary Bargain: Corporate Social Responsibility Matters, London: Earthscan, 2003.
3 Jason Clay et al, Exploring the Links between International Business and Poverty Reduction: A Case
Study of Unilever in Indonesia, an Oxfam GB, Novib, Unilever, and Unilever-Indonesia joint research
project, Oxford: Oxfam GB, Novib Oxfam Netherlands and Unilever, 2005; and Ans Kolk & Rob Van
Tulder, ‘Poverty alleviation as a business strategy? Evaluating commitments of frontrunner
multinational corporations’, World Development, 34 (5), 2006, pp 789 – 801.
4 See UNRISD, Gender Equality: Striving for Justice in an Unequal World, Geneva: UNRISD, 2005; UNDP,
Human Development Report 2005: International Cooperation at a Crossroads: Aid, Trade and Security in
an Unequal World, New York: UNDP, 2005; UNDESA, Report on the World Social Situation: the
Inequality Predicament, New York: United Nations, 2005; World Bank, World Development Report
2006: Equity and Development, New York: Oxford University Press, 2005..
5 Edward Anderson & Tammie O’Neil, A New Equity Agenda? Reflections on the 2006 World
Development Report, the 2005 Human Development Report and the 2005 Report on the World Social
Situation, Working Paper 265, London: ODI, 2006.
6 Ibid.
7 Given the expanding range of issues being addressed under the umbrella of CSR, and the fact that
different companies, business associations, civil society and other organisations promoting CSR
emphasise different aspects, it is often pointed out that there is not a uniform ‘CSR agenda’.
Nevertheless, there is ‘an agenda’ in the sense that a) there is growing consensus about the range of
issues that companies should be concerned with, and b) CSR represents a particular approach to
corporate regulation—one that emphasises voluntary initiatives and self-regulation.
8 This involves firms stimulating productive activity and consumer markets at the ‘bottom of the
pyramid’, a term used to refer to the two-thirds of the world’s population that live at or below the
US$2 a day level. CK Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through
Profits, Upper Saddle River, NJ: Wharton School Publishing, 2005. See also UNDP, Commission on the
Private Sector and Development, Unleashing Entrepreneurship: Making Business Work for the Poor,
Report to the Secretary-General of the United Nations, New York: UNDP, 2004; and Kolk & Van
Tulder, ‘Poverty alleviation as a business strategy?’.
9 Doug Guthrie, Survey on Corporate – Community Relations, 2004, at www.ssrc.org/programs/
business_institutions/publications/CCR_Selected_Results_of_the_Survey.pdf.
10 Ibid.
11 WEF, ‘Building on the Monterrey Consensus: the growing role of public – private partnerships in
mobilizing resources for development’, United Nations High-Level Plenary Meeting on Financing for
Development, September, Geneva, 2005, p 5.
12 Jessi Hempel & Lauren Gard, with Michelle Conlin, David Polek and Joshua Tanzer, ‘The corporate
givers’, Business Week, 29 November 2004.
13 WEF, ‘Building on the Monterey Consensus’.
14 Rhys Jenkins, Ruth Pearson & Gill Seyfang (eds), Corporate Responsibility and Labour Rights:
Codes of Conduct in the Global Economy, London: Earthscan, 2002; Stephanie Barrientos, Catherine
Dolan & Anne Tallontire, ‘A gendered value chain approach to codes of conduct in African
horticulture’, World Development, 31 (9), 2003, pp 1511 – 1526; Stephanie Barrientos & Sally Smith,
The ETI Code of Labour Practice: Do Workers Really Benefit?, Brighton: Institute of Development
Studies, 2006; and Marina Prieto-Carrón, ‘Corporate social responsibility in Latin America: Chiquita,
women banana workers and structural inequalities’, Journal of Corporate Citizenship, 21, 2006,
pp 85 – 94.
15 OECD Watch, Five Years On: A review of the OECD Guidelines and National Contact Points, Amsterdam:
Centre for Research on Multinational Corporations (SOMO), 2005; Peter Utting & Ann Zammit,
Beyond Pragmatism: Appraising UN – Business Partnerships, Programme on Markets, Business and
Regulation, Paper No 1, Geneva: UNRISD, 2006.
16 CCC, Looking for a Quick Fix: How Social Auditing is Keeping Workers in Sweatshops, Amsterdam,
2005.
17 Barrientos & Smith, The ETI Code of Labour Practice; and Kolk & Van Tulder, ‘Poverty alleviation as
a business strategy?’.
18 Dara O’Rourke, Monitoring the Monitors: A Critique of PricewaterhouseCoopers (PwC) Labor
Monitoring, 2000, at http://Web.mit.edu/dorourke/www/index.html; and CCC, Looking for a Quick Fix.

710
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19 S Razavi & R Pearson, ‘Globalization, export-oriented employment and social policy: gendered
connections’, in S Razavi, R Pearson & C Danloy (eds), Globalization, Export-Oriented Employment
and Social Policy: Gendered Connections, Basingstoke: Palgrave Macmillan/UNRISD, 2004.
20 UNRISD, Corporate Social Responsibility and Development: Towards a New Agenda?, Report of the
UNRISD Conference, Geneva, 17 – 18 November 2003, Geneva: UNRISD, 2004; and Zammit,
Development at Risk.
21 See David Fig et al, The Political Economy of Corporate Responsibility in South Africa (provisional
title), Geneva: UNRISD, forthcoming; Atul Sood & Bimal Arora, The Political Economy of Corporate
Responsibility in India, Programme on Technology, Business and Society, Paper No 18, Geneva:
UNRISD, 2006; Paola Cappellin & Gian Mario Giuliani, The Political Economy of Corporate
Responsibility in Brazil: Social and Environmental Dimensions, Programme on Technology, Business
and Society, Paper No 14, Geneva: UNRISD, 2004; and Clay et al, Exploring the Links between
International Business and Poverty Reduction.
22 Joao Sucupira, ‘Balanço social: diversidade, participacão, e segurança do trabalho’, Democracia Viva,
20, 2004, pp 58 – 63, at www.premiobalancosocial.org.br/artigos.asp.
23 Kevin Farnsworth, ‘Promoting business-centred welfare: international and European business
perspectives on social policy’, Journal of European Social Policy, 15 (1), 2005, pp 65 – 80; and Belén
Balanyá, Ann Doherty, Olivier Hoedeman, Adam Ma’anit & Erik Wesselius, Europe Inc: Regional and
Global Restructuring and the Rise of Corporate Power, London: Pluto Press, 2000.
24 Naren Prasad, ‘Privatization results: private sector participation in water services after 15 years’,
Development Policy Review, 24 (6), 2006, pp 669 – 692.
25 Kolk & Van Tulder, ‘Poverty alleviation as a business strategy?’.
26 See Maureen Kilgour, ‘The UN Global Compact and substantive equality for women’, in this issue.
27 Barrientos & Smith, The ETI Code of Labour Practice.
28 Oxfam International, Offside! Labour Rights and Sportswear Production in Asia, Oxford: Oxfam
International, 2006, p 3.
29 Peter Utting, ‘Regulating business via multistakeholder initiatives: a preliminary assessment’, in NGLS/
UNRISD, Voluntary Approaches to Corporate Responsibility: Reading and a Resource Guide, Geneva:
NGLS, 2002.
30 With the participation of the US and the UK governments, oil, mining and energy companies, and
human rights, labour and corporate responsibility organisations, the Voluntary Principles were
established in 2000 with the goal of maintaining the safety and security of extractive operations while
ensuring that human rights and fundamental freedoms are respected.
31 John G Ruggie, Human Rights Policies and Management Practices of Fortune Global 500 Firms:
Results of a Survey, Cambridge, MA: John F Kennedy School of Government, Harvard University,
2006, p 7.
32 Ibid.
33 See, for example, the Public Eye on Davos Awards for 2005. See also Peter Utting & Kate Ives, ‘The
politics of corporate responsibility and the oil industry’, St Antony’s International Review, 2 (1), 2006,
pp 11 – 34.
34 At the time of writing, the IFC, in collaboration with the International Business Leaders Forum, is
developing one such tool. For a discussion on human rights impact assessments, see Special
Representative of the Secretary-General, Interim Report of the Special Representative of the Secretary-
General on the issue of human rights and transnational corporations and other business enterprises,
UN document E/CN.4/2006/97, Commission on Human Rights, Geneva, 2006.
35 McKinsey & Company, Assessing the Global Compact’s Impact, 2004.
36 Special Representative of the Secretary-General, Interim Report.
37 Anne Phillips, ‘‘‘Really’’ equal: opportunities and autonomy,’ Journal of Political Philosophy, 14 (1),
2006, p 30.
38 Ronen Shamir, ‘Corporate social responsibility: a case of hegemony and counter-hegemony’, in
Santos & Rodgrı́guez-Garavito, Law and Globalization from Below, p 93.
39 Jem Bendell, Barricades and Boardrooms: A Contemporary History of the Corporate Accountability
Movement, Programme on Technology, Business and Society, Paper No 13, Geneva: UNRISD, 2004;
Robin Broad, Global Backlash: Citizen Initatives for a Just World Economy, New York: Rowman and
Littlefield, 2002; and Peter Utting, ‘Corporate responsibility and the movement of business’,
Development in Practice, 15, 2005, pp 375 – 388.
40 UNRISD, Corporate Social Responsibility and Development.
41 Michael Conroy, ‘Can advocacy-led certification systems transform global corporate practices?’, in
Broad, Global Backlash.
42 Peter Evans, ‘Counter-hegemonic globalization: transnational social movements in the contemporary
global political economy’, in Janoski et al, Handbook of Political Sociology, Cambridge: Cambridge
University Press, 2005; Boaventura de Sousa Santos & César Rodriguez-Garavito, ‘Law, politics and

711
 PETER UTTING

the subaltern in counter-hegemonic globalization’, in Santos & Rodgrı́guez-Garavito, Law and

Globalization from Below; and Niamh Garvey & Peter Newell, ‘Corporate accountability to the poor?
Assessing the effectiveness of community-based strategies’, Development in Practice, 15 (3 – 4), pp 389 –
404.
43 Bendell, Barricades and Boardrooms.
44 CCC, Looking for a Quick Fix.
45 Jem Bendell, Towards Workplace Participatory Rural Appraisal: Report from a Focus Group of Women
Banana Workers, New Academy of Business, Occasional Paper, Bristol: New Academy of Business,
September 2001.
46 Clay et al, Exploring the Links between International Business and Poverty Reduction.
47 Naila Kabeer, ‘Globalization, labor standards, and women’s rights: dilemmas of collective (in)action in
an interdependent world’, Feminist Economics, 10 (1), 2004, pp 3 – 35; and Zammit, Development at
Risk.
48 See David Levy & Peter Newell, ‘Business strategy and international environmental governance:
toward a neo-Gramscian synthesis’, Global Environmental Politics, 2 (4), 2002, pp 84 – 101; Jem Bendell
& David Murphy, ‘Towards civil regulation: NGOs and the politics of corporate environmentalism’, in
Peter Utting (ed), The Greening of Business in Developing Countries: Rhetoric, Reality and Prospects,
London: Zed Books/UNRISD, 2002; and Peter Utting, Business Responsibility for Sustainable
Development, Occasional Paper No 2, Geneva: UNRISD, 2000.
49 Ngai-Ling Sum, ‘From ‘‘new constitutionalism’’ to ‘‘new ethicalism’’: global business governance and
the discourses and practices of corporate social responsibility, paper prepared for the European
Consortium for Political Research Joint Sessions, Workshop 24: Transnational Private Governance in
the Global Political Economy, Granada, 14 – 19 April 2005.
50 See, in particular, Shamir, ‘Corporate social responsibility’; Santos & Rodrı́guez-Garavito, ‘Law,
politics and the subaltern in counter-hegemonic globalization’; and Peter Utting, Rethinking Business
Regulation: From Self-Regulation to Social Control, Programme on Technology, Business and Society,
Paper No 15, Geneva: UNRISD, 2005.
51 Rob Van Tulder, ‘The power of core companies’, European Business Forum, 10, 2002.
52 UNCTAD, World Investment Report: Transnational Corporations and Export Competitiveness, Geneva:
UNCTAD, 2002.
53 Ibid, p 91.
54 Paul Dembinsky, ‘Economic power and social responsibility of very big enterprises—facts and
challenges’, Finance & The Common Good/Bien Commun, 15, 2003, pp 27 – 34.
55 Thomas Piketty & Emmanuel Saez, ‘Income inequality in the United States 1913 – 1998’, Quarterly
Journal of Economics, CXVIII (1), 2003, pp 8 – 10; and David Harvey, ‘Neo-liberalism as creative
destruction’, Geografiska Annaler: Series B, Human Geography, 88 (2), 2006, p 148.
56 Harvey, ‘Neo-liberalism as creative destruction’, p 149.
57 Christopher Schmitt, ‘Corporate charity: why it’s slowing’, Business Week, 18 December 2000, at
www.businessweek.com.
58 Dan Roberts, ‘America’s dilemma: as business retreats from its welfare role, who will take up the
burden?’, Financial Times, 13 January 2005.
59 Carol Hymowitz, ‘Big companies become big targets unless they guard images carefully’, Wall Street
Journal, 12 December 2005.
60 Arindrajit Dub & Ken Jacobs, Hidden Cost of Wal-Mart Jobs: Use of Safety Net Programs by
Wal-Mart Workers in California, Briefing Paper Series, University of California Berkeley Labor
Center, 2 August, Berkeley: Center for Labor Research and Education, 2004.
61 OECD, Recent Tax Policy Trends and Reforms in OECD Countries, OECD Tax Policy Studies, No 9, Paris:
OECD, 2004.
62 Manuel Riesco, ‘Pay your taxes! Corporate social responsibility and the mining industry in Chile’, in
Riesco et al, The ‘Pay Your Taxes’ Debate: Perspectives on Corporate Taxation and Social
Responsibility in the Chilean Mining Industry, Programme on Technology, Business and Society,
Paper No 16, Geneva: UNRISD, 2005.
63 See www.irs.gov/newsroom/article/0,,id¼162359,00.html.

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