WWF overview of CSR

The world's top one hundred corporations - based almost exclusively in developed countries - are today principal drivers of international production, investment and trade, wielding considerable power and influence as a result. [World Investment report].

Transnational corporations (TNCs) affect society and ecological systems in a number of ways, both directly through investments and production and indirectly through R&D and lobbying. Their contribution to sustainable development can be both positive and negative. On the one hand, investments by corporations can positively contribute to increased productivity and facilitate the use of more efficient and equity enhancing technologies/applications, new environmentally friendly technologies as well as better working practices.

Environmental concerns

On the other hand, growing investments can also result in depletion of natural resources, increased CO2 emissions, spreading of toxic substances, destruction of local economies, and a lowering of environmental standards through lobbying. In the case of poor countries, the imbalance in power between investor and host country can seriously limit the host countries' economic and environmental policy options.

The scale and pace of operations undertaken by TNCs - for example in the extractive sectors - can cause pernicious detrimental impacts on both the natural and social environment. Other issues include exploitation of cheap workforces, eco-dumping, and a 'race to the bottom' with lowering of environmental standards to attract investments.

Positive initiatives have been launched where consumers, through independent environmental and social labelling schemes, have been able to use market mechanisms in a positive way. Internalisation of environmental externalities through economic measures has also been successful in a number of cases such as taxes on toxic substances.

WWF industry partnerships

WWF has experience of the benefits and potential of voluntary initiatives first-hand, through partnerships with key industry sectors including the establishment of the Marine Stewardship Council and the Forest Stewardship Council, Climate Savers and many other partnerships.

Yet WWF's experience in working on issues of global concern such as fisheries, forests, climate, toxics, freshwater and species makes it clear that the existing voluntary initiatives are not enough. The overarching goal must be to ensure that corporations operate in a manner that supports sustainability and that companies that move in a sustainable direction are supported, not disadvantaged. In order to address the current failures WWF believe that a new approach is needed

1. First of all there exists a need for legally binding global rules (Corporate Accountability, CA), especially with respect to transnational companies, to help ensure minimum acceptable levels of responsible corporate behaviour and practices in every country in which they operate. Where companies operate transnationally, voluntary initiatives alone have not proved adequate to address the needs of sustainable development.

2. Secondly there is a need to support proactive front runners that integrate sustainable development into their core business strategies (Corporate Social Responsibility, CSR).