Companies need to press national governments to show more commitment to basic international standards, says Craig Mackenzie
Last year in this column I suggested that investors should be holding companies accountable to international standards such as the Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises. To test whether there is support among companies for this idea, I wrote to the CEOs of the UK’s top 100 companies to discover their attitude to such guidelines.
The bad news is that only 11 of the 68 respondents have made a public commitment to respect the OECD Guidelines, although a number have made commitments to wider norms such as the Universal Declaration of Human Rights. The good news is that this is up from just two or three companies five years ago.
What about the others? A number of these companies argue that, as they are not multinationals, the guidelines do not apply. This is only partly convincing. Even if these companies have no international operations, they often have international supply chains that are covered by the guidelines. And, in any case, many of the provisions of the guidelines apply to companies wherever they operate.
Some companies said they did not commit to complying with the guidelines because they prefer to develop their own internal codes, which reflect their particular business needs and are expressed in employee-friendly language. Fair enough. However, this is not a good reason for failing to make a public commitment to external guidelines. I accept the need for tailored internal codes, but it is reasonable to expect companies to commit to the OECD Guidelines, and to explain how their internal codes enable this.
Perhaps the most fundamental reason why the OECD Guidelines are not more widely respected is the failure of many OECD governments to do enough to promote them. One great benefit of the guidelines is that they are endorsed by OECD governments, which agreed to establish a system of government National Contact Points (NCPs) to promote the guidelines and to assess complaints about non-compliance. Some governments – such as those in the Netherlands and Germany – appear to have been very pro-active, investing significant resources in promoting the guidelines and providing a consensual and effective forum for discussing and resolving concerns about corporate performance. Other governments have been less diligent.
If governments are serious about sustainable development, international corporate responsibility standards are essential. The OECD Guidelines are not perfect, but they are a major building block for business. It is therefore important that governments invest in NCPs so they can do the big job required of them. This is a message the CSR community can unite in sending to governments.