Principles seek to promote ‘economic responsibility’

A leading consultancy is advancing the debate about the responsibilities of multinationals with a set of principles that enjoins the companies to use their position as ‘economic actors’ to the wider benefit of society.

The UK-based SustainAbility consultancy is devising the principles because it believes that while large corporations undoubtedly bring a wide range of benefits to society, they also tend to ignore the negative effects of their economic clout.

Geoff Lye, SustainAbility’s vice-chairman, said he hoped the principles, once finalized, will start a debate ‘on the need to shift from corporate social to corporate economic responsibility’. He said too many companies, when they draw up corporate responsibility programmes, pay far less attention to their ‘economic responsibility’ than to their social and environmental policies.

The Principles of Corporate Economic Responsibility for Multinational Corporations, now in draft form, will stress that companies have a moral duty to oppose global trade that in general favours developed countries over developing ones, often through subsidies.

‘With their scale and supply chain influence, large corporations should actively seek to ensure that the power balance protects local and smaller enterprises through fair competition,’ said Lye.

The principles will also propose that companies:

discourage monopolistic and anti-competitive activities, particularly in the areas of patents and copyright
support the role of small- and medium-sized enterprises, which are often forced to close by multinationals squeezing prices
redress the ‘power imbalance’ between the top and bottom of the supply chain by improving payment terms and setting more realistic order deadlines when practical
promote fair trade
pay taxes within the local economies where they are due.