A legal perspective on Corporate Social Responsibility (CSR)

Abstract

Recent years have been marked by a remarkable decline in trust and confidence in the economy as well as in the business community, as a growing number of economic scandals are being reported by observers and whistleblowers. The need for better governance and higher ethical standards has become a focal issue for governments, regulators, supervisors and business actors themselves. In this context, corporate social responsibility (CSR) has come to play an increasingly important role in business and corporate regulation, paving the way for ethical business practices, as the concept of corporate social responsibility encompasses key components of economic growth, social equity and ecology. Although CSR was once considered a form of corporate self-regulation, governments became more and more involved in drawing up new rules governing the economy and the business sector. However, this trend is far from uniform, and the sets of regulations adopted and implemented so far across the world range from comprehensive to inexistent. As a result, the extent to which private companies will adjust their policies depends largely on where their activities are located.