Corporate Social Responsibility and Sustainable Development: The European Union Initiative as a Case Study

Abstract

Multinational enterprises (MNEs) are prime drivers of the trend of globalization. As such, they can be held responsible for the success or failure of sustainable development as it relates to continued economic growth without detriment to the environment and exploitation of the human workforce through inadequate labor standards. Corporate social responsibility is an initiative that has been touted as a possible remedy for the ills of globalization that hinder the realization of sustainable development—that is, inequities in wealth, environmental degradation, and unfair labor practices that are endemic of globalization. This Note outlines the concepts of corporate social responsibility, globalization, and sustainable development and describes the role of multinational enterprises with regard to these concepts. It also summarizes previous methods that have proved inadequate in ensuring that sustainable development becomes a reality, including national approaches, international agreements, and private initiatives. The Note then considers corporate social responsibility as a potential solution that could lead to the achievement of sustainable development. In doing this, the note examines the implications of adopting a corporate social responsibility regime for a multinational enterprise. The European Union’s (EU) initiative in creating corporate social responsibility guidelines is used as a detailed case study for scrutinizing the potential of corporate social responsibility as a viable solution. After analyzing the concept of corporate social responsibility and the need for sustainable development in light of globalization, the Note concludes that while corporate social responsibility may indeed lead to the desired goal—