Implementing corporate social responsibility: Empirical insights on the impact and accountability of the UN Global Compact

Abstract

The implementation of Corporate Social Responsibility (CSR) is crucial for organizational legitimacy in today’s globalized world. In the absence of a global governance system, several initiatives have emerged to support companies in designing, implementing and communicating CSR. However, research has so far mainly neglected to empirically evaluate the impact of such initiatives on organizational practices. This study aims to close this gap by analyzing on a large quantitative basis how business participants in the largest voluntary CSR initiative - the UN Global Compact (UNGC) - embed CSR into their organizations. Drawing on insights from institutional and stakeholder theory, I derive determinants of UNGC implementation and analyze the accountability of the initiative. My study contributes to the literature in several ways: I develop a theoretical model to describe and explain variation in UNGC implementation, and scrutinize the new measure for UNGC implementation. My results show that the initiative affects organizational practices: Contrary to the bluewashing arguments of UNGC critics, the level of CSR implementation increases with the time of membership in the UNGC. However, my findings also suggest that the declared participant information still lacks credibility - higher UNGC implementation levels are not associated with significantly less UNGC scandals. Implications for CSR research, the Global Compact and its participants are discussed.