Towards a Regulatory Private Law Approach for CSR Self-Regulation? The Effect of Private Law on Corporate CSR Strategies

Abstract

This article analyses the interplay between private law and large multinational companies in designing polices of corporate social responsibility (CSR). Based on a doctrinal legal analysis, the article first shows that private law takes a largely facilitative attitude towards CSR self-regulation in the sense that it subjects the enforcement of self-regulation and its review in the light of public interest standards to the intention of corporations as its authors. Taking account of the recent debate on whether there should be changes in private law towards a stronger interventionist or regulatory approach that subjects CSR self-regulation to public interest standards, the contribution discusses the likely consequences that this may have on the existence and further development of CSR self-regulation. For this purpose, the article reviews socio-economic studies on the motives and strategies of companies to engage in CSR self-regulation and the background role that the law plays in the development of such policies. The article argues that companies develop CSR self-regulation strategically in a way that it remains externally, i.e. towards the public and beneficiaries of this self-regulation, voluntary. Simultaneously, legal mechanisms are installed internally to ensure that those working for the company, such as employees and suppliers meet the self-regulatory goals. This strategy is also realised with a view to the existing laws. Looking into research on the factors that lead to changes in corporate behaviour, the article concludes that a stronger interventionist attitude of private law may only lead to adaptions in this strategy if combined with a particular corporate culture. Consequently, a stronger regulatory private law for CSR self-regulation may only be understood as an indirect pressure for improvement.