Corporate responsibility explained

For ICC, corporate responsibility (CR) is the commitment by companies to manage their activities in a responsible way. More broadly, CR includes efforts by business to contribute to the society in which it operates.

What is corporate responsibility?

A growing number of companies approach CR as a comprehensive set of values and principles, integrated into business operations through management policies and practices as well as decision-making processes. Companies endorsing CR typically have formally-written principles, strive to act as good citizens, and emphasize a constant dialogue with their stakeholders, including employees, suppliers and communities.

At the foundation of CR is compliance with the law. Companies have a clear duty to comply with all applicable laws and regulations in their countries of operation. This involves a company’s approach to the production and marketing of goods and services, business ethics, health and safety, environmental practices, treatment of employees, community engagement, and human rights - all of which should form part of an integrated management system.

CR may also include voluntary initiatives that go over and above legal requirements and that are rooted in the principles and objectives of the company. The continuing development of CR initiatives around the world – whether by individual companies, organizations or through collaborative efforts – is a very positive sign.

Where does ICC stand on corporate responsibility?

Since its foundation in 1919, ICC has promoted an open international trade and investment system, based on multilaterally agreed rules and responsible business conduct.
In relation to this mission, ICC strongly encourages corporate responsibility initiatives by companies. ICC supports the notion that responsible, long-term oriented entrepreneurship is the driving force for sustainable economic development and for providing the managerial, technical, and financial resources needed to meet social and environmental challenges.
It is important to distinguish the respective roles of business and government in this respect. Governments’ role is to provide the basic national and international framework of laws and regulations for business operations. Business has the duty to abide by these laws and a responsibility to develop and implement management systems to ensure good corporate practice.

A commitment to responsible business conduct requires consensus and conviction within a company. Voluntary business principles have the advantage of responding to the cultural diversity that exists among enterprises and offering the flexibility to tailor solutions to particular circumstances. Voluntary approaches minimize competitive distortions, as well as transaction costs associated with regulatory compliance, and inspire many companies to go beyond the regulatory baseline. A "one-size-fits-all" approach is incompatible with the great diversity that exists within business.

There are thousands of multinational enterprises throughout the world and many firms that have international activities directly or indirectly through purchasing and contracting. Since these companies face widely differing conditions in the various countries in which they operate, business principles should be sufficiently flexible to reflect the diversity of firms, as well as that of their suppliers and business partners. A "one-size-fits-all" approach is incompatible with the great diversity that exists within business.