CSR Influences Where and with Whom Companies Do Business
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CSR Influences Where and with Whom Companies Do Business

Corporate social responsibility is increasingly influencing where and with whom major multinational corporations do business, according to Race to the Top, a new study prepared for the World Bank and the International Finance Corporation.

Paul Holmes

Corporate social responsibility is increasingly influencing where and with whom major multinational corporations do business, according to Race to the Top, a new study prepared for the World Bank and the International Finance Corporation.

The project was commissioned by the World Bank Group to shed light on whether corporate social responsibility affects the international investment and purchase decisions of the largest companies in the world. The project also explored the practices and preferences of companies working with governments on sustainability issues.

“Many global companies have made a commitment to creating lasting social and economic value in their host communities,” said Jonathan Berman, PELC’s president and the study’s director. “This study clearly indicates that their investment and purchase decisions are now being influenced by where they can meet those commitments.”

An overwhelming majority (88 percent) of participating companies report that CSR factors are of greater influence in determining where they source and invest than such factors were five years ago. Of these, more than half report that CSR factors are “much more influential” than they were five years ago. And a majority of participating companies (52 percent) have chosen one developing-country partner over another on the basis of their CSR policies.

Over the last five years, participants report increasing their investment in CSR, in terms of staff (74 percent), budget (72 percent) and most importantly, top executive time (68 percent).

The report concludes with policy guidance to governments and the development institutions that support them. The recommendations include:
· Communicating a “CSR-friendly” environment as part of the overall investment-attraction effort.
· Addressing CSR concerns of potential investors early in their assessment of new ventures.
· Identifying or building a base of local companies that are “CSR-ready” partners for international firms.
· Evenly enforcing strong laws on CSR-related issues, such as environment, health, safety and corruption.
· Reaching out to large multinational corporations as public-private partners, focusing on the company’s stated CSR goals and programs.
  Engaging local religious institutions and civil society in creating an environment that enables CSR.

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