Corporate Social Responsibility.
Moving Towards a Regional Agenda

Photo: Hillary Mason, Flickr

ECLAC, the Executive Secretary of Global Development of the Organization of American States (OAS) and the Young American Business Trust (YABT) have been working together since 2006 on building a regional agenda of corporate social responsibility (CSR) through the project "Promotion of Corporate Social Responsibility in SMEs in Latin America and the Caribbean", which counts with the cooperation of the Government of Canada through its cooperation agency CIDA.

An estimated 200 million businesses operate in the western hemisphere. Of them, 120 million are micro, small and medium enterprises (MSMEs) that account for over 90% of total business. These companies offer 50% to 70% of jobs in the region. A third of them are headed by women and only a quarter of them have been created by entrepreneurs under 35 years of age. They are an average 14 months old and are largely informal. MSMEs export around 5% of total goods and services and only a third of them are able to participate in the global market.

Acknowledging the increasing importance of these companies and their potential impact in countries' competitiveness, over the past four years, the OAS, ECLAC and YABT have set forth a Corporate Social Responsibility agenda that has two goals. 

The first objective is to improve the social and environmental performance of these companies by identifying critical areas of their business and their disposition for change (design of technical management tools and indicators) in the aim of increasing the competitiveness of their business and selected sectors. The second goal is to define and include the views and experiences of different stakeholders with regard to a possible regional CSR agenda, with the understanding that CSR is not the task of only one party (government or private sector) but of all of society; in other words, it is a shared understanding fed by the contributions of all sectors to develop a more fair and equal society.

CSR is a new style of doing business that takes into account the social, environmental and economic impacts of business activity. CSR is a central aspect of business, as are the creation of value, risk management, innovation, etc., and it goes beyond legislation. The concept also incorporates the importance of ethical values as a trademark of a company&rsquo:s actions and the interests of communities, workers and any other group related to the business.

The joint OAS-CEPAL-YABT project began in 2006 with 14 English-speaking Caribbean nations. Since then, nine Latin American countries have joined. The project works with SMEs in the tourism, extraction and construction sectors. The selection of these sectors was not arbitrary; they are particularly important in Central American economies and in the region in general. In Latin America, revenues from tourism make up, on average, over 10% of GDP. In some cases it surpasses 50%.

The dialogue has been joined by representatives of other international organizations such as the Inter American Development Bank, the World Bank Institute, the International Labour Organization, ISO26000, Global Compact and local organizations, indigenous communities, labour representatives and academics, among others.

In April 2010, the progress attained prompted several countries of the OAS Permanent Council to request a session to learn of the scope and achievements of the CSR initiative. A significant number of countries joined this effort during the special session, responding to a call for member governments "to promote programmes and initiatives on CSR, with special emphasis on its value chains and adding greater knowledge to the current internationally acknowledged voluntary principles and guidelines", a call made during the Summit of the Americas in Quebec in 2001 and ratified during the General Assembly held in June 2009 in Honduras.

Leaders of the Global Compact met in New York in June this year, marking 10 years since its creation. The Global Compact is a United Nations CSR initiative based on ten principles that cover human and labour rights, environmental protection and anti-corruption and has already reached 8,000 members. Although the increasing role of CSR in the business agenda has been acknowledged, there are some areas companies still have to work on (human rights and anticorruption).

There was progress on the issue of environmental sustainability, however. Opinion polls carried out during the meeting found that 93% of participants considered that sustainability was one of the keys to a company&rsquo:s success, despite the economic crisis. Moreover, 50% believed that it was an issue of increasing consumer interest.

The issue of CSR and environmental sustainability has become an important reference point in different regional forums, national and local. For example, green business will be the topic of the next regional dialogue "Public Policies to Enhance the Competitiveness of Micro, Small and Medium Enterprises (MSMEs)", an event organized by the Government of Mexico (Ministries of Economy and Foreign Affairs) and the OAS. Socially responsible green businesses and their contribution to competitiveness will have an important place in the discussion agenda on regional competitiveness.

For more information on the event, see https://www.cepal.org/washington/