Corporate social responsibility towards human development: A capabilities framework

• Published date: 01 April 2018
• Author: Cécile Renouard,Cécile Ezvan
• DOI: http://doi.org/10.1111/beer.12181
• Date: 01 April 2018

ORIGINAL ARTICLE

Corporate social responsibility towards human development:

A capabilities framework

C

ecile Renouard

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C

ecile Ezvan

CODEV Research Program, ESSEC Business

School, Cergy, France

Correspondence

C

ecile Ezvan, CODEV Research Program,

ESSEC Business School, 1 Avenue Bernard

Hirsch CS 50105 Cergy, 95021 Cergy

Pontoise Cedex, France

Email: cecileezvan@gmail.com

The starting pointof this paper is the need to promote a people-centred corporate social responsi-

bility (CSR) framework in a context where many human needs and rights remain unsatisfied and

where businesses may have both a positive and a negative impact on the quality of life of human

beings today andtomorrow and may even lead to irreversible damage. Ournormative definition of

CSR is consistent with the criteria established by the EU Commission in 2011. We conceive CSR

as a responsibility towards human development in two complementary ways: (a) a holistic

responsibility shared by companies together with other actors to safeguard humanity and (b) a

direct liability of each company for its impact on stakeholders’capabilities. We apply Nussbaum’s

list of central capabilities and concept of thresholds to specify the natureand extent of corporate

responsibilities towards employees, subcontractors,investors, customers, andhumanity as a whole.

In addition, we leverage fieldwork in developing and developed countries to analyse the effect of

business activities on human capabilities. We demonstrate that by quantifying the impact of

businesses’activities on various dimensions of stakeholders’lives, and especially on the most

vulnerable ones, these businesses can be held accountable for the negative externalities they

produce.

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INTRODUCTION

Theories on the definition and objectives of corporate social responsi-

bility (CSR) have burgeoned over the last three decades (Jamali, 2007;

Reed, 1999). More recently, the notion of human development as a

corporate responsibility has receivedattention, especially in developing

countries. On one hand, some business scholars strive to demonstrate

how corporate strategies can alleviate poverty and provide for poor

people at the “bottom of the pyramid”(Prahalad, 2006). On the other

hand, a standpointcritical of CSR in developing countries has emerged,

creating an alternative perspective for research and actions (Frynas &

Yamahaki, 2016; Jamali, El Dirani, & Harwood, 2015).

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This

outlook proposes alternative ways to adjust corporate practices to

meet the needs of poor consumers, avoid worker exploitation, protect

local communities and ecosystems, and thereby help people attain a

more fruitfullife.

The starting point of our paper consists in expanding these objec-

tives to the situation of poor people in rich as well as in developing

countries: indeed, the income gap between rich and poor people has

increased both between and within countriesand leads to an increased

vulnerability for poor people in rich countries. Moreover, climate and

ecological issues make it necessary to question the long-term conse-

quences of production and consumption patterns worldwide. This

implies a consideration for corporate responsibilities that goes beyond

the dominant paradigm—until 2011—that considered CSRas “a concept

whereby companies integrate social and environmental concerns in

their business operations and in their interaction with their stakehold-

ers on a voluntary basis”(European Commission,2001).

This perspective admits several limits. Indeed, this definition can

be understood in terms of philanthropy: however, charitable donations

may lead to negative side effects, including nepotism, kick-backs, and

fraud, as shown by CSR programmes implemented by oil companies in

Nigeria (Giraud& Renouard, 2010).Second, global competition contrib-

utes towards an ecological and social race to the bottom. Thus, CSR is

most effective when providing common obligations to the economic

actors, and when corporations’contributions to the sustainable devel-

opment of people affectedby their activities are quantified.This is con-

sistent with the requirements of the Paris Agreement and with the UN

Abbreviations: CA, capability approach; CR, corporate responsibility; CSR,

corporate social responsibility; EU, European Union; HDCA, human

development and capability approach; HR, human resources; ILO,

International Labour Organization; NCP, nation contact points; OECD,

Organisation for Economic Co-operation and Development; RCI, relational

capability index.

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C2018 JohnWiley & Sons Ltd wileyonlinelibrary.com/journal/beer BusinessEthics: A Eur Rev. 2018;27:1 44–155.

Received:18 March 2016

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Revised: 14 July2017

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Accepted:3 December2017

DOI: 10.1111/beer.12181