Social Responsibility in Corporate Investment

Abstract

ABSTRACT (Social Responsibility in Corporate Investment) In our increasingly globalized economy, many transnational and multinational enterprises have sought to take advantage of investment opportunities in foreign nations, often in less developed countries. This can be a good opportunity for both the foreign investor and the host country, if properly managed and directed. In the last several decades, however, corporate investors have fallen under intense scrutiny for social problems they have caused or been directly or indirectly involved in. These have involved reports of abuse of labor, mistreatment of local inhabitants, misappropriation of land and resources, and crimes. Corporate involvement in these abuses can stem from either a corporate investor turning a blind eye to what the host government is doing to pave the way for its investment (complicity), or from the corporation’s direct involvement. Several efforts have emerged in the last few years to heighten the social consciousness of corporate investors in their host countries. This is generally nick-named Corporate Social Responsibility (“CSR”). In developing countries especially, it seems host governments are increasingly less interested in controlling human rights and other abuses through stricter government regulation. Because of this, less traditional approaches toward CSR have inevitably emerged. These have generally taken the form of either new international standards (issued by international organizations), or internal corporate codes of behavior (corporate self-policing). I am addressing these less traditional approaches in this paper. I also consider implications based on current trends in CSR affecting the U.S. and Korea, yet I do this primarily as “talking points” in this conference.