Driven by a dynamic mix of government intervention, market incentives, and market risks, globalization has sparked a resurgence in labor-focused Corporate Social Responsibility (CSR) over the past 10 years. Companies in both the developed and developing worlds have responded to these drivers with a variety of CSR initiatives in an effort to obtain market rewards or at minimum, to mitigate market risks.
This section of the World Bank Labor Markets website aims to provide an overview of the issues associated with the adoption and impact of labor-focused CSR in developing countries, including the relationship between multinational enterprises and small & medium enterprises in developing countries, the challenges of implementation among firms in developing countries and the debates surrounding codes of conduct. It is intended as a primer for development professionals, companies, and public sector officials interested in the relationship between labor-focused CSR and development objectives. And while CSR traditionally encompasses a wide range of issues, the focus of this section is exclusively on CSR initiatives that address labor standards and workers. The companies highlighted in this section are primarily those characterized by global supply chains or “high impact” products or processes as this is where most labor-focused CSR is practiced.
It is our conclusion that most labor-focused CSR initiatives are directly or indirectly linked to initiatives that strive to ensure compliance with minimal labor standards or improve working conditions. We have grouped the many labor–focused CSR initiatives according to their overarching objectives in a typology, which includes compliance programs: codes of conduct, monitoring and verification; capacity building and sustainability programs, and activities aimed to enhance sustainable livelihoods.
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