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To Legislate or Not: That Is the Question—Comparing CSR Intent and Effects in Economies with Voluntary CSR and Legislated CSR

In: International Dimensions of Sustainable Management

Author

Listed:
  • Lars Isaksson

    (Queensland University of Technology)

  • Nayan Mitra

Abstract

Multinational companies (MNCs) often debate whether or not corporate social responsibility (CSR) is worthwhile pursuing, whether it is a cost for mere window dressing or whether it is an investment with promising and interesting outcomes. On the other hand, governments debate whether CSR should be legislated or voluntary. Hence, while some MNCs engage in CSR voluntarily pursuing the benefits, other MNCs are ‘forced’ to engage in CSR—regardless if they believe in the concept or not. There are various examples and approaches. Among developed economies, for example, we find Sweden who does not have CSR legislation (yet the majority of Swedish MNCs are highly active in voluntary CSR) and Denmark, Germany and Canada with various degrees of industry-specific legislation. In emerging economies, we find, for instance, Mauritius, Indonesia and India legislated CSR to cover precise monetary contributions towards the social, economic and environmental development of these countries. Whether the global economy gravitates towards some degree of responsible capitalism or not, the discussion and arguments for and against mandatory CSR is likely to increase in the near future. To contribute to the debate, this chapter describes the differences between CSR among MNCs in Sweden (a developed economy believing in voluntary CSR) and India (an emerging economy) where CSR is mandatory by law. Our research indicates that MNCs in both economies (with voluntary or legislative CSR) strategically benefits from CSR and that CSR legislation positively affects MNCs in at least one emerging economy (India).

Suggested Citation

  • Lars Isaksson & Nayan Mitra, 2019. "To Legislate or Not: That Is the Question—Comparing CSR Intent and Effects in Economies with Voluntary CSR and Legislated CSR," CSR, Sustainability, Ethics & Governance, in: René Schmidpeter & Nicholas Capaldi & Samuel O. Idowu & Anika Stürenberg Herrera (ed.), International Dimensions of Sustainable Management, pages 35-51, Springer.
  • Handle: RePEc:spr:csrchp:978-3-030-04819-8_3
    DOI: 10.1007/978-3-030-04819-8_3
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    Citations

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    Cited by:

    1. Xu, Lili & Lee, Sang-Ho, 2021. "Policy implications of the CSR in an international transportation market under subsidy," MPRA Paper 106259, University Library of Munich, Germany.
    2. Nayan Mitra, 2021. "Impact of strategic management, corporate social responsibility on firm performance in the post mandate period: evidence from India," International Journal of Corporate Social Responsibility, Springer, vol. 6(1), pages 1-15, December.
    3. Stefanos Fotiadis & Konstantinos I. Evangelinos & Foteini Konstantakopoulou & Ioannis E. Nikolaou, 2023. "Assessing CSR Reports of Top UK Construction Companies: The Case of Occupational Health and Safety Disclosures," Sustainability, MDPI, vol. 15(8), pages 1-32, April.
    4. Xu, Lili & Zhao, Qinghong & Chen, Yuyan & Lee, Sang-Ho, 2023. "Post privatization of high-speed rail with corporate social responsibility (CSR) in an international transportation market: Mandatory CSR versus voluntary CSR," Economics of Transportation, Elsevier, vol. 35(C).

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