It is becoming increasingly recognised that government actions are vital for creating an enabling environment for private sector development, which lowers risks, reduces costs and barriers of operation and increases opportunities for competitive and responsible private enterprises (BDP, 2002; Albareda et al., 2008; UN Global Compact, 2010). Over the last decade, governments have joined other stakeholders in assuming a relevant role as drivers of CSR, working together with intergovernmental organisations and recognising that public policies are key in encouraging a greater sense of CSR (Bichta, 2003; Albareda et al., 2008). It has been argued that the challenge for governmental agencies in promoting a CSR agenda is to identify priorities, raise awareness, create incentives and support, and mobilise resources from cross-sectoral cooperation that are meaningful in the national context, as well as building on existing initiatives and capacities (Singhal, 2014). The first documents to introduce the debate on governments’ CSR role appeared in the 1990s (Moon and Sochaki, 1996). Most of these documents suggested that there was a need for governments to actively promote CSR as a response to the social and environmental challenges and problems caused by corporate action within an increasingly globalised economic context (Moon, 2004).
According to Fox et al. (2002), a government could support a CSR agenda through a number of key roles, which include (i) regulating: this can be in the form of laws, regulations, penalties and associated measures to control certain aspects of business
investment or operations, (ii) facilitating: this could include access to information, tax incentives and penalties to promote responsible business with the aim of enabling companies to engage in CSR to drive social and environmental improvements, (iii) brokering: a government could help initiate a dialogue involving relevant stakeholders and act as a broker in partnering public sector agencies, private sector and civil society organisations in order to tackle complex social and environmental challenges, (iv) warranting: this may include commitment to implementation of international principles; education or awareness raising programmes; official policy documents; publicity of good CSR practices; specific CSR related award schemes or endorsement of specific pro-CSR indicators, guidelines, systems and standards. In parallel, Lepoutre et al. (2004) reviewed the strategic roles to be played by governments managing institutional uncertainty (activate, orchestrate, and modulate) and presented common tools for public action managing strategic uncertainty (public information campaigns, organisational reporting, labelling, contracts, agreements, and incentives). Furthermore, the role of governments promoting CSR has been analysed by other authors in the context of new forms of public–private partnership linked to CSR aiming to address social problems, promote coordination with companies, social organisations and local governments (Gribben et al., 2001; Nelson and Zadek, 2000; Bodruzic, 2015), and also to analyse the role of CSR in public– private partnerships as models of governance (Guarini and Nidasio, 2003).
Another approach to the understanding of CSR public polices is the soft policy approach introduced by Joseph (2003), in which the role of government is viewed as collaborative and facilitating through the use of soft tools and means in collaboration with the private sector. Soft policies (also known as soft powers or tools) refer to
possibilities of governments to change behaviour with means other than regulation. Examples of such policies in the case of CSR include creating an enabling environment; raising awareness and stimulating public debate for challenges and issues; promoting CSR initiatives by endorsing or inviting business and wider community support; formally recognising CSR initiatives; developing CSR guidance documents; building capacities for CSR in businesses, civil society and public authorities through trainings and internet platforms; convening businesses and stakeholders as an extension of capacity-building; funding research and facilitating networking of researchers in the CSR context; engaging in Public-Private Partnerships and developing tools for CSR management (Fox et al., 2002; BPD, 2002; Bichta, 2003; Albareda et al., 2007; Singhal, 2014). It is worth mentioning here that the use of soft power or soft policies is not limited to CSR and is practiced in wider aspects of government relations with the private sector. For example, it is widely reported in the context of the management and regulation of industrial relations and labour standards (e.g. Sisson & Marginson, 2001; Kuruvilla & Verma, 2006; Martinez Lucio & Stuart, 2011; Meardi & Marginson, 2014).
A combination of some of the different government roles could be used to raise the CSR profile of a country (Albareda et al., 2007; Albareda et al., 2008; Singhal, 2014). This may include (i) creating an enabling environment through the influence of public policy as an important tool for supporting CSR practices, (ii) raising awareness and increasing public support of the voluntary nature of CSR, (iii) establishing a specialised CSR agency with a specific mission to promote and support CSR practices, (iv) reforming regulatory frameworks to meet CSR-related standards and to ensure a good CSR practice and (v) fostering partnerships with businesses, NGOs
and other key stakeholders with the aim of addressing social problems through a CSR agenda. For example, the government of Thailand established the CSR Institute (CSRI) in 2007 as a dedicated CSR agency with a specific mission to promote CSR practices among its listed public company members (Singhal, 2014). Similarly, a study on the government and civil society roles in CSR in Poland suggested the creation of a Commission for CSR as part of a cooperation involving government, the private sector and civil society (Faracik, 2008). The Indian government provided an example of how to play a key role in facilitating dialogue with the business community through two dialogue forums directly relevant to CSR policy development (Singhal, 2014). The first forum is the Coordination Committee to Promote Affirmative Action in the Indian Industry involves the Indian Ministry of Commerce and Industry, Associated Chambers of Commerce and Industry of India, Federation of Indian Chambers of Commerce and Industry, as well as senior representatives of industry. The aim of this forum is to agree and produce a Code of Conduct on Affirmative Action and to set up an ombudsman with regional teams to monitor the compliance of the voluntary code of conduct by its members. The second forum is the India Partnership Forum (IPF), which is more CSR-focused with the main interest being the adoption and application of issues such as a social code for business, the formulation of CSR, providing support to public policy measures on CSR, ensuring the mainstreaming of CSR education in business schools and capacity building for community development. A number of studies have focused on geographical comparative analysis of culture and government approaches to CSR between Europe and North America. For example Aaronson and Reeves (2002a, b) provide insights into the relevance of cultural differences and their influence on the national CSR models. Aaronson and
Reeves (2002a) explored how European policymakers have taken a wide range of public initiatives to promote CSR, in contrast to the lack of policies in the U.S.A. The work noted European-based companies acceptance of CSR related public policies compared with the less accepting attitude of U.S.-based companies, and argued that the difference was based on the countries’ respective business cultures. This research provided insight into how companies in certain regions could be more prepared to work with governments to improve social conditions with a regulated environment (Aaronson & Reeves, 2002a; Albareda et al., 2007). Furthermore, Albareda et al., (2008) compared CSR initiatives and public policies in three European countries (Italy, Norway and the United Kingdom), focusing on governmental drivers and responses. This research demonstrated that governments were incorporating a common statement and discourse on CSR, working in partnership with the private and social sectors. It concluded that for governments, CSR implied the need to manage a complex set of relationships in order to develop a win–win situation between business and social organisations. However, the research highlighted that differences existed between the three governments in their use of CSR public policies. These differences were based on cultural and political factors such as the welfare state typology, the organisational structures, and the business and social and cultural background in each country.
On a related note, there are a number of voluntary codes of conduct involving governments and businesses, which are relevant to this discussion. Examples of such initiatives include the Organisation for Economic Cooperation and Development (OECD) guidelines and the UN Global Compact. The OECD Guidelines for Multinational Enterprises (OECD, 2011) are recommendations addressed by
governments to multinational enterprises operating in or from adhering countries. They provide non-binding principles and standards for responsible business conduct in a global context consistent with applicable laws and internationally recognised standards. Several governments around the world have committed to promoting these comprehensive guidelines for responsible business practices. The UN Global Compact is a global movement of sustainable companies and stakeholders to create a better world. It is a corporate sustainability initiative, which calls on companies to do business responsibly by aligning their strategies and operations with an agreed set of principles on human rights, labour, environment and anti-corruption (UN Global Compact, 2010; UN Global Compact, 2018). The initiative also supports business to take strategic actions to advance broader societal goals such as the 17 UN Sustainable Development Goals (SDGs) (e.g. no poverty, zero hunger, quality education, decent work and economic growth, responsible consumption and production and reduced inequalities) (UN Global Compact, 2018). This initiative was adopted by all 193 Member States of the United Nations with the aim of achieving a better future for all. The SDGs resulted from an inclusive process with governments involving business, civil society and citizens. The initiative demonstrates that there is a growing understanding among business leaders that it is not enough for companies to focus only on short-term profit because social unrest and economic inequalities can damage long-term prosperity.