Tech Companies’ Corporate Social Responsibility: a Voluntary Practice or a Legal Obligation

Traditionally, Corporate Social Responsibility has taken the form of self-regulation expressed in initiatives or strategies undertaken by the organization depending on its goals. For instance, technology companies have proven that they are the ones that connect those in unserved and underserved populations across the globe. Consequently, tech companies must shift their attention and efforts to social innovation to have a positive impact on society. This means that technology companies have a special obligation to the society. Additionally, it is important to keep in mind that being “socially responsible” differs from one organization to the other. Thus, social responsibility is based on what companies can do to help reach a sustainable path to development.

Organizations are expected to have a plan on what CSR policy they follow which is then shared in their CSR reports. These reports enable organizations to effectively measure the impacts their CSR policies had through demonstrating how they have helped the societies and environments of which they operate in.  Although, CSR is a form of soft law, there is a trend internationally to move it to a more legally enforceable hard law. In 2011, the United Nations endorsed the “UN Guiding Principles on Business and Human Rights” (“UNGPs”). These guidelines provided the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. This document defined rights, duties and causation, and it can be applied to all businesses, large and small (George, 2019). The guidelines can be understood in the context of the minimal legal obligation requiring business entities to respect human rights, social norms, and environmental standards. Consequently, the CSR guidelines legal status can be considered as blurred because the level of enforceability is not clearly understandable. Additionally, governments are playing an indirect role through voluntary CSR guidelines and increasing mandatary CSR regulations like in the EU through a CSR reporting or India through a company act (Marta & Peter; 2016). However, due to the lack of enforceability of CSR standards, corporations have a high degree of flexibility and freedom in terms of ways and means through which they want to run their businesses and reach their target. Clearly, to make these guidelines mandatory and legally binding in their approach, there is a need to establish precise rules that corporations must respect.

States’ commitment to cooperation, encouragement, facilitation, or promotion of CSR have generally been on the softer side through non-binding initiatives, though there have been few binding initiatives such as such as reducing carbon footprints to mitigate climate change, improving labor policies, and embracing fair trade, engaging in charitable giving and volunteer efforts within the surrounding community, and making socially and environmentally conscious investment,  which are expected to be respected by signatory states and applied in good faith. Additionally, activism by millennials in particular and by all customers and users will also influence changing trends in CSR and by Tech companies.

For instance, Toronto-based company Fiix Software has identified five Sustainable Development Goals (SDGs) it will focus on (Quality Education, Gender Equality, Decent Work and Economic Growth, Responsible Consumption and Production, and Life on Land) and is tracking the company’s progress in its annual CSR report. Marc Castel, founder of Fiix Software mentioned that “Doing good is good for business,”. Also, he mentioned that they introduce Corporate Social Responsibility as a business department. It’s embedded into every part of our business: governance, finance, marketing, people (Peels et al; 2016).

CSR has the power to reconnect businesses and society in a way that leads global growth. When an organization is doing good for society, it pays back by enhancing the organization’s business performance because consumers are supportive of organizations that care for the society and environment other than profit maximization. CSR is considered as a private self-regulation and therefore, a soft-law instrument., CSR is better known as an international policy issue that calls on corporations to be profitable in a sustainable way by not harming human beings or the environment.