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Progressive Thinking for a Global Age

Corporate Social Responsibility in
Emerging Markets:
The Role of Multinational
Corporations
An Initial Paper for the Launch of the Foreign Policy Centre
Project on “Corporate Responsibility in Emerging Markets”
(2008) in association with Coca-Cola Great Britain

Feng Zhang
China Programme Manager
Foreign Policy Centre
London
March 2008feng.zhang@fpc.org.uk
www.fpc.org.uk

In association with

Introduction
Amongst the many dramatic changes that have taken place in the
business world since the 1990s, the rise of the corporate social
responsibility (CSR) agenda is certainly one of the most noteworthy.
As a recent special report in The Economist notes, “doing well by
doing good” has become a popular business mantra—the ideathat
firms can be successful by acting in the broader interests of society as
a whole even while they satisfy the narrow interests of shareholders. 1
But although virtually all big companies today have to come to terms
with corporate social responsibility, the concept of CSR itself remains
confusing. And although various firms have tried to place CSR at the
core of their strategies, few seem tohave figured out how an
integrated business strategy incorporating the social agenda might be
fashioned. In any case, there is still a gap between companies’
aspirations in CSR and their actions. One important reason for this
discrepancy is our insufficient understanding of what exactly is
required of today’s companies to simultaneously generate profits for
shareholders and make a positivecontribution to society.
With this in mind, the Foreign Policy Centre is launching a project
on CSR in emerging markets in association with Coca-Cola Great
Britain. The project seeks to explore issues surrounding CSR in
emerging markets, focusing on the role of multinational corporations
(MNCs). It will examine the impact of MNCs’ businesses on the
workplace, the marketplace, and theenvironment, and explore how
well-designed CSR practices can contribute to economic, social, and
environmental progress in emerging economies.
The project comprises four seminars and two papers. Following
the launch seminar which seeks to define the debate on CSR in
emerging markets generally, three subsequent seminars will focus on
the issues of labour standards, marketplace practices, and theenvironment respectively. The aim of this initial paper is to frame the
background of CSR in emerging markets, inform the actual seminars,
and prepare points for debate throughout the course of this project.
The second paper will synthesize the findings of this project. We hope
this project can be a step towards a better understanding of the
various issues regarding CSR in emerging markets.Some Definitional Issues
Although this project is intended to have a practical business focus,
2

some definitional problems nevertheless have to be solved before one
can meaningfully discuss MNCs’ CSR in emerging markets.
Emerging markets/economies. Emerging markets/economies
refers to those countries that are starting to participate globally by
implementing reform programmes and areundergoing economic
improvement. The term ‘emerging market’ was originally coined by
the International Finance Corporation (IFC) of The World Bank to
describe a narrow list of middle-to-higher income economies amongst
developing countries, with stock markets in which foreigners could
buy securities. The term’s meaning has since been expanded to
include more or less all developing countries witha Gross National
Income (GNI) per capita of $9,265 or less.
MNC. We define MNC broadly as any corporation with operations
in more than one country. It needs to be pointed out that by MNCs we
do not just mean Western or Japanese MNCs, but also a growing
number of MNCs from emerging economies in Asia, Africa, and Latin
America. According to Fortune Magazine, amongst the 500 top global...