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Development in Practice, Volume 15, Numbers 3 & 4, June 2005

Corporate social responsibility: a challenge for the donor community
Bob Frame
As corporate social responsibility (CSR) increases in large corporate organisations, a genuine approach to sustainable development is often best achieved through the supply chain. This is directly applicable to North – South supply-chain interactions(private-sector organisations, NGOs, and donors). CSR has adopted techniques from their ‘development’ usage, yet a reverse flow is not observed back to the ‘development’ sector. This is unfortunate. Privatesector organisations and NGOs (especially the larger ones) are well placed to take advantage of the increase in CSR relating to developing countries. More importantly, donors of all types would haveincreased influence if they took up CSR principles. Opportunity costs are not high and the advocacy potential is huge. This paper reviews CSR techniques and argues for donors to accept the challenge of incorporating them into their operations to influence more efficiently the process they seek to change.

Introduction
This paper proposes that the donor community, that is providers of technicalassistance (donors, private consulting companies, and NGOs), can be considered as a supply chain that should adopt corporate social responsibility (CSR) mechanisms in order to influence the development process more effectively. It is intended to stimulate action and provide access to basic texts and tools. CSR is taken here as a loosely bounded subset of sustainable development that uses instrumentssuch as eco-efficiency, stakeholder engagement, ethical investments, and ‘triple bottom line’ reporting for the implementation of effective development activities. In this case the objective is the achievement of the internationally agreed UN Millennium Development Goals (MDGs) by 2015, a topic of increasing concern (Clemens et al. 2004; Radelet 2004). This review is based on personal experienceand interviews with a range of agencies and confirms the need for far greater accountability and transparency to stakeholders (aid recipients, taxpayers, and concerned parties).

CSR—an overview
CSR is growing in importance in the corporate world. Activities range from voluntary contributions, health and safety, and good employer practices through to ethical investments, internal managementobjectives (such as zero-carbon-emission targets for travel and energy 422
ISSN 0961-4524 Print=ISSN 1364-9213 Online 000422-11 # 2005 Oxfam GB DOI: 10.1080=09614520500076324 Routledge Publishing

Corporate social responsibility: a challenge for the donor community

consumption), and more participatory stakeholder relationships (such as community interaction and supply-chain management). There isa rapidly increasing body of CSR work by academic researchers, consultants, and policy makers organised through national and international bodies such as the World Business Council for Sustainable Development (WBCSD), trade organisations, and at the central and local levels of government. Much was instigated at the Rio Summit on sustainable development in 1992 through Agenda 21, and pursued at the2002 Johannesburg Summit. Sector-specific examples include the Extractive Industries Transparency Initiative that aims for openness in the payments by companies to governments and associated entities, as well as transparency in revenues by host-country governments. However, it is widely accepted that progress has been slow among OECD countries despite the proliferation of national, regional, andlocal policy statements. Indeed, the opinion of Christian Aid (2004) is that CSR is being used by some corporations ‘merely as a branch of PR’ and that ‘rhetoric and the reality are simply contradictory’. As a result, Christian Aid is calling for a ‘framework of international regulation, backed up by national legislation, to ensure the enforcement of real social responsibility on the corporate...