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Chapter 1
Introduction to corporate citizenship
This section introduces you to a number of issues that confront society, the
environment and the business world, in particular. These issues can be categorised
into environmental, social and governance (ESG) issues.
Climate change, natural and man-made disasters, pollution, poverty, inequality, lack
of ecosystem respect, rising numbers of endangered species, fast-depleting natural
resources, the increasing human population, poor ethical conduct, human rights
abuses, ignorance, greed, irresponsible development and investments, corruption, lax
regulation and weak governance, corporate scandals and global financial crises –
these are some of the many issues confronting society in general and, in the context
of this book, the business world in particular.
Whilst society, consisting of governments, the business world, non-profit organisations
(NPOs), non-governmental organisations (NGOs) and other collective groups of
citizens has purportedly been moving towards addressing these issues.
Have these moves been adequate? Or have we taken one step forward and five steps
backwards? Has society become numb to issues such as poverty and human rights
abuses? Has greed and corruption become commonplace in business? These are
rhetorical questions.
Even the stark historical divide between developing and developed nations is, in many
instances, beginning to evaporate with the onward march of globalisation.
We have elected to follow Matten and Crane’s conceptualisation of corporate
citizenship and for the purpose of this book in general define it as the: ‘role of the
corporation in administering citizenship rights for individuals.’
There are two features of this definition that appeal to us:
•First, it is grounded in a thorough consideration of the idea of citizenship with a
specific emphasis on the liberal political-economic tradition that characterises most
industrialised societies.
•Second, it specifies emphatically that corporate citizenship is not about corporates as
citizens,but rather that it is about the roles that corporates might play in administering
citizenship rights to citizens.
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Corporate citizenship encompasses much more than corporate philanthropy and
social investment – corporate charity if you like. Instead of this narrow or ‘limited’
scope, corporate citizenship, according to the definition that we have chosen,
embraces the fact that business activity in general (that is, core business activity)
has the potential to influence the administering of citizenship rights enormously.
Matten and Crane describe three different classes of citizenship rights as
characterising the liberal political-economic tradition: social or positive rights; civil or
negative rights; and political rights.
Social rights would include things like the right to education, health care, and housing.
Ultimately, these relate to welfare, which must be provided. Civil rights would focus on
the protection of citizens against intrusions on their freedoms. So, things like freedom
of speech, thought and religion would fall into this category. Very importantly, the
protection of private property rights would typically be a civil right. Finally, political
rights include all of the rights necessary to allow citizens to participate in the
formulation of public policies and practices by which society is governed. Things like
the right to vote would be included here.
Historically the administering of these rights has typically been the responsibility of
governments. However, the process of globalisation, corporations are increasingly
finding themselves not only best placed to administer some of these rights, but also
expected to administer them in exchange for social legitimacy and the licence to do
business.
Citizenship rights in relation to the environment would also typically be defined as
civil rights. An example of a formal expression of such rights would be section 24 of
the Constitution of the Republic of South Africa (1996) which states that: ‘
Everyone has the right—
(a) to an environment that is not harmful to their health or wellbeing; and
(b) to have the environment protected, for the benefit of present and future
generations, through reasonable legislative and other measures that—
(i) prevent pollution and ecological degradation;
(ii) promote conservation; and
(iii) secure ecologically sustainable development and use of natural resources
while promoting justifiable economic and social development.’
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The terms “corporate”, “company” and “business”. These three terms share the
following two characteristics in the capitalist sense:
privately owned entities
engaged in the pursuit of profit for the owners
Although the term corporate often refers to a large multinational organisation, we
would like to emphasise that this is not always the case. Small and medium-sized
businesses in their singular and collective capacity can have a great impact on an
economy, on society and on the environment. The term corporate citizenship, too, can
then also apply to micro- and township businesses that operate in these areas. Small,
micro- and township (also referred to as “kasi”) businesses, however, can also
make a difference in their communities by creating employment and making goods
and services more accessible to residents.
Corporations are indeed principally engaged in the pursuit of profit for the
owners and that any activities that corporates might undertake under the banner of
corporate citizenship must be consistent with this ultimate purpose.
COP (Conference of the Parties)
Second World War (1939–1945), we as a species had spent the better part of six years
doing our utmost to destroy ourselves and the planet, a period only matched in
destructiveness by the First World War (1914–1918). As society emerged (somewhat
stunned) from the destruction; it was almost inevitable that a period of organised
development would be needed to sort out the mess. The war ushered in an era of
unprecedented development, facilitated and funded by international institutions such
as the International Bank for Reconstruction and Development.
By the late 1960s and early 1970s, the first signs of a gap between “good in principle”
and “good in reality” associated with the post-war development era began to appear.
Sustainable development: ‘development that meets the needs of the present without
compromising the ability of future generations to meet their own needs.’
The general systems theory (GST), in particular, can be applied to corporates, which
comprise many parts that make up a whole. The parts are interdependent and work
together to achieve the goals and objectives of the corporate.
Sustainability means many things. For example, sustainability means to maintain, to
continue being, to preserve and to support, with structures to hold onto. To
be sustainable means to sustain resources and the uses thereof and to avoid
meltdown (or collapse).
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For the purpose of this module, we will use the definition of sustainable development
by Brundtland.
What is development - to develop means many things, most commonly, it means to
grow, progress, improve, change and mature.
in the Second World War, namely the United States of America (USA), the Soviet
Union, Japan and Europe. The net result is that, today, after more than half a century
of “development”, the principal participants in the Second World War are generally
thought of as the developed nations (Russia and Eastern Europe being exceptions),
while much of the rest of the planet, including South Africa and other African countries,
are spoken of as still “developing”. In many cases, the term “developing” is often seen
as a synonym for a stagnating or even crumbling nation.
The consequence of unequal development is starting to manifest themselves in social
unrest. For example, the rising price of oil, an essential input into food production,
together with competition for crop biomass from the biofuel industry (both
consequences of the insatiable appetite of the rich for energy) have led to extreme
increases in the price of basic food commodities (e.g., maize, wheat and rice). This
has precipitated food riots in a number of places around the world
There are four key conditions for sustainable development that can be identified in this
definition. In order to be sustainable, development must
contribute towards fulfilling the needs (material and other) that will ensure a
better quality of life for this generation
be as equitable as possible
respect ecosystem limits
build a foundation for future generations to meet their needs
The elements of sustainable development, also referred to as the pillars of
sustainable development or the triple context, are
society
the environment
the economy (also often referred to as the “profit” or “finance” element)
The fact is, that while society (e.g. by way of overconsumption) and the economy (e.g.
by way of greed) may harm the environment, if the economy and society were to fall,
the environment would still stand.
