Q & A on Trends in Corporate Social Responsibility

Questions & AnswersIn November, Gwen Jaramillo and I published a piece in Practical Law that looked at trends relevant to CSR. The piece covered a range of topics, including new legislative and regulatory requirements, the role of the board of directors, and key concerns for corporate general counsel.

In noting the key role of the board in overseeing a company’s approach to CSR, we observed:

A key function of the board is to oversee management’s approach to: risk management; legal and regulatory compliance; and strategic planning. The board should be concerned with a company’s short- and long-term capacity to manage its operations in a socially and environmentally responsible way.

In discussing new compliance obligations relevant to CSR, the Q&A addressed several recent legislative and regulatory developments including Section 1502 of the Dodd-Frank Act and the Reporting Requirements on Responsible Investment in Burma.

In speaking about the role of the general counsel in responding to new obligations, we emphasized the importance of approaching these requirements with more than a compliance mentality. Especially in the context of CSR, companies are expected to go “beyond compliance” and to complement their efforts to comply with new requirements with proactive stakeholder engagement and a sensitivity to broader stakeholder concerns.

Specifically, we noted that:

Companies are at risk if they approach social and environmental concerns solely with a compliance-oriented or philanthropic mentality. While meeting current requirements and supporting local communities is important, it is also important to ensure that the company is attuned to policy trends and shifting stakeholder demands. Companies should assess the extent to which they have the capacity to operate consistently with emerging best practices, noting that these evolving performance standards may well be predictive of future compliance requirements.

A copy of the full article is available here.

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