'Minding Our Business': What the US Has Done and Can Do to Ensure that its Multinationals Act Responsibility in Foreign Markets

Journal of Business Ethics, Vol. 59, pp. 175-198, June 2005

37 Pages Posted: 31 Oct 2008

See all articles by Susan Ariel Aaronson

Susan Ariel Aaronson

George Washington University - Elliott School of International Affairs

Date Written: June 29, 2005

Abstract

This article examines the signals that US public policy sends to global market actors regarding their social and environmental practices. The United States Government does not mandate that US based firms follow US social and environmental law in foreign markets. However, because many developing countries do not have strong human rights, labor, and environmental laws, many multinationals have adopted voluntary corporate responsibility initiatives to self-regulate their overseas social and environmental practices. This article argues that voluntary actions, while important, are insufficient to address the magnitude of problems companies confront as they operate in developing countries where governance is often inadequate. The United States can do more to ensure that its multinationals act responsibly everywhere they operate. First, policymakers should define the social and environmental responsibilities of global companies. They must consistently make their expectations for global business clear - and underscore that this objective can often be accomplished without mandates. Second, the US should closely examine the policies that undermine global Corporate Social Responsibility (CSR) and address the many conflicting signals sent by policymakers. Third, the President should make the US government a CSR model by examining how to use its purchasing power to promote human rights. Finally, the US government should require pension funds to report on the social and environmental consequences of their investments. In these ways, Americans can mind our business - and thus make sure that US based firms do not undermine social and environmental progress when they operate in the developing world.

Keywords: global CSR, trade, human rights, environment, procurement, foreign policy

Suggested Citation

Aaronson, Susan, 'Minding Our Business': What the US Has Done and Can Do to Ensure that its Multinationals Act Responsibility in Foreign Markets (June 29, 2005). Journal of Business Ethics, Vol. 59, pp. 175-198, June 2005, Available at SSRN: https://ssrn.com/abstract=1292069

Susan Aaronson (Contact Author)

George Washington University - Elliott School of International Affairs ( email )

1957 E Street
Washington, DC 20052
United States

HOME PAGE: http://www.gwu.edu/~elliott/faculty/aaronson.cfm

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