Implementing Corporate Social Responsibility: Empirical Insights on the Impact of the UN Global Compact on Its Business Participants

Abstract

The implementation of corporate social responsibility (CSR) is crucial for the legitimacy of an organization in today’s globalized economy. This study aims to enrich our knowledge of the implementation of the largest voluntary CSR initiative – the UN Global Compact (UNGC). Drawing on insights from stakeholder, network and institutional theory, I derive a positive impact of UNGC participation length on the implementation level of the UNGC principles, despite potential weaknesses in the initiative’s accountability structure. Moreover, I scrutinize the validity of the newly introduced UNGC ‘Differentiation Programme’ before applying this framework in the empirical analysis. Results from ordinal, linear and instrumen-tal variable regression models suggest that, contrary to claims made by UNGC critics, the length of UNGC participation does affect the level of UNGC implementation. However, this effect appears to be much smaller than previous practitioner studies have suggested. Moreover, strong local UNGC networks affect the implementation level of the UNGC positively. Their hypothesized moderating role between UNGC participation duration and UNGC implementation level, however, is only significant in networks with activities of high quality rather than high quantity.

Keywords: Corporate Social Responsibility, Differentiation Programme, Implementation, UN Global Compact