B24b: Stimulating a step-change in the development performance of corporations
The World Summit on Sustainable Development positioned the corporate sector as a vehicle for delivering national and international poverty reduction targets in the developing world. But beyond taxes and wages, where is the evidence that big business can contribute to genuine poverty reduction? Corporations, regulators and investors alike seem content for corporate social compliance procedures to mimic those designed for environmental management; and a number of industry leaders have acquired community development capacity that simply reproduces the activities of NGOs.
Is it any wonder then that the 'development performance' of corporations is often sub-optimal, with the poor priced out of access to products and services, social management systems that focus only on mitigating investment risk, and islands of community development uncoordinated with public policy? Could more be made of conventional business competencies such as R&D, operational infrastructure, procurement, marketing and distribution? Are corporations being neglected in the PRSP and NEPAD processes? What impact will SRI funds and the new London Principles have on the poor? And what policy instruments should domestic and foreign governments adopt to encourage a step-change in corporate performance?