Advancing the Business and Human Rights Agenda: Dialogue,Empowerment, and Constructive Engagement

As corporations are going global, they are increasingly confronted with human rights challenges. As such, new ways to deal with human rights challenges in corporate operations must be developed as traditional governance mechanisms are not always able to tackle them. This article presents five different views on innovative solutions for the relationships between business and human rights that all build on empowerment, dialogue and constructive engagement. The different approaches highlight an emerging trend toward a more active role for corporations in the protection of human rights. The first examines the need for enhanced dialogue between corporations and their stakeholders. The next three each examine a different facet of empowerment, a critical factor for the respect and protection of human rights: empowerment of the poor, of communities, and of consumers. The final one presents a case study of constructive corporate engagement in Myanmar (Burma). Altogether, these research projects provide insight into the complex relationships between corporate operations and human rights, by highlighting the importance of stakeholder dialogue and empowerment. All the five projects were presented during the Second Swiss Master Class in Corporate Social Responsibility, held in Lausanne, Switzerland on December 12, 2008. The audience for this conference, which examined business and human rights, was composed of researchers, governmental representatives, and business and non-governmental organization practitioners.     

Networks of foreign affiliates: Evidence from Japanese micro-data

The paper provides evidence of the investment patterns of Japanese multinational enterprises (MNEs) across countries and industries and analyses the main drivers of their location strategies, using detailed micro-data on Japanese parents and their affiliates including the final destination of affiliate sales. The breakdown of affiliate sales by destination market reveals that Japanese MNEs establish services affiliates primarily to maximise proximity to local customers, while foreign affiliates in manufacturing sectors tend to engage more widely with third countries. Yet, some economies emerge as strategic gateways to other destinations in their region. The empirical analysis delves into the drivers of host country attractiveness for FDI seeking new markets, production efficiency and to act as regional or global platforms. Important factors shaping Japanese FDI decisions include trade and investment policies in goods and services, deep FTAs, as well as streamlined customs procedures. Furthermore, well-calibrated rules for digital commerce and investments in digital infrastructure and innovation contribute to attracting MNEs. Overall, the paper stresses the factors behind better integration into global production networks and the policy priorities to attract various types of FDI inflows.     

Environmental Tax in a Green Market

We examine the impact of an emission tax in a green market characterized by consumers’ environmental awareness and competition between firms for both environmental quality and product prices. The unique aspect of this model comes from the assumption that the cost for an increase in quality is fixed. We show that the emission tax improves welfare, thanks to a decline in pollution and despite an accentuation of product differentiation. The higher the marginal environmental damage is, the higher the optimal tax will be. The optimal tax, however, becomes lower than the marginal damage when the market is not too large. Finally, when marginal environmental damage is not too low, the optimal tax leads to a green product monopoly.     

Fuel poverty in residential housing: providing financial support versus combatting substandard housing

Between 50 and 125 million Europeans are unable to afford the energy needed for adequate heating, cooking, light and use of appliances in the home. Tackling fuel poverty has thus become a public policy challenge. In this article, we assess the effectiveness of social energy subsidies and social housing to reduce fuel poverty. The literature reports that rising fuel prices, low incomes and energy-inefficient housing are the main causes of fuel poverty. Existing public policies focus mainly on price- and income-based measures to reduce fuel poverty, such as social energy subsidies. This type of policy is palliative as it does not permit to sustainably eradicate fuel poverty. Other policies aim to encourage renovation in order to improve energy efficiency. Those policies are curative as they sustainably reduce one cause of fuel poverty: energy inefficiency. In this article, we focus on another public policy to tackle fuel poverty: social housing. We believe that this policy could be preventive, as the literature reports the better energy efficiency of social housing. We use matching methods and find that living in social housing decreases fuel poverty by 5.4% to 9.1%. On the contrary, social energy subsidies have no effect on fuel poverty.     

Item comparability in cross-national surveys: results from asking probing questions in cross-national web surveys about attitudes towards civil disobedience

This article focuses on assessing item comparability in cross-national surveys by asking probing questions in Web surveys. The “civil disobedience” item from the “rights in a democracy” scale of the International Social Survey Program (ISSP) serves as a substantive case study. Identical Web surveys were fielded in Canada (English-speaking), Denmark, Germany, Hungary, Spain, and the U.S. A category-selection and a comprehension probe, respectively, were incorporated into the Web surveys after the closed-ended “civil disobedience” item. Responses to the category selection-probe reveal that notably in Germany, Hungary, and Spain the detachment of politicians from the people and their lack of responsiveness is deplored. Responses to the comprehension probe show that mainly in the U.S. and Canada violence and/or destruction are associated with civil disobedience. These results suggest reasons for the peculiar statistical results found for the “civil disobedience” item in the ISSP study. On the whole, Web probing proves to be a valuable tool for identifying interpretation differences and potential bias in cross-national survey research.     

The Organizational Implementation of Corporate Citizenship: An Assessment Tool and its Application at UN Global Compact Participants

The corporate citizenship (CC) concept introduced by Dirk Matten and Andrew Crane has been well received. To this date, however, empirical studies based on this concept are lacking. In this article, we flesh out and operationalize the CC concept and develop an assessment tool for CC. Our tool focuses on the organizational level and assesses the embeddedness of CC in organizational structures and procedures. To illustrate the applicability of the tool, we assess five Swiss companies (ABB, Credit Suisse, Nestlé, Novartis, and UBS). These five companies are participants of the UN Global Compact (UNGC), currently the largest collaborative strategic policy initiative for business in the world (www.unglobalcompact.org). This study makes four main contributions: (1) it enriches and operationalizes Matten and Crane’s CC definition to build a concept of CC that can be operationalized, (2) it develops an analytical tool to assess the organizational embeddedness of CC, (3) it generates empirical insights into how five multinational corporations have approached CC, and (4) it presents assessment results that provide indications how global governance initiatives like the UNGC can support the implementation of CC.     

A comparative analysis of funding schemes for public infrastructure spending in Quebec

The economic literature has been investigating the positive relation between public infrastructure spending and the productivity of the private sector since Munnell (1992). We have introduced this relationship into a recursive dynamic computable general equilibrium model of the Quebec economy to investigate various funding schemes to scale up infrastructure spending in the province. We draw our assumptions from Estache et al. (2010) combined with sectoral elasticity parameters. We conduct a comparative analysis where the funding comes from debt alone, and debt with sales tax, income tax and business tax. Our main finding is that the income tax seems to produce the most positive effects and the businesses tax the most negative effects, though differences are small.     

Consumer misperception of eco-labels,green market structure and welfare

Eco-labels are essential for informing consumers about products’ environmental characteristics. However, the many different labels consumers encounter can be confusing, which makes assessing environmental quality associated with each label difficult. How does consumer misperception of competing eco-labels affect market structure and welfare? This article provides theoretical insight into this issue by using a double-differentiation model in which three products compete: an unlabeled product and two distinctly eco-labeled products, one with a medium and one with a high level of environmental quality. The study investigates the effects of consumers’ imperfect information when they perceive all eco-labels as a sign of the same high environmental quality and consider each label as a unique product. This misperception can weaken the firm that provides the greenest product, though paradoxically this situation is not always detrimental to social welfare. However, depending on the certifying organizations, consumer misperception can induce firms to use a greenwashing strategy and encourage nongovernmental organizations and regulators to introduce less stringent standards.