Voluntary corporate compliance
Across a range of initiatives, such as alliances, working groups, codes of conduct, multi-stakeholder groups, and the like, companies make voluntary commitments to comply with norms or standards beyond what the law may require.
In effect, the corporate social responsibility movement of the 1990s, which has morphed into the business and human rights, net zero, and sustainability moment of the present, largely featuresvoluntary initiatives and compliance(versus legally-binding, obligatory measures).
Despite their voluntary nature, there are dozens — if not hundreds — of examples worldwide of companies that have been investigated and found to have violated their voluntary commitments regarding climate, corruption, and human rights, among others.
What follows are just two of many such examples, which, in their aggregate, present opportunities for change if properly monitored and implemented so as to avoid greenwashing, etc.
BlackRock
“In January [2022], Larry Fink, the CEO of BlackRock, released a statement touting the need for corporations to address climate change. Yet BlackRock, the world’s largest asset manager, has nearly $600 million invested in palm oil, making it the largest U.S. investor in this unsustainable industry. Palm oil companies have a long and well-documented history of destroying rainforests, clearing and burning carbon-rich peatlands, abusing workers and displacing indigenous communities — none of which is good for the climate. Despite these horrors, consumer brands continue to drive demand for palm oil, and investors like BlackRock continue to finance it. (…)
The palm oil industry has demonstrated it is unable or unwilling to change its unsustainable ways. One thing this failure makes clear is that investors in the industry, like BlackRock, are doing little to drive improvements despite all their talk. (…)
Enabled by BlackRock’s money, dirty palm oil continues to be produced, traded and consumed with no consequence — and rampant deforestation continues to drive rapid climate change. If BlackRock claims to care about climate change, it needs to address its big palm oil problem. (…)
For years, campaigning organizations like Friends of the Earth, Greenpeace and Rainforest Action Network have worked to curb the destructive effects of the palm oil industry and to raise awareness among financiers and consumers. With the establishment of the Roundtable on Sustainable Palm Oil in 2004, many palm oil industry players have been forced to respond to the environmental and human rights impacts of their industry in response to the RSPO’s principles and criteria. Since then, however, consensus has grown that the RSPO is inadequate. (…)
Environmental groups have pressured many companies to adopt additional No Deforestation, No Peat and No Exploitation policies, or NDPE — voluntary commitments to respect labor and human rights, stop development on peatlands and stop deforestation of high value and high carbon areas.”
Eskom
Following the Gupta-Zuma State capture scandal and ensuing Zondo Commission investigation, the State-owned electricity utility Eskom began to redress the effects of State capture, establishing theState Capture Task Team (SCTT) and executing an Implementation Plan to address the Commission’s recommendations. According to the company, no current Eskom employees are implicated in State capture as the key employees involved were dismissed or resigned. One of the success stories to date includes the matter of an unlawful payment of R1.6 billion toMcKinsey, Trillian, and Regiments,for which former company executives were to be criminally investigated for improperly awarding them contracts. Eskom hasrecovered R1.1 billionfrom McKinsey and has won a judgment against Trillian. Through a collaborative partnership with theSpecial Investigative Unit(SIU), Eskom hasrecouped over R2 billionin funds unlawfully paid out to economic service providers. The combination of public findings and shame with parliamentary and prosecutorial inquiry has compelled Eskom, at least partially, to, so far, voluntarily redress some of the effects of State capture.