A Social Consciousness in the World Market: What do Codes of Behavior, Social Labels, and Investor Initiatives have to do with Workers?

A Social Consciousness in the World Market: What do Codes of Behavior, Social Labels, and Investor Initiatives have to do with Workers?


  • Shehzad Kamal Sarhad University University of Peshawar


A Social Consciousness in the World Market: What do Codes of Behavior, Social Labels, and Investor Initiatives have to do with Workers?


Shehzad Kamal

Sarhad University University of Peshawar Shehzad56@gmail.com



Over the course of the last ten years, there has been a resurgence in the number of corporate social responsibility programs undertaken by the business sector. It is now generally accepted that social responsibility, which was once primarily the realm of huge firms that attempted to be responsible, is a notion that influences a broad variety of economic agreements between local and global corporations in both developed and developing nations. This is the case regardless of whether the nation in question is a developed nation or not. New approaches have largely succeeded in supplanting the "self-applied," single-business paradigm of corporate social responsibility efforts. Nowadays, social concerns are taken into account during the formation of joint ventures, license agreements, and supply contracts. This covers the complete transaction chain that is necessary in order to buy and sell goods and services. A growing number of strategic alliances are being developed in addition to these enterprise-driven projects in order to achieve accountability mechanisms. As a consequence of this, a wide variety of actors take part in activities conducted by the private sector at all of these different levels: international, regional, national, and local. Recently, several groups, including shareholders, workers, non-governmental organizations (NGOs), and company owners, have come together to establish hybrid coalitions.

The effectiveness of efforts made by the private sector to reform labor practices in the operations of multinational firms is the topic of discussion in this article. It places an emphasis on investor initiatives, social labeling schemes, and behavioral norms, drawing from a review of several activities that were carried out in advance.




Theoretically speaking, these private-sector initiatives are voluntary commitments made in response to market incentives rather than being forced by the government. An increasing number of cross-border contractual and joint venture agreements have resulted in a "mismatch between regulatory scope and actual economic structures" (Murray, 1998, page 60), which has fueled the public desire for accountability mechanisms for the social and environmental repercussions of firm activities. The business community is worried that public pressure may reveal their offshore corporate partners in the supply chain for potentially unfair labor practices. These companies are located overseas. As a consequence of this, the goal of operations carried out by the private sector is to generate commitments at each stage of the supply chain. These commitments usually strive to extend or strengthen the regulatory duties that are already in place. On the other hand, this brings up the question of how "voluntary" these programs may legally be called. When it comes to efforts made by the private sector, firms and governments argue that market pressure makes them obligatory under unfair conditions. Despite the fact that these actions are meant to be voluntary because they are not immediately enforced by law, corporations and governments argue that market pressure makes them mandatory.

On the other hand, a growing number of enterprises in the private sector are engaging in exploitative labor practices, which raises a variety of additional concerns. What is the relationship, for example, between these activities and other endeavors to establish social justice through improved working conditions and expanded employment, particularly those obtained by public policy or regulation? What is the nature of that relationship? If this is the case, what impact do they have on the social aspects of economic development in general and international trade in particular?

Should we see these as positive advances or question the value of what they have to offer? It is difficult to categorize, evaluate, or compare claims made by businesses and other actors about social improvements that were made possible by private initiatives. Despite the fact that transnational private initiatives can provide a sustainable "high road" for corporate behavior in the midst of the complexity of international transactions over time, it is also the case that these claims are difficult to classify. As a direct result of this, there is likely to be some degree of contention. These projects function across a diverse range of political, legal, and economic situations without making use of any standardized planning, implementation, or assessment frameworks or procedures. There are many different outcomes that might occur as a result of the limitations that are present during the phases of planning, implementing, and evaluating such activities.

Activities that take place in the private sector have as their primary goal the enhancement of the value of the enterprise. This is often accomplished through cultivating connections with intermediary purchasers, customers, and other business associates. In order to maintain or validate an acceptable public image throughout all phases of foreign consumer product outsourcing, including the reputation of brand names, such measures have been required. This is particularly the case in industries that rely heavily on manual labor. It is possible for intermediary buyers to exert pressure on producers of capital goods and intermediate goods in the event that these producers are unable to meet the demands of consumers on their own. In addition, there is a growing amount of evidence that suggests that ethical business practices can boost a company's financial success, which helps to reinforce the moral case that firms should behave as "good citizens." In addition to this, preventative actions have made it possible for businesses in the private sector to grow. By demonstrating that they are making measures to improve working conditions, businesses can protect themselves from being accused of engaging in unethical or illegal business operations and also avoid consumer boycotts. These initiatives, which show that best practices in the business serve the public interest, could help to prevent government intervention if enough people get behind them. In point of fact, governments may choose to promote entrepreneurial ventures as an alternative to socially regulated trade or business. Such programs may also be regarded as a means of improving labor standards or public perception in order to attract foreign investment and commerce by some nations. On the other hand, there is an ongoing dispute regarding whether or not various government plans to promote volunteers are motivated by other considerations, such as a tendency toward protectionism.

Any initiative undertaken in the business sector must first begin with the conscious decision to communicate a sense of social responsibility. The message may be intended for a wide range of recipients, such as viewers of various forms of media, governmental authorities, non-governmental organizations (NGOs), employees, managers, investors, consumers, and business partners. Despite the fact that they are functionally and normatively comparable, operational circumstances have a significant consequence on the means employed to transmit that message as well as the impact that it ultimately has on the social conduct that occurs in the workplace.

For the purpose of facilitating presentation, the following initiative typology has been structured around investor initiatives, social labeling schemes, and codes of conduct. The fact that it is difficult to properly identify any one of these three types of activities at this stage in the development of those efforts means that overlap is unavoidable. Because of this, any attempt to categorize them will invariably result in inaccurate results. Efforts made to improve the corporate social responsibility of an organization could incorporate other kinds of activity.

This article focuses entirely on codes that corporations adopt with the goal of applying them internationally, most commonly as "sourcing guidelines" to define expectations for the workplace conduct of their business partners. There is a severe absence of application methods for many of the codes that are classified as corporate ethics. There are situations in which the code of an international client or retailer is applied to other companies in supply (or "value") chains. These companies are not always owned, managed, or governed by the company that adopted the code in the first place. Companies have the option of developing these codes on their own, in collaboration with other parties such as labor unions, management, and/or non-governmental groups, or in response to pressure from shareholders.

Either businesses can directly apply operational codes to themselves and their business partners in order to express commitments to specific conduct, or businesses can subscribe to such codes through third-party-sponsored platforms (often trade unions, NGOs, or enterprise organizations). This allows businesses to declare commitments to certain behaviors. The vast majority of the codes that have garnered attention are either operational codes from large manufacturing and retail businesses that are engaged in international trade, or they were developed by trade associations for importers or export suppliers, specifically for use by the small and medium-sized business members of those trade associations. The second kind of operational codes, also known as subscription codes, may contain a method for subscribers to self-report or be directly certified by third-party sponsors. This is because subscription codes are usually referred to as operational codes. On the other hand, model codes are not as specific as actual codes; rather, they are general claims that are aimed to assist businesses in developing their own codes. Frequently, model codes are developed by governments, trade unions, non-governmental organizations (NGOs), and/or commercial entities. Enterprises are able to use these protocols in whole or in part, even if they do not work directly within the company or through enterprise subscriptions.

Non-governmental organizations (NGOs) often play a key part in social labeling schemes that foster autonomous labelling. In some cases, NGOs even give leadership in these types of schemes. This is due to the fact that actions inside civil society, such as campaigns and public demands, are what create the perception of a market for social labels. Independent labels have been developed and are controlled by non-governmental organizations (NGOs), industry and trade unions, other enterprise groupings, workers' organizations (union labels), and hybrid coalitions consisting of one or more of these actors. In the beginning stages of a hybrid partnership or social labeling campaign being carried out by a non-governmental organization (NGO), groups hailing from wealthy nations often dominate. Others, such as Kaleen in India and Abrinq in Brazil (see Table 1), were run by public-private partnerships or enterprise groups. These organizations were responsible for operations. An independent social label is typically administered by an enterprise association or hybrid partnership in accordance with an industry-wide code of conduct. Small and medium-sized businesses, as well as those in industries with low brand loyalty, have shared the costs and increased the visibility of an independent social label. In certain cases, the label may be placed on the product, as is the case with RUGMARK. On the other hand, the label may simply be a trade name used by established businesses, as is the case with Responsible Care, a program that was developed by the chemical industry. It's possible that some of these programs, like the Clean Clothes Campaign, which started out as multi-stakeholder subscription codes, will eventually be awarded a certification label.

Single-enterprise enterprises that are engaged in production, export or retail sales, enterprise/government cooperation, etc. are also able to affix social labels to their products and utilize the system for outsourced activities with external suppliers by applying slogans and symbols other than brand names. This is possible since the system is not tied to specific brands. Certain labeling systems, whether formed independently or by a business, function according to specified behavioral criteria that regulate the efforts of a firm to obtain a license or use a label. These standards can apply whether the labeling system was established independently or by the business.

Subsidies for running costs may be provided by manufacturers, distributors, and importers who are required to pay taxes on labeled products. 11 as a numerical value In the case of initiatives that are handled by specific enterprises, a portion of these costs are sometimes absorbed internally (see "sources of financing" in Table 2 for more information); alternatively, a portion of these costs are frequently passed on to the consumer.

Screening by investment fund administrators and shareholder activity appears to be increasing popularity, at least in industrialized nations. In recent years, there has been an increase in formal shareholder activism in Germany, Japan (albeit mostly owing to environmental concerns), and the United States of America; nevertheless, other European nations and Canada have lagged substantially behind. 16 as a numerical value The level of growth of publicly listed businesses, the extent of engagement in share ownership by civic society, and the legislative limits on shareholder activism grounds are some of the cultural, legal, and economic elements that determine the geographical distribution of these activities.

Businesses are put under pressure to take action as a result of several factors, including attention in the media, consumer boycotts, government funding for private initiatives, and research conducted by academic institutions, research groups, and non-governmental organizations. Several successful shareholder actions have been primarily spurred by coalitions of various types of institutional investors in various companies. In point of fact, the bulk of labor-related motions are sponsored by institutional investors including insurance companies, pension funds, religious funds, union funds, local government funds, and fund managers. Other types of institutional investors include union funds. It is unclear what labor-related tangible contributions religious investors and public employee pension funds have made, despite the fact that there is evidence to suggest that these types of investors are particularly engaged. Labor-related shareholder proposals are sponsored collectively by trade unions and union pension funds rather infrequently, but they may occasionally receive support when submitted by other sponsors.



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How to Cite

Shehzad Kamal. (2024). A Social Consciousness in the World Market: What do Codes of Behavior, Social Labels, and Investor Initiatives have to do with Workers?. The Study of Religion and History, 1(4), 23–31. Retrieved from http://srhjournal.com/index.php/39/article/view/26