"Minding Our Business": What the United States Government has done and can do to Ensure that U.S. Multinationals Act Responsibly in Foreign Markets

Aaronson, Susan Ariel
June 2005
Journal of Business Ethics;Jun2005 Part 2, Vol. 59 Issue 1/2, p175
Academic Journal
The United States Government does not mandate that US based firms follow US social and environmental law in foreign markets. However, because many developing countries do not have strong human rights, labor, and environmental laws, many multinationals have adopted voluntary corporate responsibility initiatives to self-regulate their overseas social and environmental practices. This article argues that voluntary actions, while important, are insufficient to address the magnitude of problems companies confront as they operate in developing countries where governance is often inadequate. The United States can do more to ensure that its multinationals act responsibly everywhere they operate. First, policymakers should define the social and environmental responsibilities of global companies. They must consistently make their expectations for global business clear -- and underscore that this objective can often be accomplished without mandates. Second, the US should closely examine the policies that undermine global Corporate Social Responsibility (CSR) and address the many conflicting signals sent by policymakers. Third, the President should make the US government a CSR model by examining how to use its purchasing power to promote human rights. Finally, the US government should require pension funds to report on the social and environmental consequences of their investments. In these ways, Americans can mind our business -- and thus make sure that US based firms do not undermine social and environmental progress when they operate in the developing world.


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