The State and Corporate Social Responsibility

The State and CSR

Development of corporate social responsibility has multiple positive outcomes not only for the companies, but it also contributes to the accomplishment of national objectives of the states and to tackling global problems.

Private sector is one of the most influential actors in the globalized market economy. Corporate responsibility and progressive actions from the companies are some of the necessary preconditions for implementing sustainable development goals and addressing global issues such as poverty and unequal distribution of goods, world health problems, global warming etc. (see: CSR and Sustainable Development)

On the national level, corporate responsibility makes its contribution in the accomplishment of public policy objectives, raising public welfare and tackling effectively social or ecological challenges. Besides, it is commonly acknowledged that responsible business sector helps make the country more competitive,  through attracting more investors and increasing the country’s investment appeal (especially due to rapid development of SRI),  promoting inclusion of the local companies into the global supply chains, contributing to the economic sustainability of the country  and development of international economic relations and foreign trade.

Due to the above said, governments of the various states actively promote the development of corporate responsibility on both levels – international, through various international agencies (e.g. UN, OECD), development of the international standards, as well as the national levels, through national strategies and various initiatives.

Public policy instruments for CSR promotion

CSR is the private sector’s voluntary choice, thus there is no doubt that the decisive role in the development of corporate responsibility is on the companies themselves.  

The State is mainly responsible for making and enforcing the law. Promotion of corporate responsibility, as companies’ self-regulatory mechanism, cannot replace the provision of basic social and environmental standards by State legislation. 

However, the Governments have an important role in stimulating corporate responsibility, which ensures much higher engagement of the private sector in the accomplishment of the National priorities of sustainable development and social and environmental objectives. 

The approaches applied by the Government to promote corporate social responsibility represent traditional types of policy instruments and can be grouped into the following main categories: 

  • Regulation

  • Facilitation

  • Partnership

  • Official support / endorsement

  • Financial and non-monetary incentives

Traditional types of policy instruments

National Public Policies and Government Actions to Promote CSR – International Experience

European Commission Strategy and Initiatives on the
Development of Corporate Sustainability and Responsibility

Policy of the Georgian Government

Government of Georgia does not have a unified consolidated strategy for promoting and supporting corporate responsibility. For the time being, there is no State policy on CSR promotion or a coordinating Government agency. However, there are separate Government initiatives and programs in place directly or indirectly related to and supporting the adoption and development of corporate social responsibility in Georgia.