ILO Working paper 7

What drives CSR? An empirical analysis on the labour dimensions of CSR

Relying on the data provided by an ESG rating agency, this paper aims at bringing more understanding on the diversity of firms’ behaviours in terms of labour related CSR and filling a gap on the potential role of labour market institutions, including workers’ collective rights, to contribute to an effective CSR policy.

Focusing on four different dimensions of labour CSR (freedom of association, non-discrimination, health & safety and the social monitoring of the supply chain), we assess the influence of a series of economic and institutional characteristics on the level of commitment taken by companies and on the decoupling between firms’ commitment and concrete implementation.

In line with the proponents of the complementarity thesis of CSR, our empirical analysis provides evidence that the existence of strong labour institutions is positively associated with more commitments taken by companies despite sizeable variations according to the issues analysed and the institutions concerned. However, the analysis of decoupling provides a somewhat more nuanced perspective.