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Corporate citizenship and social responsibility policies in the

United States of America Mark Anthony Camilleri

Department of Corporate Communication, University of Malta, Msida, Malta and Business School, University of Edinburgh, Edinburgh, UK

Abstract Purpose – The aim of this case study is to outline relevant regulatory guidelines on environmental, social and governance issues in the USA. This contribution includes a thorough analysis of several institutional frameworks and guiding principles that have been purposely developed to foster corporate citizenship behaviours. Design/methodology/approach – A case study methodology involved a broad analysis of US regulatory policies, voluntary instruments and soft laws that have stimulated organisations to implement and report their responsible behaviours. Findings – This contribution ties the corporate citizenship behaviours with the institutional and stakeholder theories. The case study evaluated the US’s federal government, bureaus and its agencies’ policies on human rights, health and social welfare, responsible supply chain and procurement of resources, anticorruption, bribery and fraudulent behaviours, energy and water conservation practices as well as environmental protection, among other issues. Research limitations/implications – Past research may have not sufficiently linked corporate citizenship with the corporate social responsibility (CSR) paradigm. This research reports how different US regulatory institutions and non-governmental organisations are pushing forward the social responsibility, environmental sustainability as well as the responsible corporate governance agenda. Originality/value – This research critically analyses US policy and regulatory instruments including relevant legislation and executive orders that are primarily intended to unlock corporate citizenship practices from business and industry. It has also provided a conceptual framework for the corporate citizenship notion. In conclusion, it implies that there are business and political cases for corporate citizenship.

Keywords Sustainability, Social responsibility, Environmental responsibility, Corporate citizenship, Stakeholder engagement, USA CSR policy

Paper type Case study

Introduction The US markets for labour and capital are fairly unregulated as there are low levels of welfare state provisions (Kalleberg, 2013; Beaman, 2012). Consequently, many social issues such as education, health care or community investment have traditionally been at the core of corporate social responsibility (CSR) in the USA (Camilleri, 2016; Crane et al., 2013; Welford, 2005). The CSR initiatives and the communicating activities within the areas of philanthropy, stewardship, volunteerism and environmental affairs may not be treated as a regulatory compliance issue in the US context. CSR is often characterised by the businesses’ voluntary societal engagements, as they are not obliged to undertake social and environmental responsibility practices. Such laudable behaviours are also referred to as

The author thanks the editor of this journal as well as the three reviewers of this paper. Their insightful advice was greatly appreciated.

The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/2040-8021.htm

Corporate citizenship and social

responsibility

Sustainability Accounting, Management and Policy Journal

Vol. 8 No. 1, 2017 pp. 77-93

DOI 10.1108/SAMPJ-05-2016-0023

http://dx.doi.org/10.1108/SAMPJ-05-2016-0023

corporate citizenship (Fifka, 2013; Matten and Crane, 2005) that encompass responsible behaviours that go beyond financial reporting requirements (Iyer and Lulseged, 2013). These organisational behaviours are particularly evidenced in cause-related marketing, stewardship initiatives, philanthropic and charitable contributions (Porter and Kramer, 2002; Varadarajan and Menon, 1988). In fact, US companies donate 10 times as much as their British counterparts (Brammer and Pavelin, 2005) However, many of them may have lower credentials on their environmental responsibility. The USA is consuming some 207 per cent of its ecological capacity (Worldwatch, 2015), and the average US citizen uses 11 times as many resources as the average Chinese and 32 times as much as the average Kenyan (Worldwatch, 2015.). The USA was a net importer of 67 non-fuel minerals and metals out of the 92 tracked by the US Geological Survey (2010). Nonetheless, the US policy makers handle the contentious issues that are related to global warming or the use of genetically modified organisms in food production quite differently than their counterparts (Doh and Guay, 2006). In other parts of the world, the provisions of health care or the other matters pertaining to the climate change have traditionally been considered in the realms of government’s responsibilities. Therefore, corporate responsibilities for social and environmental issues have become the object of codified and mandatory regulation in certain jurisdictions (Camilleri, 2015). The larger firms rather than small- and medium-sized enterprises are the leading actors and drivers of CSR engagement and sustainable behaviours.

In this light, this case study reviews the US regulatory policy and guiding principles on environmental, social and governance issues (that are primarily intended for large organisations). It includes a thorough analysis of the corporate citizenship policies of the USA federal government, bureaus, agencies and non-governmental organisations (NGOs) and makes specific reference to relevant legislation to substantiate the argumentation of this contribution. The US regulatory instruments include federal legislation, state regulation, formal accreditation systems and soft laws that stimulate businesses and large organisations to implement and disclose the corporate citizenship activities to their stakeholders. First, this paper provides a conceptual framework of the notion of corporate citizenship as it draws reasonable comparisons with its related concepts. Second, it analysed the findings of previous empirical studies that investigated how responsible organisations were engaging in economic, legal, ethical and discretionary behaviours toward their stakeholders. Third, it reviewed the US’s guiding principles on corporate citizenship and human rights, labour and supply chains, anticorruption, energy and the environment, as well as health and social welfare among other issues. This article provides an interesting discussion on corporate citizenship practices, as it links this subject with the stakeholder, institutional and legitimacy theories. Finally, this broad research implies that the organisations’ ought to anticipate the regulatory pressures toward socially and environmentally responsible behaviours. More importantly, it suggests that it is in their interest to forge strong relationships with their diverse stakeholders.

The social responsibility and corporate citizenship concepts Initially, the corporate citizenship term was typically used to describe the corporations as social institutions. Therefore, this notion is rooted in political science, as it directs corporations to respond to non-market pressures. Throughout the years, the corporate citizenship agenda has been wrought from distinctive CSR theories and approaches. Carroll (1979) attempted to synthesise the fundamental principle of social responsibility. He explained the rationale behind social responsibility initiatives and went on to describe the corporate responses to social issues. Businesses always had a commitment toward society, as they are obliged to engage in economic, legal, ethical and discretionary (philanthropic)

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activities (Carroll, 1979). Therefore, corporate citizenship has potential to unlock significant benefits to both business and society (Carroll and Shabana, 2010).

Sound environmental practices could be linked to improvements in economic performance and productivity, operational efficiencies, higher quality, innovation and competitiveness (Porter and Kramer, 2011). Hence, CSR can be strategic in its intent and purposes (Basu and Palazzo, 2008; Burke and Logsdon, 1996). An integration of these different perspectives has led to the definition of corporate citizenship. The conceptual grounds to better understand the nature of corporate citizenship can be found in the bodies of literature on CSR (Carroll, 1979), corporate social responsiveness (Clarkson, 1995), corporate social performance (Wartick and Cochran, 1985; Wood, 1991; Albinger and Freeman, 2000), the theory of firm (McWilliams and Siegel (2001)), stakeholder engagement (Strand and Freeman, 2013) and other enlightened “self-interest” theories, as CSR could be a source of opportunity, innovation and competitive advantage (Porter and Kramer, 2006).

For instance, CSR’s economic responsibilities include the obligations for businesses to maintain economic growth and to meet consumption needs. The economic component of CSR represents the fundamental social responsibility of businesses. Many firms produce goods and services and sell them at fair prices. This will in turn allow them to make a legitimate profit and to pursue growth. Legal responsibilities imply that businesses must fulfil their economic mission within the extant framework of regulations and legal parameters. The legal component recognises the obligation of the enterprise to obey the laws. However, it could prove harder to define and interpret the ethical responsibilities of businesses. This component is often referred to as a “grey area”, as it “involves behaviours and activities that are not embodied in law but still entail performance that is expected of business by society’s members” (Carroll, 1979, p. 30). The ethical responsibilities suggest that businesses ought to abide by moral rules that define appropriate behaviours within a particular society. Another category of corporate responsibility is related to discretionary, voluntary or philanthropic issues. Corporate philanthropy is a direct contribution by a corporation to a charity or cause, most often in the form of cash grants, donations and/or in-kind services (Kotler and Lee, 2005).

This category of social responsibility is totally dictated at the “discretion” of the organisation, as there are no laws or codified expectations that guide the corporations’ activities (Rasche et al., 2013). “Discretionary responsibilities include those business activities that are not mandated, not required by law, and not expected of businesses in an ethical sense” (Carroll, 1979, p. 500). Practically, some examples, where organisations meet their discretionary responsibilities, include when they provide day-care centres for working mothers by committing themselves to philanthropic donations or by creating pleasant work place aesthetics. Carroll (1991) described these four distinct categories of activity by illustrating a “Pyramid of Corporate Social Responsibility”. His pyramid reflected the fundamental roles that are expected by business in society. Figure 1 presents a graphical depiction of Carroll’s Pyramid of CSR.

Eventually, Schwartz and Carroll (2003) suggested an alternative approach that is based on three core domains (economic, legal and ethical responsibilities). The authors produced a Venn diagram with three overlapping domains, which were later transformed to seven CSR categories. This development was consistent with the relentless call on the part of the corporations toward the business case for CSR (Carroll and Shabana, 2010; Carroll, 2016). In a similar vein, Kotler and Lee (2005) demonstrated how a CSR approach had established a new way of doing business that led to the creation of value (Wheeler et al., 2003; Porter and Kramer, 2011) with a respectful and proactive attitude towards stakeholders (Strand and Freeman, 2013).

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Corporate citizenship continues to receive specific attention, particularly by those facilities that are operating outside their own domestic markets. At the same time, multinational corporations (MNCs) have been (and still are) under pressure to exhibit “good corporate citizenship” in every country or market from where they run their business. MNCs have always been more closely monitored and scrutinised than the domestic firms. No doubt this will continue to be the case in the foreseeable future.

Measuring corporate citizenship Several empirical studies have explored the respondents’ attitudes and perceptions on corporate citizenship or its related constructs. Very often, their measurement involved quantitative analyses on organisational commitment toward responsible organisational behaviours (Maignan et al., 1999; Edmondson and Carroll, 1999; Pinkston and Carroll, 1996; Aupperle et al., 1985). The first research study that has used Carroll’s pyramid for CSR found that the construct’s content validity and the instruments that assessed the categories were valid, as there were four empirically interrelated, but conceptually independent components of CSR (Aupperle et al., 1985). Recently, Carroll (2016) reiterated that these results were also supported by Edmondson and Carroll (1999) and Pinkston and Carroll (1996). Other research has focused on investigations of managerial perceptions of corporate citizenship rather than focusing on corporate behaviours (Basu and Palazzo, 2008; Singhapakdi et al., 1995). A number of similar studies have gauged corporate citizenship by adopting Fortune’s reputation index (Fryxell and Wang, 1994; Griffin and Mahon, 1997; Stanwick and Stanwick, 1998), the KLD index (Fombrun, 1998; Griffin and Mahon, 1997) or Van Riel and Fombrun’s (2007) Reptrak. Such measures expected the surveyed executives to assess the extent to

Figure 1. Carroll’s pyramid of CSR

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which their company behaves responsibly toward the environment and the community (Fryxell and Wang, 1994).

Despite their wide usage in past research, the appropriateness of these indices still remains doubtful. For instance, Fortune’s reputation index failed to account for the multi-dimensionality of the corporate citizenship construct, as it is suspected to be more significant of management quality than of corporate citizenship (Waddock and Graves, 1997). Fortune’s past index suffered from the fact that its items were not based on theoretical arguments, as they did not appropriately represent the economic, legal, ethical and discretionary dimensions of the corporate citizenship construct. Hunt et al. (1989) investigated broad-based perceptions on the following:

• the extent to which employees perceive that managers are acting ethically in their organisations;

• the extent to which employees perceive that their managers are concerned about the issues of ethics in their organisations; and

• the extent to which employees perceive that ethical (or unethical) behaviour is rewarded (or punished) in their organisation.

Other authors, including Webb et al. (2008), also explored the philanthropic values that were related to socially responsible consumption and its measurement.

Pinkston and Carroll (1994) identified four dimensions of corporate citizenship, including orientations, stakeholders, issues and decision-making autonomy. They argued that by observing orientations, one may better understand the inclinations or the posturing behaviours of organisations with respect to corporate citizenship. They argued that the stakeholder dimension should better define to whom the organisation feels responsible, as it could identify where the corporate citizenship issues are originating. Their decision-making autonomy was believed to determine at what organisational level corporate citizenship decisions are actually made. In a similar vein, Griffin and Mahon (1997) combined four estimates of corporate citizenship:

(1) Fortune’s reputation index; (2) the KLD index; (3) the Toxic Release Inventory (TRI); and (4) the rankings that are provided in the Directory of Corporate Philanthropy.

They admitted that their four measures did not necessarily track one another. Such findings suggested that these indicators were not representative of the same underlying construct. Their items could have not been sufficient to provide an overall understanding of corporate citizenship.

Singh and Del Bosque (2008) adopted a multi-dimensional perspective on three domains, including commercial responsibility, ethical responsibility and social responsibility. First, they proposed that the commercial responsibility of businesses relates to their continuous development of high-quality products and truthful marketing communications of their products’ attributes and features among customers. Second, they maintained that ethical responsibility is concerned with the businesses fulfilling their obligations toward their shareholders, suppliers, distributors and other agents with whom they make their dealings. Singh and Del Bosque (2008) argued that ethical responsibility involves the respect for the human rights and norms that are defined in the law when carrying out business activities. They hinted that respecting ethical principles in business relationships has more priority over achieving superior economic performance. Their other domain, social responsibility, is

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concerned about laudable behaviours. The authors suggest that businesses could allocate part of their budget to the natural environment, philanthropy or toward social works that favoured the most vulnerable in society. This perspective supports the development of financing social and/or cultural activities and is also concerned with improving societal well-being (Singh and Del Bosque, 2008).

Social and environmentally responsible policies The national governments are usually considered as the main drivers on CSR policy. However, there are other actors within society, such as civil organisations and industry (Camilleri, 2015). It is within this context that a relationship framework has been suggested by Mendoza (1996) and Midttun (2005). It seems that at the time, there was a need for a deeper understanding of the governments’ role and function in promoting CSR. Societal governance is intrinsically based on legitimacy and interdependent stakeholder relations (Albareda et al., 2007). The power relations between actors are often underestimated in the control of their legitimacy process (Lawrence, 2008). Political perspectives on legitimacy highlight the power relations between different actors as they propose environmental, social and governance conditions for the business (Mena and Palazzo, 2012; Scherer et al., 2013; Vogel, 2005). There are different expectations and perceptions within each stakeholder relationship, which will have to be addressed to develop an appropriate CSR policy (Camilleri, 2015). Essentially, this relational approach is based on the idea that recent changes and patterns affecting the economic and political structure may transform the roles and capacities of various social agents (Albareda et al., 2008). These exchange relationships among different actors and drivers are shaping CSR policy and communications. The exchange arena that is depicted in Figure 2 is exemplified in the US government’s comprehensive approach to providing support and guidance on areas of corporate conduct and sustainable behaviours.

Figure 2. Actors and exchange arenas

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The US secretary of state’s agenda is to ensure effective coordination and partnerships with individual bureaus and offices to harness global economic tools that advance US foreign policy goals on responsible initiatives. For example, the US Bureau of Economic and Business Affairs (EB) leads a CSR team. Its primary purpose is to promote responsible business practices and fostering sustainable development whilst building economic security. This team provides guidance to US companies and their stakeholders to engage in corporate citizenship. EB’s CSR team supports major areas of responsible corporate conduct, including “good corporate citizenship”, “human rights”, “labour and supply chains”, “anticorruption”, “health and social welfare”, “contribution to growth and development of the local economy”, “innovation, employment and industrial relations”, “environmental protection”, “natural resources governance” including the Kimberley Process, “transparency”, “trade and supply chain management”, “intellectual property” and the “women’s economic empowerment” among other issues. Most of EB’s corporate policies are drawn from the Organisation for Economic Co-operation and Development (OECD) “Guidelines for Multinational Enterprises” and from US national contact point for the guidelines (as explained hereunder).

Human rights, labour and supply chains In 1998, the Bureau of Democracy, Human Rights and Labour (DRL) set up a Human Rights and Democracy Fund (HRDF) to fulfil the bureau’s mandate of monitoring and promoting human rights and democracy in the global context. The HRDF fund was designed to act as the department’s “venture capital” fund for democracy and human rights issues, including the promotion of democratic principles and personal liberties. Moreover, many US states are continuously legislating to protect the human rights of individuals (including citizens, immigrants and non-nationals) within their territories. For example, the state of California has passed a bill (effective as of 1 January 2012) that mandated retailers and manufacturers who generated more than $100,000,000 (in annual worldwide gross receipts) to disclose their non-financial reporting. These entities are expected to report (in their financial statements) how they are eradicating slavery and human trafficking from their direct supply chains (Pickles and Zhu, 2013). Such programmes enable the USA to minimise human rights abuses, to support democracy activists worldwide, to open political space in struggling or nascent democracies and authoritarian regimes and to bring positive transnational change in society. DRL’s important efforts have brought positive change as its funding of HRDF has grown from $7.82m in 1998 to over $207m in 2010 (HRDF, 2015).

In parallel, an “Office to Monitor and Combat Trafficking in Persons” (TIP) works with business leaders to prevent and stop human trafficking. TIP does this by advancing the Luxor Guidelines, which focus on corporate policy, strategic planning, public awareness, supply chain tracing, government advocacy and transparency to reduce forced labour in supply chains. In 2015, TIP Office has awarded over $18m in grants and cooperative agreements to combat human trafficking. This office continues to fund an emergency global assistance project that provides services on a case-by-case basis for individuals that have been identified as trafficked persons (TIP, 2015).

Currently, many NGOs and international organisations are working in tandem, as they support 27 projects that address prosecution, protection and prevention of sex and labour trafficking in different places around the globe (TIP, 2015). On the 28 October 2015, the Partnership for Freedom in collaboration with the Department of State and four other federal agencies launched “Rethink�Supply Chains: The Tech Challenge to Fight Labour Trafficking”, an innovation challenge that calls for technological solutions that identify and address labour trafficking in global supply chains for goods and services. The Partnership

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for Freedom has awarded $500,000 in prizes and services that are aimed to spur innovative solutions to end human trafficking and to support victims of human trafficking in the USA.

The USA made human trafficking illegal in 2000, after which it started to publish annual assessments of other countries’ efforts to tackle it. But, it has only slowly turned up the heat on offenders within its borders. Australia and the UK have recently passed light-touch laws requiring transparency in supply chains. This legislation required manufacturers and retailers that earn global revenues above the $100m threshold to list their efforts on how they are eradicating modern slavery and human trafficking from their supply chains. For the time being, a firm can comply by simply reporting that it is doing nothing. But, it seems that few corporations are willing to admit such a statement that will surely affect their CSR credentials. Hence, this issue is forcing its way on to managers’ to-do lists. The ILO has launched a fair-recruitment protocol which could be ratified by national governments. The ILO’s intention is to cut out agents. In this light, TIP has partnered with Slavery Footprint to provide online tools to initiate marketplace action and ongoing dialogues between individual consumers and producers about modern slavery practices in supply chains (TIP, 2015).

Similarly, DRL continues to promote labour rights throughout the supply chain as it enforces labour law and provides due diligence. DRL has also strengthened legal advocacy that expanded livelihood opportunities for many individuals as it advanced multi- stakeholder approaches. EB, in cooperation with DRL and other stakeholders, has coordinated the US Department of State’s participation in the Kimberley Process to stem the flow of conflict diamonds and to address their traceability across supply chains. In a similar vein, President Obama has recently endorsed the US Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010. This act contained a supply chain sustainability provision in the form of a Conflict Minerals law. In a nutshell, this law required SEC-regulated companies to conduct third party audits on their supply chains to determine whether they were procuring conflict minerals (including tin, tantalum, tungsten or gold) from the Democratic Republic of the Congo. These SEC-regulated firms were mandated to create a report detailing their due diligence efforts, as well as the results of their audits (which ought to be disclosed to the general public and SEC). The chain of suppliers and vendors of these reporting companies are expected to provide appropriate supporting information.

Good corporate citizenship and anti-corruption The high-level, large-scale corruption by public officials that is also referred to as kleptocracy can have a devastating effect on democracy, the rule of law and economic development. The corruption undermines sound public financial management and accountability at all institutional levels: It deters foreign investment in many countries, it stifles economic growth and sustainable development, it distorts prices and undermines legal and judicial systems (INL, 2006). Those who contribute to such corruption by paying or promising to pay bribes or by giving other undue advantages to foreign public officials will undermine good governance and alter fair competition. The USA has long led by example in its enduring fight against corruption. Through its Foreign Corrupt Practices Act (FCPA) in 1977, the USA became the first country to criminally penalise its nationals and companies that bribe foreign public officials in commercial transactions. In fact, the USA denies safe haven to egregiously corrupt officials and other public figures as specified in the Presidential Proclamation 7,750 (of January 2004). The United Nations Convention Against Corruption has also provided a framework for international cooperation against corruption, including preventative and enforcement measures. The US government has participated in drafting U.N. legislative guide materials prior to its implementation and enforcement (INL, 2006). The USA is also member of the OECD’s Anti-Bribery Convention, where EB represents the US

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Department of State within the OECD Working Group on Bribery in International Business Transactions.

Health and social welfare In the USA, public education was not considered as a social welfare activity, probably because it is taken for granted, since its inception 125 years ago. On the other hand, public health and vocational rehabilitation are not included within the Social Security Act but are present in separate Federal laws. However, medical care and cash benefits have always been provided under the workmen’s compensation laws. These laws cover work-injuries and members of the armed forces and their dependents and veterans who are entitled to medical care at public expense.

Interestingly, landmark reform on the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HR 4872) was passed and enacted through two federal statutes. PPACA was signed in 23 March 2010. This act which is also known as “Obamacare” provided the phased introduction over four years of a comprehensive system of mandated health insurance with reforms that were designed to eliminate “some of the worst practices of the insurance companies”, including pre-existing condition screening and premium loadings, policy cancellations on technicalities when illness seems imminent, annual and lifetime coverage caps, among other issues. It also sets a minimum ratio of direct health-care spending to premium income and creates price competition that was bolstered by the creation of three standard insurance coverage levels to enable like-for-like comparisons by consumers and a web-based health insurance exchange where consumers can compare prices and purchase plans (PPACA, 2010). This system preserves private insurance and private health-care providers and provides more subsidies to enable the poor to buy insurance. The Health Care and Education Reconciliation Act of 2010 (HR 4872), which amended PPACA (that was passed a week earlier), was enacted by the 111th US Congress and became law on 30 March 2010 (Reuters, 2010). This latter act (HR 3221) also incorporated the Student Aid and Fiscal Responsibility Act (SAFRA) expanded federal Pell Grants to a maximum of $5,500 in 2010 and tied grant increases to annual increases in the Consumer Price Index, plus 1 per cent. Therefore, SAFRA ended the practice of federal subsidization of private loans. This has translated to cutting the federal deficit by $87bn over a period of 10 years.

Energy and the environment The Environmental Protection Agency (EPA) has also developed a variety of methods, tools and guidance programmes that are aimed at supporting the application of environmental sustainability. The Bureau of Energy Resources (ENR) advances US interests with regards to secure, reliable and ever-cleaner sources of energy. ENR promotes good governance and transparency in the energy-sector, as it supports the Extractive Industries Transparency Initiative (EITI). Countries implementing the EITI disclose information on tax payments, licences, contracts, production and other key elements that revolve around resource extraction. This information is disclosed in an annual EITI Report. This transparent report allows citizens to see for themselves how their country manages its natural resources, as it also specifies the revenue that they generate. The EITI Standard contains a set of requirements that countries, including the USA, need to meet to qualify as an EITI Candidate or EITI Compliant country (EITI, 2015).

In the 1960s and 1970s, the USA established a series of progressive laws and institutions. For example, the National Environmental Policy Act (NEPA) of 1969 committed the USA to sustainability, declaring it a national policy “to create and maintain conditions under which humans and nature can exist in productive harmony that permit fulfilling the social,

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economic and other requirements of present and future generations” (NEPA, 1969). The formulation of the EPA’s policies and instruments have anticipated Brundtland’s concept of “sustainable development” and his idea that generates clean prosperity currently whilst preserving resources and ecological functions for use by future generations. Arguably, policies on environmental responsibility ought to reinforce resource management, energy efficiency and measures that mitigate climate change, as the USA seems to be lagging behind other countries, particularly in the areas relating to the sustainable energy infrastructures.

Environmental lobbyists are increasingly arguing that in the past three decades, average temperatures in the continental USA rose five times as much than in a century-long period. A new report from the Worldwatch Institute, entitled “Creating Sustainable Prosperity in the USA: The Need for Innovation and Leadership” called for a broad range of policy innovations in the areas of renewable and non-renewable resource use, waste and pollution and population. This NGO purports that US leaders have not implemented adequate and sufficient reforms on social and environmental responsibility. Arguably, at the moment many businesses are still characterised by their unsustainable practices such as linear flows of materials, heavy dependence on fossil fuels, disregard for renewable resources and resource use. According to Columbia University’s Environmental Sustainability Index, the USA has merely scored 38 out of 100 in “global stewardship” and 27 out of 100 in “reducing stresses”.

These results suggest the USA’s poor performance in mitigating air and water pollution and ecosystem stresses is the outcome of the country’s minimal responsibility and sensitivity toward global environmental institutions (and international treaties). In a recent survey among 17 countries by National Geographic, the US consumers ranked among the last in their green consumption habits (Greendex, 2012). Chen and Bouvain (2009) reported that the percentage of US companies that were members of the Global Compact was much lower than in the other countries. This finding could indicate that certain aspects of the Compact may not be acceptable to the US corporations. Maybe, the relatively low environmental credentials among US businesses and individual citizens could be influenced by the political decisions. The USA is a regular attendee at the United Nations Conventions on Climate Change, yet consecutive governments have never ratified Kyoto’s protocol. Therefore, the USA is no participating in the international emissions trading scheme.

Discussion This case study’s analysis was primarily on the US agencies and bureaus regulatory policies and principles and to some extent on their interaction with other actors in the exchange arena (Camilleri, 2015; Albareda et al., 2007). It reported how the regulatory policies and the strategies of interest groups are creating both challenging opportunities and threats for the US-based businesses. Evidently, the institutional legacies are affecting the ways in which civil society, industry and NGOs interact together. This reasoning echoes the legitimacy theory as heterogenous, competing groups of stakeholders often expect and solicit social and environmentally responsible behaviours from businesses. Debatably, the US government and its agencies should ensure that the true ecological cost of environmental degradation and climate change is felt in the market. In this light, there may be scope for US regulatory authorities to promote responsible behaviours. For instance, recently there is an increased awareness on the circular economies that are characterised by their resource efficiency levels and cleaner production through recycling, reducing and reusing materials (EU, 2015; Geng et al., 2012; Geng and Doberstein, 2008; Yuan et al., 2006). Moreover, the organisations should be urged to find alternative ways for sustainable energy generation, energy and water conservation, environmental protection and greener transportation systems. This way, they

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will be considered as legitimate businesses, as their corporate performance matches the stakeholders’ expectations. The organisations’ implementation of their legitimation strategy could include voluntary and solicited CSR disclosures that address norms, values or beliefs of stakeholders (Reverte, 2009). Responsible companies could be in a position to prevent third-party pressures through their engagement in social responsibility practices and sustainable behaviours. At the same time, they could lower the criticisms from the public and minimise their legal cases through their active compliance with regulations and guiding principles.

The organisations’ legitimacy is a critical driver for a dynamic institutional and organisational change (Tost, 2011). The organisations’ evaluative process was also suggested by Scherer et al. (2013), as they discussed about the corporations’ isomorphic adaptation to societal pressures. Yet, such political perspectives have often been considered as being overly normative (Kuhn and Deetz, 2008; Scherer and Palazzo, 2007) and of neglecting the complexity of the debates between corporations and society. Baur and Arenas (2014) also noted that the regulated interactions and the consensus building may not be required if corporations address the sustainable development issues. However, the responsible behavioural issues often call for the re-negotiation of social, economic and environmental factors among regulatory authorities and other interested parties.

Indeed, addressing the environmental protection often requires shifting through a multitude of complex and often contradictory demands of stakeholders (Freeman, 2010; Hardy and Phillips, 1998) that are defined beyond nation-state governance institutions. Multiple ethical systems, cultural backgrounds and rules of behaviour could possibly coexist within the same communities (Scherer and Palazzo, 2007), as the legitimacy of the business community around sustainable development issues is often being challenged (Porter and Kramer, 2011; Scherer and Palazzo, 2011). Therefore, the stakeholder engagement processes are important instruments for legitimacy building, as the pluralist nature of US politics encourages the formation of lobby groups and associations that are often regarded as legitimate representatives (Doh and Guay, 2006). Other research also contended that the legitimacy in resolving social responsibility and sustainable development issues often requires the ability to establish trust-based collaborative relationships with a wide variety of stakeholders especially those with non-economic goals (Sharma and Vredenburg, 1998, p. 735). These stakeholders may have an accepted role in influencing the public policy process.

Conclusions Evidently, different US institutions, including bureaus, agencies and other stakeholders, are pushing forward the social responsibility agenda, as they formulate corporate citizenship policy to trigger companies to invest in social innovation (Kanter, 1998) and environmental responsibility (Baughn and McIntosh, 2007; Simpson et al., 2004). This contribution has analysed and interpreted relevant US policy and regulations pertaining to human rights; labour and supply chains; anticorruption; energy and the environment as well as health and social welfare among other issues. Although the US-based corporations are likely to be guided by federal law and state regulation (Welford, 2005), very often they may be operating in countries that could have different legal frameworks and regulatory parameters. Certain jurisdictions’ regulatory instruments could contain different environmental, social or governance reporting requirements (Camilleri, 2015; Iyer and Lulseged, 2013). The multi-national corporations’ effective implementation of corporate citizenship behaviours and their disclosures also relies on how they nurture relational approaches with distinct stakeholders, including the regulatory ones. It is very likely that the contextual differences

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over the relevance and legitimacy of various stakeholders will continue to influence the public policy process, as well as the manner in which corporations engage in responsible behaviours. Ultimately, it is in the businesses’ interest to anticipate the reinforcement of any mandatory compliance procedures.

Implications and future research avenues On paper, there are several policies frameworks and initiatives that are pushing forward the corporate citizenship agenda in the USA. However, the proof is in the pudding. This contribution has indicated that there are significant gaps between policy and practice. CSR policies, procedures and activities necessitate considerable discretionary investments, in terms of time and resources by policy makers, civil authorities, businesses and NGOs. The underlying question is to establish whether both companies and non-for profit organisations are perceiving a business or a political case for corporate citizenship, as there is potential for them to create value for their business and for society as they pursue the sustainability path.

Perhaps, businesses could be supported in their transition to use efficient technologies for their cleaner production. The industries may be penalised when they do not conform to regulatory requirements on responsible behaviours (e.g. when they are not reducing their environmental impact). For instance, with carbon pricing, governments cannot interfere with management decisions. The businesses themselves ought to decide on effective ways on how they will cut their emissions. For example, the European Union’s Emissions Trading Scheme is expanding its carbon markets to curb the pollution on the environment. Arguably, one of the challenges for the policymakers is the monitoring and controlling of these markets.

This case study indicates that there is still considerable potential for research that focuses on policy that is intended to encourage corporate responsible behaviours. A comparative research could distinguish between different regulatory policies and instruments in diverse contexts. There are many lessons to be learned from other countries that have introduced non-financial disclosure requirements (Camilleri, 2015).

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