Normative Power Markets: The Uneven Embedding of Sustainability Norms in Global Markets

To what extent have large transnational corporations (TNCs) engaged with the social and environmental strands of the broad sustainability rubric that NGOs and a myriad of multi-stakeholder initiatives have promoted since the 1990s? To date the literature on private governance and corporate social responsibility has focused on how firm size, sector and various characteristics of its home country explain firm engagement with CSR and its outcomes. Scholars have paid less attention to how this engagement varies across the two major areas promoted by the movement, namely environmental and social sustainability. Given that they represent very different areas of corporate management and concern and that many sustainability initiatives give firms wide latitude in the issues they choose to address, it is an important question in evaluating the influence of the corporate sustainability movement and its effects. We use a content analysis of the sustainability reports published by TNCs from Europe and North America from the mid-1990s to the present to address this question. We find that: (1) firms from both regions engaged earlier with environmental than social sustainability (2) firms continue to publish higher quality data on their environmental than their social impacts and (3) firms have adopted more ambitious improvement plans for their future environmental performance than for their future social performance. In the second part of the paper we seek to explain firms’ differential engagement with the two strands of sustainability and argue that the ways in which norms of responsibility for social and environmental issues have become embedded in global markets at least partially account for this outcome. Specifically, we contrast how the business press and investor communities frame and promote environmental and social responsibility through their coverage of the issues and the accountability principles the latter have developed to define and measure them. Taken together this evidence indicates that NGOs, the investor community and governments have been more successful in constructing market norms for corporate environmental stewardship than for social sustainability, something that much of the CSR literature, which tends to treat all sustainability issues as equals, largely has ignored.