Voluntary codes of conduct have become common (and even expected) practice as part of a broader corporate social responsibility (CSR) strategy for companies across all industries. Increasingly, companies have been facing litigation and reputational risks in connection with the implementation of their CSR goals and policies as articulated in their codes of conduct. This article looks at case law where the legal enforceability of CSR codes is at issue and provides practical considerations for their drafting, revision and implementation to minimize legal and reputational risks.
CODES OF RESPONSIBLE BUSINESS CONDUCT EXPLAINED
Codes of conduct seek to clarify a company's mission, values and principles by developing standards of conduct intended to govern decision-making and business operations, primarily with respect to environmental, social and governance (ESG) issues including human rights, environmental impacts, diversity, transparency and anti-corruption. They are often supplemented by supplier codes of conduct that seek to extend compliance with standards of responsible business conduct throughout a company's supply chain.
In certain cases, codes incorporate international norms such as the United Nations Global Compact's 10 principles, Organisation for Economic Co-operation and Development Guidelines on Multinational Enterprises or International Labour Organization's Fundamental Conventions regarding labour standards and rights of workers.
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