Globalization: Numerous Federal Activities Complement U.S.	 
Business's Global Corporate Social Responsibility Efforts	 
(08-AUG-05, GAO-05-744).					 
                                                                 
The trend toward globalization has intensified the debate about  
the proper role of business and government in global "corporate  
social responsibility" (CSR),which involves business efforts to  
address the social and environmental concerns associated with	 
business operations. The growth in global trade and the dramatic 
increase in foreign direct investment in developing countries	 
raise questions regarding CSR-related issues such as labor,	 
environment, and human rights. U.S. firms with operations in many
countries employ millions of foreign workers and conduct a range 
of CSR activities to address these issues. However, there is	 
controversy as to the proper government role. GAO describes (1)  
federal agency policies and programs relating to global CSR and  
(2) different perspectives regarding the appropriate U.S.	 
government role and views on the impact of current federal	 
activities on corporate global CSR efforts.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-744 					        
    ACCNO:   A32257						        
  TITLE:     Globalization: Numerous Federal Activities Complement    
U.S. Business's Global Corporate Social Responsibility Efforts	 
     DATE:   08/08/2005 
  SUBJECT:   Developing countries				 
	     Federal agencies					 
	     Federal aid programs				 
	     Federal regulations				 
	     Foreign policies					 
	     Globalization					 
	     International relations				 
	     Policy evaluation					 
	     Government and business				 
	     Government/business relations			 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-05-744

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

August 2005

GLOBALIZATION

 Numerous Federal Activities Complement U.S. Business's Global Corporate Social
                             Responsibility Efforts

                                       a

GAO-05-744

[IMG]

August 2005

GLOBALIZATION

Numerous Federal Activities Complement U.S. Business's Global Corporate Social
Responsibility Efforts

                                 What GAO Found

Although there is no broad federal CSR mandate, we identified 12 U.S.
agencies with over 50 federal programs, policies, and activities that
generally fall into four roles of endorsing, facilitating, partnering, or
mandating CSR activities. Many of these programs have small budgets and
staff and aim to accomplish broader agency mission goals, rather than
being specifically designed to facilitate or promote companies' global CSR
activities. The U.S. government endorses CSR by providing awards to
companies, such as the Department of State's Award for Corporate
Excellence. Federal programs facilitate CSR by such activities as
providing information or providing funding to engage in CSR. For example,
a Department of Commerce program facilitates CSR by providing training on
corporate stewardship. Some agencies partner with corporations on specific
projects related to their core mission. For example, the U.S. Agency for
International Development (USAID) partnered with one U.S. corporation
operating in post-war Angola to build up the country's business sector and
workforce. Other agencies, such as the Overseas Private Investment
Corporation, mandate CSR by requiring companies to meet CSR-related
criteria to obtain their services.

While perspectives on the government's role are tied to perspectives on
CSR and its connection to profit, many we spoke with who are actively
involved in global CSR desired a government role supporting business's
voluntary CSR efforts. Those with a free-market economic perspective
believe corporations should be primarily concerned with earning a profit
and government should not promote CSR as it reduces profits. Those with a
"business case" perspective often welcome government assistance with their
voluntary efforts because they view their CSR efforts as increasing
profits and business value. Finally, those with a social issues
perspective believe that business should contribute to broader social
goals but split on whether business action should be voluntary or
mandatory. Most groups we spoke with at U.S. companies and others actively
engaged in CSR were generally supportive of U.S. federal agency efforts to
endorse and facilitate CSR and partner with companies voluntarily pursuing
CSR actions. For example, several groups supported a government role in
providing CSR-related information and convening stakeholders to address
CSR-related issues.

           Range of U.S. Government Activities Related to Global CSR

              Source: GAO illustration based on World Bank report.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Global Corporate Social Responsibility Is an Umbrella Concept

Covering Many Business Actions and Involving Many Players Although No
Broad Federal CSR Mandate Exists, Federal Agencies Conduct Many Activities
Related to Global CSR Perspectives on the Appropriate Government Role in
CSR Vary, but

Many Support Federal Assistance for Voluntary Efforts Concluding
Observations Agency Comments and Our Evaluation

1 2 3

5

16

26 34 35

Appendixes

       Appendix I: Objectives, Scope, and Methodology 37 Appendix II: Federal
      Agency CSR-Related Programs and Activities 41 Appendix III: GAO Contact
                                                and Staff Acknowledgements 69

Tables	Table 1: Table 2:

Table 3: Table 4: Table 5: Table 6:

Table 7: Table 8: Table 9: Sample Definitions of Corporate Social
Responsibility Definitions of Terms Related to Corporate Social
Responsibility Responses from Department of Commerce Responses from
Department of Energy Responses from U.S. Environmental Protection Agency
Responses from Export-Import Bank of the United States Responses from
Inter-American Foundation Responses from Department of Labor Responses
from Overseas Private Investment Corporation 6

7 41 44 46

50 52 54

56

57 59 66

67

68 Table 10: Responses from U.S. Securities and Exchange

Commission Table 11: Responses from the Department of State Table 12:
Responses from the Department of Treasury Table 13: Responses from U.S.
Agency for International

Development Table 14: Responses from Office of the U.S. Trade
Representative

                                    Contents

Figures Figure 1: Some Federal Programs and Activities Complement U.S.
Corporate CSR Practices 19 Figure 2: Illustrative U.S. Government
Activities Related to CSR Range from Endorsing CSR to Mandating CSR 22

AbbreviationsEUR

CSR Corporate Social Responsibility
DFI Digital Freedom Initiative
EPA U.S. Environmental Protection Agency
Ex-Im Bank Export-Import Bank of the U.S.
HIV/AIDS human immunodeficiency virus/acquired immune deficiency

syndrome IAF Inter-American Foundation GRI Global Reporting Initiative NGO
nongovernmental organization OECD Organization for Economic Cooperation
and Development OPIC Overseas Private Investment Corporation SEC U.S.
Securities and Exchange Commission USAID U.S. Agency for International
Development USTR Office of the U.S. Trade Representative

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States Government Accountability Office Washington, D.C. 20548

August 8, 2005

The Honorable David E. Price House of Representatives

The Honorable Sander M. Levin House of Representatives

The trend toward globalization-as evidenced by the growth in global trade
and the dramatic increase in foreign direct investment in developing
countries, from $22 billion in 1990 to $154 billion in 2002-has
intensified the debate about the role of business and the U.S. government
in addressing "corporate social responsibility" (CSR) related issues.
Presently, for example, some opponents of the U.S.-Central American Free
Trade Agreement (CAFTA) have complained that the agreement does not do
enough to ensure that workers in these countries have adequate labor
protections. The term CSR is often used to refer to business efforts to
address the impact of business operations on such concerns as labor,
environment, and human rights. U.S. multinational corporations, which
conduct operations in many countries and employ millions of foreign
workers, have sometimes responded to the varying pressures they face by
adopting CSR efforts to address social and environmental concerns. Some
advocates argue that the U.S. government should embrace CSR more actively
and use policies such as trade agreements to encourage or require its
adoption by U.S. multinational corporations. Others state that CSR should
be a voluntary corporate activity, and the federal government should
neither regulate nor promote CSR.

Given the role of U.S. corporations in the growth of trade and investment
in developing nations and your interest in issues related to
globalization, this report describes (1) global corporate social
responsibility, (2) federal agency policies and programs relating to
global CSR, and (3) different perspectives regarding the appropriate U.S.
government role and views on the impact of current federal activities on
corporate global CSR efforts.

To describe global corporate social responsibility, we reviewed business
and ethics literature and interviewed selected corporations and other
groups interested in CSR. To determine what policies and programs federal
agencies have adopted that relate to global CSR, we surveyed federal
legislation and spoke with agency officials and experts in CSR. We
obtained information on specific agency programs and policies related to
CSR using a two-step process. First, we provided a general description of
global CSR

to agency officials and asked them to identify relevant programs,
policies, and efforts within their agency. We then sent a questionnaire to
officials responsible for each identified program and interviewed
officials to obtain further information. To identify different
perspectives regarding the role of the U.S. government related to
corporate global CSR efforts, we reviewed CSR-related trade and business
literature and interviewed, on a nonattribution basis, representatives
from 14 selected U.S. multinational corporations; 4 business interest
groups; 4 investor groups; 6 nongovernmental organizations; and 4 academic
institutions that are leaders in the CSR field. We conducted our work from
May 2004 through May 2005 in accordance with generally accepted government
auditing standards. (Appendix I provides detailed information on our
objectives, scope, and methodology.)

Results in Brief	Global CSR is an umbrella concept that can best be
described through the definitions used for the term, the actions companies
take to practice CSR, and the roles of key players. CSR can be broadly
defined as addressing the interests of all company stakeholders, which
include not only shareholders but also customers, employees, suppliers,
and the surrounding community on issues such as environmental protection,
worker safety, and ethical conduct. Global CSR addresses these issues
within international markets, particularly in developing countries. U.S.
businesses take a variety of actions related to CSR that range from
voluntary, such as philanthropic donations, to government mandated, such
as disclosure of significant environmental conditions. Businesses play a
central role in determining if and how to address social and environmental
issues they face in their operations. Civil society, investor groups,
multilateral organizations, and governments play key roles in identifying
issues of concern and in encouraging businesses to adopt CSR efforts to
address these issues.

Although the United States has no broad federal CSR mandate, we identified
12 U.S. agencies with over 50 programs, policies, and activities that
generally fall into four key government roles of endorsing, facilitating,
partnering, and mandating company CSR activities. However, many of these
programs have small budgets and staff and aim to accomplish broader agency
mission goals, rather than being specifically designed to facilitate or
promote companies' global CSR activities. The U.S. government endorses CSR
by providing awards to companies, such as the Department of State's Award
for Corporate Excellence and discussing CSR in public speeches. Federal
programs facilitate CSR primarily by providing information or providing
funding and incentives to key players to engage in

CSR. For example, the Department of Commerce facilitates CSR by training
its commercial service officers specifically on corporate stewardship. The
U.S. Agency for International Development's (USAID) Global Development
Alliance provides an example of a federal program that partners with
corporations to leverage additional resources. Finally, some agencies,
such as the Overseas Private Investment Corporation (OPIC), mandate CSR by
requiring companies to meet criteria consistent with CSR to obtain their
services.

While varying perspectives of the government's role are tied to
perspectives on CSR and its connection to profit, many we spoke with from
groups that are actively involved in global CSR reported that a government
role supporting companies' CSR efforts would be useful. Those with a
freemarket economic perspective state that corporations should be
primarily concerned with earning profits and that government should not
promote CSR because it reduces profit. Those with a "business case"
perspective contend that CSR efforts can increase business long-term
profits and value, and welcome government assistance with voluntary
business efforts. Finally, those with a social issues perspective believe
that business should contribute to broader social goals but have mixed
opinions of whether this should be accomplished through voluntary CSR
actions or more extensive regulation. Most representatives we spoke with
at U.S. companies and other groups who were actively engaged in CSR were
generally supportive of U.S. federal agency efforts to endorse and
facilitate CSR and partner with companies voluntarily pursuing CSR
actions. For example, several groups supported a government role in
providing CSR-related information and convening stakeholders to address
CSR-related issues.

Background	The expansion of world trade and investment has led to the
increasing integration of the world economy in recent decades-a process
often referred to as "globalization." Total trade in developing countries,
exports and imports, rose from less than $1.5 trillion in 1990 to $3.8
trillion in 2002, while foreign direct investment in developing counties
grew even faster during this period, from $22 billion to $154 billion.
Some view globalization as fostering economic growth, increasing
employment, and improving living standards in both developed and
developing nations. At the same time, others view globalization as
resulting in negative social impacts and raise concerns about the
expanding activities of multinational corporations, particularly in
developing countries. U.S. multinational corporations are now faced with
difficult issues, such as the treatment and conditions of foreign workers
in corporate supply chains, environmental

and health issues associated with production in diverse local communities,
and human rights issues associated with authoritarian governments in
countries where multinationals operate. In addition, some negative
incidents involving U.S.-based companies have been widely publicized,
hurting their own and the United States' image, such as the use of
sweatshops in the manufacture of clothing and other products. In another
example, a U.S.-based company recently came under allegations that its
overseas mining operations produced toxic waste that have caused
illnesses.

U.S. corporations are increasingly building operations or buying products
from sources in developing countries. However, the legal, regulatory and
ethical environments in which U.S. businesses and their suppliers operate
vary across countries. For example, some have asserted that developing
countries have inadequate or poorly enforced environmental and labor laws.
Given the limited capacity of some developing countries, CSR advocates
argue that corporations themselves must establish and maintain codes of
conduct regarding operating standards in these environments. Companies
face increasing pressure from nongovernmental organizations (NGO), the
media, "socially responsible" investor groups, and other stakeholders to
adhere to high standards globally in their own operations and throughout
their supply chains. In addition, some members of Congress have shown
support for CSR-related policies, similar to those advocated by working
groups convened by the Kenan Institute.1

In response to these business challenges and outside pressures, companies
are increasingly adopting "corporate social responsibility" programs. For
example, recently U.S. electronics companies signed a joint code of
conduct to protect working conditions, workers' rights, and the
environment in the electronics industry supply chain. A number of U.S.
companies have instituted programs to address HIV/AIDS and other diseases
in their operations in developing countries, for example, by raising
awareness or providing access to treatment. Most recently, U.S. companies
provided nearly $453 million to relief efforts in the wake of the tsunami
that hit South and Southeast Asia and East Africa in December 2004.2
Despite these efforts, some CSR advocates call for more government action
to

1The Frank Hawkins Kenan Institute of Private Enterprise - Washington
Center, www.kenaninstitute.unc.edu.

2U.S. Chamber of Commerce Web site, www.uschamber.com, April 28, 2005.

promote CSR, with some noting that several national governments in Europe
have put in place mechanisms to encourage or require the adoption of CSR
practices.

  Global Corporate Social Responsibility Is an Umbrella Concept Covering Many
  Business Actions and Involving Many Players

Global CSR is an umbrella concept that can best be understood by
describing the different definitions used for the term, the actions
businesses take to practice CSR, and the roles of key players involved in
CSR. Although groups use different definitions and terms, CSR generally
involves business efforts to address a broad range of issues, including
the environment, labor, and human rights. Businesses perform many
different actions to address CSR concerns. The extent and type of these
actions are influenced by key players in CSR that include not only
businesses, but also the civil society, investor groups, multilateral
organizations and governments that seek to influence them.

The term "global CSR" is sometimes used to refer to business efforts to
address the social impacts of business in the global economy. Discussions
of global CSR in the context of developing countries focuses on the need
for business to address the gaps from inadequate or poorly enforced laws
to protect the environment, labor, human rights, and other social
resources.

CSR Is Generally Defined as The term "CSR" is an umbrella concept with
many different definitions. Business Efforts to Address However, most
definitions suggest that, in addition to addressing the the Interests of
Its Many interests of its shareholders, business should address the
interests of its

other stakeholders, including customers, employees, suppliers, and the

Stakeholders	local community. CSR definitions cover a broad range of
potential social concerns, including business ethics, community
development, labor, environment, and human rights. Table 1 presents sample
CSR definitions.

         Table 1: Sample Definitions of Corporate Social Responsibility

Name of group Definition of CSR

Business for Social "Achieving commercial success in ways that honor
ethical

Responsibility (BSR)	values, and respect people, communities, and the
natural environment."a

European Commission	"A concept whereby companies integrate social and
environmental concerns in their business operations and in their
interactions with their stakeholders on a voluntary basis."b

Institute of Business "The voluntary actions taken by a company to address
the

Ethics	ethical, social, and environmental impacts of its business
operations and the concerns of its principle stakeholders."c

World Bank	"The commitment of business to contribute to sustainable
economic development-working with employees, their families, the local
community and society at large to improve the quality of life in ways that
are both good for business and good for development."d

Source: GAO compilation from sources listed.

aBusiness for Social Responsibility, BSR Issue Briefs, Overview of
Corporate Social Responsibility.

bEuropean Commission, Directorate-General for Employment and Social
Affairs, Promoting a European framework for Corporate Social
Responsibility, Green Paper, July 2001, p. 8.

cInstitute of Business Ethics, Web site, http://www.ibe.org.uk.

dThe World Bank, Corporate Social Responsibility Practice, Public Sector
Roles in Strengthening Corporate Social Responsibility: Taking Stock,
January 2004, p. 3.

CSR definitions vary on whether CSR is considered exclusively voluntary or
whether it includes mandatory requirements for business regarding social
and environmental issues. Some definitions of CSR limit it to voluntary
business decisions and actions, above and beyond what is required by law.
Others organizations have reasoned that CSR should include mandatory
efforts, especially because in developing countries it can be a tool to
encourage compliance with laws and regulations.3 This voluntary compliance
with laws and regulations assumes a greater role in developing countries,
because even where developing countries have adequate laws and regulations
concerning social and environmental concerns, they often have limited
enforcement resources.

Some groups prefer other terms to address all or some of the ethical,
social, and environmental issues addressed by CSR. For example, one
business

3The World Bank, Public Sector Roles in Strengthening Corporate Social
Responsibility: A Baseline Study, October 2002, p. 1.

group preferred the term "corporate citizenship" because business social
and environmental efforts are indicative of business's effort to be good
citizens, while they believe the term "CSR" implies that those efforts are
a responsibility rather than voluntary. Others prefer the terms
"sustainable development" or "triple bottom line," reasoning that business
decisions and performance should be evaluated in terms of their economic,
social, and environmental impacts. Other terms such as "business ethics"
deal with one of the many concerns of CSR. Table 2 presents definitions of
some terms related to CSR.

Table 2: Definitions of Terms Related to Corporate Social Responsibility

                                Term Definition

Business Ethics "The application of ethical values to business behavior."a

Corporate Citizenship	"The conduct of business in ways that reflect
proactive, responsible behavior in business and in dealings with all
constituents and with respect to communities, society, and the natural
environment more generally."b

Sustainable Development "[development that] meets the needs of the present
without compromising the ability of future generations to meet their own
needs."c

Triple Bottom Line	"A method that allows companies to assess their
performance against three bottom lines: environmental, social, and
economic."d

Source: GAO compilation from sources listed.

aInstitute of Business Ethics, Web site, http://www.ibe.org.uk.

bLogan David, Roy Delwin, and Regelbrugge Laurie, Global Corporate
Citizenship - Rationale and Strategies, The Hitachi Foundation, Washington
D.C.: 1997, p. 7.

cReport of the World Commission on Environment and Development, (the
Brundtland Commission) Our Common Future, United Nations, August 1987, p.
24.

dThe Sustainable Business Network and Ministry for the Environment, New
Zealand, Enterprise3 Your Business and the Triple Bottom Line, Economic,
Environmental and Social Performance, June 2003,

p. 2.

Many U.S. Businesses' U.S. businesses conduct many different types of
actions that address CSR Actions Address CSR concerns that range from
voluntary, such as philanthropic donations, to Concerns government
mandated, such as disclosure of significant environmental

conditions. These actions may or may not be part of a formal CSR effort.
Although groups categorize business actions addressing CSR concerns
differently, they can broadly be grouped as relating to (1) business
ethics, (2) community development, (3) environment, (4) governance, (5)
human

rights, (6) marketplace, and (7) workplace.4 In our discussions with
representatives of U.S. corporations, which are noted as leaders in CSR,
we identified illustrative examples of U.S. companies' actions that
address these categories of CSR concerns.

Business Ethics	Business actions addressing the CSR concern of business
ethics involve values such as fairness, honesty, trust and compliance,
internal rules, and legal requirements. Among the actions taken to address
business ethics are incorporating ethics into corporate value and mission
statements, developing ethics codes, conducting ethics training, and
monitoring ethical performance. In one example from the companies we
interviewed, the company had recently trained its workforce-including all
levels of management-on its standards of business conduct and now
publishes these standards in 20 languages.

Community Development	Business actions addressing the CSR concern of
community development involve business policies and practices intended to
benefit the business and the community economically, particularly for
low-income and underserved communities. Community development activities
include employing and training disadvantaged workers, partnering with
minority-and womenowned businesses, and locating facilities in underserved
communities. One business we interviewed with a factory in South Africa
works with its employees to develop the physical structures of schools for
youth and adults in that community.

Environment	Business actions addressing the CSR concern of the environment
involve company policies and procedures to ensure the environmental
soundness of its operations, products, and facilities. Examples include
pollution prevention, energy efficiency, and supply-chain environmental
management. One company we interviewed stated that it strives to exceed
minimum U.S. government standards for toxic emissions, even in foreign
countries. The company stated that it had sent a team of specialists to
Mexico to bring a Mexican facility to the U.S. standard.

Corporate Governance	Business actions addressing the CSR concern of
corporate governance involve the broad range of policies and practices
that boards of directors use to manage themselves and fulfill their
responsibilities to investors and

4Business for Social Responsibility Education Fund, Corporate Social
Responsibility: A Guide to Better Business Practices, 2000.

other stakeholders. Examples include developing processes for
communication with stakeholders, adopting formal board guidelines, and
implementing board and Chief Executive Officer (CEO) performance
evaluations.

Human Rights	Business actions addressing the CSR concern of human rights
involve assuring basic standards of treatment to all people, regardless of
nationality, gender, race, economic status, or religion. Among the
concerns in developing human rights policies are to avoid child labor in
manufacturing, government action depriving citizens of basic civil
liberties, and forced or prison labor. For example, a company we
interviewed said it had signed the United Nations Global Compact, which
requires businesses to comply with human rights requirements as one of its
10 principles.

Marketplace	Business actions addressing CSR marketplace concerns involve
business relationships with its customers and such issues as product
manufacturing and integrity; product disclosures and labeling; and
marketing, advertising, and distribution practices. Marketplace-related
actions include establishing ethical marketing and advertising policies,
ensuring safety and efficacy of products, and employing ethical sales
tactics. One company we interviewed that views water, health, and hygiene
as their business stated it had developed low-cost water purifying systems
and products to save water in hand washing and improve the lives of
consumers in developing countries.

Workplace	Business actions addressing CSR workplace concerns generally
involve human resource policies that directly impact employees, such as
compensation and benefits, career development, and health and wellness
issues. Examples of workplace CSR actions include adoption of global
workplace standards, involvement of employees in business decisions, and
establishment of employee grievance policies and procedures.

Business, Civil Society, Businesses play the central role in determining
their efforts to address CSR Investor Groups, concerns, but these efforts
can also be influenced by the actions of civil Multilateral Organizations
society, investor groups, multilateral organizations, and government.

    and Government Play Important Roles in Shaping CSR

Businesses' Role in CSR	Businesses play a central role in CSR by
determining which social and environmental issues are addressed and how
they are addressed. CSR literature notes that there is a growing
recognition by businesses that CSR includes the way the company runs its
core business, not just its philanthropic activities. Businesses can
further influence CSR in their relationships with other firms through
business networks, intermediaries, and supply chains. For example, a
business may require or promote CSR among its business partners.

Available but not necessarily representative data on U.S. business efforts
to address CSR concerns suggests that many firms conduct some CSR efforts
and that a small number of firms hold themselves to more rigorous non
financial reporting standards on social, economic and environmental
information. A 2002 survey of U.S. firm involvement in sustainability (a
closely related term to CSR) included responses from 140 U.S.-based firms
that were likely among the most active U.S. companies in CSR.5
Threequarters of responding firms reported practicing some form of
sustainability. Large firms, defined as those having revenues over $25
billion annually, were more likely than smaller firms to issue
sustainability reports, according to that same survey. Over half of the
firms issuing a sustainability report indicated that they were following
Global Reporting Initiative (GRI) guidelines. The GRI is an independent
institution that disseminates globally applicable sustainable reporting
guidelines for companies use in reporting on economic, environmental and
social dimensions of their activities, products, and services. As of March
2005, 69 U.S. firms had registered to use the GRI guidelines for reporting
CSR Issues. Similarly, 71 U.S. firms have signed onto the United Nations
Global Compact. Signatories to the Global Compact voluntarily agree to
support its 10 principles in areas of human rights, labor, environment,
and anticorruption policies.

Available information from some surveys suggest that business leaders
address social issues for business as well as for other reasons, including
consistency with their core operating values. Two recent surveys of
business executives reported that businesses practiced corporate
citizenship or sustainable business practices for a variety of reasons.
The voluntary nature of these surveys makes it impossible to project to
the universe of all firms. In the first survey, the majority of business
respondents concurred with the statement that "good corporate citizenship

52002 Sustainability Survey Report, August 2002, PricewaterhouseCoopers,
LLP.

helps the bottom line." 6 Similarly, the majority of the respondents to
the second survey indicated "cost savings" as a reason for adopting
sustainable business practices.7 The majority of firms responding to the
first survey also indicated that their founding traditions and core
organizational values of their companies dictate their commitment to
corporate citizenship. Similarly, the second survey reported that the
majority of responding firms indicated the CEO/Board commitment as a
contributing reason for their sustainable business practices. Further,
this survey reported that a number of respondents stated that one reason
for adopting sustainable practices was because it was "the right thing to
do."

Despite over 30 years of research, no consensus has been reached on the
relationship between business social and financial performance. Numerous
empirical research studies have attempted to determine whether those firms
that engage in socially responsible practices also do well in terms of
financial performance. A 1997 study that surveyed 25 years of research
observes that, many studies find a negative relationship between these
practices and financial performance, although the largest number of
studies find a positive relationship.8 More recent studies also reach a
range of conclusions with some finding a positive association,9 some
finding at least a neutral association, and others finding no significant
or a mildly negative relationship.10 A recent paper on the business
justification for CSR

6The State of Corporate Citizenship in the U.S.: A View from inside
2003-2004, The Center for Corporate Citizenship at Boston College and the
U.S. Chamber of Commerce Center for Corporate Citizenship, 2004.

72002 Sustainability Survey Report, August 2002, PricewaterhouseCoopers,
LLP.

8They further caution, "Even though there is hope in the large number of
studies that have shown a positive relationship, academics and
practitioners alike should be concerned with the variability and
inconsistency in these results. Some of the reasons for these
contradictory results stem from conceptual, operationalization, and
methodological differences in the definitions of social and financial
performance." Griffin, Jennifer J., and John F. Mahon, "The Corporate
Social Performance and Corporate Financial Performance Debate: Twenty-Five
Years of Incomparable Research," Business and Society, Mar. 1997, pp.
5-31.

9Association of Chartered Certified Accountants, Corporate Social
Responsibility: Making the Business Case, London, 2002; Orlitzky, Marc,
Frank L. Schmidt and Sara L. Rynes, "Corporate Social and Financial
Performance: A MetaAnalysis," Organization Studies, Vol. 24, no. 3
(May-June 2003).

10Laffer, Arthur B., Andrew Coors and Wayne Winegarden, "Does Corporate
Social Responsibility Enhance Business Profitability?" Laffer Associates,
2004 available via www.csrwatch.com.

concludes, "It has not yet been possible to make a strong, causal,
quantitative link between CSR actions and financial indicators such as
share price, stock-market value, return on assets and economic value
added."11

The difficulty in accurately measuring CSR benefits to business
complicates any assessment of CSR. CSR literature, as well as discussions
with CSR experts, indicates that it can be very difficult to assess the
profitability of CSR actions because benefits may occur far into the
future and involve intangibles such as enhanced brand and company image or
other goodwill. Furthermore, the authors of a recent study suggest that
the provision of CSR will vary across industries, products, and firms. For
example, they argue that larger, more diversified firms, and those that
produce more highly differentiated products, may be more likely to engage
in CSR practices than smaller firms or those that produce in less
differentiated markets. The authors further suggest that if a firm is
successful in implementing a CSR action, competitors may adopt similar
measures, and this may have the effect of eroding any profit advantage. As
a result, they argue that there should be a neutral relationship between
CSR activity and firm performance.12

Civil Society's Role in CSR	CSR literature recognizes the impact of civil
society on raising awareness of social issues among businesses. The World
Bank defines civil society as the wide array of nongovernmental and
not-for-profit organizations that express the interests and values of
their members or others based on ethical, cultural, political, scientific,
religious, or philanthropic considerations. Civil society organizations
include community groups, nongovernmental organizations (NGO), labor
unions, indigenous groups, charitable organizations, faith-based
organizations, professional associations, and foundations. A recent report
by the Kennedy School of Government notes that the growth in civil society
is one of the drivers making CSR more mainstream.

Civil society groups can serve to strengthen the links between CSR
activities and business profits by increasing the transparency of
corporate

11Association of Chartered Certified Accountants, Corporate Social
Responsibility: Making the Business Case, London, 2002.

12McWilliams, Abigail and Donald Siegel, "Corporate Social Responsibility:
A Theory of the Firm Perspective," Academy of Management Review, 2001,
Vol. 26: No. 1, pp. 117-127.

operations. For example, civil society activities exposing sweatshops or
other questionable corporate activities can provide an incentive for firms
to act in ways that would not damage their reputation. Further, civil
society sometimes establish standards that business can use to signal
compliance or to enhance their reputation with their customers and other
stakeholders, potentially increasing profits and firm value. In 1997, the
Council on Economic Priorities Accreditation Agency13 released its Social
Accountability (SA) 8000, a voluntary standard to help companies monitor a
variety of workplace concerns. The SA 8000 provides verification of
corporate performance. The Coalition for Environmentally Responsible
Economies (CERES) partnered with the United Nations Environmental Program
(UNEP) to oversee the development of the GRI14 reporting guidelines in the
late 1990's. The Interfaith Center for Corporate Responsibility15 (ICCR),
composed of over 275 religious institutions, published a guide to be used
as a reference tool by companies to monitor policies in such areas as
community development, environment, ethics, human rights and workplace
issues.

Investor Groups' Role in CSR	Investor groups such as mutual funds and
pension plans are responsible for a growing proportion of U.S. investments
and therefore, are a potentially increasing influence over business's CSR
actions. According to a report by the Social Investment Forum,16 a
national membership organization of social investment practitioners and
institutions, firms using some type of socially responsible investment
strategy manage over 11 percent of all U.S. investment assets under
professional management. The report further indicated that between 1995
and 2003 social-invested assets grew faster than all other types of
professionally managed investment assets in the United States. CSR
literature notes the increased activism of some institutional investors
and their calls for increased corporate accountability and transparency.

13www.cepaa.org. 14www.globalreporting.org. 15www.iccr.org.
16www.socialinvest.org.

The Role of Multilateral Organizations in CSR

Multilateral organizations have played an active role in developing
standards relating to CSR and in promoting the concept of CSR. The
Organization for Economic Cooperation and Development17 (OECD) first
published its guidelines for multinational enterprises in 1976. These
guidelines include recommendations by OECD-member governments to
multinational enterprises on appropriate business conduct in such areas as
business ethics, labor relations, environmental practices, and information
disclosure. The OECD revised the guidelines in 2000 to include a call for
companies to respect human rights, abolish forced and child labor, and
take a more active role in promoting environmental sustainability. The
United Nations launched its Global Compact18 in 1999, and it now consists
of 10 principles covering concerns with human rights, labor, environment,
and anticorruption. The World Bank also has a number of program goals
related to CSR, including supporting the development of environmental and
social practices in individual businesses in emerging markets, working
with national governments to help countries better understand and address
CSR, and cosponsoring (with the OECD) the Global Corporate Governance
Forum,19 which helps countries improve standards of governance for their
corporations.

The Role of Governments in CSR	A 2002 World Bank study identified four
major CSR roles for government: endorsing, facilitating, partnering, and
mandating. Government endorsement of CSR can take a variety of forms,
including direct recognition of businesses with awards. In their
facilitating role, governments enable or provide incentives to companies
to engage in CSR to obtain social and environmental improvements.
Government partners with the private sector and civil society in tackling
complex social and environmental problems. In the mandating role,
governments require minimum CSR-related actions in laws and regulations.

Some industrialized countries have established programs to foster CSR. For
example, in 2001, the European Commission published a green paper to
launch debate on how the European Union could promote CSR. Subsequently,
the commission held a forum to foster dialogue among the business
community, trade unions, civil society organizations, and other

17www.oecd.org. 18www.unglobalcompact.org. 19www.gcgf.org.

stakeholders on CSR.20 In May 2001, France became the first country to
require all publicly listed companies to report on the social and
environmental consequences of their activities. In 2000, the United
Kingdom appointed a Minister for Corporate Social Responsibility, who
maintains a central Web site that highlights government departments with
CSR responsibilities.

Although the social and economic priorities vary among developing
countries, the high incidence of poverty and weak civil society means
there are often fewer conventional drivers for CSR. Most developing
country governments seek foreign investment to help them grow and develop
and must attempt to balance development with other social and
environmental goals. A 2002 World Bank report notes that developing
country governments do not often participate in the development of CSR
policies and standards.21 Another report on public sector support for CSR
among global supply chains states that the lack of resources for
developing country governments, which do not view export sector workplaces
as the highest priority for social and environmental intervention, hinders
progress in addressing CSR-related issues in global supply chains.22

The effectiveness of government programs supporting CSR in achieving
public policy goals has not been established, in part because of the
difficulties inherent in such assessments. CSR literature notes that it is
difficult to assess the impact of CSR-related partnerships on public
policy goals because it is difficult to measure or compare their
intangible inputs and outputs. Representatives from the four academic
institutions we interviewed agreed that it was difficult to assess the
impact of CSR on social goals. Several of these academicians also noted
that they had not seen good work measuring the benefit of CSR to society.
One noted that CSR is incremental and that it is hard to measure
incremental improvements.

20http://europa.eu.int/comm/employment_social/soc-dial/csr/.

21Public Sector Roles in Strengthening Corporate Social Responsibility: A
Baseline Study, the World Bank, October 2002.

22Public Sector Support For The Implementation of Corporate Social
Responsibility (CSR) in Global Supply Chains: Conclusions from Practical
Experience, the World Bank, December 2004.

  Although No Broad Federal CSR Mandate Exists, Federal Agencies Conduct Many
  Activities Related to Global CSR

While the federal government does not have a formal role in global
corporate social responsibility, we identified over 50 programs, policies,
and activities at 12 agencies that are related to global CSR using a data
collection instrument completed by agency officials. We narrowed down the
programs to those that were ongoing in fiscal year 2003 or afterwards,
those that may affect U.S. corporations' CSR efforts overseas, including
their supply chains, and those that touch on key components of CSR, such
as labor, environment, human rights, community development and corporate
governance. As illustrated in the text below, most of these activities can
be loosely categorized into the four key roles of governments in global
CSR identified by the World Bank: endorsing, facilitating, partnering and
mandating.23 Appendix II catalogs all the programs we identified by
agency.

    There Is No Comprehensive Mandated Federal Role, Definition, or Agency
    Coordination in Global CSR

There is no comprehensive legislation mandating a federal role in global
corporate social responsibility, and few agencies actually define CSR.
Many agencies work with the private sector on issues that are generally
covered by the concept "corporate social responsibility," such as labor,
environment, human rights and corporate governance, but few agencies
define corporate social responsibility or label their activities CSR. Some
agencies noted that they use other terms, such as corporate stewardship or
corporate citizenship, to refer to similar issues.

While there is no law designating a lead agency to coordinate federal
government activities related to global corporate social responsibility,
United States agencies are currently in the initial stages of creating a
Web site to catalogue federal CSR initiatives. This informal interagency
initiative, led by staff at the Inter-American Foundation (IAF), initially
involved the Department of State, USAID, the Department of Commerce, the
Environmental Protection Agency (EPA), and the Overseas Private Investment
Corporation (OPIC). The purpose of the initiative is to publicize the U.S.
government programs and resources that promote good corporate practices or
CSR to businesses and NGOs. The IAF expects to make the Web site publicly
available sometime in 2005.

23In trying to categorize programs into these roles, we identified 9
programs that did not clearly fit into these categories. We also
identified 13 programs that appear to have elements of more than one
category.

Some agencies also reported that while they do not have a formal program
focused on global corporate social responsibility, they have a number of
initiatives that relate to global CSR. For example, officials at the
Department of State, which had the greatest number of initiatives related
to global CSR, told us that they house their CSR-related activities in
several bureaus linked through informal coordination. Likewise, at the
EPA, which also had a large number of related initiatives, an official
told us that the agency does not have a specific CSR program, but
acknowledged there were many links between EPA programs on the environment
and the goals of CSR. Further, EPA recently completed an internal
inventory of its voluntary initiatives that partner with corporations to
improve coordination and policy consistency.

    While Agency Perspectives on CSR Vary, Many Federal Programs in Pursuit of
    Broader Mission Goals Are Related to Global CSR

Agency perspectives on global corporate social responsibility vary from
active endorsement to reluctance to labeling their programs CSR. For
example, several bureaus in the Department of State foster corporate CSR
practices as a means to enhance their own efforts aimed at public
diplomacy, protecting human rights, and other areas. Similarly, the
Department of Commerce has officially endorsed corporate social
responsibility, stating that American companies must follow the highest
standards of conduct anywhere they do business and that American companies
contribute to the communities in which they do business. Through good
corporate governance and global corporate social responsibility, the
Department of Commerce maintains that American companies are helping to
spread democratic values and prosperity around the globe, which leads to
greater economic freedom, higher standards of living, and greater social
and political freedoms. However, other agencies do not want their programs
to be labeled CSR because they do not see it as part of their mission or
believe they lack authority to engage in CSR activities. For example,
while officials from the Office of the U.S. Trade Representative
acknowledged that the agency undertakes some activities that might
complement CSR, they stated that the agency's mission is to negotiate
trade agreements, not to engage in CSR efforts. Similarly, a senior
official at the Department of Labor said that, while the department has
many activities that could conceivably be seen as supporting global CSR,
the department is not doing them for that reason. He believes the
department lacks specific authority to do work on CSR.

Some agencies without a formal position on CSR actively take advantage of
mutual interests between their missions and company CSR practices to
achieve their broader mission goals. For example, USAID and the IAF

leverage resources from corporations for development missions, and EPA
intends to control pollution through voluntary programs with corporations.
Specifically, USAID's Global Development Alliance aims to achieve the
agency's development goals by leveraging resources from the private sector
and other partners. USAID's alliances address a range of issues, such as
encouraging economic growth, developing businesses and workforces,
addressing health and environmental problems, and expanding access to
education and technology. To illustrate, USAID partnered with one U.S.
corporation operating in post-war Angola to build up the country's
business sector and equip Angola's workforce with necessary business
skills. The company and USAID each agreed in 2002 to provide $10 million
over 5 years for a series of projects to strengthen small and medium-sized
businesses, including helping refugees and former soldiers to return to
agriculture, developing an enterprise development bank, and supporting the
creation of an agricultural training center. From fiscal years 2002 to
2004, USAID reported funding approximately 290 public-private alliances
with over $1.1 billion in federal money and over $3.7 billion in partner
contributions.24 Figure 1 illustrates how federal agency programs
sometimes complement company CSR practices.

24Funding reported by USAID includes moneys obligated in the planning
stage as well as actual expenditures. The partner contributions include
committed contributions that are projected for future years as well as
contributions already expended by partners.

Figure 1: Some Federal Programs and Activities Complement U.S. Corporate
CSR Practices

Many of the programs we identified started in the last 5 years. For
example, the Department of State's Partnership to Eliminate Sweatshops
Program started in 2000 to provide grants to address unacceptable working
conditions in manufacturing facilities overseas that produce goods for the
U.S. market. In fiscal year 2003, the program funded the development of a
confidential database of factory monitoring reports that would be
accessible by companies seeking compliance information on factories in
their supply chains. The effort was in response to U.S. companies that
have cited lack of information about factory compliance as an obstacle to
improving their own compliance efforts and responsible behavior.

Since 2001, several presidential initiatives aimed at foreign assistance
have partnered with companies to achieve the initiative goals, which also
complement corporate CSR practices. For example, one interagency

                                  Source: GAO.

Other agencies, such as OPIC, the Export-Import Bank of the United States
(Ex-Im Bank), and the U.S. Securities and Exchange Commission (SEC) engage
in activities that are related to CSR, generally in response to statutory
or congressional requirements rather than based on a formal agency
decision on CSR.

    Many Federal CSR-Related Programs Are Recent, Focus on a Range of Countries
    and Sectors, and Have Small Budgets and Staffs

presidential initiative led by the Department of Commerce,25 the Digital
Freedom Initiative, was announced in 2003 to partner with U.S. businesses
to transfer the benefits of information and communication technology to
businesses in the developing world.26 The program has over 90 U.S.
corporate and nonprofit organization partners that provide volunteers and
other resources to support its activities. As part of the initiative, in
Senegal, a U.S. information technology company is developing 12 academies
to train Senegalese to install, manage, and maintain modern computer
networks.27

Federal agency activities related to CSR focus on a range of countries and
sectors. For example, the International Child Labor Program at the
Department of Labor funds projects in Bangladesh, Pakistan, Central
America, and West Africa that work with various industry associations to
address the use of child labor. The Department of State funds a number of
projects in China and other countries in various sectors, including the
apparel industry and the extractives sector. Federal programs and
activities assist U.S. companies with their philanthropic efforts, as well
as with their efforts to be socially responsible in their core business
operations, including their supply chains. None of the programs we
identified were specifically designed to monitor company CSR activities.

Most federal programs, policies, and activities related to CSR have small
budgets and staffs. Many programs do not specifically track budget and
staffing information for their CSR-related activities. Of the programs
reporting budget and staffing information, most are relatively small. The
Departments of Commerce and State and EPA, which identified the largest
numbers of discrete initiatives related to CSR, reported relatively modest
budgets and staffing for their initiatives. In total, only four programs
reported budgets at or over $2 million in fiscal year 2003 for CSR-related
activities. The two programs that reported the largest annual budgets of

25Members of the Digital Freedom Initiative Interagency Working Group
include the Department of Commerce, USAID, the Department of State, the
Peace Corps, the Small Business Administration, and the Federal
Communications Commission.

26The Digital Freedom Initiative is part of the Volunteers for Prosperity
Initiative. Managed by USAID's Office of Volunteers for Prosperity, this
is also an interagency Presidential initiative that promotes international
voluntary service by highly skilled American professionals in support of
the nation's global health and prosperity agenda.

27According to a Commerce official, the Digital Freedom Act (DFI) has no
specific funding. The program uses some USAID money already assigned to
projects that complement the DFI program. For example, these training
efforts are a component of an ongoing alliance the company has through the
USAID Global Development Alliance.

around $20 million and $30 million are at the Department of Labor28 and
USAID, respectively. Similarly, many federal CSR efforts are staffed by
agency officials with multiple responsibilities, working part time on the
effort.

    Federal Agencies Conduct a Range of Activities that Endorse, Facilitate,
    Partner and Mandate Company CSR Activities

Most U.S. government programs, policies, and activities related to global
CSR can be loosely categorized into the World Bank's four public sector
roles: endorsing, facilitating, partnering, and mandating.29 These roles
range from the least government involvement-endorsing companies' voluntary
efforts above and beyond compliance with laws and regulations-to the most
government involvement through mandating behavior consistent with CSR.
Although some federal efforts related to CSR can be classified as serving
more than one role, roughly two-thirds of the U.S. government programs,
policies, and activities, that we identified fell in the middle of the
spectrum by either facilitating and/or partnering with companies on their
voluntary CSR efforts. The remainder either fell into the mandating and
endorsing roles, or outside the World Bank's roles. Figure 2 illustrates
the range of U.S. government activities in the World Bank framework. See
appendix II for a complete listing and brief description of the 54
CSR-related programs and activities that we identified at 12 U.S.
agencies.

28However, an official from the Protecting the Basic Rights of Workers
program at the Department of Labor, which reported a $20 million budget in
fiscal year 2003, said the program received no funding from the fiscal
year 2005 appropriations.

29See Fox, Tom; Ward, Halina; and Howard, Bruce. Public Sector Roles in
Strengthening Corporate Social Responsibility: A Baseline Study. The World
Bank, 2002. The report describes four principle public sector roles as
follows (The report acknowledges overlaps across the four categories):

Endorsing: Political support and public sector endorsement of the concept
of CSR and in particular, CSR-related initiatives.

Facilitating: Enabling or incentivizing companies to engage with the CSR
agenda or to drive social and environmental improvements.

Partnering: Bringing the complementary skills and inputs of the public
sector, the private sector, and civil society in tackling complex social
and environmental problems.

Mandating: Defining minimum standards for business performance embedded
within the legal framework.

Figure 2: Illustrative U.S. Government Activities Related to CSR Range
from Endorsing CSR to Mandating CSR

              Source: GAO illustration based on World Bank report.

Endorsing 	The U.S. government has a number of awards programs that
endorse CSR by recognizing companies for socially responsible activities.
U.S. officials also endorse the concept to audiences through public
speeches on an ad hoc basis. Some examples of endorsing include:

o 	The Department of State's annual Award for Corporate Excellence, which
emphasizes the role U.S. businesses play to advance good corporate
governance, best practices, and democratic values overseas. Since 1999, 12
businesses have received the Award for Corporate Excellence,30 following
nominations submitted by Chiefs of Missions at U.S. Embassies and
Consulates abroad. In fiscal year 2004, the Department of State received
50 award nominations from Chiefs of Missions.

o 	The EPA's Climate Protection and Stratospheric Ozone Protection Awards,
which encourage and recognize outstanding corporate environmental efforts
in climate protection. For example, a 2002 corporate recipient of EPA's
Climate Protection Award reduced its energy use by over 30 percent
internationally and offset all the remaining greenhouse gas emissions both
in the United States and overseas.

30Typically, one award is given to a multinational enterprise and one
award is given to a small and medium-sized enterprise each year, but that
is flexible and up to the selection committee to decide.

Facilitating 	The U.S. government facilitates CSR by providing
information, funding or incentives to companies and other players to
engage in CSR-related issues. Some examples include:

o 	The Department of Commerce's training on rule of law, human rights, and
corporate stewardship for commercial service employees. The training helps
these officers provide information on corporate stewardship issues to
companies involved in the export promotion process. Additionally,
commercial service officers can use this information in their work with
overseas chambers of commerce. As of March 2005, 260 commercial service
employees had received the training since the program's inception in
2003.31

o 	The Ex-Im Bank's Environmental Exports Program, which began in 1993.
The program enhances the Ex-Im Bank's financing package for such U.S.
goods and services, thereby encouraging foreign buyers to purchase U.S.
exports that are beneficial to the environment. Specifically, the program
extends loan repayment terms, finances the interest accrued during the
disbursement period, and finances local costs to an amount equal to 15
percent of the contract price. Exports eligible for the program include
renewable energy projects, water treatment projects, air quality
monitoring instruments, equipment for waste collection and clean up,
services for environmental assessments and ecological studies, and other
projects that meet specified emission thresholds. During fiscal year 2003,
Ex-Im Bank supported over $173 million of environmentally beneficial goods
and services, including $13 million in products and technologies related
to renewable energy.

Partnering	Several U.S. government programs partner with corporations or
convene partnerships with key stakeholders, which can help companies
accomplish their CSR initiatives. In addition to USAID's Global
Development Alliance discussed earlier, representative examples include:

o 	EPA's Climate Leaders Program, which partners with companies to achieve
EPA's goal of protecting the environment. The Climate Leaders Program is a
voluntary government partnership that enlists major U.S. companies to set
an aggressive greenhouse gas reduction target. EPA established inventory
protocols to assist the companies in tracking their

31This figure includes 183 commercial officers, 56 foreign service
national commercial specialists, and 21 domestic trade specialists.

success toward their greenhouse gas target. Partners receive training and
technical assistance in completing the greenhouse gas inventories, and EPA
works with each partner to develop standard Inventory Management Plans.
EPA plans to provide recognition in later years after partners have met or
exceeded their targets, which are publicly available on the EPA Web site.

o 	The Voluntary Principles on Security and Human Rights, which provide
guidance to oil and mining companies on how to ensure respect for human
rights in their security procedures. In 1999, together with the government
of the United Kingdom, the Department of State convened international NGOs
with U.S. and United Kingdom oil and mining companies concerning human
rights abuses by hired security forces. A set of voluntary principles was
developed through collaboration with the relevant stakeholders. According
to a State Department official, nearly every major oil and mining company
is now a participant in the Voluntary Principles process.

Mandating 	While there is debate over whether complying with laws and
regulations constitute CSR, a number of federal requirements and
regulatory mechanisms that mandate social and environmental issues could
fall under the CSR umbrella. Examples of regulations and agencies that
require participating companies to comply with CSR-related requirements
include:32

o 	An SEC rule,33 which provides anyone who owns more than $2,000 in a
company's stock for more than 1 year with the opportunity to propose
issues for shareholders to vote on. SEC ensures that companies do not
exclude shareholder proposals for vote at annual company meetings, unless
they meet the legal criteria for exclusion outlined in the rule. According
to an investor group that tracks shareholder proposals, out of 1,052
shareholder proposals that were filed at U.S. companies for 2005 meetings,
approximately 350 proposals focused on issues related to

32In addition to the regulations listed here, various respondents also
mentioned the Foreign Corrupt Practices Act; the Sarbanes-Oxley Act of
2002; the Alien Tort Claims Act; and import controls, such as those
prohibiting the importation into the United States of merchandise produced
by forced or indentured child labor as laws or regulations that impact
companies' CSR activities.

33Rule 14a-8 of the Securities Exchange Act of 1934.

Strengthening Enforcement and Compliance with CSR-Related Regulations in
Other Countries

corporate social responsibility, such as global warming and global labor
standards.

o 	The Overseas Private Investment Corporation (OPIC), which provides
long-term financing and/or political risk insurance to U.S. companies
investing in over 150 emerging markets and developing countries, requires
that all beneficiary companies comply with certain CSR criteria. These
requirements cover issues that include host country development impact,
environmental protection, international labor rights, and human rights.
The requirements are written into contracts, and OPIC specifies that they
must be carried down to the subcontract level.

In addition to the four roles discussed above, a number of U.S. programs
foster a business environment conducive to CSR by working with other
national governments to strengthen compliance and enforcement of social
and environmental regulations in countries where U.S. companies operate.
These efforts serve to protect U.S. businesses from competing with
companies that are not complying with weakly enforced laws and
regulations. Some examples include:

o 	The Department of Labor's program on Protecting the Basic Rights of
Workers, which works with host country ministries of labor to improve
adherence to international core labor standards and acceptable conditions
of work in developing countries. In accordance with a congressional
appropriation, in fiscal year 2003 the office allocated $20 million for
these efforts worldwide, including in a number of countries in Africa, the
Americas, Asia, and in Ukraine. However, according to an agency official,
the budget decreased significantly in subsequent years to $2.5 million in
fiscal year 2004 and no funding in fiscal year 2005.

o 	EPA's International Compliance Assurance Division, which works with
governments to ensure compliance of companies with environmental
standards. Since 2001, approximately 20 trainings have been held for
officials from a wide range of countries, including South Africa, Nigeria,
Indonesia, Vietnam, Brazil, Guatemala, and Egypt, among others.

  Perspectives on the Appropriate Government Role in CSR Vary, but Many Support
  Federal Assistance for Voluntary Efforts

Our review of CSR literature revealed support for government involvement
in CSR varied with views of CSR's connection to business profit. Opinions
of those we interviewed on the impact of existing federal agency efforts
and the appropriate government role related to CSR generally revealed a
desire for government involvement and the widest support for federal
agency activities that assist businesses in their voluntary efforts.

    Perspectives on the Appropriate Government Role in CSR Vary with Views of
    CSR's Connection to Business Profits

Free-Market Economic Perspective

Based on our review of CSR literature, perspectives on the appropriate
role of government in CSR vary, but generally correlate with three major
perspectives on the connection of CSR to business profits: (1) free-market
economic, (2) "business case," and (3) social issues.

Those with a free-market economic perspective generally view businesses
engaging in CSR as a potential taking of profits from the business owners
that will ultimately diminish the effectiveness of the business and a
freemarket economy. The well known economist, Milton Friedman refers to
the doctrine of "social responsibility" as fundamentally subversive in a
free society, stating, "there is one and only one social responsibility of
business-to use it[s] resources and engage in activities designed to
increase its profits so long as it stays within the rules of the game,
which is to say, engages in open and free competition without deception or
fraud."34 According to this free-market economic perspective, business
managers have a primary duty to maximize value for shareholders and in
doing this businesses serve the general welfare by directing resources to
produce goods and services society wants. In this view, engaging in CSR
actions that are not based on profitability can affect not only business
performance but also potentially reduce the general welfare of society.
David Henderson, an economist who has written extensively questioning the
value of CSR, recently wrote "The general adoption of CSR, in response to
social pressures, would undermine the market economy and make businesses

34Friedman, Milton, "The Social Responsibility of Business is to Increase
Profits." New York Times Magazine, September 13, 1970.

less effective in performance of their primary role."35 While this
free-market economic perspective recognizes that government has a role in
structuring the legal framework of a market economy, those with this view
do not support government involvement in the general adoption of the
concept of CSR.

Business-Case Perspective 	Many CSR proponents cite a "business-case"
perspective, in which business CSR efforts are supported based on their
contribution to business profit and value. Those with the business-case
perspective reason that businesses can undertake CSR actions that will
increase businesses' value or return on investment in terms of increased
revenue, increased asset value, or reduced cost. Business leaders often
indicate that their CSR practices help their bottom line. Supporters of
the business-case perspective assert that addressing important social
issues in the business environment can contribute to the long-term value
of the firm. Supporters of this perspective have developed many different
lists of potential benefits to a business in adopting CSR. For example,
one discussion of the business case identified the following six potential
business benefits:36

o 	Operational cost savings-Investment in environmental efficiency
measures such as waste reduction and energy efficiency can save money as
well.

o 	Enhanced reputation-Good company performance in relation to
sustainability issues can build reputation, while poor performance, when
exposed, can damage brand value.

o 	Increased ability to recruit, develop, and retain staff-These can be
direct results of introducing `family friendly' policies. Also,
volunteering programs may improve employee morale and loyalty to the
company.

35Henderson, David, "The Role of Business in the Modern World: Progress,
Pressures and Prospects for the Market Economy." (Landover Maryland,
Competitive Enterprise Institute) 2004, p. 20.

36Raynard, Peter and Forstater, Maya, Corporate Social Responsibility:
Implications for Small and Medium Enterprises in Developing Countries, The
United Nations Industrial Development Organization, Vienna, 2002, pp. 8
and 9, with reference to: Raynard, P & Forstater, M (2001) The Business
Case for Sustainability. London, SIGMA.

o 	Better relations with government-More favorable government relations
and regulatory rulings are key for many companies looking to extend their
business in politically unstable conditions.

o 	Anticipation and management of risk-Managing risk is increasingly
complex in a global market environment. Greater oversight and stakeholder
scrutiny of corporate activities makes managing risk key to company
success.

o 	Learning and innovation-The interaction required with a wide range of
individuals and organizations outside the traditional business
relationships can encourage creativity, which can lead to increases in
profitability.

The benefits of CSR can also be viewed in a global context, with the
interaction between multinational businesses and foreign host-country
governments concerning issues of foreign direct investment and business
operations in host countries, generally. Engaging in CSR practices may
help the multinational business manage certain political and reputation
risks in their operations, particularly with regard to host countries in
the developing world.37

Negative publicity can seriously undermine the reputation of multinational
business internationally, and it can create a political climate that may
lead a host government to take actions, such as regulation or other
restrictions, that can undermine the firm's efficiency and profitability.
In addition, some developing countries may not have adequate laws to
address concerns about workers rights or the local environment, and even
where they do, these countries may not have the resources, technical
expertise, or the willingness to adequately enforce their laws and
regulations. By demonstrating a commitment to good business practices,
such as through CSR, multinational businesses may send a signal that they
are committed to helping mitigate problems or issues that may arise
regarding their operations, thus creating a more positive climate in which
to pursue business opportunities.

Those with a "business case" perspective view a major role of government
as supporting business's voluntary CSR-related efforts. Surveys of
business

37Haufler, Virgina, A Public Role for the Private Sector: Industry
Self-Regulation in a Global Economy (Washington, D.C.: Carnegie Endowment
for International Peace) 2001.

leaders indicate that they believe that CSR should be completely
voluntary. This perspective stresses business involvement in the
development of CSR efforts because the business knows its resources and
constraints and can best identify potential benefit to the business.
Supporters of this perspective look for business to work with civil
society and government to develop CSR approaches that address relevant
social issues. Subscribers to this view see advantages of government
working with business. For example, in a recent book Walking the Talk the
Business Case for Sustainable Development, the authors state, "Governments
too, have a vested interest in collaborating with companies. Governments
are spending less time on command-and-control regulations and more on
forms of cooperation with industry to produce workable, incentive based
solutions. They are finding that historically intractable social and
environmental problems, such as poverty, disease, and threats to
biodiversity, can only be solved through partnership."38

Social Issues Perspective 	Those with a social issues perspective focus on
the extent to which business addresses social issues, but opinions within
this group are mixed on whether to rely on voluntary or mandatory CSR
approaches. A 1999 survey of 25,000 consumers worldwide found that
two-thirds of the population in countries surveyed indicated that "they
want companies to go beyond their historical role of making a profit,
paying taxes, employing people and obeying all laws; they want companies
to contribute to broader societal goals as well."39 Some supporters of the
social issues perspective cite successes of some business voluntary CSR
efforts in contributing to social issues. Some also call on business to
voluntarily adopt CSR practices to address social issues beyond what might
be justified by business profit. Such organizations see a role for
government in fostering voluntary corporate CSR actions.

Others with a social issues perspective take a very different view. They
believe that business is primarily concerned with profit and thus should
not be trusted to develop solutions for important social issues on their
own. According to those with this view, business involvement in CSR
efforts can become merely a branch of public relations instead of
effectively

38Holiday, Charles O. Jr.; Schmidheiny, Stephan; and Watts, Phillip,
Walking the Talk: The Business Case for Sustainable Development,
Greenleaf, Sheffield; 2002, p. 156.

39The Millennium Poll on Corporate Social Responsibility, Conducted by
Environics International Ltd. In cooperation with the Prince of Wales
Business Leaders Forum and the Conference Board. Consumers in 23 countries
were surveyed.

addressing social problems.40 As a result, they feel that governments
should move to mandate CSR. Several groups have argued for increased
government engagement in CSR initiatives aimed at ensuring that business
adhere to international norms. For example, one consumer group's position
paper on CSR calls on governments and international agencies to introduce
legislation to set standards that transnational corporations must observe
and also a framework for monitoring corporate behavior.41 Similarly,
another group noted that there is a need for increased government
engagement in CSR initiatives aimed at ensuring that businesses adhere to
international norms because governments are the only actors with
jurisdiction over the private sector.42 Another human rights NGO states
that voluntary initiatives will often be ineffective and insufficient.
This organization further states that more attention should be given to
the role international law can play in anchoring these responsibilities in
a legal framework that crosses national boundaries.43

    Views of Groups Actively Engaged in CSR Vary on the Appropriate Role of the
    U.S. Government and the Impact of Current Federal Activities Related to CSR

In addition to reviewing the available literature, we also interviewed 32
individuals representing groups actively engaged in CSR to obtain their
views on the appropriate role for the federal government and the impact of
current federal activities on their CSR efforts. Specifically, we
interviewed 14 companies, 4 business groups, 6 NGOs focused on
environmental, human rights and labor issues, 4 investor groups, and 4
academic institutions (See app. I for a complete list of the
respondents).44 A majority of respondents supported a government role in
global CSR, yet views varied regarding the appropriate federal role and
the impact of current activities. Most respondents generally supported
government assistance

40Behind the Mask: The Real Face of Corporate Social Responsibility,
Christian Aid, p. 2.

41Consumers International and Corporate Social Responsibility, Consumers
International.

42Calder, Fanny and Culverwell, Malaika, Following Up the World Summit on
Sustainable Development Commitments on Corporate Social Responsibility,
Options for Action by Governments, Royal Institute of International
Affairs, February, Chatham House, 2005, p. 36.

43International Council on Human Rights Policy, "Beyond Voluntarism, Human
Rights and the Developing International Obligations of Companies,"
Versoix, Switzerland, 2002, p. 2.

44We selected these groups and organizations to help us obtain a broad
range of knowledgeable and informed views on global CSR and the federal
government's role in global CSR; our selection was not intended to be
representative in any statistical sense. Groups that are not active in
global CSR may have different views and opinions, especially in terms of
the federal government's role.

Mixed Reactions Regarding the Impact of U.S. Government Efforts to Endorse
CSR through Awards

with voluntary CSR efforts such as endorsing, facilitating, and
partnering, while some also expressed an interest in government-mandated
CSR, especially to increase disclosure of CSR-related information. Most
respondents saw a need for the U.S. government to encourage foreign
governments to enforce CSR standards to help level the playing field for
U.S. companies adhering to high CSR standards.45 Some respondents based
their discussion of the government role on their knowledge of current U.S.
government activities related to global CSR, yet we found that several
were unaware of these efforts. Also, some said they were aware of U.S.
government efforts, but primarily cited domestic CSR efforts or
initiatives that are not led by the U.S. government. Several respondents
called for a greater U.S. government role in CSR, as in some other
countries, and greater coordination of existing U.S. efforts.

A number of respondents were aware of U.S. government award programs that
endorse CSR, but had mixed reactions regarding their effectiveness.
Whereas a majority of companies we interviewed who commented on awards46
said they have a positive impact, for example, by motivating employees and
validating the company's efforts, some were not motivated by awards. One
company in favor of government endorsing CSR through awards said that,
although there are a lot of awards given to companies for corporate social
responsibility, an award from the U.S. government or another government is
credible and valuable. However, another company said it receives so many
awards that receiving one more is not very useful, unless it is
accompanied by significant media attention. Most of the business groups
reacted positively to federal government awards, stating that awards call
attention to success stories and provide a signal of the type of behavior
the government likes, help to motivate companies, and provide a positive
counterbalance to regulations and compliance by rewarding voluntary
efforts. Most of the NGOs that were aware of federal government awards for
global CSR activities were skeptical of the impact of the awards,
questioning the nominations and selection processes and whether the awards
are a good indicator for companies' CSR performance. The two investor
groups that were aware of federal government awards programs

45For example, see The Frank Hawkins Kenan Institute of Private
Enterprise, Washington Center, Statement of Findings: Promoting CSR in
China, Sept. 2004 and Promoting Global Corporate Social Responsibility:
The Kenan Institute Study Group Consensus, Sept. 2003.

46Respondents tended to speak generally of U.S. government and non-U.S.
government awards, as they were not always clear whether or not a
particular award was given by the U.S. government.

thought they were a positive influence. In addition to awards, a few
respondents also suggested the government should more actively endorse CSR
in its own procurement processes and in government pension investments.

Respondents Viewed Many respondents from the various groups expressed
support for federal Government Efforts to Facilitate government efforts to
facilitate CSR, especially through providing

CSR Favorably

Respondents Generally Viewed Partnerships with Government on CSR Favorably

Mixed Views on Government Mandating CSR through Laws and Regulations

information. Representatives from companies and other groups suggested
that the government could play a more active role in providing information
on setting benchmarks in areas such as the environment and human rights,
providing information on best practices and how to start CSR activities in
other countries, or establishing a clearinghouse with CSR-related
information. A few respondents suggested that providing information or
assistance would be particularly helpful for small and medium-sized
companies and companies just getting started with CSR.

Many respondents viewed government partnerships with companies and efforts
to convene stakeholders to accomplish CSR goals favorably and thought it
was an appropriate role for the U.S. government. One company that has
worked with USAID and the Centers for Disease Control on a health-related
issue in Haiti said that the government is well placed to help companies
focus on the needs of those living in poverty and that companies have a
lot to contribute by helping to provide safe drinking water, fight
HIV/AIDS, and improve education and economic welfare. Two NGOs that are
aware of partnership programs had mixed reactions. For example, while one
NGO said partnerships are helpful in bringing parties together and
leveraging private sector resources, another NGO was concerned about
potential conflicts of interest. Respondents from business groups,
investor groups, and academic institutions who commented on federal
efforts to partner with companies on CSR issues were generally positive
about these partnerships. Many organizations supported a federal role in
partnering by convening stakeholders to address specific CSR issues or to
share information. For example, the Department of State's involvement in
developing the Voluntary Principles on Security and Human Rights was cited
as an example of a positive effort by the U.S. government to convene
stakeholders to address a CSR-related issue.

Companies and business groups generally held mixed views regarding the
impact of laws and regulations on company global CSR efforts, whereas NGOs
and investor groups largely believed that laws have a positive impact on
CSR. In general, these latter groups desired a government role in

mandating CSR, especially to increase disclosure and transparency of
company CSR activities. A few respondents cited the lack of U.S.
legislation or involvement in CSR as an impediment to companies' CSR
efforts.

While some companies were concerned about burdensome mandates, several
said that certain existing regulations and government efforts create
minimum standards and level the playing field internationally, which is
helpful to companies with active CSR programs.47 According to one director
of CSR, the company's initial reaction to CSR requirements, such as import
controls, is negative because they are costly and burdensome. However, the
company recognizes that new rules can help level the playing field, as not
all companies voluntarily adopt high standards. Another company said the
Foreign Corrupt Practices Act has had a positive impact on the company's
CSR activities by enhancing the visibility of CSR and helping to raise
standards of transparency and governance. Similarly, customs legislation
that set minimum criteria allows the company to discuss CSR standards with
its suppliers and ensures that it is not the only company focusing on
these issues, which could create a competitive disadvantage. A business
group expressed concern that codes can also lead to two moral principles
conflicting with each other, such as policies to prevent harm to animals
or the environment may inhibit the ability of companies from discovering
life-saving treatments or technologies. One multinational company said it
upholds homogenous standards globally, so in that sense, U.S. programs
could affect its global standards in reporting, building design standards,
and worker health and safety. However, the company also noted that its own
standards often exceed legal standards.

Many respondents agreed that government should play a role in promoting
transparency and disclosure of companies' CSR efforts. Some companies
strongly supported a federal role in promoting transparency, yet others
warned against regulation and adverse consequences, for example, if U.S.
companies face regulatory burdens and are forced to disclose more than
their foreign competitors. For example, the Sarbanes-Oxley Act of 2002 was
cited by companies as a costly and burdensome mandate. However, some NGOs
and investor groups supported government mandating that companies should
disclose information on CSR-related issues. Three

47Some companies held both views: that some regulations are burdensome,
while other regulations are useful in setting minimum standards and
leveling the playing field.

academic institutions cited recent European regulations on disclosure of
CSR issues as a model for the U.S. government.

A majority of respondents from the various groups supported a government
role in encouraging other governments to enforce their own laws and
standards related to common CSR issues. A few suggested that trade
agreements offer an opportunity to encourage other governments to enforce
CSR standards. According to one business group,

"The single most useful activity of the U.S. government to promote
corporate responsibility would be to promote the implementation and
enforcement of existing national laws in other countries and to assist
national governments in this regard. The majority of countries around the
world have adequate laws, but such laws are not implemented or enforced.
Commercial activity and private enterprise depend on national governments
to set a level playing field so that competitive markets can flourish for
the benefit of consumer and society. This requires . . . appropriate legal
frameworks in areas such as corporate governance, financial disclosure,
bribery and corruption, environmental protection and labor rights."

Some Respondents Want More Some respondents expressed a desire for more
coordination among U.S.

Coordination among U.S. CSR activities related to global CSR and pointed
out that other countries are

Activities and Greater Role in more involved in CSR than the U.S.
government. Some noted that federal

Global Leadership on CSR	efforts are not well coordinated, which can make
it difficult for companies to participate in U.S. government activities,
and called for increased coordination among U.S. government agencies for
CSR activities. Several respondents also expressed a desire for a greater
U.S. government role in CSR, stating that the United States is absent from
world leadership, especially the European Union, on this issue. According
to one company, many European countries are involved in CSR activities;
and if the U.S. government does not play a role regarding U.S. companies'
international CSR activities, leadership will go elsewhere. Similarly,
another company wanted the U.S. government to participate in the global
debate on CSR and to continue its efforts to represent U.S. interests in
the face of the European Union's more regulatory approach to CSR.

Concluding	The globalization of recent decades has increased the breadth
and extent of U.S. corporations' operations in foreign markets, through
both increased

Observations 	investment and trade. These globalization trends have led to
increased pressure on U.S. multinational corporations to adopt more
CSR-related activities in their global operations, particularly for
developing countries. Nevertheless, the extent that U.S. multinationals
adopt CSR practices continues to vary by industry, location, and by
individual firm priorities. At

the same time, if the recent CAFTA debate in Congress is any guide, the
U.S. government also faces calls to strengthen labor, environmental, and
social conditions abroad. Thus, the debate over the right balance between
private sector and government roles in achieving these CSR-related goals
will likely continue.

Important public policy questions have been raised by the trends in
globalization and global corporate social responsibility such as whether
the U.S. government should adopt an official position regarding global
CSR. However, the dichotomy of views regarding the benefits of CSR to
business and society complicates any consensus on the appropriate
government role. Our research shows that U.S. federal agencies already
conduct a number of programs and activities that overlap and/or interact
with corporate global CSR efforts. In addition, our interviews with agency
officials indicate many view CSR as a useful complementary tool for
attaining their broader policy missions. Key private sector players in
CSR, meanwhile, indicate that they generally found current U.S. government
activities helpful in their voluntary CSR efforts. More generally, it
appears that CSR-even if not a substitute for regulation-has resulted in
the commitment of U.S. multinational resources, and focus on issues of
importance to the U.S. and to host countries. The challenge for the U.S.
government is to determine how global CSR fits within the broader range of
policy tools directed at achieving sustainable improvements in the quality
of life for both U.S. and foreign citizens.

  Agency Comments and Our Evaluation

We provided a draft of this report to the Administrator, Agency for
International Development; the Administrator, Environmental Protection
Agency; the President, Export-Import Bank; the President, Inter-American
Foundation; the President, Overseas Private Investment Corporation; the
Executive Director, Securities and Exchange Commission; the U.S. Trade
Representative; and the Secretaries of the Departments of Commerce,
Energy, Labor, State, and the Treasury. We received technical comments
from the Agency for International Development; the Environmental
Protection Agency; the Export-Import Bank; the Inter-American Foundation;
the U.S. Trade Representative; and the Departments of Commerce, Labor, and
State. We revised the text based on these comments, where appropriate.

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the date of this letter. At that time, we will send copies of this report
to interested Congressional Committees and to the Agency for International
Development; Environmental Protection Agency; the Export-Import Bank; the
Inter-American Foundation; the Overseas Private Investment Corporation;
the Securities and Exchange Commission; the U.S. Trade Representative; and
the Departments of Commerce, Energy, Labor, State, and Treasury. We will
also make copies available to others upon request. In addition, this
report will be available at no charge on the GAO Web site at
http://www.gao.gov.

If you or your staff have any questions concerning this report, please
contact me at (202) 512-4347 or at [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. GAO staff who made major contributions to this
report are listed in appendix III.

Loren Yager, Director, International Affairs and Trade

Appendix I

                       Objectives, Scope, and Methodology

Members of the House of Representatives asked us to provide information on
the federal involvement in global corporate social responsibility. This
report describes (1) global corporate social responsibility (CSR), (2)
federal agency policies and programs relating to global CSR, and (3)
different perspectives regarding the appropriate U.S. government role and
views on the impact of current federal activities on corporate global CSR
efforts.

To describe global corporate social responsibility, we reviewed business
and ethics literature and interviewed corporations and other groups
interested in CSR. Specifically, we reviewed documentation from academic
institutions, business associations, and multilateral organizations,
including the European Commission and the World Bank CSR Practice.
However, the information on foreign law in this report does not reflect
our independent legal analysis, but is based on interviews and secondary
sources. We collected major definitions and descriptions of CSR and global
CSR and related terms and obtained information on different perspectives
that have led to different definitions for CSR and CSR-related terms.

To determine what policies and programs U.S. federal agencies have adopted
that relate to global CSR, we surveyed federal legislation, reviewed
literature, and spoke with agency officials and experts in CSR. To select
the federal agencies to involve in our review, we first considered which
agencies' missions suggest possible involvement with promoting,
facilitating, or monitoring global corporate social responsibility
efforts, which yielded seven agencies. We then added two additional
agencies to include all of the agencies that participate in the
interagency working group developing a Web portal to publicize the U.S.
government programs and resources that promote good corporate practices or
CSR. We added the remaining three agencies, following referrals by agency
officials or CSR experts, and had discussions with some agency officials
to determine if their agencies had relevant programs for this review. The
agencies we identified with CSR-related programs were:

o  Department of Commerce,

o  Department of Energy (DOE),

o  U.S. Environmental Protection Agency (EPA),

o  Export-Import Bank of the U.S. (Ex-Im Bank),

Appendix IEURObjectives, Scope, and MethodologyEUR

o  Inter-American Foundation (IAF),

o  Department of Labor,

o  Overseas Private Investment Corporation (OPIC),

o  U.S. Securities and Exchange Commission (SEC),

o  Department of State,

o  Department of the Treasury,

o  U.S. Agency for International Development (USAID), and

o  Office of the U.S. Trade Representative (USTR).

We identified specific agency programs and policies related to CSR using a
two-step process. First, we provided a standard Data Collection Instrument
(DCI) with a general description of global CSR to agency officials and
asked them to identify current programs, policies, and efforts within
their agencies that directly or indirectly promote, facilitate, or monitor
global CSR efforts. The description discussed the general elements that a
global CSR program can involve, including labor, human rights,
environmental and corporate governance efforts. In addition, we also asked
agencies about programs that we identified through interviews or
literature review. We then sent a more detailed DCI to officials
responsible for each identified program to obtain further information,
such as the program's objective, start year, legal basis, targeted groups,
and activities. Most of the programs have other goals and objectives, and
some only relate to CSR in particular aspects of their activities. We
collected budget information and staffing levels, where available, to
estimate the level of effort dedicated to the CSR activities by the
agency.

After we received the responses from the agencies, we followed up with
many of the identified federal programs to obtain additional information,
which helped us determine whether we should include the program in our
review. We also obtained additional documentation from a subset of the
programs to verify the information and conducted a thorough review of all
of the responses identifying the legal basis for the program/activity. We
narrowed down the programs to those that met the following criteria: (1)
were ongoing in fiscal year 2003 or afterwards; (2) may affect U.S.
corporations' CSR efforts overseas, including their supply chains (e.g.,

Appendix IEURObjectives, Scope, and MethodologyEUR

government to government efforts); and (3) touch on key components of CSR,
such as labor, environment, human rights, community development and
corporate governance. We also obtained agency concurrence that the program
is related to CSR.

We excluded programs or activities that are primarily aimed at U.S.
corporations' CSR efforts within the United States, although they may
influence a company's CSR efforts overseas, and efforts that are primarily
targeted at the federal government, such as government procurement
policies. Due to the lack of federal legislation on, and a generally
accepted definition of, corporate social responsibility, there are likely
additional programs, policies, and efforts related to global CSR within
the federal government that we did not identify.

To obtain different perspectives regarding the role of the U.S. government
in corporate global CSR efforts, we reviewed CSR literature. In addition,
we conducted and synthesized information from a structured interview with
32 individuals representing a diverse variety of groups actively engaged
in CSR. We initially identified 25 U.S. companies that were (1) leaders in
CSR, based on companies that appeared on the Business Ethics Magazines's
Top 100 to Corporate Citizens list each year from 1999 to 2004 and (2) had
international operations. Fourteen of these companies agreed to
participate in interviews with us. However, their views may not represent
those of all 25 leaders we identified, or those of all U.S. companies. We
identified representatives from other groups actively engaged in CSR
through a review of CSR literature and referrals from experts and agency
officials. We selected these groups and organizations to help us obtain a
broad range of knowledgeable and informed views on global CSR and the
federal government's role in global CSR; our selection was not intended to
be representative in any statistical sense. Groups that are not active in
global CSR may have different views and opinions, especially in terms of
the federal government's role. Specifically, we interviewed:

o 	Fourteen U.S. multinational corporations that appeared on the Business
Ethics Magazine's Top 100 Corporate Citizens list for each year from 1999
to 2004-Brady Corporation; Coors Brewing Company; Cummins, Inc.; Deere &
Company; Herman Miller, Inc.; Hewlett-Packard Development Company, L.P.;
International Business Machines Corporation; Intel Corporation; Merck &
Co., Inc.; Modine Manufacturing Company; Motorola, Inc.; Procter & Gamble;
The Timberland Company; and Whirlpool Corporation;

Appendix IEURObjectives, Scope, and MethodologyEUR

o 	Four business interest groups that have been active in CSR-Business for
Social Responsibility; the Conference Board; the U.S. Chamber of Commerce
Center for Corporate Citizenship; and the U.S. Council for International
Business;

o 	Four investor groups-Calvert Group, Ltd.; Domini Social Investments,
LLC ; Dow Jones Sustainability Index; and the Interfaith Center on
Corporate Responsibility;

o 	Six nongovernmental organizations-Coalition for Environmentally
Responsible Economies; Fair Labor Association; Human Rights Watch; Social
Accountability International; World Resources Institute; and Worldwide
Responsible Apparel Production; and

o 	Four academic institutions-Center for Corporate Citizenship, Boston
College; Center for Responsible Business, the Haas School of Business,
University of California at Berkeley; the Corporate Social Responsibility
Initiative, John F. Kennedy School of Government, Harvard University; the
Frank Hawkins Kenan Institute of Private Enterprise, University of North
Carolina's Kenan-Flagler Business School.

The structured interview instrument included questions designed to obtain
information from these organizations on their definition of CSR and
similar terms; efforts related to evaluating the effectiveness of CSR
activities; the impact of current U.S. government programs, policies and
practices; and opinions regarding the appropriate U.S. government actions
or role regarding U.S. companies' global CSR activities. However, in this
report, we do not evaluate the concept of CSR nor the justification or
efficacy of any government role with regard to CSR activities.

We conducted our work from May 2004 through May 2005 in accordance with
generally accepted government auditing standards.

Appendix II

Federal Agency CSR-Related Programs and Activities

This appendix provides a listing and brief description of the 54 programs
and activities we identified at 12 U.S. agencies that relate to global
CSR. Currently, an inventory of U.S. government efforts related to global
corporate social responsibility is unavailable. To develop this list, we
provided a standard DCI to 12 agencies with a general description of
global CSR to obtain information on current programs, policies, and
efforts within their agency that directly or indirectly promote,
facilitate, or monitor global CSR efforts. For programs or activities that
are interagency in nature, we list the program or activity with the lead
agency and indicate other agencies involved with a footnote. Due to the
lack of federal legislation on, and a generally accepted definition of,
corporate social responsibility, we do not consider this list exhaustive.
See appendix I for a more detailed description of our data-collection
process.

                 Table 3: Responses from Department of Commerce

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
informationa Staff levelb

 Training on Human    To train    2003  15 U.S.C.  Commercial   Trainings.    $500,000    One full-  
                                                                   Since                 
  Rights, Rule of    commercial           4051 et  officers,    inception,                  time     
                                            seq.c                   260                  
      Law and          service                    foreign      commercial                 equivalent 
                      officers                    service      employees                 
     Corporate       and foreign                   nationals,  have been                    (FTE)    
                                                               trained. The              
    Stewardship        service                      domestic     office is                 divided   
                                                               planning both             
                    nationals on                     trade     a certificate                         
                    rule                                          and an                    among
  Sarah.Murphy@m    of law, human                 specialists. award program                three    
                                                                    to                   
ail.doc.gov,      rights and                                  recognize               people plus 
                                                                 companies               
      Foreign                                                       and                  contractor  
                      corporate                                 commercial               
    Commercial      stewardship.                                 officers,                           
                                                               respectively,              support.
      Service                                                  for corporate             
                                                                stewardship              
                                                                activities.              
                         To                                    Report                                
  The President's    disseminate  2003d Executive   U.S. and   production                 One staff
                                                               and           $18,311 for 
 Export Council's    information            Order   foreign       public     publication works full  
                         on                11753.                awareness               
     Report on      good                           companies,   through the               time, and  
                    citizenship                                  report's     expenses.  
     Corporate      activities of                 U.S.          launch. The              four staff  
                    U.S.                          missions,       Council                
    Stewardship     corporations.                   foreign      maintains                work part  
                                                               subcommittees             time on all 
                                                  governments.      to                   
http://www.ita.doc.                                             pursue its                 of the    
                                                                    own                  
    gov/td/pec/                                                interests                  Council's  
                                                               and, in 2003,             
                                                                 created a               activities, 
                                                               subcommittee               which are  
                                                                    on                   
                                                               corporate                             
                                                               stewardship                ongoing.
                                                               to produce                
                                                               this report.              

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
informationa Staff levelb

                                                       Placing                      
  Digital     To promote        Executive U.S.        business      No          One 
  Freedom      economic    2003     Order business     and NGO   specific    person 
Initiativee                        13317. community, volunteers  funding.f works 50
                                                         in                
                                                        small                       
              growth by                   government businesses             percent 
                                                         in                      on
                                                     partner                        
                                          agencies   countries.              this
www.dfi.gov   providing                   and        For                   
            information                    business  example, in           program. 
            and                                       Senegal,                f     
            communications                community  an E-market           
                                          in          training             
            technology to                    four                          
                                           partner   program was           
            businesses in                 countries. implemented           
                                                         in                
            the developing                           partnership           
                                                      with two             
            world through                            large U.S.            
                                                     information           
            partnership                              technology            
            with                                     companies.            
            U.S. business                                                  
             volunteers.                                                   

 Good Governance     To    2000   15      Foreign     Training,  $1,065,585   Three 
                  increase      U.S.C.                providing  for           full 
     Program      market        1512.    companies    tools and          FY time, i 
                  access                              resources, 2002-2003h     one 
                    and                and individual  capacity             part    
                  ensure a                            building,             time    
www.ita.doc.gov/g  level                              awareness             staff.j 
                  playing              entrepreneurs, building,             
                   field                                 and                
                  for U.S.                business    outreach.             
  oodgovernance                                         In FY               

companies in associations, 2003, over 1,000
emerging civil society companies/individuals
markets by groups, and were trained directly
training foreign foreign federal through the program or
companies on and regional indirectly through train
business ethics, governments. the trainer programs.g
corporate
governance and
rule of law
issues.

    HIV/AIDS     To further 2003    U.S.        U.S.      Information       No          Five 
Initiative                                             publication    specific     people 
                  private        Leadership   companies        and       funding.  work on   
                   sector                                 dissemination,          
shalizeh.nadjmi@ engagement       Against     and trade      liaison     However,    this    
                 on                                          between              
                  HIV/AIDS                  associations, businesses and $15,000  initiative 
  mail.doc.gov       by          HIV/AIDS,                other          from     

fostering publicprivate partnerships with other key stakeholders focused
on HIV/AIDS.

Tuberculosis and Malaria Act of 2003, See P. L. 108-25.

                           and chambers of commerce.

U.S. government organizations, multilateral organizations, NGOs and
academia. Hosted 2004 forum on business involvement in HIV/AIDS for more
than 200 companies and other entities.

the $500,000 ranging appropriation from 15 listed above for percent to
training 80 percent commercial of their service officers timek was spent
on [Estimate]. the Forum.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
informationa Staff levelb

Implementation of the Labor Standards Provision of the Bilateral Textile
Agreement with Cambodia

Ross_Arnold@ita. doc.gov

To provide 1999 U.S.-Government
incentives to the Cambodia of Cambodia
Government of Bilateral
Cambodia to Textile
improve working Agreement,
conditions in the paragraph
Cambodian 10, as
textile and notified
apparel industry under Article
through effective 2.17 of the
enforcement of World Trade
local labor laws Agreement
and on Textiles
internationally and Clothing.
recognized core
labor standards.

Two consultations $7,500 One staff
every year between the [Estimate]. for 2
governments of the weeks. Five
United States and staff for 1
Cambodia to discuss day apiece.
labor standards, [Estimate].
specific benchmarks,
and the
implementation of the
program. Based on
those consultations,
the U.S. Government
made a determination
as to whether working
conditions in the
Cambodia textile and
apparel sector
substantially comply
with such labor law and
standards, and apply
quota increases
commensurate with
progress on labor
issues.l

Source: GAO based on information provided by agency officials.

aBudget information is for fiscal year 2003 unless otherwise noted.

bStaff located in the Russia and Independent States Division.

cThe conference committee for H.J. Res. 2, the Consolidated Appropriations
Resolution, 2003, instructed the department to establish this program. See
p. 684 of H. Rept. 108-10.

dThis is the year when the Subcommittee on Corporate Stewardship was
created to work on this report. The report was released in September 2004.

eIn addition to the Department of Commerce, members of the Digital Freedom
Initiative Interagency Working Group include USAID, the Department of
State, the Peace Corps, the Small Business Administration, and the Federal
Communications Commission.

fOther agencies, such as USAID, contribute resources to this initiative,
which are not reflected here. For example, there are local Digital Freedom
Initiative coordinators in Senegal and Peru that are funded through USAID
funds.

gSince 2003, the Program has expanded to additional countries in Eastern
Europe and Latin America, published manuals on Corporate Governance and on
Business Ethics, and is facilitating institutional capacity building
through partnerships with private sectors, government and nongovernmental
organizations, and international institutions. In fiscal years 2005 to
2006, the Business Ethics manual will be translated and published in five
other languages.

hThe 2003 program initiatives were fully funded through Freedom Support
Act Funds through the Department of State.

iStaff located in the Russia and Independent States Division.

jStaff located in the Latin America Division. In FY 2004, the program had
three full time and two part time employees.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

kThe one staff person who worked 80 percent of her time on the HIV/AIDS
Initiative in fiscal year 2003 noted that her time dedicated to the
initiative decreased in fiscal years 2004 and 2005 to 33 percent of her
time.

lThe International Labor Organization and the Departments of State and
Labor provided input into this process.

                  Table 4: Responses from Department of Energy

CSR-Related Legal Budget
program/activity Objective Start year basis Groups targeted Activities
information Staff levela

Office of Energy  To strengthen     Not     Various    Private       Select       No        Not     
                                                       sector,      programs   discrete 
 Efficiency and     America's    available. acts. b academia,      work with   budget.  available.e 
                                                    states,        the U.S.             
Renewable Energy  energy                                     local   private            
                  security,                           governments,  sector on           
     -Select      environmental                         trade        global             
Activities                                                        energy             
within the Office  quality, and                     organizations, issues,              
       of                                                          such as the          
Technology     economic                             research       Clean             
                  vitality                                           Cities             
Development    in                                organizations, Program and          
                  public-private                                                        
                  partnerships                      other federal    Freedom            
                  that                                                                  
michael.mills@ee.                                   agencies and   Cooperative          
                  enhance energy                    the               Auto              
     doe.gov       efficiency.                      U.S. Congress, Research             
                                                                   (CAR).d              
                                                       foreign                          
                                                    governments                         
                                                    and                                 
                                                     multilateral                       
                                                      cagencies.                        

Carbon To develop and Sequestration make available Leadership Forum
internationally

improved costcslfsecretariat@hq effective .doe.gov technologies for

the separation and capture of carbon dioxide, a greenhouse gas, for its
transport and long-term safe storage.

2003 Presidential Foreign initiative. governments, intergovernmental
organizations, U.S. and foreign-owned companies that produce and/or
utilize energy, environmental organizations, and international experts on
energy and environment.

Under Not available. Six people
development. Ten work part
projects that were time on this
proposed by effort
Carbon [Estimate].
Sequestration
Leadership Forum
members have
been endorsed.
Stakeholder
registry is
forthcoming. U.S.
companies have
participated in
discussions as
observers, but a
formal role for
companies is yet to
be developed.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Legal Budget
program/activity Objective Start year basis Groups targeted Activities
information Staff levela

 Secretariat for  To organize   2003 Presidential  Governments,     Under        No         Two to 
       the        and                                                         discrete       three 
  International    coordinate        initiative.  international  development. budget.     FTE plus 
                                                                                               two 
 Partnership for  multinational                   organizations,   However,             full-time  
                                                  civil             seven              
    Hydrogen      research and                       society,     companies            contractors 
     Economy      projects                          companies.    sponsored            [Estimate]. 
                  among                                              the               
                    16 member                                    inaugural             
                                                                 meeting               
michael.mills@ee.  nations to                                       of the             
                                                                    member             
     doe.gov       advance the                                   nations, and          
                                                                     the               
                  transition to                                   Department           
                        a                                             of               
                  global                                         Energy                
                  hydrogen                                       engages in            
                   economy. f                                    ongoing               
                                                                 discussion            
                                                                  with U.S.            
                                                                 companies to          
                                                                 obtain their          
                                                                    input.             

Source: GAO based on information provided by agency officials.

aStaff levels are for fiscal year 2003 unless otherwise noted.

bSee Department of Energy Organization Act of 1977 (See P.L. 95-91), The
Energy Policy Act of 1992 (P.L. 102-486), Energy Security Act of 1980
(P.L. 96-294), Hydrogen Research, Development and Demonstration Act of
1990 (P.L. 101-566) and the Hydrogen Future Act of 1996 (P.L. 104-271).

cThe office's efforts with foreign governments and multilateral agencies
are indirect via relationships established and maintained by the U.S.
Department of State and USAID.

dThe Clean Cities program promotes public-private partnerships to increase
the use of alternative fuel vehicles. Freedom Cooperative Auto Research
(CAR) partners with automobile companies to research cleaner, more
efficient transportation systems.

eAccording to an agency official, it would be difficult for anyone to
identify how much time they spend on CSR activities. The office takes on a
broad portfolio of activities, and with the problem of defining what
constitutes CSR, it is not possible to identify budget and staffing for
the office's CSR activities.

fHydrogen is considered an alternative, cleaner energy source.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

          Table 5: Responses from U.S. Environmental Protection Agency

CSR-Related Budget
program/activity Objective Start year Legal basis Groups targeted
Activities informationa Staff levelb

                  To enlist         Clean                                                     
Climate Leaders     major    2002     Air Large U.S. Training and 15 percent of 15 percent
                                     Act,                                       
    Program      U.S.             section companies.    technical   the total   of three full 
                 companies         103.                assistance               
                     to                                to help      budget of    time staff   
                 voluntarily                           partners                 
www.epa.gov/clim   set and                             complete   $900,000 was    members'    
                    track                                                       
  ateleaders/       their                             greenhouse    used for      time was    
                   success                               gas                    
                 toward                              inventories. international               
                 meeting                                By the                    spent on
                     an                                 end of       efforts    international 
                 aggressive                          fiscal year                
                 greenhouse                          2003, close   [Estimate].     efforts    
                                                        to 50                   
                     gas                             partners had               [Estimate].   
                  reduction                                signed               
                                                       up. EPA                  
                   target.                             plans to                 
                                                          provide               
                                                      recognition               
                                                       in later                 
                                                      years for                 
                                                     partners who               
                                                     meet                       
                                                      or exceed                 
                                                        their                   
                                                       targets.                 

     Climate      To recognize  1998   Section    U.S. and       To date, over   $25,000    One staff  
                                                  foreign        100                       
Protection Awards  and provide       13103(b)(13)   companies,   individuals,  [Estimate].   person    
                  incentive to             of the    foreign      companies,                 works 2   
                                        Pollution                     and                  
http://www.epa.go  businesses,         Prevention                organizations              months per 
                                              Act  governments,  from                      
v/cppd/awards/cli organizations        of 1990,   institutions,  all over the                  year on 
                                         Pub.                    globe                            this 
 mproawards.htm   and                L. 101-508.    nonprofit    have received                         
                  individuals                                                                program
                  who                             organizations, awards. Award             [Estimate]. 
                  voluntarily                                                              
                      make                         individuals.   winners are              
                                                                 recognized at             
                   significant                                         a                   
                  achievements                                      special                
                                                                    dinner,                
                   in climate                                     along with               
                                                                      the                  
                   protection.                                   Stratospheric             
                                                                 Ozone                     
                                                                 Protection                
                                                                     Award                 
                                                                   winners.                

  Stratospheric    To recognize  1990   Section    U.S. and        To date, 477    $25,000    One staff  
                                                   foreign                                   
Ozone Protection   and provide        13103(b)(13)   companies,    individuals,  [Estimate].   person    
     Awards        incentive to             of the    foreign       companies,                 spends    
                                         Pollution                                           
                   businesses,          Prevention                organizations,              about 150- 
                                               Act  governments,  and                        
http://www.epa.go organizations,        of 1990.   institutions,  teams from                  200 hours  
                                                                  over 40                    
v/docs/ozone/awa  and                                nonprofit    countries have                         
                  individuals                                                                per year on
      rds/        who                              organizations, earned the                    this     
                  voluntarily                                     award.                     
                       make                             and                                              
                                                    individuals.                              program,
                   significant                                                                 plus some 
                   achievements                                                              additional  
                  in protecting                                                                support   
                  the ozone                                                                              
                  layer.                                                                     [Estimate].

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Budget
program/activity Objective Start year Legal basis Groups targeted
Activities informationa Staff levelb

    Energy Star To   1995d  Various     U.S.        $30,000 was   One staff   
        promote             acts. e                             
        Program                     manufacturing                  member     
    -international                                     spent on 
     International                                international               
    consistency in                   companies,                 spends 25
        Efforts                      retailers,     effortsf     percent of   
    specifications                     energy                   
          for energy                 efficiency     [Estimate]. her time on   
schmeltz.rachel@                                                  the      
       efficient                       program                  
epa.gov products                   sponsors/                 international 
          in                                                    
           voluntary                 utilities,                    efforts    
                                       foreign                  
         programs. c                governments.                [Estimate].   

The program has signed international agreements with the European
Commission, Japan, Canada, Australia, New Zealand and Taiwan and is
starting to harmonize product specifications with China. The program is
working with international partners on a common database of Energy Star
qualified products.

Bilateral and To increase the 1990 Various acts.g Government In fiscal
year 2003, Not available. One full-
Regional capacity of officials. EPA trained officials timeh staff
Trainings on governments to from several plus
Environmental ensure countries including additional
Compliance, compliance Panama, support.
Inspections and with Nicaragua,
Enforcement environmental Honduras, Costa

standards. Rica, El Salvador, jones.davis@epa. Belize, Guatemala, gov
Mexico, India and

Brazil.

Co chair of the INECE is a International network of Network for government
Environmental and non-Compliance and government Enforcement enforcement
(INECE) and compliance

practitioners

www.inece.org	from over 100 countries. It aims to increase the capacity of
governments to monitor and detect violations of domestic environmental
laws by corporations.

              1989 1985 Governmental             INECE connects    
                   Memorandum environmental       developed and    
                         of enforcement            developing      
                   Understanding authorities,     governments'     
                      between EPA including       environmental    
                     and Dutch prosecutors,      compliance and    
                   Ministry of investigators,      enforcement     
                   Housing, environmental         authorities.     
                   Spatial ministries, and     Specifically, INECE 
                                  Planning and provides training,  
                               nongovernmental 
                   the organizations            holds conferences, 
                     Environment working to        and issues      
                    led to creation increase      publications.    
                   of INECE.i environmental    
                                   compliance. 

EPA and the One FTE
Dutch spread
government among
each provide several
about half of people
the expenses working on
totaling INECE.
$200,000
250,000 a
yearj
[Estimate].

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Budget
program/activity Objective Start year Legal basis Groups targeted
Activities informationa Staff levelb

China-U.S. Cooperation in Industrial Pollution Prevention and Energy
Efficiency Cooperative Agreement

gianninispohn.suzanne@ epa.gov

To assist China to develop voluntary governmentindustry partnership
programs in industrial pollution prevention and energy efficiency.

2001	Clean Air Act, Section 103 and National Environmental Policy Act,
Sec. 102(2)(f).

Companies in Training, awards,k $300,000 One staff China, including and
information total person U.S. companies, provision. approved works 25-50
and the Chinese costs for the percent of government. project.l her time

[Estimate].

Chair of the  To track the   2004     The        ANSI     As a member   No         One   
                                   National    members,   of the        discrete  staff  
  American    strategic and       Technology   including   Interagency  budget.  person  
  National       policy            Transfer   consumer    Committee on           works   
                                      and     groups,                            part    
 Standards   implications of      Advancement  industry,    Standards            time on 
                                                             Policy                 this 
 Institute     CSR work in        Act (NTTAA) government,  composed of           effort. 
  (ANSI)'s                                    and              the               
Ad Hoc Group       the            of 1995 and    NGOs.      Standards            
     on                                                                          
    CSR       International               OMB              Executives            
                                     Circular               from all             
                                    A-119.                   federal             
              Organization                                  agencies,            
www.ansi.org       for                                       the EPA             
                                                             member              
             Standardization                               coordinates           
                                                              input              
                 (ISO).                                   from federal           
                                                          agencies               
                                                          regarding              
                                                               the               
                                                           development           
                                                           and utility           
                                                              of an              
                                                          international          
                                                           standard in           
                                                              CSR.               

    Party to      To improve   2003    A side     Corporations     The        No      Two   
                                                       in       commission specific  staff  
                                                  the U.S.,     held a               work   
 Commission for    voluntary                      Canada,       workshop   budget.   part   
                                    agreement to                of                  
 Environmental                        the North    and Mexico,  experts in          time on 
                   corporate                           as         early                this 
  Cooperation,   disclosure of        American       well as    2003 and            effort. 
                                                                published           
  Financially-   environmental       Agreement on institutional background          
                                                       and      papers              
                 information                          other     for the             
    Relevant     that               Environmental   investors   workshop,           
                                                                as                  
 Environmental        is             Cooperation  who are users well as a           
                  financially                          of        report.            
  Information      relevant.           (NAFTA)     financially                      
    Project                          established    relevant                        
                                         the      information.                      
correa.sylvia@ep                     Commission                                     
     a.gov                               for                                        
                                    Environmental                                   
                                    Cooperation,                                    
                                        See P. L.                                   
                                             103-                                   
                                    182, title V.                                   

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Budget
program/activity Objective Start year Legal basis Groups targeted
Activities informationa Staff levelb

U.S.-Chile Free The objective is The U.S.-Annex 19.3, Companies, in The
project will try $25,000 Three staff Trade Agreement to facilitate Chile
FTA Section 1(d) of particular to build and through FY work part (FTA) -
CSR exchange of went into the U.S.-Chile business councils promote
networking 2005. time on this Project information and effect in Free Trade
for sustainable and exchange of effort.

expertise on January Agreement. development, information between
Hill-Macon.Cam best practices 2004. This Chilean National business
councils. @epa.gov that have been project is Environmental EPA, USTR, the

used by likely to Council Department of State companies to start in
(CONAMA). and CONAMA held promote spring/ a workshop on sustainable summer
corporate development. 2005. responsibility in

Chile in 2004 as part of the FTA.

Partnership for   To address   2002     Clean Air  Governments,  Clearinghouse $700,000   Two 
                                             Act,                     of                FTEs. 
Clean Fuels and  vehicular air      Section 103;     private     information,           
                                                     sector,                            
    Vehicles       pollution          National        NGOs,      publications,          
                 worldwide by       Environmental international      technical          
                                                                    assistance          
metcalfe.jane@ep eliminating         Policy Act,  organizations. to African             
                 lead                                            countries              
                 in gasoline        Section 102.                  to phase out          
     a.gov       and                                                   lead in          
                 phasing down                                    Africa, and            
                                                                 related                
                   sulfur in                                      projects in           
                    diesel                                           other              
                 and gasoline,                                    countries.            
                                                                     U.S.               
                 and adopting                                      companies            
                    cleaner                                       participate           
                    vehicle                                         on the              
                 technologies.                                     Advisory             
                                                                    Board,              
                                                                 which steers           
                                                                      the               
                                                                 partnership.           

Source: GAO based on information provided by agency officials.

aBudget information is for fiscal year 2003 unless otherwise noted.

bStaff levels are for fiscal year 2003 unless otherwise noted.

cThe objective of the Energy Star product labeling program is to reduce
greenhouse gas emissions in the United States by encouraging consumers and
businesses to purchase and use more efficient products.

dThe Energy Star program was introduced in 1992. The first agreement with
another country to recognize the Energy Star label internationally was in
1995 with Japan.

eStatutory Authorities for EPA's Climate Programs: Clean Air Act, 42
U.S.C. 7401 ct sew. -section 103(a), (b), (g); National Environmental
Policy Act, 42 U.S.C. 4321 ct seq. - section 102(2)(F); . Global Climate
Protection Act of 1987, 15 U.S.C. 2901 - section 1103.

fThe total budget for the Energy Star program was approximately $50.3
million in FY 2003.

gClean Air Act S: 103; Clean Water Act S: 104; Solid Waste Disposal Act S:
8001; Federal Insecticide, Fungicide, and Rodenticide Act S: 20; Toxic
Substances Control Act S: 10; National Environmental Policy Act S:
102(2)(f).

hThis staff person works full time on these efforts as well as efforts
related to the International Network for Environmental Compliance and
Enforcement (INECE), although more of the time is spent on this effort.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

iSee also Clean Air Act S: 103; Clean Water Act S: 104; Solid Waste
Disposal Act S: 8001; Federal Insecticide, Fungicide, and Rodenticide Act
S: 20; Toxic Substances Control Act S: 10; National Environmental Policy
Act S: 102(2)(f).

jThis figure does not include resources for staffing or additional funding
that came from the State Department.

kThe awards are incentives offered by China's State Environmental
Protection Administration to companies operating in China (including U.S.
companies) named "China Environmentally Friendly Enterprises." The local
environmental protection bureau reduces the frequency of routine
inspections and gives a higher priority to loans for capital environmental
improvements to these companies.

lA total of $200,00 had been funded as of March 2005.

        Table 6: Responses from Export-Import Bank of the United States

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
informationa Staff levelb

Environmental        To take    1995c Export-Import    Foreign    During FY      $531,000    Three FTEs 
                                                          buyers     2003,                     
Procedures and    into account         Bank Act of    and U.S.     Ex-Im Bank   [Estimate]. [Estimate]. 
     Guidelines      the potential         1945, as      exporters     screened                
                      beneficial           amended,    participating approximately             
                          and                               in       70                        
http://www.exim.gov/    adverse           codified at  foreign       applications              
                                                       projects.          for                  
 products/policies/  environmental         12 U.S.C.                     their                 
                                                                       potential               
    environment/      effects of             635.                    environmental             
  environment.html     goods and                                     effects. The              
                     services for                                       Bank's                 
                                                                     Engineering               
                     which support                                   and                       
                     is requested                                     Environment              
                     under its                                         Division                
                     direct                                                                    
                                                                     undertook                 
                        lending                                      formal                    
                     and guarantee                                   environmental             
                                                                     evaluations               
                       programs.                                     of the                    
                                                                       projects                
                                                                        related                
                                                                         to 21                 
                                                                       separate                
                                                                     applications              
                                                                          for                  
                                                                      financing.               

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
informationa Staff levelb

Environmental         To       1993 Export-Import U.S. suppliers        The        $148,000    0.80 of an 
                                                     of                                          
  Exports Program   encourage the       Bank Act of  environmentally  Environmental  [Estimate].     FTE     
                     use of its          1945, as      beneficial    Exports Program             [Estimate]. 
                                         amended,                    was                         
http://www.exim.gov  programs to                      products, and  instrumental                
products/policies/   support the         codified at  participantsd    in enabling               
                                                  12                                             
environment/       export of         U.S.C. 635.    undertaking    Ex-Im Bank to              
 environment.html     goods and                      projects that                               
                                                     are              support over               
                    services that                     beneficial to  $173 million of             
                                                           the                                   
                    have                              environment.                               
                    beneficial                                       environmentally             
                     effects on                                      beneficial                  
                         the                                         goods                       
                    environment                                      and services in             
                    or                                                                           
                      mitigate                                          FY 2003,                 
                      potential                                       including $13              
                       adverse                                         million in                
                    environmental                                     products and               
                      effects.                                        technologies               
                                                                       related to                
                                                                        renewable                
                                                                         energy.                 

Source: GAO based on information provided by agency officials.
aBudget information is for fiscal year 2003 unless otherwise noted.
bStaff levels are for fiscal year 2003 unless otherwise noted.
cInterim guidelines were established in 1993.
dParticipants refer to both U.S. suppliers and/or foreign buyers.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

               Table 7: Responses from Inter-American Foundation

CSR-Related Groups Budget program/activity Objective Start year Legal
basis targeted Activities Information Staff levela

U.S. Government To provide 2003 Authorizing U.S. A web portal will be
$37,000 was 20-25 CSR Web Portalb public access to legislation, companies
launched in 2005 obligated in percent of U.S. See 22 and other housing
each agency's FY 2003, but one staff

[email protected]	government U.S.C. 290f. organizations activities related to
CSR activities were person's time CSR programs, operating in or corporate
carried out in [Estimate]. case studies, the U.S. and stewardship. FY
2004. events, and abroad. contacts.

Program Office   To meet    1991 Authorizing   U.S., Latin     Supports    $1,039,500. 0.75 of an  
      -           IAF's                                       innovative   d           
  Corporate     mandate of       legislation, American and  projects in                FTE divided 
                                                            Latin America              
Outreach    providing            See 22      Caribbean      and the                             
               grants                                        Caribbean in                 among
                                 U.S.C. 290f. corporations   partnership                   several 
                to support                                       with                        staff 
[email protected]                                and business  companies that                         
                grassroots                                     want to                   persons
               initiatives                    associations,   invest in                [Estimate]. 
                    by                                        grassroots               
                cofunding                         local     development;               
                                                            Facilitates                
                 projects                                   tax-deductible             
                   with                       governments                              
               corporations                     and NGOs.   contributions              
                                                               by U.S.                 
                interested                                   corporations              
                    in                                        to support               
                developing                                  grassroots                 
                    or                                      development                
               enhancing                                     programs in               
               their                                            Latin                  
               CSR efforts                                   America and               
               in                                                the                   
                                                              Caribbean;               
               the region.                                     Provides                
                                                              technical                
                                                            assistance to              
                                                              corporate                
                                                             partners to               
                                                            create more                
                                                            sustainable,               
                                                            participatory              
                                                                 CSR                   
                                                              programs.                

 RedEAmerica       To      2002 Authorizing    U.S. and     Learning   $1,848,560 Two full 
                encourage                                  exchanges                  time 
 Initiativee   companies        legislation,   foreign       among       for FY      staff 
               and                                          members,      2004    starting 
                                   See 22     companies     strategy                 in FY 
                corporate                                 formulation,               2004. 
[email protected] foundations      U.S.C. 290f. and          development             
               to                            corporate    of trainings            
               take                          foundations.    in all               
               leadership                                  countries,             
                   in                                     mobilizing              
               grassroots                                 corporate               
                                                          and                     
               development                                   other                
               in                                          resources;             
                                                             At the               
                   the                                     end of FY              
                Americas.                                   2004, 52              
                                                           companies              
                                                          were in the             
                                                            network,              
                                                           several of             
                                                             which                
                                                          represented             
                                                            multiple              
                                                           companies.             

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget program/activity Objective Start year Legal
basis targeted Activities Information Staff levela

Cosponsor for To bring CSR Americas together Conferencef government,

civil society,

[email protected]	business, the academic world and other institutions to
develop effective and sustainable

CSR principles for the Western hemisphere.

2002 Authorizing  Private,       Provides funding, $35,800       10-15     
                     public                           for       
        legislation,      and       participated on   FY 2004.g  percent of   
                                    steering                    
           See 22    nongovernme      and operating               one staff   
        U.S.C. 290f. ntal sectors.     committee.               person's time 
                                                                [Estimate]. h 

Source: GAO based on information provided by agency officials.

aStaff levels are for fiscal year 2003 unless otherwise noted.

bThe Inter-American Foundation is leading this interagency effort.
Additional participating agencies include the Departments of Commerce and
State, USAID, and EPA.

cThis estimate includes only IAF staff time.

dThis figure represents grants from IAF for which corporations are
cofunding part of the activities with cash or in-kind contributions. These
figures are not exhaustive as not all foundation representatives had
submitted their figures.

eThe full name of the RedEAmerica Initiative is the Inter-American Network
of Corporate Foundations and Companies for Grassroots Development.

fThe Inter-American Development Bank is the lead organizer for the
conference. The U.S. Department of State has also played a role
coordinating U.S. government involvement in the conference.

gThis figure does not include resources dedicated to the conference from
the Department of State.

hThis estimate does not include staff time dedicated to the conference
from the Department of State.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

  Table 8: Responses from Department of Labor CSR-Related Groups Budget Staff
     program/activity Objective Start year Legal basis targeted Activities
                              informationa levelb

Bureau of International Labor Affairs (ILAB) - Protecting the Basic Rights
of Workers program

www.dol.gov/ilab

To improve the capacity of developing country governments to achieve
compliance with national labor laws and internationally -recognized
workers rights.

2000	Annual appropriations legislation. Current authority isP. L. 108-447,
Div. F, Title 1 (Department of Labor Appropriations Act, 2005).

Foreign Training, Governments, equipment workers and provision,c
employers. drafting of

training materials and promotional activities. The

$20 milliond	Nine staff work part time on this program.

program works in a range of sectors and countries in Africa, the Americas,
Asia, and in Ukraine. One project in Cambodia is establishing an
independent monitoring system to generate reliable information on the
implementation of core labor standards in the garment sector.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

  CSR-Related Groups Budget Staff program/activity Objective Start year Legal
                 basis targeted Activities informationa levelb

ILAB - International To support Child Labor Program efforts to

- activities working eradicate with industry exploitive child
associationse labor

worldwide. www.dol.gov/ilab

1993	Annual appropriations legislation. Current authority isP. L. 108-447,
Div. F, Title 1 (Department of Labor Appropriations Act, 2005).

Children, The program

parents, has funded

community several projects

leaders, for various

government lengths of time

officials, and in Bangladesh,

industry Pakistan,

associations.	Central America, and West Africa that involve industry
associations to combat child labor. For example, the program provided a $6
million grant to the International Labor Organization to prevent child
labor in the coffee industry in Central America and the Dominican
Republic, which included the creation of a child labor monitoring system,
among other activities.

About $35 million Not
between fiscal available.
years 1999-2004
for all projects
working with
industry
associations.

Source: GAO based on information provided by agency officials.

aBudget information is for fiscal year 2003 unless otherwise noted.

bStaff levels are for fiscal year 2003 unless otherwise noted.

cExamples of equipment include computers or vehicles to access workplaces.

dThe budget for this program decreased significantly in fiscal years 2004
and 2005 to $2.5 million and no funding, respectively.

eThe International Child Labor Program generally provides technical
assistance and funds international projects designed to eliminate the most
hazardous and exploitive forms of child labor; researches and reports
information to inform U.S. foreign policy, trade policy, and development
projects; and raises awareness of the U.S. public to increase their
understanding of the issues relating to international child labor and
recent efforts to combat the problem. For example, the program works with
foreign governments to improve their capacity to handle the issue of child
labor and has provided funds to the International Labor Organization to
address trafficking of children for labor exploitation. However, the
program informed us that they consider their work with industry
associations to be most relevant to global corporate social
responsibility.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

        Table 9: Responses from Overseas Private Investment Corporation

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
information Staff level

Corporate social To develop and

responsibility implement

requirements	policies and procedures to

www.opic.gov	comply with OPIC statutory mandates and management policies
with respect to host country development impact, environmental protection,
international labor rights, human rights and related risk management
responsibilities.

1971a Various actsb Companies receiving OPIC support in the form of direct
loans, loan guaranties, political risk insurance and "subprojects"
obtaining funds from OPICsupported financial intermediaries.

Evaluates each project's expected impact on development, the environment,
and requires projects to meet all applicable host country labor laws or
international conventions on labor rights.

Not available.	Not available.

Corporate To ensure that

governance OPIC users'

requirements	corporate governance

www.opic.gov	policies and practices follow and implement OPIC policies and
procedures in compliance with OPIC's statutory responsibilities and risk
management requirements.

1971c	Overseas Private Investment Corporation Amendments Act of 1977, See
P. L. 95268, Sec. 237(1).

U.S. investors All major that receive sponsors of an OPIC support OPIC
financed and the project must companies in answer which they questions
invest. relating to the

Foreign Corrupt Practices Act and OPIC ensures that support does not go to
persons and practices restricted by Treasury's Office of Foreign Assets
Control. OPIC monitors loan projects on an ongoing basis.

Not available.	Not available.

Source: GAO based on information provided by agency officials.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

aCertain policies and procedures have been in effect since OPIC began
operations in 1971 with periodic updates in response to evolving statutory
requirements, U.S. executive branch requirements and international best
practices

bForeign Assistance Act of 1969, OPIC Amendments Act of 1985, Export
Enhancement Act of 1999, Jobs through Exports Act of 1992, and annual
appropriations since 1992.

cCertain policies and procedures have been in effect since OPIC began
operations in 1971 with periodic updates in response to subsequent
statutory requirements.

        Table 10: Responses from U.S. Securities and Exchange Commission

  CSR-Related                                        Groups                 Budget    
program/activity  Objective  Start year Legal       targeted  Activities  information      Staff 
                                        basis                                              level 
 Implementation  To ensure   Late 1960s Rule 14a-8 SEC            The     Not            Not     
    of Rule      that                              reporting              available.  
    14a-8 on      companies  [Estimate]   of the   companies. Shareholder             available. 
  Shareholder        do                                                               
Proposalsa    not exclude            Securities             Proposal               
                 shareholder             Exchange              Taskforce              
 [email protected]    proposals             Act of                corresponds             
                     for                1934,                                         
                   vote at                See 17              with                    
                   annual                                     companies               
                   company                C.F.R.               regarding              
                  meetings,             240.14a-8.            requests to             
                 including                                      exclude               
                 those                                                                
                 related to                                   shareholder             
                                                              proposals               
                 global CSR,                                  that                    
                 unless they                                  do not meet             
                                                              the                     
                 meet the                                      criteria               
                 legal                                                                
                  criteria                                     according              
                     for                                          to                  
                  exclusion                                   Rule 14a-8.             
                 outlined in                                                          
                 Rule                                                                 
                   14a-8.                                                             

Full Disclosure Program - Office of Global Security Risk

[email protected]

To ensure that companies disclose all material information regarding their
operations in, or contacts with, countries identified as supporting
terrorism or associated with the production or proliferation of weapons of
mass destruction or human rights abuses.

2004b	Securities Act of 1933 and the Securities Exchange Act of 1934c
Foreign Review companies and company U.S. documents to companies ensure
that with foreign companies are subsidiaries aware of the that have
disclosure contacts with standard countries of applicable to concern.
their operations

or contacts.

Not available.	Three full time staff in FY 2004.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
information Staff level

Full Disclosure To ensure that

Program	companies whose

[email protected]	securities trade in the U.S. capital markets or that sell
securities through public offerings provide appropriate narrative and
financial disclosure regarding their operations, their financial
condition, and the terms of their securities offerings.

1933	Securities SEC reporting Review Not available. Not Act of 1933
companies. company available. and the disclosure and Securities provide
Exchange comments to Act of 1934. companies.

Source: GAO based on information provided by agency officials.

aRule 14a-8 provides shareholders owning more than $2,000 of company stock
for more than 1 year with the opportunity to place a proposal in the
company's proxy materials for presentation to a vote at an annual or
special meeting of shareholders. The rule generally requires the company
to include the proposal unless the shareholder has not complied with the
rule's procedural requirements or the proposal falls within 1 of the 13
substantive bases for exclusion contained in the rule. For some or most of
the proposals, the company accepts the proposal or negotiates with the
shareholder and the issue never reaches the SEC. However, if a company
intends to exclude a proposal from its proxy materials, the company must
submit its basis for excluding the proposal to the SEC. The Shareholder
Proposal Taskforce reviews these requests for exclusion. Accordingly, the
task force considers proposals that address a range of issues, including
global CSR issues.

bThe Office of Global Security Risk was established in 2004. However, the
Division of Corporate Finance began focusing on this type of disclosure in
2001.

cSee conference report at H. Rept. 108-221. The conference committee
considering the Commerce Justice State Appropriations Act, 2004 (enacted
in Div. B of P. L. 108-299) requested the establishment of this
initiative.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

Table 11: Responses from the Department of State CSR-Related Groups Budget Staff
     program/activity Objective Start year Legal basis targeted Activities
                              informationa levelb

Bureau for        To address    2000 State           
Democracy, Human  unacceptable         Department    
Rights and Labor  working                      Basic 
                                            Authorities 
(DRL) -           conditions in      Act of 1956, as 
Partnership                          
to Eliminate      manufacturing       amended, See   
Sweatshops        facilities            22 U.S.C.    
Program           overseas that      2651a(c)(2) and 
                     produce goods         22 U.S.C.    
camponovocn@      for the U.S.        2151n(d)(3).   
state.gov         market.            

NGOs, The Partnership has

governments, provided several

U.S. and million dollars to

foreign support public and

companies.	private sector initiatives to establish codes of conduct,
encourage effective workplace monitoring and auditing systems, and conduct
research, trainingand education initiatives. The program has funded
projects in a number of countries, including China and other Asian
countries, Central America, the Middle East and Africa.

$1,994,554c	One staff person works 60 percent of his time and one staff
person works 25 percent of her time on this effort [Estimate].

    DRL        To provide   1999    State       NGOs, U.S.   The bureau   $10,000  One staff  
 -Voluntary                                                  convenes       in    
 Principles   guidance to         Department   and U.K. oil   companies,  FY 2004             
     on                                                         NGOs,               person
Security and  extractives               Basic   and mining    and local            works15-   
Human                          Authorities                                     
Rights     companies on       Act of 1956,   companies,   governments           20 percent 
                                      as                          to              
             how to ensure       amended, See and corporate   implement           of his time 
                                                                 the              
camponovocn@  respect for         22 U.S.C.   responsibility principles,            on this   
                                                                and is            
             human rights        2651a(c)(2). organizations.  working to            effort    
 state.gov   in                                                include            
             the creation                                     additional          [Estimate]. 
             and                                                                  
             implementation                                  governments.         
                                                             Nearly               
              of security                                    every major          
                                                               oil and            
              procedures.                                       mining            
                                                             company is a         
                                                             participant          
                                                                in the            
                                                              Voluntary           
                                                              Principles          
                                                               process.           

    DRL      To utilize 2001    State         U.S.     Ongoing or Equatorial One staff   
 -Bilateral     private                                 planned              
             investment                                projects                          
  efforts        to           Department   companies,  in          Guinea -  
                                                       Equatorial              person
             strengthen             Basic    NGOs,      Guinea,   $225,000;  works 20    
                              Authorities               Oman and             
camponovocn@   human         Act of 1956,   foreign      China.              percent of  
               rights             as                              Oman -N/A; 
              and the        amended, See                          China -   his time on 
 state.gov    rule of                     governments.                       
               law in         22 U.S.C.                            $400,000  this effort 
               select                                                 in     
             countries.      2651a(c)(2).                          FY 2004.  [Estimate]. 

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

  CSR-Related Groups Budget Staff program/activity Objective Start year Legal
                 basis targeted Activities informationa levelb

DRL - Work Within Multilateral Institutions

camponovocn@ state.gov

To promote and Not State Multilateral
protect U.S. available. Department organizations
government Basic Authorities and their
interests in the Act of 1956, as member
area of CSR and amended, See states.
human rights 22 U.S.C.
within 2651a(c)(2).
multilateral
institutions.

Prepares guidance No specific One staff
for U.S. delegations budget. person
and responds to works 5
requests for percent of
information from his time on
United Nations this effort
organizations when [Estimate].
issues arise related to
corporate
responsibility. DRL
also represents the
State Department
and the U.S.
Government at a
variety of
conferences and
meetings related to
corporate
responsibility, where
human rights issues
are directly relevant.

Bureau of    To promote  1999  Mission   U.S. small   Award        $6,000d  One staff 
                best              of the                 nominations,         
 Economics and   business        Bureau of and medium-      public                       
                                                         ceremony. In           person
Business     practices,       Economics     sized     FY 2004, the          works 30- 
    Affairs     good                and                                       
    (EB) -                        Business   companies   Department           40 percent 
 Secretary of    corporate        Affairs.               received             
 State's Award  governance,                     and        a record               of her 
      for       and                                       number of                 time 
                                                         50                              
Corporate    democratic                 multinational nominations           on this
                                                         from                 
  Excellence    values                     corporations. U.S. Chiefs           efforte   
                overseas.                                     of              
                                                           Mission            Estimate]. 
                                                          worldwide.          
smith-nissleyn@                                                               
state.gov                                                                  

EB -US-Mexico  To recognize  2003 Presidential   U.S. and       Award         Not      One staff  
               the                                           nominations,             
 Good Partner    role that        initiative.     Mexican       public    available.g             
    Award          U.S.                                       ceremony.                 person
                and Mexican                     businesses,  Seventy                    works 100 
                                                             nominations              
                                                                 were                             
smith-nissleyn                                 associations  received in              
               enterprises,                                       FY                   percent on
  @state.gov     business                       and academic 2003. More                 the award 
                                                             than 900                 
               associations,                   institutions.    people                            
                                                             attended the               program
               and academic                                  Award                     from April 
                                                             Ceremony and             
               institutions                                  Gala, which               - June and 
                   play                                      received                 
               in advancing                                   extensive                30 percent 
               the                                              media                 
               goals of the                                   coverage,                 for the   
                                                              especially              
                Partnership                                                                       
                    for                                       in Mexico.                remainder 
                Prosperityf                                                           of the year
                    to                                                                
               boost the                                                              [Estimate]. 
               social                                                                 
               and economic                                                           
               well-being of                                                          
                  Mexican                                                             
                 citizens.                                                            

Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

  CSR-Related Groups Budget Staff program/activity Objective Start year Legal
                 basis targeted Activities informationa levelb

EB -OECD       To raise    1976   Requirement Companies,   Promotes    No        One staff  
National                                   as                          discrete 
Contact Pointh    awareness         signatory to labor      understanding budget.              
                                             the unions     of the                   person
                 among U.S.            OECD      and NGOs.      OECD                 spends 33 
                                                             Guidelines            
[email protected] companies of         Declaration            and helps              percent of  
                                             and            companies,             
                  the OECD         Decisions on             labor unions           his time on 
                                                                 and               
                 Guidelines        International            NGOs in their          this effort 
                     for                                    efforts                
                Multinational       Investment              to resolve               and one   
                                        and                 issues that            
                Enterprisesi       Multilateral               may arise              office    
                and                                             with               
                to facilitate      Enterprises.              respect to             director   
                                                                 the               
                resolution                                   Guidelines;            spends 10- 
                when                                            From               
                parties raise                               2000-2004, 16           15 percent 
                   issues                                     specific             of his time 
                                                              instances            
                concerning                                  were brought             on this   
                U.S.                                        to the                 
                 companies'                                 attention of             effort    
                                                                 the               
                treatment of                                  National             [Estimate]. 
                the                                            Contact             
                 guidelines.                                   Point.              

EB-U.S. Lead to   To combat      1999     See Pub. L. 
                                                    100- 
OECD Working      transnational       318, The        
Group on Briberyj bribery of            Omnibus Trade 
                     foreign public      and             
[email protected] officials and       Competitiveness 
                     monitor              Act of 1988,   

Foreign Leads U.S. No separate One governments, delegationk to the
funding. deputy enforcement of asking the the OECD Executive Convention on
Branch, led by Combating State, to Bribery of negotiate a Foreign Public
convention on Officials in bribery at the International OECD. See also
Business Senate Transactions Resolution of (Antibribery Advice and
Convention). Consent to the

OECD

Antibribery

Convention, of

July 31, 1998.

companies.	OECD Working Group on Bribery to monitor implementation and
enforcement of the OECD Antibribery Convention, and to assess areas where
the Convention could be amended to decrease bribery and other corrupt
activity. Meet with the private sector and civil society groups regarding
implementation of the OECD Antibribery Convention.

office director spends 50 percent of his time on this effort [Estimate].

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

  CSR-Related Groups Budget Staff program/activity Objective Start year Legal
                 basis targeted Activities informationa levelb

EB-U.S. Lead to G-8 To reduce 2003      22 U.S.C. Georgia,       
                                               2656. 
Anticorruption and corruption                     Nicaragua,     
and                                               
Transparency Pilots enhance                       Nigeria, Peru, 
                 transparency to                     other G-8      
brownpa@state. ensure that                          governments. 
gov development                                   
                      assistance                     
                   resources and                     

budget revenues achieve their intended purposes.

Provide assistance $150,000 1.25 FTEs.
through the Bureau of (cost of
International contractor
Narcotics and Law who serves
Enforcement Affairs as project
to develop a series of coordinator).
projects with four
countries that signed
compacts with G-8
countries in 2004
committing to reduce
corruption and
enhance
transparency in their
budgets, government
procurements and
concession-letting
procedures.l

     EB -                                                    Liaise with No       0.25 
  Coordinate   To increase  2002 Presidential   Governments,   USAID,    separate   of 
                                                                                    an 
U.S. input to                    initiative.    companies,    Treasury,  funding. FTE. 
     the       transparency                                  the private          
    United         over                          industry    sector and           
  Kingdom's      payments                                       civil             
  Extractive   and revenues                   associations,   society,            
  Industries   in                                            coordinate           
 Transparency      the                        international  U.S. policy          
               extractives                                   toward the           
  Initiative    sector in                     organizations,   EITI, a            
    (EITI)                                                     United             
               countries                      civil society, Kingdom-led          
               heavily                                                            
brownpa@state. dependent on                     investors.   initiative.          
               these                                                              
     gov       resources.                                                         

Bureau of Oceans and International Environmental and Scientific Affairs
(OES) - CSR-Related Activities

lbrutten@state. gov

To promote 2001 Foreign
corporate Assistance Act
responsibility of 1961, as
through its amended.
efforts on
sustainable
development,
particularly
through
voluntary public
private
partnerships,
and on making
trade
liberalization
and natural
resource
protection
mutually
supportive of our
Free Trade
Agreement
(FTA) objectives.

U.S. companies and business groups, civil society, foreign governments,
and international organizations.

Meets with No specific Not
representatives from budget. available.
the private sector and
civil society on a
regular but ad hoc
basis, includes
representatives from
the private sector and
civil society on official
U.S. delegations
relating to sustainable
development,
provides information
about and
encourages
sustainable
development
partnership efforts. In
addition, OES leads
negotiations for
environmental side
agreements to trade
agreements.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

  CSR-Related Groups Budget Staff program/activity Objective Start year Legal
                 basis targeted Activities informationa levelb

Office of Private      To      2004 Coordinating    U.S.     Manages a Web  No           One 
                   coordinate                                site           specific   full- 
Assistance, Iraq  U.S. private        function   commercial, for donations, budget.   time   
                   donations         operating   academic or coordinates                     
                      and                                    referrals               person.
GramagliaTR@state   private         through the   cultural   from Congress,          
                                                             and                     
                  partnerships        bureau.    contacts    with other              
      .gov                                       and         agencies,               
                  intended for                      civic                            
                  the                              groups.    presents to            
                     Iraqi                                   gatherings of           
                    people,                                                          
                   including                                 individuals or          
                  financial                                  organizations           
                  and in-                                    with an                 
                      kind                                   interest in             
                   donations,                                supporting              
                      and                                    reconstruction          
                   mentoring.                                     and                
                                                             humanitarian            
                                                             needs                   
                                                                in Iraq.             

Middle East Partnership Initiative

- Business Internship Program

FranceskiS@state. gov To provide women from the Middle East with skills to
promote successful businesses in the region while promoting mutual
understanding and ongoing relationships between people in the United
States and the Middle East.

2003	Emergency Wartime Supplemental Appropriations Act, 2003 (See P.L.
108-11) and chapter 4 of Part II of the Foreign Assistance Act of 1961, as
amended.

U.S. U.S. companies host

companies.	interns for three months at their own expense. In fiscal year
2003, more than 35 companies hosted interns.

$2,000,000	One part time plus contractor support.

Middle East Partnership Initiative

- Junior Achievement Program

FranceskiS@ state.gov

To help the Middle East region's youth gain the skills required to build
and succeed in their nations' economies and to become productive and
participative citizens.

2003	Emergency U.S. and Wartime foreign Supplemental companies.
Appropriations Act, 2003 (See Pub. L. 108-11) and chapter 4 of Part II of
the Foreign Assistance Act of 1961, as amended.

Through a $2,400,000m One part
cooperative time plus
agreement to the contractor
Junior Achievement support.
program, MEPI is
setting up chapters
throughout the region
to promote
entrepreneurship,
such as job training,
among high school
aged youth. U.S. and
foreign companies
serve as long-term
sponsors and
mentors for this
program.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

                         (Continued From Previous Page)

CSR-Related Groups Budget Staff program/activity Objective Start year
Legal basis targeted Activities informationa levelb

  Bureau of    To ensure      Not        United      United   Negotiations    No    Several 
                 that                    Nations              over         specific 
International initiatives available.n Participation  Nations  resolutions, budget.    staff 
              related                 Act                         work              in this 
Organization   to CSR at                of 1945.              programs and          bureau  
Affairs        the                               programs,                       
  - select      United                               funds,   budgets in            devote  
 activities     Nations                                       United                

and its affiliated agencies and Nations time to DaleyPB@state.
organizations other organizations, and CSR on an gov remain organizations.
reviews of programs ad hoc

consistent with and activities. basis.
the imperatives
of the
marketplace and
compatible with
United States
interests.

 Office of the     To combat   2004   The U.S.    Private    The private    No        Not     
      U.S.                                                     sector is specific 
  Global AIDS      HIV/AIDS,         Leadership   sector.   a critical   budget.  applicable. 
                                                            partner at            
  Coordinator      promoting           Against             the country            
     (OGAC)                                                  level.p              
- Public-Private  integrated          HIV/AIDS,               These               
                                                           partnerships           
 Partnershipso    prevention,       Tuberculosis,           facilitate            
                                                             company              
                 treatment and        and Malaria              workplace          
                                              Act               programs          
Moloney-KittsMA@     care           of 2003, See               to create          
                                                               awareness          
                 interventions       Section 101            about the             
state.gov                             of                 spread of             
                    with an         P.L. 108-25.               HIV/AIDS,          
                    urgent                                      decrease          
                  focus on 15                               stigma among          
                                                                   those          
                   countries                              who know their          
                     that                                      HIV                
                                                           status, and            
                 are among the                               provide              
                     most                                 antiretroviral          
                   afflicted                                     therapy          
                  nations in                               to employees           
                      the                                      and                
                    world.                                    their               
                                                          families. The           
                                                            office began          
                                                                 keeping          
                                                            track of the          
                                                               number of          
                                                           partnerships           
                                                              in FY               
                                                              2005.               

Source: GAO based on information provided by agency officials.

aBudget information is for fiscal year 2003 unless otherwise noted.

bStaff levels are for fiscal year 2003 unless otherwise noted.

cThis represents grants that were funded in fiscal year 2003. Grants
funded in fiscal years 2001 and 2002 were also ongoing in fiscal year
2003.

dThis figure represents expenses only, incurred by the Bureau of Economics
and Business Affairs. This figure does not include staff salaries or the
Secretary's representation funds for ceremony hospitality and the design,
manufacture and shipping of the awards.

eMore than 50 additional staff help to plan and organize the award
ceremony.

fThe Partnership for Prosperity is a bilateral initiative between Mexico
and the United States designed to leverage private sector resources and
expertise to boost the social and economic well-being of Mexican citizens,
particularly in regions where economic growth has lagged.

gThe cost is the responsibility of the host country. The U.S. will host
the ceremony in 2005, but the program had not yet established a budget for
the costs.

Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

hIn addition to the Department of State, USTR, EPA and the Departments of
Treasury, Commerce, and Labor help resolve complaints against companies.

iThe guidelines are a set of nonbinding recommendations that have been
agreed upon by OECD member countries. Their aim is to provide guidance for
companies on a range of business activities, including industrial
relations, human rights, environment, information disclosure, competition,
taxation, and science and technology.

jThe Department of State also coordinates with the Departments of Commerce
and Justice to address, as appropriate, alleged incidents of bribery of
foreign public officials (by foreign-based corporations) that adversely
affect the opportunity for U.S. companies to compete on a transparent and
level playing field for international tenders and contracts.

kThe Departments of Commerce and Justice are also members of the U.S.
delegation.

lThese projects implement the Evian Declaration on Fighting Corruption and
Improving Transparency that was signed by G-8 leaders in 2003, and
proposes specific actions to reduce corruption and enhance transparency as
part of a strategy to ensure that development assistance resources and
budget revenues achieve their intended purpose. According to a State
Department official, the Declaration proposed a partnership between donor
and recipient countries to change the incentives to make corruption less
attractive to public officials, expose the economic and political costs of
corruption, and institutionalize effective checks and balances on corrupt
regimes.

mFiscal year 2003 funds are also being spent in fiscal year 2004.

nAccording to an agency official, this has been a continuing effort that
has become more or less intense as CSR issues have become larger or
smaller pieces of the work programs at these UN agencies.

oOGAC is not an implementing office. Actual implementation of partnerships
with the private sector and other workplace activities are put forth from
its implementing agency partners, primarily USAID and The Department of
Health and Human Services (HHS).

pAt the local level, U.S. government offices work with pharmaceutical
companies on an ad hoc basis to facilitate drug donations in specific
countries.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

              Table 12: Responses from the Department of Treasury

CSR-Related Groups Budget
program/activity Objective Start year Legal basis targeted Activities
information Staff levela

Implementation of the Clean Diamond Trade Act and Executive Order 13312 by
the Treasury Department's Office of Foreign Assets Control (OFAC) - (with
the Department of State)b

www.treas.gov/ofac

To implement the Kimberley Process Certification Scheme, pursuant to which
participating countries, including the United States, seek to prevent
rough diamonds used to fuel armed conflict aimed at undermining or
overthrowing legitimate governments from entering the legitimate world
diamond trade.

2003 	Clean Diamond Trade Act (P.L. 108-19), Executive Order 13312, and
Rough Diamonds Control Regulations, 31 C.F.R. part 592 (Regulations).

Companies or individuals involved in the export from and/or import into
the United States of rough diamonds.

The Regulations provide that trade in rough diamonds is prohibited unless
the rough diamond is controlled through the Kimberley Process
Certification Scheme as set forth in the Regulations.c The U.S. also
participates in Kimberley Process multilateral working groups on
Monitoring and Statistics.d

                            No specific Three FTEs.f

e

budget.

Source: GAO based on information provided by agency officials.

aStaff levels are for fiscal year 2003 unless otherwise noted.

bOFAC administers the Rough Diamonds Control Regulations. In addition,
pursuant to the Clean Diamond Trade Act (Act), OFAC (as the designee of
the Secretary of the Treasury) and the Department of State cochair a
Kimberley Process Implementation Coordinating Committee to coordinate
implementation of the act and the Kimberley Process Certification Scheme
for the United States. The Committee meets periodically to evaluate
implementation issues, and, if necessary, take steps to improve
performance. Other agencies, including the U.S. Census Bureau and Customs
and Border Protection (CBP) are also involved with the implementation.

cThe Kimberley Process Certification Scheme as set forth in the
regulations includes, among other requirements, trading rough diamonds
only with other Kimberley Process participants having a validated
Kimberley Process Certificate accompanying all exports and imports, and
keeping accessible records about these transactions for at least 5 years.

dAs part of the Kimberley Process, the diamond industry undertook to
implement a voluntary system of self-regulation through a system of
warranties that allows for the traceability of rough diamond transactions.

eThis does not capture the resources of additional agencies involved in
the implementation of the Clean Diamond Trade Act.

fAccording to an official at Treasury, most of the staff time is at the
Department of State. This does not capture the resources of additional
agencies involved in the implementation of the Clean Diamond Trade Act.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

       Table 13: Responses from U.S. Agency for International Development

CSR-Related                       Legal  Groups                Budget    
program/activity   Objective   Start basis targeted Activities informationa  Staff 
                               year                                         levelb 
     Global       To encourage                                              
Development         public-                                              
    Alliance      private                                                   
                  partnerships                                              
                      for                                                   
                  development                                               
www.usaid.gov/gda  projects.                                                

2001	Foreign Assistance Act of 1961 (P. L. 87195), as amended.

Foundations, Trains USAID for-profit firms, staff on publiccivil society
private organizations, alliances and foreign conducts governments.
outreach to

private sector and civil society partners. For fiscal years 2002-2004,
USAID leveraged over $3.7 billion in partner assets through $1.1 billion
in agency funding.

                                       c

$29.8 million.	Six full time staff plus contractors and field support.d

    Volunteers for     To deploy  2003 Executive   U.S.-based   By the end of     No      Three 
                        skilled                                                specific    full 
     Prosperitye       volunteers        Order   organizations,    FY 2004,    budget.     time 
                        in U.S.                                                         staff.g 
                        foreign         13317.                  Volunteers for          
                       assistance                  including                            
www.volunteersforprosp programs.                 corporations.    Prosperity            
                           f                                                            
      erity.gov                                                 recruited               
                                                                nearly                  
                                                                200 for-profit          
                                                                and nonprofit           
                                                                organizations,          
                                                                representing a          
                                                                pool of at              
                                                                least                   
                                                                34,000 skilled          
                                                                   American             
                                                                professionals           
                                                                 available to           
                                                                   serve as             
                                                                 volunteers.            
                                                                Participating           
                                                                organizations           
                                                                reported                
                                                                having                  
                                                                deployed                
                                                                nearly                  
                                                                    7,000               
                                                                 volunteers.            

Source: GAO based on information provided by agency officials.

aBudget information is for fiscal year 2003 unless otherwise noted.

bStaff levels are for fiscal year 2003 unless otherwise noted.

cIn addition, according to officials, USAID overseas missions and
USAID/Washington funded alliances to the total amount of $360 million.

     Appendix IIEURFederal Agency CSR-Related Programs and EURActivitiesEUR

dEach USAID mission office and bureau has a Global Development Alliance
point of contact, and each mission office manages at least one
public-private alliance.

eUSAID serves as the interagency coordinator for this initiative. Per the
executive order, USAID, the Departments of State, Commerce and Health and
Human Services were required to set up Volunteers for Prosperity offices
or operating units.

fThe volunteers serve to support efforts related to six presidential
initiatives: The Emergency Plan for AIDS Relief, the Trade for African
Development and Enterprise Initiative, the Water for the Poor Initiative,
the Digital Freedom Initiative, the Middle East Partnership Initiative,
and the Millennium Challenge Corporation. Organizations that become
Volunteers for Prosperity participants and support the deployment of
highly skilled American volunteers are given priority for federal funds
for these initiatives.

gAs of March 2005, three full-time staff were approved, although two staff
were in place.

       Table 14: Responses from Office of the U.S. Trade Representativea

CSR-Related Legal Groups Budget
program/activity Objective Start year basis targeted Activities
information Staff levelb

Negotiating   To ensure        Trade              Negotiating No                     
    Free        that     2002.   Act   Foreign     terms of   discrete      FTA
                                  of                                   
Trade                                          trade                              
 Agreements  negotiating       2002.              agreements  budget.  negotiators
                                     governments. with                 
             objectives                              U.S.                            
             on labor                               trading              address CSR
                                                   partners.           
               and the                             USTR will            as warranted 
www.ustr.gov                                       consider            
             environment                           including              during     
                laid                              CSR issues           
             out in the                               and                            
                Trade                             projects in          negotiations.
                                                     trade             
             Act of 2002                          agreements           
                 and                              if the               
                                                  issue                
             issues of                             is raised           
             concern                              by trading           
             to trading                           partners.            
             partners                             For                  
                                                  example,             
                 are                                  CSR              
             included in                          language is          
             free trade                           included in          
                                                    the US-            
                                                   Chile and           
             agreements.                              US-              
                                                   Singapore           
                                                  free trade           
                                                  agreements.          

                To                                    USTR meets  No            One 
Outreach to   improve     Not        Not     Business    with     discrete  percent 
               labor                                                       
             standards                                business             of one   
  Business      and    available. available.          groups on   budget.  staff    
                                             groups.  an                   
              business                                     ad hoc                   
Associations   conduct                                   basis to          person's
                                                          discuss          
              in U.S.                                 a range of            time.   
             business                                 issues. On           
                                                      occasion,            
             overseas.                                this                 
www.ustr.gov                                          includes             
                                                      encouraging          
                                                      businesses           
                                                          to               
                                                       implement           
                                                       corporate           
                                                       codes of            
                                                       conduct.            

Source: GAO based on information provided by agency officials.

aOfficials from the USTR acknowledged that the agency undertakes some
activities that might complement CSR, but emphasized that the agency's
mission is to negotiate trade agreements, and not to engage in CSR-related
efforts.

bStaff levels are for fiscal year 2003 unless otherwise noted.

Appendix III

                     GAO Contact and Staff Acknowledgements

                     GAO Contact Loren Yager (202) 512-4347

Acknowledgements	In addition, Kate Blumenreich, Kenneth Bombara, Martin De
Alteriis, Mark Dowling, Tim Fairbanks, and Kim Frankena made key
contributions to this report. Shirley Brothwell, Emilie Cassou, Jeanette
Espinola and Richard Lindsey also provided assistance.

GAO's Mission	The Government Accountability Office, the audit, evaluation
and investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost

is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
Reports and newly released reports, testimony, and correspondence on its
Web site. To Testimony have GAO e-mail you a list of newly posted products
every afternoon, go to

www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

  To Report Fraud, Contact:
  Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470

Congressional	Gloria Jarmon, Managing Director, [email protected] (202)
512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

Relations Washington, D.C. 20548

Public Affairs	Paul Anderson, Managing Director, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***