3. The response from governments, civil society and corporations

As ethical dilemmas in international business became more widespread and complex, governments, civil society associations and corporations began to develop policies and agreements as a response.

#### 3.1. Governments

The response of governments to the new scenario of international business was an attempt to manage the globalization process by creating transnational norms for corporations.

In 1977, the Foreign Corrupt Practices Act was an early example of national regulation with international reach, since it affected the activities of American companies abroad. Enacted in the aftermath of the Enron and Worldcom frauds, the 2002 Sarbanes-Oxley Act established a set of ethical standards to be followed by every firm doing business in the USA. Because of the sheer size of the US economy, American regulators are in position of influencing corporate behavior around the world. Smaller societies, however, are vulnerable. Tight labor or environmental regulations may lead to capital flight to countries with lower standards.

Fair trade started in 1986 in the Max Havelaar Foundation in the Netherlands. After a beginning in the coffee industry, it expanded to honey, bananas, tea and orange juice. It gained important traction in 2000 when Starbucks announced the introduction of a blend of fair trade

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The Global Reporting Initiative (GRI) was created in 1997 by a project of the Coalition for Environmentally Responsible Economies and the United Nations Environment Program. This non-profit organization developed the most widely used standard for controlling corporate sustainability practices. The GRI framework aims to increase the consistency and comprehensiveness of sustainability reports, requiring companies to present abundant information in terms of corporate strategy, operational profile and management systems, as well as data on

In 2000, some 50 organizations used GRI principles to report their sustainability performance. The number grew progressively to the present day, in which it is estimated that more than 4000 companies from more than 60 countries use them. Firms participating in the United Nations Global Compact are required to submit reports following GRI guidelines. In return, they have the right to use the Global Compact seal on their products, which establishes them as socially

While philanthropy and charity were always present in the business world, the idea that corporations have a moral obligation toward stakeholders beyond shareholders is quite recent. Corporate leaders began paying attention to corporate citizenship in the late 1990s, following

The main response of corporations to the moral challenges of globalization has been the development of global codes of ethics. The majority of individual company codes and industry-wide standards emerged after the mid-1970s. In the US, many came as a response to foreign bribery scandals while others reacted to broadly calls for greater social responsibility. Codes of conduct help clarify internal policies and procedures, promote a common company identity among a diverse international workforce and communicate standards to external stakeholders. Voluntary codes can help encourage appropriate conduct and reduce pressures

Enderle developed a taxonomy of four typical philosophies that guide policy when domestic

The Foreign Type adapts the practices of the subsidiaries to the laws and customs of the host country under the notion of "when in Rome, do as the Romans". The Imperial Type keeps home standards virtually unchanged. In the Interconnected Type, the company does not consider itself as being of a particular nationality but of a certain region, such as the European Union. In its foreign operations, it uses the region's standards. Finally, Global Type companies do not believe that belonging to a country is relevant for the practice of international business. These companies consider the fact that the parent company is, say, in the USA does not

50 performance indicators related to its economic activity and environmental impact.

responsible companies to consumers and other stakeholders.

coffee [33].

3.3. Corporations

waves of anti-globalization protests.

for mandatory government action.

and foreign standards differ [34].

Over the years, there has been growing awareness of the difficulties for nation states to solve a problem that is essentially global. This is why governments have sought regional and global agreements such as the Declaration on International Investment and Multinational Enterprises [26] and the Declaration of Fundamental Principles and Rights at Work [27].

In 1999, UN Secretary General Kofi Annan launched the Global Compact, establishing a set of principles on human rights, labor, environment and corruption taken from commitments made by governments at different UN pacts, such as the Universal Declaration (1948), the Rio Declaration on Environment and Development (1992), the International Labor Organization's Fundamental Principles and Rights at Work (1998) and the UN Convention Against Corruption (2003) [28].

In general, these initiatives only achieved limited results because no body exists with transnational political authority and enforcement capability. The difficulty of finding common intercultural values and the pressures of special interests to keep global economy free of regulation also affected the efficacy of government initiatives to influence corporate behavior [29].

On September 2015, a number of countries adopted the sustainable development goals (SDGs), a set of 17 global goals which cover a broad range of social issues like poverty, hunger, health, education, climate change, gender equality and social justice to be achieved by 2030. The SDGs are likely to become an important source of guidelines for the behavior of multinational corporations in years to come [30].
