SUSTAINABILITY AND

ETHICS IN
INTERNATIONAL
BUSINESS
MODULE 10
 L01. Explain the principles of corporate social responsibility
(CSR) and their application in international business.

L02. Identify ethical issues in international trade and

develop strategies to address them.

LEARNING L03. Align business strategies with the United Nations’

Sustainable Development Goals (SDGs).
OBJECTIVES:
L04. Evaluate the environmental and social impacts of
international business practices.

L05. Develop ethical and sustainable business models for

long-term global success.
 Corporate Social Responsibility
(CSR) refers to a company’s
commitment to manage its social,
environmental, and economic effects
responsibly while making a profit.
CORPORATE
SOCIAL
RESPONSIBILITY
(CSR) IN A In international business, CSR extends
GLOBAL CONTEXT beyond national boundaries,
respecting cultural differences while
adhering to universal ethic
standards.
 CORE PRINCIPLES OF CSR
Principle Application
Being answerable for actions that affect
Accountability
stakeholders.
Transparency Openly reporting practices and outcomes.
Ethical Behavior Acting with fairness, respect, and honesty.
Respect for Stakeholder Balancing interests of shareholders, employees,
Interests customers, communities.
Respect for Rule of Law Complying with international and local laws.
Respect for International Following human rights and environmental
Norms of Behavior standards.
Respect for Human Rights Upholding dignity, equality, and freedom.
CHRISTIAN PERSPECTIVE

Christian Social Responsibility (CSR) highlights

stewardship of God’s creation, love for neighbor,
justice, integrity, and service – principles rooted in
Micah 6:8 (“Act justly, love mercy, and walk
humbly with your God,”)
MODELS OF CSR
(GLOBAL ADAPTATIONS)
Archie Carroll’s pyramid of
Corporate Social Responsibility
is a model increasingly used to
define business social
responsibility. This model gives
the structure organizations
need to meet the economic,
legal, ethical, and philanthropic
demands of business.
GLOBAL CSR STANDARDS AND FRAMEWORKS
ORGANIZATION FOR
ECONOMIC CO-OPERATION
AND DEVELOPMENT
The OECD, or Organization for Economic
Co-operation and Development, is an
international organization of 38 member
countries committed to democracy and the
market economy. It serves as a forum for
governments to collaborate on economic
and social policies, share data, and develop
best practices to promote sustainable
development, prosperity, and well-being.
OECD GUIDELINES FOR MULTINATIONAL
ENTERPRISES
The OECD Guidelines for Multinational Enterprises have set out recommendations to
encourage companies to adopt responsible business conduct in several areas, including
employment, human rights, supply chain responsibility, the environment, consumer
protection and competition.

It consists of the following actions:

Embedding
responsible Identifying and Providing for or
Ceasing,
business assessing Tracking Communicating cooperating in
preventing, and
conduct into actual and implementation how impacts are remediation
mitigating
polices and potential and results addressed when
adverse impacts
management adverse impacts appropriate
systems
INTERNATIONAL
ORGANIZATION FOR
STANDARDIZATION (ISO)
ISO is an independent, non-
governmental international
organization. It brings global experts
together to agree on the best ways
of doing things. From quality
management to AI, their mission is to
make lives easier, safer, and better
– for everyone, everywhere.
ISO 26000:
GUIDANCE ON
SOCIAL
RESPONSIBILITY
ETHICAL ISSUES IN INTERNATIONAL TRADE
Issue Description
Child Labor and Factories in developing countries using child
Exploitation labor.
Unsafe Working
Sweatshops, poor safety standards.
Conditions
Bribery and Corruption Paying off officials to secure contracts.
Environmental
Overexploitation of resources, pollution.
Degradation
Cultural Insensitivity Marketing products offensive to local customs.
Unauthorized use of patented technologies and
Intellectual Property Theft
brands.
 a. Identify the ethical issue
ETHICAL b. Gather facts
DECISION-
MAKING c. Consider stakeholders
FRAMEWORK d. Evaluate alternative actions
e. Make a decision consistent with moral and
legal standards
f. Monitor outcomes

Example: Apple’s move to audit and reform

suppliers’ labor practices in China.
 Implement Codes of Ethics

STRATEGIES Supplier Audits and Certifications

TO ADDRESS
ETHICAL Whistleblower Protection
ISSUES Programs

Anti-Corruption Compliance
Programs
SUSTAINABLE DEVELOPMENT GOALS
(SDGs) and BUSINESS PRACTICES
 SUSTAINABLE DEVELOPMENT GOALS (SDGs)
SDG
Goal Focus Area
No.
1 No Poverty Ending poverty in all forms everywhere
Ending hunger, achieving food security, and promoting
2 Zero Hunger
nutrition
Good Health and
3 Ensuring healthy lives and promoting well-being
Well-Being
4 Quality Education Inclusive and equitable quality education
Achieving gender equality and empowering women and
5 Gender Equality
girls
Clean Water and Ensuring availability and sustainable management of
6
Sanitation water
Affordable and Clean Access to affordable, reliable, sustainable, and modern
7
Energy energy
 SUSTAINABLE DEVELOPMENT GOALS (SDGs)
SDG
Goal Focus Area
No.
Decent Work and Promoting inclusive and sustainable economic growth
8
Economic Growth and jobs
Industry, Innovation,
9 Building resilient infrastructure and fostering innovation
and Infrastructure
10 Reduced Inequalities Reducing inequality within and among countries
Sustainable Cities
11 Making cities inclusive, safe, resilient, and sustainable
and Communities
Responsible
12 Consumption and Sustainable consumption and production patterns
Production
13 Climate Action Taking urgent action to combat climate change
 SUSTAINABLE DEVELOPMENT GOALS (SDGs)
SDG
Goal Focus Area
No.
14 Life Below Water Conserving oceans, seas, and marine resources
Protecting, restoring, and promoting sustainable use of
15 Life on Land
ecosystems
Peace, Justice, and
16 Promoting peaceful and inclusive societies and justice
Strong Institutions
Partnerships for the Strengthening global partnerships to support goal
17
Goals achievement

Example: Unilever’s Sustainable Living Plan targets health, well-being,

environmental impact, and livelihoods.
 Assess Materiality - Identify which SDGs
are most relevant to the business.

ALIGNING Set Clear Goals - Quantify contributions to

specific SDGs.
BUSINESS
STRATEGY Integrate into Core Operations - Embed
WITH SDGs sustainability into supply chains, product
development, HR, and marketing.

Engage Stakeholders - Collaborate with

governments, NGOs, and communities
EVALUATING
ENVIRONMENTAL AND
SOCIAL IMPACTS OF
INTERNATIONAL BUSINESS
1. ENVIRONMENTAL IMPACT
• Climate Change Contributions -
Emissions from logistics,
manufacturing.
• Resource Depletion - Overuse of
water, minerals, and forests.
• Pollution - Industrial waste, air, and
water pollution.
• Biodiversity Loss - Deforestation
and habitat destruction.
 2. SOCIAL IMPACTS
EVALUATING Positive
ENVIRONMENTAL a. Job Creation
AND SOCIAL
IMPACTS OF b. Community
INTERNATIONAL Development
BUSINESS c. Infrastructure
improvements
Negative
a. Labor Exploitation
b. Cultural erosion
c. Inequality
 3. TOOLS TO EVALUATE IMPACT
Environmental Impact Assessments (EIA)
An Environmental Impact Assessment (EIA)
is a process used to evaluate the potential
environmental impacts of a proposed project
or development. It helps decision-makers
understand the potential consequences of a
project on the environment, including land,
water, air, flora, fauna, and human health. EIAs
also consider socio-economic and cultural
impacts, and often include recommendations for
mitigation and management.
EVALUATING
In the Philippines, an Environmental Impact
ENVIRONMENTAL AND Assessment (EIA) is a comprehensive and
SOCIAL IMPACTS OF interdisciplinary process to assess a project's
potential positive or negative effects on the
INTERNATIONAL surrounding environment.
BUSINESS
 EVALUATING ENVIRONMENTAL AND
SOCIAL IMPACTS OF INTERNATIONAL
BUSINESS
3. TOOLS TO EVALUATE IMPACT
Social Impact Assessments (SIA)
A Social Impact Assessment (SIA) is a process that evaluates
the potential social consequences, both positive and negative, of a
planned project, policy, or development activity. It aims to understand
and manage these impacts, ensuring that projects contribute positively
to the community and minimize potential harm.
Sustainability Reporting (e.g., GRI Standards)
Sustainability reporting, like that guided by the Global Reporting
Initiative (GRI) Standards, is a process where organizations publicly
disclose their impacts on the economy, environment, and society. It
aims to enhance transparency, accountability, and improve
stakeholder engagement regarding an organization's contribution to
sustainable development.
DEVELOPING ETHICAL AND SUSTAINABLE
BUSINESS MODELS FOR GLOBAL SUCCESS
Characteristics of Sustainable Business Models

Characteristic Description

Triple Bottom Line Focus Profit, People, Planet.

Long-Term Value Creation Prioritize lasting impact over short-term gains.

Circular Economy
Reuse, recycle, reduce waste.
Practices

Design products/services that are accessible and

Inclusive Innovation
affordable.

Strong Ethical Governance Leadership commitment to ethics and sustainability.

 DEVELOPING ETHICAL AND
SUSTAINABLE BUSINESS MODELS FOR
GLOBAL SUCCESS
Steps in Building Ethical and Sustainable Models
• Vision and Mission Alignment - Reflect CSR
and sustainability
• Stakeholder Engagement - Continuous
dialogue with all affected parties
• Ethical Supply Chain Management - Choose
partners committed to fair practices
• Innovation for Good - Develop sustainable
products and technologies
• Transparent Reporting - Regularly disclose
environmental and social performance