Since some of the world’s largest economies are now companies rather than states, the benefits to civil society of working more closely with business are clear.
However, perhaps less well understood are the benefits of protecting civic space for business – the freedom of citizens to organize, speak out, and protest against mismanagement and corruption.
The good news is that, in at least one area, business and civil society are increasingly converging.
When President Donald Trump announced that the United States was pulling out of the Paris Agreement on climate change, some of the loudest criticisms came not from civil society, but from business leaders.
Turning up the heat
The success civil society has had in working with business on climate change shows that improving the relationship between business and civil society is possible. The new challenge is to convince business that action on civil liberties is just as important as action on global climate change.
Climate activists, through shareholder action as well as boycott and divestment campaigns, have secured commitments from institutions to pull $5 trillion from the fossil fuel industry worldwide.
Many businesses continue to find common ground with civil society for climate-friendly solutions. Activist shareholders recently succeeded in getting the world’s largest oil and gas company, Exxon Mobil, to commit to disclose the impact of climate change on its business.
On human rights, however, progress has been much slower.
Too often, “business as usual” can lead to human rights abuses, resulting in land grabs from indigenous peoples, killings of human rights defenders, or attacks on peaceful demonstrations.
Moreover, massive tax evasion around the world continues to reduce government spending and exacerbate global inequality. Indeed, the enormous scale of global corporate tax evasion perpetuates economic inequality, forcing cuts in basic social services and even, as the evidence suggests, ultimately impeding economic growth. Citizens for Tax Justice estimates that the 500 largest U.S. companies consistently keep $2.4 trillion in profits offshore, avoiding up to $695 billion in taxes.
In addition, $50 billion, far more than the inflow of official development aid, leaves Africa illegally each year, and business is thought to play a key role in ensuring this.
Nevertheless, while it is clear that improving business’s commitment to civil liberties and human rights will have obvious benefits for civil society, it is less known that business can benefit as well.
Indeed, according to the World Economic Forum, the weakening of the rule of law and the decline of civil liberties are a major global risk in 2017 .
A study by the UN Global Compact shows that social risk can increase, on average, 10 percent of a business’s operating costs. The difference between operating in an environment with low levels of corruption and one with higher levels of corruption can be 20% of profits. Bribery, against which empowered civil society offers a powerful defense, is estimated to be worth about $1 trillion per year.
Attacks on civil liberties can also cost businesses. According to research, the economic damage from Internet blackouts in the English-speaking region of Cameroon this year is $2.4 billion. This puts a clear price on the failure to protect civic space.
The rewards for supporting civic space are also clear. CIVICUS’ latest annual report identifies several areas of partnership for positive social change between business and civil society. It emphasizes the need for business to adopt a “do no harm first” approach and then go further by demonstrating an active commitment to advocacy.
Nicolas Patrick of the global law firm DLA Piper, which is part of the Business Advocates Network, insists that business can only succeed where there is the rule of law. His firm views civil society as an indicator and facilitator of the rule of law. It supports civil society organizations with strategic advice on how to obtain registration in high-risk jurisdictions and support in cases of arbitrary detention.