Institutional perspective of CSR in Brazil: How Brazilian companies create legitimacy for their sustainability practices

Sara Dahlman

Student thesis: Master thesis

Abstract

CSR as a corporate practice has gained momentum over the years. There has been a clear focus on the strategic approach to CSR and developed countries in the academic literature. Giving the lack of insight in the institutional perspective on CSR in Brazil this study aims to create a deeper understanding for how Brazilian companies create legitimacy for their sustainability practices, as a mechanism of the institutionalisation process of CSR in Brazil. The research project highlights three specific cases, the Soy Moratorium, the Sustainability Index and the Equator Principles and Amazon Dam Projects were the nine focal companies have been faced with legitimacy challenges. Institutionalisation as a process often has longitudinal features, why the study focuses of the corporate communication over ten years’ time. An inductive approach was employed, where grounded theory and a case study have been used as methodological stand for the thesis. The study concludes that the companies employ different legitimacy strategies depending on the setup of the standards. The soy moratorium is multi-stakeholder initiative, created by the soybean companies in collaboration with business associations and civil society. The companies have a more active political role, and it is more in line with institutional conceptualisation of CSR, where moral legitimacy is the most important form of legitimacy. The soy moratorium is grounded in a democratic dialogue between stakeholders, in order to find the most appropriate way of solving the problem of deforestation. The Sustainability Index has several features of cognitive legitimacy, where it is used by the companies as a verification of their sustainability practices, as a way to show convergence with wider accepted cultures and norms. The Equator Principles encourage best practices and the companies adopting the principles promote cognitive legitimacy for their practices, through complying with generally recognised norms. The difference between the sustainability index and the Equator Principles are the setup of the initiatives. The index selects companies based on static criteria, eliminating the companies’ possibilities to negotiate inclusion or exclusion. The Equator Principles are guidelines that the companies implement, why the application of the principles can be negotiated. As there is no external authority to decide whether the principles are properly applied or not, it opens up possibilities for critique from other societal actors. Civil society can be seen as a moderator between companies and morality, where legitimacy has to be negotiated through a deliberate dialogue. This differs from the Soy Moratorium, where the democratic dialogue is the foundation for the initiative. Hence, the Soy Moratorium and the Equator Principles implies some form of societal dialogue, while the Sustainability Index is a more traditional form of standard.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2012
Number of pages104