Incentivising Responsible Business

Abstract

This report summarises evidence of the effectiveness of each of the following influences for incentivising businesses to adopt more responsible practices: Customer pressure, Transparency and reporting schemes, Shareholder activism, Workers’ and managers’ values, and Business performance benefits. This report attempts to estimate the strength of the evidence available for each of these influence pathways, but in the time available for this short report it has not been possible to undertake a comprehensive review of the literature on each type of incentive. A comprehensive literature review, evidence map, or similar product could provide a higher degree of confidence in the strength of the evidence in each area. The scope of this report has been agreed to focus on a range of external drivers that may incentivise businesses to voluntarily adopt more responsible business practices. The scope excludes laws, regulations, and mandatory requirements such as those embedded in legal arrangements like trade agreements. K4D helpdesk reports provide summaries of current research, evidence and lessons learned. This report was commissioned by the UK Department for International Development