I believe the reason is not "evil", but "greed" and a touch of disassociation.

The flow of investments

Ordinary people have some leftover money that they want to save, i.e. in pension funds. They are doing no evil, they're just wanting to secure a financially secure retirement.

Fund managers invest in stock market companies, and they pretty much have to choose the stock companies giving the best return on the money invested, because that's what the customers demand. "Ethical profiling" is sometimes done, but that can easily become a minefield of subjectivity and corruption, and generally not something people ask for when they are putting away some savings for their retirement. Investing in the companies giving the best ROI is not evil, it's just the job of the fund managers.

The stock company management has some responsibilities, one of them is to deliver the highest possible profit to the shareholders, another is to follow all local rules and regulations, "being nice and ethical" may also be on that list, but possibly on the third place - it rarely takes precedence over the two others. Perhaps local law forbids them to dump waste into the local rivers and to use children to work on slave conditions, but the local laws probably don't forbid them to invest in other companies abroad that adhere to more lax local laws. Said companies may not be bad enough to dump pollution in the local river and employ children, but they may again invest in other companies (or stock funds) ... the investment chain may be complex, in the end some of those savings may have ended up funding really dirty companies.

Still, the individual investors will feel no regret - it's not their fault that the rivers in far-away countries are toxic nor that the children there are deprived from education and play because they have to work instead. Such problems are too far away, they are of course bad, but "somebody else's problem".

Supply chains

We all want phones, cars, computers, vacuum robots and whatnot, and we typically want the "best bang for the buck". We rarely ask for "ethical products", and rarely we're willing to pay extra for that. And after all, the products are bought from local companies following local regulations which clearly forbids dumping toxic waste in the river and employing children ... so why should we care.

However, those regulations does not forbid them to source materials from some third company. If it's a lot cheaper to source products from another company instead of producing them locally - then the company pretty much has to do that if they are to survive (and at least if they are to give the best ROI to the shareholders).

Perhaps this "other company" isn't a bad company, but it also has a complex supplier network. In the end, a significant part of the end-product has been produced by companies that are "cutting ethical corners" to get things done cheaply. They are dumping the pollution directly in the local river, and a big part of the workforce should have been going to school instead of working in the factory. They can do that because there are no local regulations against it, they can do that because neither their shareholders nor customers ask any questions, they have to do that to survive (otherwise their competitors will take the market), and they can even justify their actions ... after all, those children are working in the factory not because the evil company are holding them as slaves, but because they have no choice, they have to work to get food on the table at home. Without the employment in the factory they would be starving! So from the perspective of the company management, they are doing good, not bad! And even if dumping the toxic waste directly into the river is bad - if they wouldn't be doing it, some other company with even less ethical rules would be doing it instead.

Even the Fairphone CEO realized at some point that it was mission impossible to make a fair phone - but at least they could make a fairer phone.

So, a significant part of the stuff we buy as consumers have been made by "dirty" companies doing things we consider unethical. Still, the individual customers will feel no regret - it's not their fault that the rivers in far-away countries are toxic nor that the children there are deprived from education and play because they have to work instead. Such problems are too far away, they are of course bad, but "somebody else's problem".

The politicians

I do believe a full laissez-faire rule without any law-regulated restrictions on any of those companies would only make the situation worse - far worse. It is the work of the politicians to ensure companies are stopped from doing evil - through strict laws, regulations and, eventually, by putting high tolls, taxes and fees on "bad" behaviour so it simply won't be profitable to behave badly.

Then comes the problems ... the politicians are corrupt, they are incompetent, they are prone to influences from lobbyists, some of them seem to think their main job is to "impress" voters rather than make the world a better place to live, some of them live in "bubbles" ... and again, the politicians can only govern local/national rules and regulations, that some company in some far-away country are dumping toxic waste in the river is ... "somebody else's problem". (and even when they try to interfere, it often goes horridly wrong).

The road to hell is paved with good intentions - often problems are solved by introducing new laws and regulations, but there is a problem that it seems easier to add new laws and regulations than to remove old ones, and that "smart" people always find unintended ways to get around the regulations. Hence we're often left with a jungle of regulations making it really difficult for the small entrepreneurs to get anything done, and also making it overly expensive for the bigger companies to get anything done domestically, hence making sure even more of the goods we purchase comes from countries with more lax regulations and less ethical code.

Final words

I don't think that "abolish government altogether" will solve the problems, and I don't think blockchain technology will be any silver bullet - but transparency is a good thing. Technology as such can be used for good and bad. "Code is law" can go horribly wrong (I think we've seen that with ethereum some few times - due to bugs that are probably inadvertently made by the developers. Just think about smart contracts where the bugs are made on purpose by one of the parts ...