Archive for November, 2008
One growing issue is that of government involvement in CSR. Actually one could argue, what do governments actually care about CSR, as the name already suggests, Corporate Social Responsibility is about Companies and their role in society, their approach to responsibility and their stakeholders. So – no role for governments! Well, that would be very shortsighted and actually not the way the current trend is going. Let me just give two examples: Within the ISO 26 000 process we have six stakeholdergroups – Industry, Governments, Trade Unions, Consumers, NGOs and Service-Support and others. When we started off, the Industry group was the strongest represented, and Governments where only at the very end in the number of participants, but since Salvadore/Bahia, the 1. of the ISO 26 000 working group meetings this picture has changed dramatically. At the last meeting in Santiago de Chile the government stakeholder group emerged as the second largest group, so interest of the governments has grown over the last 3 years dramatically.
The second indicator might be the fact, that in our CSR Company Consultancy we register a dramatic increase of governments seeking support in developing and implementing CSR strategies on federal or regional levels. Since last week I can call myself officially technical advisor to the Ministry of Social Affairs of the United Arab Emirates for CSR, we have worked for the Lithuanian government in a benchmark study identifying the best CSR practices in Europe of governments and I have also been involved in advising the Nigerian Presidential Office in developing a CSR strategy for this huge and divers country.
Why is this so? Well governments are not living in a vacuum, they are also part of society, they are key players in CSR. First, they are employers as every other organisation is also, they have working places, they have working hours, they pay their employees, they buy goods and services, they sometimes even sell goods and services, they deal with customers, even if they call them differently, they handle large amounts of money and they have definitly an impact on environment through the use or resources. So, governments have all key elements of CSR to cover, from coruption to social issues, from good governance to environmental concerns.
But secondly they are also policy makers, they set the framework within which the society actors can move. Companies most important stakeholders besides their employees is government. Government can change laws that determine the success or the failure of an economic enterprise. Through this policy they can further or stopp activities. In the area of CSR this has become a major tool to promote CSR. There are many different appoaches, Indonesia has a CSR law, Britain a CSR undersecretary, Sweden a CSR ambassador, many other countries national CSR strategies, and even more individual ministries that develop CSR strategies for themselves and their area of influence. In one of my favorite countries, the UAE, the Ministry for Social Affairs has just set up a Social Responsibility Fund that is set up by government decree and has the job to not only promote CSR amongst UAE based companies, but also to put the UAE on the global map of CSR, leading the way into the future. I have the honour to be on the technical management board of this fund, the first of its kind in the world to my knowledge in this set up. I will talk more on this fund at a later blog, so keep tuned.
So, why do governments get involved in CSR, when we have learned from earlier definitions that CSR is something voluntary and companies do good things and then like to talk about it? Just a little hint, the new ISO 26 000 standard has a definition on SR, the word “voluntary” does not appear. Yes, the development is going in a different direction, voluntary approaches have proven not sufficient. If we look at the UN Global Compact, as laudable this initiative is, it is also developing tools to become more comprehensive, as it has been misused in the past for PR purposes without incorporating the content into the practices of the company. Or even a much worse example, the EU promoted Alliance for CSR, a totally “say nothing” tool without any substance and just something large corporations join because they have to for political reasons, again not incorporating the sense of CSR into their practices. The list could be continued, but the direction societies are going is different. We need more comprehensive documents, more standards, more guidance, more concrete tools, more incentives, more push – and governments are destined by definition to deliver these things. They set the frame in which companies work, they define what is acceptable, what not, they can encourage and discourage by using incentives and sanctions. So they uniquely have a large tool kit at hands with which they can operate and make things happen in certain directions.
But the overall goal is competitivness. Denmark is developing a national CSR standard for one single reason, to promote Danish trade, creating a brand for Danish products, based on CSR, so that consumers all over the world when buying a product “Made in Denmark” can expect that this product is produced according to hightest standarda including social and environmental issues. Something that the market is increasingly searching for.
So it is the economy again, stupid, but sometimes the economy needs the clear guidance of governments to find out that it is about making business, and CSR is an ideal tool to achieve that goal.
The most asked question to me in the last few days was if the current financial crisis has a negative impact on CSR, if it is the end of CSR or if CSR will die like so many other fashion terms after the first little wind blow.
Now my answer could sound bias, as I work in the field of CSR and consult companies, teach at Universities and hold lectures all over the world, but my statement is based on business experiance and scientific proof.
First: Never ever had we as a company had so many requests for CSR Strategy advice as in these last few days. And not from some exentric individuals who might believe CSR is a new religion in these shaky times, no, sound business enterprises in the multibillion turnover category or state institutions that reckognize, that CSR policy making might be a tool to help their organisations to help companies and individuals for the future development.
And secondly, the scientific proof. Now maybe some will say that is not necessarily scientific but it is common sense. And that is what CSR is lastly about the most – common sense. We are experiancing a trust crisis, banks do not trust each other anymore, not to speak about their clients whom two months ago they sold the products, the suppliers do not trust the companies and most of all, the consumers are beginning to distrust the future and therefor change their buying habbit from spending more than they have to less than they could. The cycle is moving downwards. How to bridge this trust gap? CSR could be the adequate tool. CSR is very much about HOW a company does its business. In the way HOW it does its business it shows, does it act responsible, does it respect common sense, does it respect its stakeholders, does it produce environmentaly friendly, is its business model sound and based on laws and that what we call societies expectations. And by showing this HOW, the customers will gain trust in the products, the shareholders trust in the sustainability of the business model, the stakeholders in the way they are informed and issues are dealt with.
CSR is a tool to overcome this crisis and put the economy on sound business pillars again. It might take some time for all stakeholders to realize it, as old trodden paths are conviniant to walk on, but sometimes it needs a new perspective to find an even better route to success. And of course all stakeholders wish the companies success, not only the board members. But this success might look slightly different in future.