CSR Forum Final Report

7/27/2019 CSR Forum Final Report

1/131

EUROPEANMULTISTAKEHOLDERFORUM ONCSR

Final results &recommendations

29 June 2004Final Report

CORPORATESOCIAL

RES

PONSIBILITY


2/131


3/131

EUROPEAN MULTISTAKEHOLDER FORUM ON CSR

FOREWORD

At the Forum's final meeting on 29 June 2004,the following Report, a fair record of points ofconsensus identified during the twenty monthprocess and work of the Forum, was presented,discussed and agreed*. There are some differ-ences and debates that remain. Members ofthe Forum expressed their views about the mer-its and limitations of this Report in their speechesand statements made on the occasion of theclosing plenary meeting of the Forum. Thesestatements, along with other information on dis-cussions and work of the Forum can beaccessed and downloaded at the following

addresses:

http://europa.eu.int/comm/enterprise/csr/index_forum.htm

http://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htm

Forum Members:

UNICE (Union of Industrial Employers'

Confederation of Europe), CEEP (EuropeanCentre of Enterprises with Public Participationand of Enterprises of General EconomicInterest), UEAPME (European Association ofCraft, Small & Medium-sized Enterprises),Eurocommerce, CECOP (EuropeanConfederation of Workers' Cooperatives, SocialCooperatives & Participative Enterprises), ERT(European Round Table of Industrialists),Eurochambres, CSR Europe (European BusinessNetwork for Corporate Social Responsibility),

WBCSD (World Business Council on SustainableDevelopment), ETUC (European Trade UnionConfederation), Eurocadres/CEC (EuropeanConfederation of Executives and ManagerialStaff), Social Platform (Platform of EuropeanSocial NGOs), Green Eight (Group of 8Environmental NGOs), BEUC (European

Consumers' Organisation), FIDH (FdrationInternationale des Droits de l'Homme), AmnestyInternational, Oxfam (which ceded their seat toIIED), FLO (Fairtrade Labeling Organisations

International)

Forum Observers:

EU Council, European Parliament, CoR(Committee of the Regions), ILO (InternationalLabour Organisation), UNEP (United NationsEnvironment Programme), EUROSIF (EuropeanSustainable and Responsible Investment

Forum), EUA (European University Association).

FOREWORD

* This endorsement remains subject to furtherinternal consultation led by some NGOs withintheir constituency.
http://europa.eu.int/comm/enterprise/csr/index_forum.htmhttp://europa.eu.int/comm/enterprise/csr/index_forum.htmhttp://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htmhttp://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htmhttp://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htmhttp://forum.europa.eu.int/irc/empl/csr_eu_multi_stakeholder_forum/info/data/en/csr%20ems%20forum.htmhttp://europa.eu.int/comm/enterprise/csr/index_forum.htm


4/131


5/131

Table of Contents

I Fo rum Rep o rt

Introduction ................................................................................................... 2

Europ ea n a nd in te rna t iona l conte xt

The Forum 's orig in, ob jec t ive s, orga nisa t ion a nd p roc ess

Wha t d o w e und erstand b y CSR?

Part One Reaffirmation of international and European agreedprinciples, standards and conventions .............................. 6

Part Two Analysis of CSR determining factors: drivers, obstaclesand c ritical success factors ................................................. 8

Drivers

Ob stac les

C ritica l Suc c e ss Fa c to rs

Part Three Future initiatives and recommendations ......................... 12

Ra ising a w a rene ss a nd im p rov ing know led g e on CSR

Deve lop ing the c ap ac it ies and c om pe tence s to he lp

m a instrea m C SR

Ensuring a n e na b ling en viro nm en t for CSR

II Attend a nc e list - Final hig h leve l mee t ing 29 June 2004

III Acknow ledgemen t s

IV Con tac t s

V Rou nd tab le Rep or ts

z Roundtable on improving knowledge about CSR and facilitatingthe exchange of experience and good prac tice

z Roundtable on fostering CSR among SMEsz Roundtable on development aspects of CSRz Roundtable on diversity, convergence and transparency of CSR

practices and tools

EUROPEAN MULTISTAKEHOLDERFORUM ON CSR


6/131

2INTRODUCTION AND CONTEXT

Introduction

European and international context

At the Lisbon Summit in 2000, when setting thestrategic goals for Europe, the European Council

made, for the first time, an appeal on CSR, seek-

ing contributions from businesses in meeting

those goals. This was complemented by the

European Council in 2001 in Gothenburg, when it

decided that the EU sustainable development

strategy should complete and build on the

Lisbon commitment by including an environmen-

tal dimension. This recognises that in the long

term, economic growth, social cohesion and

environmental protection must go hand in hand.

The Lisbon Summit was also the starting point for

the current EU debate, which has included the

initial Green Paper on CSR (2001) and the sub-

sequent Commission Communication on CSR(2002), and the setting up of the European

Multi-Stakeholder Forum on Corporate Social

Responsibility (hereafter the Forum).

The deliberations of the Forum and its Round

Tables took place in this context, and in a con-

text of EU enlargement. There was also an

important international echo: in 2002, at the

World Summit on Sustainable Development in

Johannesburg, which resulted in the Plan for

Implementation and its particular reference to

the concept of CSR.

As well as these formal discussions, in manyplaces, companies, citizens and stakeholder

organisations continued to debate the roles

which could be played and the action which

could be taken by different actors, in securing

economic, social and environmental improve-

ments.

The Forum came at a time when there were

also many other multi-sector dialogues and

debates taking place at other levels, develop-

ing an understanding of how society can move

forward, through new partnerships and ways of

working together.

The contribution which businesses and stake-

holders can make, through CSR, to these aspi-

rations, and what the factors are which deter-

mine this contribution, are the subject of the

Forum's report.

The Forum's origin, objectives, organisa-tion and process

In July 2002, the European Commission

announced its intention to establish the Forum

with the aim of promoting CSR through raising

the level of understanding of CSR, and fostering

a dialogue between the business community,

trade unions, civil society organisations and

other stakeholders.

Its objective was:

With the overall aim to foster corporate social

responsibility, the CSR EMS Forum shall promoteinnovation, transparency and convergence of

CSR practices and instruments through:

z Improving knowledge about the relationship

between CSR and sustainable development

(including its impact on competitiveness,

social cohesion and environmental protec-

tion) by facilitating the exchange of experi-

ence and good practices and bringing

together existing CSR instruments and initia-

tives, with a special emphasis on SME specific

aspects;



7/131



z Exploring the appropriateness of establishingcommon guiding principles for CSR practices

and instruments, taking into account existing

EU initiatives and legislation and international-

ly agreed instruments such as OECDGuidelines for multinational enterprises,

Council of Europe Social Charter, ILO core

labour conventions and the International Bill

of Human Rights.

The European Commission facilitated andchaired the Forum, which had a membership ofemployer's organisations, business groups, tradeunions and Non Governmental Organisations(NGOs). The Forum was asked to present beforesummer 2004 a report about its work to the

European Commission, and a framework of con-clusions and recommendations.

Four theme based Round Tables took place as

part of the process, each one meeting three

times:

1. Improving knowledge about CSR and facili-tating the exchange of experience andgood practice;

2. Fostering CSR among SMEs;

3. Diversity, convergence and transparency ofCSR practices and tools;

4. Development aspects of CSR.

These Round Tables adopted some ground rules

to help them in their work, including :

z exploring case examples in a spirit of mutualrespect, the "no shame and no fame" rule;

z experiences were presented as far as possi-ble by multi-stakeholder teams.

The Round Tables benefited from hearing aboutthe practical experiences of a range of differentcompanies, including social economy organisa-tions / cooperatives, which have long estab-lished experience of placing CSR at the core oftheir business.

Each Round Table had a balanced membershipmade up of representatives from trade unions,NGOs, business and employers' organisations,enriched by observers from a number ofEuropean and international organisations.

Each one of these Round Tables produced a

summary report to the Forum which are

attached. This final report of the European Multi

Stakeholder Forum on Corporate Social

Responsibility builds on the learning they containand reflects their outcomes.

What do we understand by CSR?

The starting point for the Forum's discussion was

the definition of CSR provided by the European

Commission.

"CSR is a concept whereby companies integrate

social and environmental concerns in their busi-

ness operations and in their interactions with their

stakeholders on a voluntary basis"

Through CSR businesses contribute to sustainable

development. The deliberations of the Forum

have led to an enriched understanding of CSR.

Our baseline understanding is:

z CSR is the voluntary integration of environ-mental and social considerations into busi-

ness operations, over and above legal

requirements and contractual obligations.

CSR is about going beyond these, not replac-

ing or avoiding them.z The commitment of management in driving

CSR forward is essential.

z CSR is about the core business activities of acompany, and while companies are there to

make profits, an approach which integrates

environmental and social considerations and

is based on dialogue with stakeholders is like-

ly to contribute to the long-term sustainability

of business in society;

zCSR is one means amongst many for achiev-ing economic, social and environmental

progress, and for integrating these concerns

into business practice.

z The dialogue with relevant stakeholders addsvalue to the development of companies' CSR

practices and tools. As employees are an

integral part of a company, it is important to

pay particular attention to the role of

employees and their representatives and dia-

logue with them.


8/131


z CSR is complementary to other approachesof ensuring high environmental and social

performance: there are limits to CSR, and it

alone cannot be expected to ensure envi-

ronmental and social improvement and thatit should not be used to shift public responsi-

bilities to companies.

z CSR is an ongoing learning process for com-panies and stakeholders. The development

of tools and practices is work in progress.

Companies need to consider their

approach carefully and choose tools which

suit their needs and respond well to stake-

holders' expectations. They need to refine

and develop their approach over time,

responding to changing circumstances andexpectations. Scope for flexibility, innova-

tion and refinement are important for suc-

cessful CSR.

z Convergence of CSR practices and tools isoccurring on a market-led basis through vol-

untary bottom-up and multi-stakeholder

approaches, and other drivers, and that this

can achieve quality and a good balance

between comparability, consistency and

flexibility.

z Companies taking a CSR approach, as wellas other organisations, benefit from commu-

nicating about these activities in a transpar-

ent and meaningful way. There are different

ways in which this can be achieved, of

which reporting is one. A company's

response to the transparency challenge will

depend on its activities, capacity and the

needs of its stakeholders, which may be dif-

ficult to reconcile.

z The environmental, social and economicimpacts of a company's activities up and

down its supply chain, as well as in its own

operations need consideration.

z When operating in developing countriesand / or in situations of weak governance,

companies need to take into account the

different context and challenges, including

poverty, conflicts, environment and health

issues.



9/131

EUROPEANMULTISTAKEHOLDERFORUM ON CSR

CORP

ORATE

SO

CIAL

RES

PONSIBILIT

Y

29 June 2004

PART ONEPART ONE

Reaffirmation of internationalReaffirmation of internationaland European agreed principles,and European agreed principles,standards and conventionsstandards and conventions

5


10/131

6 PART ONEREAFFIRMATION OF AGREED PRINCIPLES

Part One

Recalling the baseline understanding, and after

having heard and discussed around fifty casesinvolving companies and stakeholders, the

Forum recognises that there are a number of

reference texts and instruments, which have

served as a starting point or guidance for com-

panies and stakeholders when developing their

CSR approaches. The aim here is not to try to

be exhaustive or prescriptive, but the Forum

would like to draw attention to a number of key

texts. There are other texts referenced in the

Round Table reports.

Important reference texts and instruments, bothdeveloped with the involvement of business

and directly addressed to them are:

z the ILO tripartite declaration of principlesconcerning Multinational Enterprises (MNEs)and social policy (1977, revised 2000),

z the OECD guidelines for MNEs (1976, revised2000),

z the UN Global Compact (2000)

There are also a number of texts addressedmore widely to states and governments, con-

taining values that can inspire companies when

developing their CSR, which in turn can play a

role in reinforcing and making tangible the val-

ues these texts represent. The Forum highlights

the following texts:

z the UN Declaration on Human Rights (1948),International Convention on civil and politi-cal rights (1966), International Conventionon economic, social and cultural rights

(1966) - The International Bill of Rights.

z the Council of Europe Convention forProtection of Human Rights andFundamental Principles (1950),

z EU Charter of Fundamental Rights (2000)

z Council of Europe Social Charter (1961,revised 1996)

z the ILO Declaration on fundamental princi-ples and rights at work (1998),

z Rio Declaration on Environment and

Development (1992) and its Agenda 21(1992),

z Johannesburg Declaration and its ActionPlan for Implementation (2002)

z UN guidelines on consumer protection(1999)

z The EU Sustainable Development Strategy,as adopted by the European Council at theGothenburg Summit (2001)

z Aarhus Convention on access to informa-tion, public participation in decision makingand access to justice in environmental mat-ters (1998)

Many companies or groups of companies

involved in CSR take account of these texts

explicitly when developing their CSR policies,

practices and tools. They build on them or

elaborate internal rules to implement them.

Others, especially SMEs, may do so implicitly.

What is important, is the concrete and effective

contribution to the overall implementation and

reinforcement of fundamental values and prin-

ciples and sustainable development which CSRcan make.


Reaffirmation of international and European principles, standards and conventions


11/131


CORP

ORATE

SO

CIAL

RESPONSIBILIT

Y

29 June 2004

PART TWOPART TWO

Analysis of CSR determiningAnalysis of CSR determiningfactors: drivers, obstacles andfactors: drivers, obstacles andcritical success factorscritical success factors

7


12/131

8 PART TWOANALYSIS OF CSRDETERMINING FACTORS

Part Two

Each of the Round Tables has, from its discus-sions and debates catalysed by presentations

and case examples, identified the factors

which for its particular topic, determine the

take-up and development of CSR. This part of

the Forum's final report brings together the most

important determining factors, drawing on the

Round Table reports, and briefly discusses them.

They are not presented in any order of priority.

The determining factors may be internal to a

company, or external. They may be related to

the business case for CSR, or to what has been

called the values case for CSR. They may be

related to the overall context of the desire for

sustainable development, and associated

activity by public bodies and civil society

organisations to encourage this, as well as by

businesses themselves.

It is important to note that the relevance of

these determining factors may vary, according

to the size, age, activity of the company, and its

geographical, political or cultural context.Particularly in the case of SMEs, what may be

determining factors for some are not necessari-

ly equally important for all. Some will more rele-

vant to owner-managers, and some to others

working in the business. It is also the case that

something which is seen as an obstacle may be

seen in other circumstances as a driver or a

success factor.

Some of the determining factors apply to the

overall take-up and approach to CSR. Others

apply to the choice of particular tools or prac-tices, once a company has decided to take a

CSR approach.

Drivers

Internal drivers

Although this section of the report summarises

the key learning about internal drivers in general,

it is recognised that the significant drivers will vary

from business to business, depending on factors

such as the reasons for the initial creation of the

organisation, its internal culture and strategy.They will also manifest themselves differently,

depending on the context in which the business

is operating.

The values and commitment of key decision

makers are an internal driver. There are situa-

tions where senior decision makers decide that

it is 'the right thing to do', to reinforce and inte-

grate environmental and social values regard-

less of whether there is a carefully weighed up

business case.

The other internal drivers are related to the busi-

ness case - minimising risk, maximising opportu-

nity - although it is often easier to set out this

case 'in principle' than to find hard evidence to

back it up. In the longer term, business success

and where relevant shareholder value will, it is

argued, be better delivered by those compa-

nies which are contributing to sustainable

development.

z Reducing costs through eco-efficiency;

z Protecting or enhancing the resources (envi-ronmental or human) on which the businessdepends;

z Anticipating, avoiding and minimising riskand the associated costs;

z Anticipating costs (including insurancecosts), societal and stakeholder expecta-tions customer demands, and future legisla-tion;

z Retaining the "license to operate";

z

Differentiating from, and gaining an edgeover, competitors;

z Protecting, building and enhancing reputa-tion particularly for branded and business toconsumer companies;

z Attracting and retaining skilled and motivat-ed employees;

z Learning and innovating, improving qualityand effectiveness;

z Being an attractive prospect for investors;

z Improving relationships with stakeholders.


Analysis of CSR determining factors: drivers, obstacles and critical success factors


13/131


9PART TWOANALYSIS OF CSRDETERMINING FACTORS

External drivers

As understanding of the impact of business onthe environment and on society hasdeveloped, so society's expectations of business

practice have also developed. These expecta-tions show themselves in a number of ways, asdifferent parts of society directly and indirectlyincentivise or promote some approaches or pro-vide disincentives for others, with the aim ofimproving the environmental and social impactof businesses.

These signals come from different players, including

z Investors - seeking to invest in line with theirown values, or in line with an expectation thatcompanies with a CSR approach will be bet-

ter investments;z Consumers and others in the supply chain -

choosing one product, service or companyover another on the basis of their understand-ing of its environmental or social credentials;

z Public authorities - through a range of mech-anisms including promotion and informationprovision, their own role as purchasers, regula-tory and fiscal signals;

z NGOs - monitoring and assessing the environ-mental and social impact of business and

campaigning for improvements;z Trade unions - seeking to influence company

behaviour through mechanisms such as col-lective agreements;

z Other companies, business networks, interme-diaries and supply chains - co-operativelythrough sharing experience, developing ashared understanding of better approachesand expectations, providing external bench-marks and challenging practices in businessto business relationships.

Obstacles

Whether perceived or real, the key obstacles all

relate to the choice which a company will make

about whether there is a net benefit in taking a

CSR approach, and adopting a particular CSR

practice or tool.

z Adopting a CSR approach involves continu-ous effort and adaptation. There may becosts, such as the time and investment need-ed to plan and implement new ways of doing

things. Evidence for the benefits of particular

CSR tools and practices, or for CSR in general,remains in some cases elusive and generallypoorly available (aside from eco-efficiencybenefits). For smaller companies in particular,

even when there are net benefits in prospect,there may not be the resources available todeploy, or other more immediate pressuresand competing priorities may mean that CSRis not pursued.

z A steep learning curve - a new set of jargon tobe made concrete to their circumstances ortranslated into business language, a new wayof doing things, additional records to be kept,a new set of organisations and people tointeract with. The CSR agenda is very broad,and there may be a lack of useful information

or examples of what others have done. Thecompany, particularly SMEs, may lack theskills, resources or experience to move for-ward.

z Obstacles to obtaining help - some compa-nies may be reluctant to seek help, unsureabout the organisations which are offeringhelp, or unable to find suitable sources ofhelp.

z CSR can be a complex and uncertain area,taking in impacts and influences across the

environmental and social field as well as theeconomic, and suggesting an approachwhich favours engagement and dialoguewith relevant stakeholders;

z Unclear boundaries and the need to clarifythem - what parts of the organisation, whichissues, where geographically, how far out intothe supply chain, how far does responsibilityextend when causes are multiple or indirect?Stakeholders may need to be identified, com-plex, on-going communication mechanismsestablished, and conflicting priorities andinterests understood.

z Identifying or developing tools or practices,which suit the company's particular andchanging circumstances, and are effectiveand credible.

z Collecting information and ascertaining itsreliability;

z Filling gaps in awareness and understanding,especially in international supply chains, orinternational companies, in order to move for-

ward.


14/131

10 PART TWOANALYSIS OF CSRDETERMINING FACTORS

z Weak or absent public governance and therule of law, weak infrastructures, poorlyresourced and developed local stakeholdercapacity and civil society, limited possibilities

for partnership, low or short-termist con-sumer, customer or investor interest, meanthat it is even more challenging to establisheffective and credible CSR.

z The time it takes to align activities aroundthe values and business case for CSR, partic-ularly within complex companies. In themeantime, there may be conflicting actions,particularly when margins are narrow or rep-utational factors are not so important to acompany.

z The particular language of CSR, may needto be adapted and made concrete, partic-ularly for SMEs.

Critical Success Factors

The four Round Tables identified some critical

success factors for credible and effective CSR,

including:

z Commitment from key people - directors,owners, senior managers;

z Ensuring that the values and vision of theCSR approach are integrated into the busi-ness and its culture;

z Integrating the CSR approach and any asso-ciated practices and tools, with the corpo-rate strategy, core business, mainstreammanagement processes and policies, andeveryday operational practice. This mightmean adapting existing systems, or adopt-ing or developing new ones;

z Setting appropriate goals or targets, relatedto the core business, developing a staged

plan for achieving them (including somequick wins), evaluating progress towardsthem, and communicating this appropriately;

z Communicating about the approach, strat-egy, aims or activities in a transparent andmeaningful way. Such communication isalso a way of helping to magnify the bene-fits associated with drivers of CSR practice,for example through aiding learning andinnovation, as well as building credibility andhelping to improve relationships with stake-

holders.

z Openness to learning, improvement andinnovation;

z Engagement with external stakeholders -including local stakeholders in non-EU coun-

tries - understanding their views and expec-tations, being open to learning from them,communicating well with them about issues,goals and progress, being open about areasof agreement and disagreement and thusbuilding a trusting relationship, where thecompany and its stakeholders are willing toco-operate in good faith in efforts toachieve its CSR goals, including to the extentof working in partnership together;

z Involving employees and their representa-

tives in developing and implementing CSR,programmes, activities and initiatives;

z Sharing experience, learning from and withpeers, in sectoral and multi-stakeholder ini-tiatives or through networks, good practiceexamples, initiatives and benchmarking,and being willing to solve problems, inno-vate and improve as a result of this learning;

z The availability of easily accessible and spe-cific advice, and appropriate, effective andcredible tools and initiatives which the com-

pany can learn from when developing itsown approach, use, or join in with, which aresuitable to its circumstances or are flexibleenough to be enable the company to learnover time, innovate and respond to circum-stances.

z Particularly for developing countries, theexistence of an appropriate legal environ-ment which reinforces compliance with fun-damental standards, and the presence ofstrong civil society organisations such astrade unions and NGOs as stakeholders and

potential partners;

z A high level of awareness among consumersand investors, of the issues and companies'options in responding to them.



15/131


CORP

ORATE

SO

CIAL

RESPONSIBILIT

Y

29 June 2004

PART THREEPART THREE

Future initiatives and recomFuture initiatives and recom--mendationsmendations 11


16/131

12 PART THREEFUTURE INITIATIVES


Part Three

Future initiatives and recommendations

In line with the objectives of the Forum, Part Three

builds on the work of each of the four Round

Tables and particularly the analysis of CSR deter-

mining factors, set out in Part Two of this report.

Against this background, the Forum wishes to

make these recommendations, covering the

three areas considered in each of the Round

Table discussions:

a) Raising awareness and improving knowledgeon CSR

b) Developing the capacities and competencesto help mainstreaming CSR

c) Ensuring an enabling environment for CSR

The recommendations are based on our com-

mon understanding, set out in the Introduction.

Those recommendations addressed to business

are relevant to all types of companies (including

SMEs and social enterprises), and will be of most

immediate interest to those companies which

want to take up or further develop their CSR

approach. For those companies which have not

yet begun this approach, we hope they will be

an inspiration.

The Round Table on SMEs recognised the need to

understand what motivates those SMEs which

are involved in CSR; how best to reach them;

how to most effectively support their internalisa-

tion of CSR; and how to promote CSR to other

SMEs. The Forum has tried to take account of this

in its analysis and recommendations but many

were based on the available experience of larg-er companies. Therefore, the Forum acknowl-

edges that in order to successfully engage more

SMEs, there is a need to further reflect their reali-

ties and to enable them to progress in line with

their circumstances and capacities.

A) Raising awareness and improvingknowledge on CSR

1. Raising awareness of core values and key prin-

ciples embodied in reference texts

The Forum recommends that

z public authorities and all other stakeholdersin their respective capacities and fields ofresponsibility increase awareness on the key

principles and reference texts (examplesgiven in Part One) and on how they havebeen and can be made understandable,tangible and be translated into practice.Awareness raising and promotion can takeplace in a variety of ways, for example viacodes of practice, collective agreements,partnerships and global framework agree-ments. This should also include the supplychain, giving special attention to small andmedium-sized enterprises.

z when fulfilling their responsibilities in relation

to the texts in Part One, national, Europeanand international public authorities co-oper-ate closely with stakeholders in order to betterunderstand how to promote these values andprinciples and how they can be taken up,implemented and monitored.

z stakeholders consider co-operating in orderto learn about obstacles and success factorsin translating these principles and values intopractice.

z respective stakeholders work, individuallyand/or together, to elaborate user's guidessuch as those which exist from IOE or TUAC,devoted to deliver practical information onmost relevant tools and principles identified inPart One. This information should be present-ed in a useful and understandable way forcompanies, including SMEs, and other stake-holders.


17/131


13PART THREEFUTURE INITIATIVES

2. Collecting, exchanging and disseminating

information about CSR

The aim of collecting, exchanging and dissemi-

nating information about CSR is to promote and

develop effective CSR practices, tools and ini-

tiatives which improve the social, economic

and environmental impact of business.


z stakeholders contribute to this collection,diffusion and exchange of information oneffective and credible CSR practices, toolsand initiatives;

z in order to make such information morepublicly and easily available, there be a

European multi-stakeholder run internet por-tal, inter-linking different stakeholdersenabling them to learn;

z information be also made publicly andeasily available through existing stakeholderchannels and sources which are close to thecompanies, in particular SMEs.

3. Researching and improving knowledge

about and action on CSR

Although universities, business schools, stake-

holder organisations, consultancy bodies, aswell as the European Commission and Member

States currently undertake, coordinate or pro-

mote research on CSR, there is nonetheless a

lack of empirical research on CSR.


z more comparative, qualitative researchon CSR be undertaken, particularly thatwhich is multi-disciplinary, multi-stakeholderand action research based on real casestudies;

z different actors research specific aspectsof the business case, trends in CSR, CSR take-up, practices, tools, and impact (i.e. theireffectiveness in improving the social, eco-nomic and environmental impact of busi-ness). Special attention should be given inresearch projects to the following CSR areas,identified in the Round Table discussions:

- the impact at the macro-level of CSR oncompetitiveness and sustainable devel

opment;

- Integration of social and environmentalcriteria in public procurement, and theimpact of this;

- supply-chain issues and the added value

of partnerships between large and smaller companies;

- best available technology transfer issues;

- the relationship between corporate governance and CSR;

- making CSR information accessible toconsumers, investors and the wider public.

z these future initiatives build on those initia-tives supported by the European

Commission, through its various programmessuch as the 6th Research FrameworkProgramme.

B) Developing the capacities and com-petences to help mainstream CSR

4. Enhancing the capacity of business to under-

stand and integrate CSR

Developing and implementing CSR policies is achallenge which requires learning and innova-tion, and companies wishing to take a CSRapproach are likely to need to enhance theircapacity. It is important that there be a varietyof learning opportunities for companies, andthat there is a need for those which are topical,relevant and easily accessible to the company.The commitment of leaders in each organisa-tion to integrating CSR into the business is vital toenrich decision-making processes at all levelswith the aim of improving the competitivenessof the company in a sustainable way.

The Forum recommends

z co-operation within and between compa-nies, business organisations, and stakehold-ers, towards developing opportunities tolearn at the level of networks, sectoral initia-tives, chains of suppliers and buyers, andpartnerships;

z increasing the general availability of easilyaccessible, ready-to-use, practical informa-tion and advice on how to secure coherent,

incremental implementation of CSR within


18/131



and across all functions / departments / oper-ations / locations and enable each companyto assess and learn from its own experience.

z increased exchange of experience be

organised between purchasers and suppliersin order to build capacities in sustainable sup-ply chain management, through improvedunderstanding of global supply chain issuesand responsibilities, including how purchasingpractices impact suppliers and their commu-nities. There should be particular attention tothe involvement and contribution of SMEs,and notably those in the South, and to exam-ples of partnerships with larger companieswhich support engagement in CSR practices.

The Forum recommends to companies striving for

greater integration of CSR in their daily business

operations that

z they adapt tools to take account of theirneeds, circumstances and impacts.

z they be willing to progress in their CSR effortsby examining their performance in relation totheir CSR objectives, and learn from this; e.g.through key performance indicators (KPIs),impact assessment, and reporting on theseachievements.

z

people who work on CSR be trained in howto understand the economic, social and envi-ronmental impacts of their company.

z they focus on developing internal learningopportunities (which might include adaptingeveryday communications and meetings aswell as formal training programmes directedtowards the development of skills and com-petencies).

5. Building the capacity of "capacity builders"

Building on the Round Table discussions theForum recognises that there are many organisa-tions which can play a catalysing or support rolefor companies in their CSR efforts (for examplebusiness advisors, consumer organisations,investors, trade unions, media), and in somecases have a multiplier effect.


z such organisations develop relevant under-standing, skills and capacities on CSR;

z people who work on CSR be trained to

understand the economic, social and envi-

ronmental impacts of relevant companiesand how to support the development of bestpractices;

z business advisors and support organisations

which wish to do so, develop know-how oneffective CSR practices, to contribute tocapacity building, take-up and assisting busi-nesses in their CSR efforts;

z recognising that not all stakeholders havethe resources required to take CSR initiativesforward, public authorities, companies andother stakeholders support capacity buildingactivities.

6. Including CSR in education and the curriculum

Business schools, universities and other educationinstitutions have an important role to play in order tobuild the necessary capacity for relevant CSR strate-gies. Their core business is indeed about education.In this capacity they need to help future managersand employees improve their capacities to coher-ently approach CSR. But they educate not only thebusiness world. They are essential to improve theknowledge on CSR for everybody in our capacity asconsumer, employees, stakeholder partners, etc.


zCSR and related topics be mainstreamedinto traditional courses, in the curricula offuture managers and graduate students, inexecutive education, and in other education-al institutions.

C) Ensuring an enabling environment for CSR

7. Creating the right conditions for CSR

Primary responsibility rests with governments andpublic authorities, to ensure that the right combi-

nation of economic, environmental and socialframework conditions exists to support sustainablegrowth and entrepreneurship, and the sustainabledevelopment of societies and economies. It is cit-izens and businesses which will deliver thechanges in consumption and investment patternsneeded to deliver sustainable development.

7.1 The European Union's Lisbon and Gothenburgstrategies together provide the European frame-work for sustainable development of society andeconomies, aiming to make the European Union

a more competitive, dynamic knowledge-based


19/131


15

economy, capable of sustainable economicgrowth with more and better jobs and greatersocial cohesion, delivering a cleaner, safer andhealthier environment.

The Forum recommends thatz EU institutions and governments step up

their efforts towards a more co-ordinatedpolicy approach, and that they implementthe Lisbon goal and Gothenburg strategy;

z public authorities ensure that there is botha legal framework and the right economicand social conditions in place to allow com-panies which wish to go further through CSR,to benefit from this in the market place, bothin the EU and globally.

7.2 When companies develop their CSRapproaches, it is important that they take intoaccount their nature, size, activities and locationas well as costs, capacities and other competi-tive concerns, and the expectations of stake-holders, in order to further improve their environ-mental and social performance in an innovativemanner.

Trust and credibility in CSR are enhancedthrough transparency and open communica-tion which in turn can contribute to learning,

organisational processes, management per-formance and successful CSR practices.Therefore the challenge of transparency existsnot solely for companies but for all organisations.

There are a variety of processes to ensure cred-ibility of CSR practices, including for examplereporting, dialogue and partnering with stake-holders, monitoring and communication ofprogress and results, and a variety of toolsincluding on-line communication, internal /external auditing etc. The Forum notes that for

trade unions and NGOs, transparent CSR report-ing is a particularly important process in provid-ing meaningful information, a clear record ofCSR development and assessing credibility (seeRound Table Transparency Report section 3 and4 for more detail).

Drawing on the experience of companies withwell-developed transparency and communica-tion policies, the Forum recommends that com-panies

z explore the most suitable channels of com-

munication for them with a view to ensuring

that information reaching different stake-holders is meaningful and credible to them;

z have a clear commitment and strategyfrom the top towards transparency and

communication on CSR, ensuring that rolesand tasks for developing method andprocesses are clearly defined and assigned;

z identify what items are pertinent withregard to the company's vision and specificobjectives, the risks and opportunities associ-ated with its environmental and social foot-print, the views of relevant stakeholders, thecommercial sensitivity of certain data, andother possible competitive concerns;

z identify and improving appropriate per-

formance criteria and where relevant draw-ing inspiration from existing tools or makinguse of any of the many transparency frame-works currently available;

z collect and using information to ensure abetter understanding of the complexity ofmanaging certain CSR issues and sometimeconflicting expectations;

z consider the risks, opportunities and costsof suitable tools and / or systems to improvethe robustness and assure the quality ofdata;

z develop a continuous learning processwhereby the company can evaluate theoverall impact of its practice, track changesin stakeholders' expectations, and share itsexperience with others.

These points can also be useful guidance forother organisations, not just companies, accord-ing to their particular roles, responsibilities andimpact.

7.3 As long-term non-financial factors are beingtaken into account by more and more investorsincluding through Socially ResponsibleInvestment (SRI), which is thus an increasinglyimportant driver of CSR, the Forum recommendsthat

z information about SRI funds and other funds,and their approach to CSR (funds and indices,their methodology and investment criteria) begathered and made accessible, so thatpotential investors, and companies, can

understand, evaluate and use them better.

PART THREE

FUTURE INITIATIVES


20/131



8. Developing stakeholder dialogue

The spirit of constructive dialogue is very impor-

tant in furthering the aims of CSR.

The Forum recommends thatz companies and stakeholders contribute to

constructive dialogue from the developmentstage of companies' CSR activities on goalsand progress thereby adding value to theseactivities;

z for successful dialogue to take place thereneed to be clear understanding of roles andexpectations, and a willingness to pursueinnovative, inclusive and dynamic coopera-tion and / or partnerships in good faith;

z

since they are an integral part of the com-pany and are key players in realising CSR, dia-logue with employees and trade union / work-er representatives at company level is partic-ularly important. Dialogue at other levels mayalso be relevant.

z companies and stakeholders engage indialogue at a local level on relevant issues, toensure that local realities and concerns areunderstood and taken into account;

9. The role of public authorities / EU

The EU has a key role in promoting sustainabledevelopment within Europe and on the wider

global stage. Through CSR companies can

make a contribution to sustainable develop-

ment. The EU and public authorities have a role in

enabling this.


z EU institutions and governments be consis-tent across policy areas, taking a lead in mov-ing towards the goal of sustainable develop-

ment, both within Europe and at a globallevel, in particular through appropriate tradeand development policies and internationalagreements, thereby setting a context forCSR;

z EU institutions and governments encourageand assist all countries to ratify and implementinternational conventions protecting humanand social rights and the environment.

z as it is a clear responsibility of national gov-ernments to promote democracy and humanrights, governments provide the appropriate

legal framework for protecting human, socialand economic rights of citizens, and a climateconducive to economic, environmental andsocial progress particularly in developingcountries;

z public authorities at different levels (EU,national, regional and local) recognise theircontribution to driving CSR, alongside others,and in cooperation with stakeholders, assessand strengthen their role in raising awarenessof, providing information on, promoting, andsupporting the take-up, development andinnovation of effective CSR, and the develop-ment of environmentally and socially respon-sible products and services;

z EU and / or Member States consider and

evaluate how to use public funds in the mostresponsible and effective manner, taking intoaccount environmental and social, as well aseconomic considerations.

z public authorities examine their practices,know their social, environmental and eco-nomic impacts and disseminate best practiceon their role as organisations, for example asemployers and consumers.


21/131


CORP

ORATE

SO

CIAL

RESPONSIBILIT

Y

29 June 2004

FINALFINALREMARKSREMARKS

17


22/131

18FINAL REMARKS


Final remarks

The recommendations above are mutually rein-forcing and as a whole set out a way forward forCSR in the EU. . The Forum looks forward to seeingprogress in the areas of these recommendationsand invites all actors to contribute to this. TheForum asks the Commission to reflect on how tosupport these recommendations in forthcomingcommunications.

The Forum invites the Commission together withstakeholders, to convene an initial shared reviewin two years time of progress made in relation tothe Forum's recommendations, and of the trends,developments and innovations in CSR.


23/131


EU Multi-Stakeholder Forum on Corporate Social Responsibility (CSR EMS Forum)

Attendance List Final High Level Meeting, Brussels, 29th June 2004

Forum Members

Employer Organisations

UNICE

Mr. Philippe de Buck, UNICE

Ms. Renate Hornung-Draus, BDA

Mr. Emmanuel Julien, MEDEF

Mr. Vidar Lindefjeld, NHO

Ms. Natascha Waltke, UNICE

CEEP

Mr. Alain Wolf, CEEP

Mr. Christian Pppinck, CEEP

EuroCommerce

Mr. Ray Baker, B&Q PLC

Mr. Jouko Kuisma, KESKO Corporation

Julia Egerer, EuroCommerce

UEAPME

Mr. Luc Hendrickx, UEAPME

Business Networks & Organisations

CSR Europe

Viscount Etienne Davignon, CSR Europe

Mr. Bernard Giraud, Groupe Danone

Mr. Jan Noterdaeme, CSR Europe

Mr. Frank Welvaert, Johnson & Johnson Europe

Mr. Lothar Meinzer, BASF

CECOP

Mr. Eric Lavilluniere, CECOP

Ms. Agns Mathis, Febecoop/CCACE

European Round Table of Industrialists (ERT)

Ms. Kathie Harris, ERT

Mr. Wim Philippa, ERT

Eurochambres

Mr. Arnaldo Abruzzini, Eurochambres

Ms. Felicie Schneider, Eurochambres

World Business Council for Sustainable Development (WBCSD)

Mr. Lothar Meinzer, BASF

PARTICIPANTS FINAL MEETING


24/131

Trade Unions

ETUC

Mr. Walter Cerfeda, ETUC Secretariat

Ms. Penny Clarke, EPSUMr. Patrick Itschert, ETUC:TCL

Ms. Heleen Jalvingh, ETUC-Netherlands

Ms. Janet Williamson, TUC-UK

Mr. Turo Bergman, SAK-Finland

Ms. Edgardo Iozia, UNI-EUROPA

Eurocadres/CEC

Mr. Dirk Ameel, Eurocadres

Civil Society Organisations

Platform of European Social NGOs

Ms. Anne Sophie Parent, Social Platform

Ms. Denise Auclair, Caritas Europa/Cidse

Ms. Suzy Sumner, Solidar

Green 8

Mr. Duncan McLaren, Friends of the Earth

Mr. Jorgo Riss, Greenpeace Europe

Amnesty International

Mr. Dick Oosting, Amnesty International

European Consumers' Organisation (BEUC)Mr. WillemienBax, BEUC

Fairtrade Labelling Organisations International (FLO)

Ms. Anja Osterhaus, FLO

International Federation for Human Rights (FIDH)

Mr. Olivier De Schutter, FIDH

Oxfam*

Ms. Halina Ward, International Institute for Environment and Development, IIED

*Oxfam ceded their seat to Ms. Ward from IIED at this meeting

Forum Observers

EU Council

Mr. Paul Cullen, Permanent Representation of Ireland to the EU;

/Representing current EU Presidency (Ireland)

Mr. Puk van der Linde, Ministry of Economic Affairs, the Netherlands

/Representing future EU Presidency (The Netherlands)

European Parliament

Mr. Philip Bushill-Matthews, MEP European Parliament

Mr. Richard Howitt, MEP European Parliament




25/131


Committee of the Regions (CoR)

Ms. Constance Hanniffy, Committee of the Regions

ILO secretariat

Mr. Gran Hultin, ILO/GenevaUnited Nations Environment Programme (UNEP)

Ms. Eglantine Hauchard, UNEP Liaison Office for the EU

European Sustainable & Responsible Investment Forum (Eurosif)

Mr. Jrme Tagger, Eurosif

European University Association (EUA)

Mr. Howard Davies, EUA

Rapporteurs

Ms. Celine Louche, Vlerick Management School (assistant to Lutgart van den Berghe)

Ms. Anne Peeters, Centre d'Etudes et d'Action pour la Cohsion sociale (CEDAC)

Ms. Penny Walker, independent consultant

European Commission

Mr. Stavros Dimas, Commissioner for Employment and Social Affairs

Mr. Erkki Liikanen, Commissioner for Enterprise and Information Society

Mr. Jean-Paul Mingasson, Director-General, Enterprise DG

Ms. Odile Quintin, Director-General, Employment and Social Affairs DG

Mr. Pedro Ortun, Director, Enterprise DG

Mr. Jackie Morin, Head of Unit, Enterprise DG

Mr. Ludwig Kraemer, Environment DGMr. Giuseppe Cacciato, Enterprise DG

Mr. Dominique Be, Employment and Social Affairs DG

Ms. Claudia Gintersdorfer, Enterprise DG

Ms. Giusy Chiovato Rambaldo, Employment and Social Affairs DG

Ms. Corinne Dreyfus Politronacci, Trade DG

Mr. Hugh Pullen, Trade DG

Ms. Tina Zournatzi, Enterprise DG

Mr. Marco Loprieno, Development DG

Mr. Gareth Steel, Trade DG



26/131

ACKNOWLEDGEMENTS

ACKNOWLEDGEMENTS

The Forum would like to thank the following

expert-rapporteurs, who have played a remark-able role:

- Anne Peters, Centre d'Etude et d'Actionpour la Cohsion Soc iale, Belgium

- David Grayson, Business in the Community,UK

- Penny Walker, Independent Consultant, UK

- Prof. Lutgart Van den Berghe, Vlerick LeuvenGent Management School, Belgium

Grateful acknowledgement is also made to allthose who participated in the Round Tablesand Forum meetings, in particular all those whogave presentations as input into the Forum.

Finally the Forum would not have been possiblewithout the support of the EuropeanCommission and the work of the Forum'sCoordination Committee.

Most especially the Coordination Committee isindepted to Penny Walker for her endless com-mittment and mediation skills.

For the lay-out and compilation of this Reportwe also express our gratitude to Anduela G jergjiand Bernhard Knoblach from CSR Europe.



27/131


CONTACTS

CONTACTS

Trade Unions(Lead organisation: ETUC)

- Penny Clarke, EPSU45 Rue RoyaleB-1000 BrusselsTel: +32 2 250 1080Email:[email protected]

- Patrick Itschert, FSE

8, Rue Joseph StevensB-1000 BrusselsTel : +32 2 511 54 77Email:[email protected]

- Juliane Bir, ETUC5, Bld Roi Albert IIB-1210 BrusselsTel : +32 2 224 0411Email:[email protected]

Employer organisations

(Lead organisation: UNICE)- Natascha Waltke, UNICE

168, Avenue de CortenberghB-1000 BrusselsTel: +32 2 237 65 11E-mail: [email protected]

- Emmanuel Julien, MEDEF55, Av. BosquetFR-75330 ParisCedex 07Tel: +33 1 53 59 19 19Email: [email protected]

Business networks(Lead organisation: CSR Europe)

- Jan Noterdaeme, CSR EUROPE78-80, Rue DefacqzB-1060 BrusselsTel: +32 2 541 16 10Email:[email protected]

- Kathie Harris, ERT18 a, Place des CarabiniersB-1030 BruxellesTel: +32 2 534 31 00E-mail:[email protected]

NGOs(Lead organisations: Social Platform andGreen8)

- Suzy Sumner, SOLIDARRue du Commerce 22,B-1000 BrusselsTel: +32 2 500 10 20Email:[email protected]

- Denise Auclair, CIDSE16, Rue StevinB- 1000 BrusselsTel : +32 2 230 77 22Email:[email protected]

- Jorgo Riss, on behalf of Green 8,GREENPEACE EUROPE159, HaachtsesteenwegB- 1030 Brussels

Tel: +32 2 274 19 00Email:[email protected]

For further information on the Forum's process and results please contact any of the

participants of the Coordination Committee:
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


28/131


29/131

European Multistakeholder Forum on CSR Round Table Reports

11

Round Ta b le Rep o rt Sec tio n


30/131


31/131

European Multistakeholder Forum on CSR RT Improving Knowledge about CSR

11

Round Ta b le

Im p ro v ing Know led g e a b out CSR

a nd Fa c ilita ting the Exc ha ng e o f

Exp e rie nc e a nd Good Pra c tic e

Final report


32/131


33/131


22

Conten t

1. Introduction and context...............................................................................................3

2. Analysis of the key drivers, barriers and success factors...........................................42.1 Drivers.............................................................................................................................................4

2.2 Barriers............................................................................................................................................62.3 Success Factors............................................................................................................................8

3. Areas for further consideration ...................................................................................10

4. Conclusions and recommendations identified and explored ................................114.1 Raising Awareness and improving knowledge on CSR......................................................114.2 Developing the capacities and competenc ies to help mainstreaming C SR................124.3 Ensuring an enabling environment for CSR...........................................................................13

Annex 1 - SUMMARY OF CASE STUDIES...........................................................................15

Annex 2 - LIST OF PARTICIPANTS.....................................................................................21


34/131


35/131


33

1. In trod uc t ion a nd c ontex t

This report is based on the three RoundTable (RT) meetings on the subject of Im-proving knowledge about Corporate So-cial Responsibility (CSR) and facilitatingthe exchange of experience and goodpractice. In the case studies presentedduring the meetings and the pursuing dis-cussions, several key points were raised.

These were as follows:

Why and how is CSR done Impact of CSR on business and society Processes, incentives & tools to stimu-

late dissemination of knowledge, in-novation, uptake of CSR;

Integration of CSR in business strate-gies, structures & processes;

Integration of CSR in education &training.

The analysis and discussion of severalcase studies and business experiences,during the first two Round Table meetings,showed the complex 'CSR challenges'firms and their stakeholders face. Indeed,adapting the management disciplinesand practices to include a multitude ofstakeholder interests is far more complexthan the traditional decision models andprocesses. However, things are differentfor external and internal stakeholders. Theso-called 'internal' stakeholders - workersand their representatives - are alreadypresent in the traditional decision-makingmodels and processes. So here main-streaming is already a fact of life. Never-theless this still leaves the challenge ofdeveloping a more holistic CSR focus forand with the numerous groups of stake-holders, each with their specific interestsand business approach.

CSR needs resources and hence, a soundeconomic basis. It was argued that onlyeconomically healthy companies canaddress soc ial and ecological issues.

Some do not agree with this view be-cause CSR is considered to be an invest-ment in the long-term sustainability of thecompany, and thus is applicable to com-panies in any situation.

Dr. Anupama Mohan pointed out that thereal challenge for CSR is to managecomplexities. She showed that CSR refersto a myriad of approaches and definitionseach with its own interpretation. Thiscomplexity results in a large diversityacross nations, cultures, institutional andsociological perspectives, industries, or-ganisations, and also across corporations.Mads Ovlisen from Novo Nordisk pointed

out that it is not only up to business to de-fine CSR, but also to society.

The first round of the EMS Forum RoundTables already clearly showed that theissues tackled, the involvement of enter-prises and the degree of CSR integrationare very heterogeneous throughout theEuropean Union (EU), without even takinginto account the global business world.

This was perceived as inevitable from abusiness perspective, as companies op-

erate in different contexts, are confrontedwith different demands, etc. However, itwas argued that some guidance in ex-ploring the limits of CSR could be useful.One of the key determinants of successwas to be more explicit about the respec-tive roles of business and government aswell as other stakeholders. More attentionshould also be paid to a better under-standing of what works and whatdoesnt work. In order to add as much

value to the Forum as possible, the sec-ond wave of Round Table presentationswere asked to focus on drivers, barriersand success factors, as well as elementsdetailed in the introduction of this report.

It was agreed upon that the working defi-nition of CSR would be the definition pro-posed by the European Commission (EC)in its Communication of J uly 2002.


36/131


4

Overview of the cases:

Company (and/or organisation) Theme/topicDanone & IUF General tools for CSR management (the

Danone Way)

Development of a communication andinformation platform for employee-related issues

Norsk Hydro & Transparency InternationalNorway

Challenges of bribery and corruption Constructive dialogue with NGOs

Insight Investment& Amnesty International Challenges and opportunities of sociallyresponsible investment

Entreprise & Personnel and Euronext Mainstreaming CSR in a companys strat-egy and management systems

CSR and investor relationsUPM Kymmene, Stracel & WWF Implementing CSR in an MNE

Telefonica & Fundacion Empresa & So-ciedad

CSR mainstreaming from a reputationpoint of view

Federchimica & EMCEF/FEM CA CISL Responsible Care programme of theChemicals Industry

Ethical Trading Initiative & Chiquita Learning and experience exchangethrough dialogue and co-operation

Consumentenbond The consumer dimensionOECD Guidelines OECD Guidelines: focusing on the im-

plementation and monitoring processes

2. Analysis of the key drivers,

b a rriers a nd suc c ess fa c tors

2.1 Drivers

From the case studies, presentations anddiscussions in the two Round Table meet-ings it was clear that numerous factorsdrive the business world into the directionof CSR. In order to gain a better under-standing of these drivers and exploit that

knowledge to stimulate other firms to gointo that same direction, a framework ofdriving forces had to be developed. Twobroad categories of drivers can be de-tected: a set of drivers comes from 'inside'the corporation, whereas others are more'external' in origin.

2.1.1 Internal Drivers

Numerous types of 'internal' drivers havebeen identified and discussed during the

RT meetings. To some extent they can bere-grouped in two broad categories:

A first internal driver can be that CSR isembedded in the corporate culture, val-ues and attitudes (see point a). This is es-pecially true when CSR is part of thefounders and managements values.

The 'business case' for CSR is composed ofnumerous rational arguments for integrat-ing CSR concerns in the normal businessprocesses and corporate behaviour. Inanalysing the business case, it is arguedthat CSR has a positive effect on the(long-term) performance of a firm. How-ever, it was argued in the second wave ofthe RT that it is difficult to demonstrate thebusiness case for CSR because of thecomplex nature of business performanceand the huge problem of 'causality'. Not-withstanding these 'academic' chal-lenges, numerous rational argumentspopped up from the RT discussions (seepoints b through d). Some arguments fo-cus more on cost efficiency (e.g. riskmanagement), while others mainly relateto quality improvement, innovation andgrowth (e.g. corporate reputation).


37/131


55

a. CSR as part of the corporate cultureand values, and/or as an ingredient ofthe founders philosophy

During the opening session of the firstmeeting of the RT, Mads Ovlisen argued

that CSR should be a philosophy or aconviction. Companies that are mostlikely to succeed in mainstreaming CSRare those companies that include the ele-ments of CSR already in their values andin their culture. Such CSR values and cul-tures can go back to the founders' phi-losophy (e.g. Danone case).

b. Better risk managementOne of the ways CSR could add to better

performance is through a more efficientand more effective risk management. Thiswas also shown by the case of Feder-chimica where the number of accidentshad dropped significantly after adoptingthe Responsible Care Programme. In thisexample, CSR helps to operate more effi-ciently, protect workers and save money.

c. Better corporate reputation, leading toa competitive advantage in all types

of marketsIt was argued that corporate reputation isone of the most important assets of acompany. Companies with a solid reputa-tion might be considered as preferredsuppliers, business partners or employers.CSR might thus be considered as a way todifferentiate from competitors.

Telefonica identified reputation as itsnumber one concern. Reputation is an

important intangible asset that representsin most cases a significant part of the totalfirm value. However the Telefonica casealso clearly showed that reputation is sub-

jective, in the eye of the beholder. Theytherefore developed a holistic corporate-wide framework to identify possible ex-pectation gaps and to 'manage' corpo-rate reputation in close relationship withtheir stakeholders.

The presentations showed that CSR can

play an important role in reputation man-agement (discussions showed that having

a good reputation seemed almost impos-sible without serious CSR considerations).Mads Ovlisen pointed out that employeesget motivated by CSR as well, so thatcompanies adopt CSR to attract and re-tain better employees.

d. Higher effectiveness and innovationthrough better stakeholder relations

Good stakeholder relations can facilitateimplementation of difficult decisions andhelp to solve important trade-offs. Thecase of Danone and IUF for example,clearly demonstrated that establishingsound relationships between the com-pany and its trade unions helps to maketough decisions in a climate of mutual

understanding. However it was clear thatsuch stakeholder relations rely a greatdeal on mutual trust and confidence ofthe stakeholders and the company. CSR isa people-centred process, which cannotbe uncoupled from stakeholder relations.Long-term lasting relationships are built ontrust. Building trust relies on dialogue andinvestments from all parties involved. Eve-ryone needs to play their role in order tocontribute to building trust in mutual rela-

tionships.

In other discussions it was also mentionedthat better stakeholder relations can leadto more pro-active developments andmore effective innovations.

2.1.2 External Drivers

All external drivers relate to some types of'pressure' from external, societal forces.Given the importance of investors, this

category has been given extra attention.

e. Incentives from the investor commu-nity

According to Insight Investment, institu-tional investors and fund managers havea responsibility towards stimulating CSR. Itwas argued that Socially Responsible In-vestment (SRI) in particular might consid-erably influence the ethical stance of acompany. As SRI receives growing atten-

tion, more companies are actively takingmeasures to make sure they are not ex-


38/131


66

cluded from SRI indices such as theFTSE4Good.

Therefore, SRI and investor relations' offi-cers (who are both explaining compa-nies strategies to investors and echoinginvestors expectations within their com-

panies) were considered as possible driv-ers of a CSR-approach for companies.However it was argued that it can takesome time (approximately 5 years?) be-fore investor relation officers will be ableto perform their potential role as CSRcatalysts.

At the same time, we must keep in mindthat it cannot be overlooked that SRI hasstill an extremely limited market share. De-

fining SRI funds from both a positive andnegative screening perspective, the rele-vant SRI fund market in 2003 was less than1 % of the total retail market acrossEurope and between 2-3 % of the institu-tiona l market. However, if the SRI defini-tion simply comprises exclusions forinstance from an industry perspective and engagement practices, the ratio ofSRI funds reach a considerable size in cer-tain countries (in particular in the UK and

the Netherlands).f. Pressure from societyNumerous stakeholder groups play an im-portant role in fostering corporate socialresponsibility. The case of Federchimicashowed that the Responsible Care Pro-gramme had emerged as a conse-quence of the critical attitude of societytowards the chemical industry after theBhopal incident in the eighties. Mads Ov-lisen pointed out that CSR could help a

company in receiving and keeping its li-cence to operate attributed to it by so-ciety.

g. Pressure from governments and publicpolicy

The OECD Guidelines for Multinational En-terprises are an example of widely ac-cepted voluntary guidelines that canurge companies to comply with theseguidelines and adapt their behaviour ac-

cordingly.

2.2 Barriers

Numerous factors can hamper the devel-opment and implementation of a trueCSR strategy. Some of these barriers arecaused by the complexities involved. The

more stakeholders involved, the moreglobal the supply chain, the more com-plex societal expectations, the tougherthe challenges firms face. Other barriersrelate to the difficulty of implementing aCSR strategy in competitive capital andproduct markets. Last, but not least, lack-ing skills, experience and resources canalso hamper the effective introduction ofsuch a CSR strategy.

h. Vague boundaries of societal respon-sibilitiesConcerns exist about managing the sup-ply chain and how far to control subcon-tractors. Irregularities in the supply chainoften lead to reputation damage or litiga-tion. In some instances this can be a two-way process in which subcontractors de-mand responsible behaviour from theircustomer. However, some companies donot consider that the supply chain is within

their control. The issue is that there can belimits to what a company can do with re-gard to its suppliers. The more complexthe supply chain, the less it can be con-trolled at reasonable cost. However, itwas ETIs view that employers are morallyresponsible for their workers, even if theyare not directly employed by them. Theyshould - and in some cases already have a duty to comply with standards inhealth and safety, and other employment

conditions no matter where in the supplychain these employees work. It was sug-gested that the ILO labour standardscould be useful in this respect.

Also the unclear responsibilities of otherinstitutions in society add to the vagueboundaries of corporate social responsi-bilities. It was considered necessary thatgovernments clarify their role in societyand live up to their responsibilities as well.


39/131


7

i. Complex set of issues and the chal-lenge of working with different stake-holder groups

A company may need to work with dif-ferent stakeholders, having specific inter-ests and attitudes. It can take time and

effort to discuss and align - sometimesconflicting - interest groups and agendas.However, identifying relevant stake-holders is not only the responsibility andchoice of the company, it is a processthat can be initiated and coordinated bythe different parties involved. Workers, forexample, are clearly visible and presentthrough their representative structures, in-cluding trade unions.

Having clear objectives and processes forthe development and implementation ofCSR policies and programmes, as well asfor the stakeholder dialogue, is necessary(see next point).

j. Difficulty of clear communication andtransparency

It is important, yet difficult, to comprehen-sively inform and communicate withstakeholders having different interests. The

argument was raised by some that com-panies should avoid one-way reportingand presentations. Some believe thattransparency might be inhibited by frag-mented and incomparable data from atime, company size and geographicalperspective.

The way dialogues and discussions areorganised can have an effect on the will-ingness of some parties, including NGOs,

to enter into future relationships. Someparticipants felt that discussions and dia-logues about general principles often donot touch the heart of the matter. Somestated that a dialogue should tackle morespecific problems, which are relevant tothe stakeholders participating in the dia-logue. The evolution of the Round Tablediscussions is a good example of thebenefit that can be gained by a more fo-cused 'multi-stakeholder' dialogue.

The issue was raised about the differenceand complementarity of social dialogueand CSR. It was agreed that CSR is not the

same as the social dialogue. Multi-stakeholder dialogues are not intended toreplace soc ial dialogue. However, as theinternal social aspect of CSR whereworkers and trade unions play a funda-mental role - is one of the main CSR pillars,

CSR needs to be linked to social dialogueand vice-versa. Meanwhile, some arguethat there is a need for a better under-standing of the role trade unions can playin the CSR debate and how other stake-holder forum can be structured in order toinclude unions.

k. Complex corporate structuresIt was argued that the majority of largecompanies are spread all over the world

and are divided into departments anddivisions (i.e. they function in a verticalway). This can inhibit cross-functional dis-cussions needed for an effective CSRprocess.

How can all the people involved be takenon board to develop and implement agroup-wide CSR policy? Internationalalignment between the different divisionsof a company and the creation of a

global platform for CSR can be in contrastwith multi-national or trans-national ap-proaches that respect the cultural andcompetitive diversity.Such barriers were indicated in the casesof UPM-Kymmene, Telefonica and Entre-prise & Personnel.

l. Implementing and developing CSR ina competitive world

In the first session of the Round Table, it

was suggested that a lot of managers aresceptical about CSR because they be-lieve that it will bring extra costs leading tocompetitive disadvantage. The case ofUPM Kymmene shows that it can be diffi-cult to implement a CSR strategy whencompetitive pressure is high. It was con-cluded that it is not easy to implementCSR simultaneously with other businesspriorities in a balanced and motivatingmanner.

Moreover, some are convinced that theconsumer lacks interest in CSR as productsof this nature remain niche. Many con-


40/131


8

sumers are interested in services and/orproducts representing good value formoney, regardless of other concernsapart from product safety. Research re-sults from a study of Consumentenbondshowed that consumers are interested

but, in most cases, lack information toevaluate the CSR stance of a company.In their view, getting the needed informa-tion is the main problem with CSR for con-sumers.

There might also be a need to turn thetable and look at how expensive it canbe not to be socially and environmentallyresponsible.

m. Focus of investors on quantitative

short-term financial performance indi-cators

Capital markets and investment circlesoften focus on short-term financial per-formance indicators. Such indicators mayseriously hamper the implementation of afully-fledged CSR strategy within a com-pany on the stock exchange. Since main-streaming CSR takes time, the pace oftransformation and its long-term positiveeffects should not be underestimated. This

is certainly the case in an internationalgroup because of the considerable dif-ferences in CSR expectations and culture.Moreover, such financial indicators canfail to capture the immaterial value cre-ated through better CSR.Investors claim to be lacking relevantmetrics that capture and show the busi-ness case for CSR.

n. Lack of skills and resources

It was suggested that numerous compa-nies do not fully engage in adopting CSRstrategies because they lack the requiredskills and resources. Lack of skills and re-sources can result in add on rather thanintegrated CSR strategies, which areunlikely to succeed. CSR means manag-ing complex stakeholder relations andsometimes making difficult trade-offs.Companies need the right skills to copewith such complex challenges. More diffi-

cult management processes and proce-dures can also necessitate extra humanand financial resources, and as such, can

become a barrier for certain firms to fullyengage in CSR strategies.

To some extent the lack of informationand knowledge can also explain the bar-riers consumers are faced with when mak-ing their buying choices.

2.3 Success Factors

Based on the experiences gained byleading CSR companies, the Round Ta-bles offered an overview of numerousfactors that were instrumental in introduc-ing successful CSR strategies.Some of these success factors rely on thespecific competencies of firms and theirpositive approach towards CSR (likecommitment from the top, engagement

of all employees, adapted business mod-els). Others depend more on a favour-able framework and environment, whichhelps to stimulate true CSR attitudes andpractices (like mutual trust, commitmentof all stakeholders, flexibility).

o. Commitment of and support from thetop management and of the whole or-ganisation

Leadership is required to inspire and mobi-

lise everyone throughout the companyand to ensure wider understanding of CSRbenefits and implications. In several casesduring the two Round Table meetings, itwas stressed that ongoing support fromtop management was a crucial successfactor for mainstreaming CSR.

p. Integration of CSR in corporate strat-egy and its translation into the dailyoperations

Coherence between corporate culture,core business finality and CSR principles isnecessary, but not evident. As employeesface CSR challenges in their daily activi-ties, they too need to fully understand thecommitments of the firm. Therefore, it isimportant to translate CSR into an under-standable language for all employees sothat they can see how their job can con-tribute to the CSR policy of the companyand how their actions impact upon the

companys reputation. In addition to em-ployee education, however, there is alsoa need for involvement of employees and


41/131


99

their representatives in the developmentand implementation of CSR policies andprogrammes.It was also mentioned that short-term indi-vidual interests may conflict with CSR ob-

jectives. Some participants suggested

that aligning job functions and bonus sys-tems with those objectives would help re-solve these conflicts.

q. CSR strategy and policy that goes be-yond mere ad-hoc initiatives of corpo-rate citizenship

Ad hoc approaches towards CSR werecriticised by some participants, which fa-voured the development of a more holis-tic approach to manage the whole CSR

process. From the Telefonica case andtheir concrete experience in Peru, welearned that philanthropy is not a suffi-cient condition for CSR. Philanthropy is,however, not a bad thing. A company,willing to engage in this, should try tocombine these initiatives with includingCSR in its business strategy and processes.

r. Possibility to rely on existing manage-ment systems and processes

It was argued that mainstreaming CSRbecomes easier if a company can rely toa certain extent on already existing man-agement systems and processes. This is,however, not possible or relevant in allcases, as different goal setting, monitor-ing, assessment etc., may be required.Separate CSR systems were thought notto add to a successful mainstreaming.

Therefore management systems in forcethat are gradually adapted and enriched

with CSR components were seen as moreappropriate. Hence the great importanceof research to adapt management disci-plines and integrate CSR principles in tra-ditional management tools. Someinteresting routes can already be found inthe business world, such as the adapta-tion of Chiquitas balanced scorecard toinclude CSR objectives.

This should not mean that companies

cannot develop their own CSR manage-ment systems. The Danone Way (first ses-sion) and Telefonicas reputation

management model (second session) aregood examples of this.

s. Adequate data gathering and com-munication about companies CSRperformance

The greater need/demand for transpar-ency is embedded in a more generaltrend of disclosing a broad set of socialand environmental indicators that go be-yond the traditional financial indicators.Increasing importance is attached to in-tangible assets and, in this respect, issuesrelated to performance in terms of stake-holder expectations and CSR can be in-cluded. Adapted communication andreporting frameworks may offer a better

chance for a successful implementationof a CSR strategy. It was demonstrated ina number of cases that companies andother organisations have developed spe-cific indicators, e.g. to measure the repu-tation risk of CSR performance. Theverification process and evaluation ofgoals that have been set should also betaken into consideration.

t. Trust

Trust is not only a success factor in stake-holder relations, it is also necessary foremployees and the company as a wholeto have trust in the C SR process. Trust inthe process depends on the presence ofclearly stated goals. Further, transparencyconcerning the plan for action and theprocess can stimulate trust. When goalsare clear, their achievement can beevaluated and monitored. This structuredapproach may contribute to building trust

in the process. Which factors might con-tribute to building trust merits further ex-ploration by the Round Table.Disagreement can appear in every dia-logue. The way disagreements are copedwith and managed can be decisive forthe building of trust. Some argue that trustis not only a prerequisite but also a resultof a clear and open dialogue with well-defined goals. Others stress the need forpartners that are willing to engage and

co-operate.


42/131


110

u. CSR instruments and processes haveto be sufficiently flexible

From the RT discussions, it became clearthat it is important to know where everybusiness unit or division is situated in theCSR process. This was referred to as CSR

maturity. Therefore, it is important thatapplied CSR instruments and processesare sufficiently flexible in order to allowdifferent business units and divisions thatare at different stages of maturity and indifferent situations to use them.

v. Engagement with stakeholders andcommitment of other parties in society

CSR is not a matter for companies alone.It was clearly stated by some stakeholder

groups, that CSR is not only about the'business case'. Companies have to beable to rely on the commitment of otherparties in society. This is referred to as so-cietal responsibility by ETI. A companyshould be able to count on its stake-holders. Key business partners and cus-tomers have to contribute, as well as localand supranational authorities.

The involvement of employees and theirrepresentatives is key and local stake-

holder groups as well as NGOs can offervaluable advice and expertise. Exampleswere given concerning area planning,including mobility considerations, housingclose to the work place and other ameni-ties.

w. Availability of tools and multi-stakeholder initiatives

CSR standards and instruments such asthe ILO core labour conventions, the

OECD Guidelines for Multinational Enter-prises, the Global Reporting Initiative(GRI), the EUs Eco-Management andAudit Scheme (EMAS), SA8000 andAA1000 can be used as an aspira-tion/guide for implementing CSR intocompanies daily management prac-tices. Furthermore, private standardisationbodies are also developing standardsthat incorporate social and environ-mental aspects.

x. Opportunities to learn from, and withpeers

Broad, multi-stakeholder CSR initiatives national, regional, sectoral, provide thenecessary framework for i

Documents

CSR Forum Final Report