Corporate Responsibility: Is it worth it and for whom?

On 9 December, a panel of five discussed the value of CSR in the framework of an event organised by Edelman and chaired by the Publisher of EurActiv.com, Christophe Leclercq. The animated debate showed the differing views that exist on the various aspects of CSR.
The panel was made up of senior figures with ample experience in CSR: the CEO of a public relations firm; a vice president of a value-based management company; a communications strategist with experience of working with non-governmental organisations; as well as a risk manager and crisis counsellor.

At EU policy level, the Green Paper on CSR started the debate on the concept of CSR in July 2001. Since then, the Commission’s Follow-up Communication and most recently, the Council’s Resolution have added to the discussion.

Issues:
The following main issues were discussed in the framework of the debate:

Costs and benefits of CSR for large and smaller-sized businesses;
Ethical considerations in investors’ choice;
Role of governments, NGOs and consumers in CSR;
Role of regulation in the field of CSR;
Environmental responsibility as a “feel good” factor versus the depletion of natural resources;
The question of corporate credibility and transparency.
Positions:
Richard Edelman, President and Chief Executive Officer of Edelman, public relations and public affairs firm, launched the discussion by citing data from a 2002 Edelman Survey on NGOs. Based on this survey, Europeans were found to put the highest level of trust in NGOs, followed by business, while government and the media scored at the bottom. The three most trusted brands in Europe were those of NGOs. As regards corporate attributes in social responsibility, the survey showed that Europeans gave highest value to “honesty with the public”, together with “employee treatment”.

John Pigott, Senior Vice President of Stern Stewart & Co, a consulting firm specialising in value-based management and corporate finance, thought that many companies paid lip service to CSR. The bottom line, however, is that investors are concerned by profitability and that firms should be free from boycotts and legal fines. Investors’ choice does not depend on ethical considerations. In the speaker’s view, CSR would not work for middle-sized companies due to their financial constraints.

Chris Rose, a communications strategist, formerly a director of Greenpeace, suggested that governments had conceded too much power to business. He felt that governments did not deal well enough with CSR challenges as for instance, child labour could only be terminated by regulation. He felt that the current situation of nation states trying to resolve global problems was inadequate. At the same time, he also noted that the concept of “community” differed in different countries.

An NGO representative from the audience noted that the public acceptance curve was much higher than the companies’ legal compliance curve. The speaker thought companies should not comply because of the “feel good” factor but due to the realisation that the world is running low on global resources, such as water, oil and fish.

Mike Seymour, Edelman’s International Director for Crisis and Issues Management, reminded the audience of the lost corporate credibility following scandals, including the Enron, Andersen and WorldCom cases. Accounting practices nowadays seem obscure and the credibility of law and science has been undermined. The speaker believed, however, that ethical behaviour would eventually pay off as the demand for increased transparency will increase.

A participant wondered whether CSR was not rather about “Civil Social Responsibility”. The question of consumer choice was raised and several participants thought that people could indeed do more to support CSR principles in society. Another participant thought that governments should do more to provide people with choices, while a differing view claimed that governments have reached their limit and now would be time for the business community to take the lead.

Next steps:
Discussions on CSR will continue in the framework of the Multi-Stakeholder Forum on CSR, which was launched on 16 October, following the Commission’s Follow-up Communication on CSR. The Forum is scheduled to start its roundtables in 2003 and submit a report on its conclusions to the Commission by mid-2004.