Jean-Pierre SEGAL, André SOBCZAK, Claude-Emmanuel TRIOMPHE
A-From the corporate social tradition to corporate social responsibility
It is quite natural that at a time when a certain type of economic development is called into question and there are serious questions about the way business is conducted, the subject of corporate social responsibility should be to the fore, along with the issue of sustainable development. This is far from being a new concern. Nor have the concrete specifications being laid down today for benchmarks or standards for large multinationals come out of nowhere – unquestionably they are inspired by a highly developed procedural tradition of transparency in the Anglo-Saxon business world. As an introduction to this report, it is worth reminding readers briefly of this dual relationship, to help them to identify more accurately, in time and space, a concept of corporate social responsibility (CSR) that is both the inheritor of old practices and a product of a new approach, one could even say a nascent approach.
Social concerns are not the prerogative of contemporary capitalism – in 19th century Britain, Germany or France, certain manufacturers were already conspicuous by their concern for society, housing, welfare, charity to workers and their families. Similarly, certain religious assemblies and socialist thinkers had conceived of alternative factories in which the community dimension and local involvement already had a place. With the advent of the 20th Century and the generalisation of legislation and social welfare, this spirit of charity gave way to very extensive legislative, contractual and institutional structures. It was the emergence after the Second World War of multinational companies and their growing part both in the global economy and in local employment that again raised the question of the relationship between the enterprise and society.
Our British colleagues draw attention in their report to the fact that the question of corporate social responsibility arose in the United States in the 1950s, before reaching Europe a little later posed in very “Americanised” terms. The criteria used today to define CSR in Europe, such as the fact of going beyond the law or incorporating societal elements into corporate decisions, can be found in the academic literature from the 1960s. The idea that account needs to be taken of the various stakeholders and not just the financial interests of shareholders existed in the USA in the early 1970s, before profoundly influencing the British debate on corporate social responsibility that began in the early 1980s. At the same time, in France, for example, there was a tendency to speak of “citizens’ enterprises”, while Rhenish capitalism, which was then booming, practised a kind of German-style version of social responsibility, with the social market economy.
Today, with the globalisation of economies, brands and financial markets, the situation has changed somewhat. Enterprises are evolving on a continental scale, weaving increasingly complex business and financial relationships with one another, restructuring their activities and relocating many activities to regions with “cheap” labour. Public opinion has become increasingly concerned about the lack of social regulation of this globalisation of markets. It has told national and international public authorities what it expects of them and has very gradually begun to succeed in making itself heard. Financial markets themselves have perceived a need to standardise business practice. Ethically oriented mutual investment funds have come into being at the same time as social rating agencies designed to open the eyes of financial agents to the reality of the social practices of the enterprises in which they are investing their savings. Many large companies have also begun to think hard about their communications on this subject.
B-From Green Paper to communication, the Commission’s desire to define and promote social responsibility
It is in this context that the European authorities, wishing both to encourage a particular European social model and to promote good practice in European enterprises, have taken up the subject of social responsibility with a view to making it better known and ensuring that the way in which European enterprises understand its content is as homogeneous as possible. The publication in July 2001 of the Green Paper, designed to promote widespread debate on this subject in Europe, was a key point in this process of seeking a definition of CSR that was shared as widely as possible.
The Green Paper puts forward a number of broad defining criteria, which we have taken as the starting point for producing this report:
- the voluntary nature (i.e. going beyond the legal obligations imposed on the enterprise) of the relevant practices;
- the sustainable nature of the relevant commitment (CSR is not the sum total of “media coups” but a sustainable commitment based on a new form of corporate governance);
- partnership (in accordance with fairly non-specific modalities) between those involved within and outside the enterprise on the subjects that concern them;
- the need for transparency in this context (it is not enough simply to “say” something, if it cannot actually be “proved”, elements of proof must at least be provided).
Of course both the spirit and the letter of these criteria lend themselves to debate, and a debate was precisely what the Green Paper set out to launch. This report also sets out to feed this debate, by comparing the concept with the actual reality on the ground. At this point, to enable readers to appreciate how complex the subject is, we shall list some of the questions raised in defining this famous CSR:
- That of “motivation”, for example. Strictly speaking, talk of “voluntary” practices conflicts with the idea of “legal constraint”. Everybody knows the extent to which the functioning of an enterprise and the daily decisions taken within it are elements of dense webs of constraints that are not only legal, but also technical, financial and social. Is it accurate to describe as voluntary practices that in fact ensue from intelligent (but also constrained) adaptation in line with the expectations of the enterprise’s environment?
- That of the legal norm specifying the lower limit of social responsibility. How can practices “going beyond the law” be compared if legal obligations vary from one country to another? Is it realistic to expect companies with subsidiaries in other countries to base their practices on the norms in their country of origin when the differences between norms are one of the engines driving their global-scale redeployment?
- That of the borders of the company itself at a time when they are increasingly in motion, with processes involving assets purchases and sales, mergers, outsourcing, agreements, subcontracting, etc. Is the company that is the buyer expected to maintain the socially responsible commitments of the company that is bought?
C-Aim of the report
This report presents the conclusions of the research which we were commissioned to carry out by the European Foundation for the Improvement of Living and Working Conditions, just at the time when many voices were heard calling for case studies to be undertaken based on the reality on the ground and facilitating documentation of good practice in European enterprises, but also discussion of its scope and, if applicable, its limits.
Covering, as it does, relationships between the enterprise and its environment, in the widest sense of the term, CSR covers all an enterprise’s “voluntary” practices capable of having an impact on its physical, financial and social environment. This means that properly speaking, no distinction would be made between “internal” and “external CSR, both spheres being subject to legal obligations (compliance with standards in respect of environmental and labour law) and to voluntary commitments entered into by many enterprises wishing to be socially responsible.
However, it is common practice in the business world to distinguish between three fields of practice of CSR:
1. consideration by the enterprise of the impact of its activities on the physical and “natural” environment,
2. the enterprise’s commitment to serving local or global communities (in particular via voluntary contributions in support of cultural and humanitarian measures, etc.),
3. consideration of what is at stake for society in financial decisions (in particular, in issues of working and employment conditions, equitable occupational conditions, etc.). Our work addresses this third arm of CSR, on the basis of an explicit instruction to develop an approach to the subject informed by the contents of 12 case studies in four European countries: Germany, the UK, France and Hungary.
We were, of course, asked to document the subject, showing how European companies of different sizes, operating in different sectors and countries, were currently implementing social practices in respect of employment and working conditions and could be regarded as socially responsible. However, we also had to look at both the modalities used to implement these practices and the reception given to them by the various stakeholders. The perspective of our work also involved contributing to the debate currently underway in Europe between the various stakeholders on the subject of CSR the field data that are always welcome when a general concept is applied in a variety of possible contexts.
D-Structure of the report
The report is divided into two parts:
in the first part, we summarise the key points of our work, namely our chosen methodology, the main findings from the case studies, and the conclusions we derive and bring to the CSR debate;
in the second part, we present the four national reports produced by the German, British, French and Hungarian teams. They describe the specific contexts of the local CSR debates, the content of the various case studies conducted in each country, and the main conclusions that can be drawn from them.
This report is the result of cooperation between four national teams – German, British, French and Hungarian. It has been produced by Paul Blyton, Frédéric Bruggeman, Jean-Pierre Segal, Agnès Simonyi, André Sobczak, Claude-Emmanuel Triomphe, Klaus Winkler and Josef Wieland.
At various stages of the research, assistance was provided by Kate Bradbury, Lutz Michael Buchner, Carole Coudert, Helmut Eberhardt, Jenö Koltay, Maïte Laal, Dominique Lanoë and André Paccou.
The person responsible for scientific coordination of the work as a whole was Jean-Pierre Segal.