Corporate Social Responsibility. Layout of the presentation CSR : what are we talking about? The challenges of CSR workers’ representatives CSR,

Corporate Social Responsibility

Layout of the presentation

CSR : what are we talking about?

The challenges of CSR workers’ representatives

CSR, public authorities, workers’ representatives: an experience still in its embryonic stages

CSR and experts

CSR : what are we talking about?

1. A reality that has come from elsewhere The Unites States in the 1950’s :

• An ethical and philanthropic approach, stemming from a religious background, chiefly adopted by large firms and multinational corporations

• In a context dominated by– The historical weakness of social rights in the United

States– The voluntary practices of businesses– A minimisation of the role of trade unions

• An attempt to regulate a very unfair « shareholder » capitalism

2. A rather different European definition … A notion that comes to Europe later (end of the 90’s) Based on a different set of common values

• Solidarity

• Common good, collective interest

• Anticipate rather than repair The Commission of the European Union takes CSR among its

concerns

• Green paper : June 2001 and a wide-ranging consultation

• Communication in July 2002

• Multiple stakeholder Forum (2003-2004)

The EU definition of CSR:• “to be socially responsible means not only fully meeting

all applicable legal obligations, but going beyond that to invest more in human capital, in the environment and relations with the stakeholders”

• This supposes “the willing inclusion by businesses of social and environmental concerns in the commercial activities and their relations with their stakeholders”

3. … But there is a link between CSR and Sustainable Development (SD):

• “development that makes it possible to meet the needs of the present generation without compromising the ability of future generations to meet theirs, … in particular for the most deprived people”

• Therefore SD concerns the whole of humanity at a global level

• I must include three dimensions

The three dimensions

The differences between SD and CSR• CSR concerns a business, a group of businesses, a

network or a sector of activity• CSR may be considered to be a contribution by

business to sustainable development• … Thanks to policies that seek to reduce externalities,

the impact of businesses on their social and natural environment

• However, these notions currently imply some significant ambiguities: e.g. “sustainable enterprise” “sustainable strategy”, …

4. The driving force behind the deployment of CSR: the increasing exposure of multinational corporations

Increasing power and social responsibility

• The transformation of economic power, beyond a certain threshold, into social power

• … even as traditional public regulation levers are weakening les régulations (there is a vacuum to be filled…)

• The internationalisation and increasing vigour of challenges to mainstream practice

– A lowering of the threshold of risk acceptability by civil society in a globalised world

• The non-accountability of businesses and the media coverage of scandals

The ransom of power• Increasing risks for businesses

– A local problem immediately becomes a global one

– The corporate image: a key element in a business’s strategy

• The need to take on public responsibilities: illiteracy, schools, health,…

• The question of the legitimacy of corporate action– Private enterprise and the offer of “public services for the

common good”: water, electricity, …

The response of the multinationals• Steer the process of deploying CSR

– Transforming a constraint into an asset (competitive advantage)

– CSR = an instrument of legitimisation

• The two pillars of CSR policies in business– The primacy of intentional proactive measures

– CSR as a simple extension of the logic of financial investment (risk management)

A varying level of commitment to CSR on the part of businesses: the main factors

• The more or less international nature of the group– e.g. in the references to human rights

• The nature of its activity and risks• The impact of the company’s history and corporate

culture• An opportunity to revisit all of the company’s activity

with the “colours” of CSR

Therefore… A current tendency to “naturalise” CSR, the vision of

multinationals appearing as the only legitimate one …• … Whereas CSR by definition involves and implies

different, even diverging, interests The development of “soft law” - a kind of privatisation of law

- through the multiplication of voluntary commitments, against a backdrop of weakened public regulations

CSR is a groundswell movement and not a fashion• It is creating a system with the current context of

deregulation and the domination of the Anglo-American view of governance

The challenges and stakes of CSR for workers’ representatives

The risk of being “offside” The trend towards voluntary actions tends to undermine the

contractual dimension of social relations

• They encroach upon the traditional sphere of social relations; they address themselves directly to the employees

• Hence the risk of a reduced place for workers’ representatives CSR, as an extended policy of risk management, safeguards the

predominance of the shareholder/stakeholder A CSR policy that focuses on other players from civil society can

contribute to the marginalisation of workers’ representatives

Opportunities offered by current corporate policies As a general rule, CSR can be an important lever for opening up a

business to legitimacies other than those of managers and shareholders

CSR is a source of challenges to Management by workers’ representatives

• Concerning voluntary one-sided commitments by corporate management

– By pointing out malfunctions– By transforming these unilateral decisions into contractual

agreements

• Concerning the CSR and SD communications made by management

– By including them in the debate– By getting involved in the process (consultation?)

What is the role of workers’ representatives in CSR processes? One stakeholder among many others (trivialised if not

marginalised), or a structuring stakeholder in the CSR processes?– A company cannot have responsibility externally without being

responsible internally– Trade union organisations are “multistakeholders”– This is a decisive and difficult challenge, considering clearly

stated will of the representatives of European employers’ associations to dissociate CSR and social dialogue

A role to play in the construction in Europe of a new social compromise regarding the role of business in society?

CSR, public authorities, employee representatives: some experiments still at an embryo stage

1. Implementation of new regulations National: the example of the French law on new economic

regulations (article 116) - May 2001– The management report of listed companies (potentially 950

companies) must include “information… about the way the company intends to take into account the social and environmental consequences of its activities”

– This is a legal obligation starting with the publication of the financial statements for 2002

– A decree fixed the list of information required, both social and environmental

• This law is more relies more on incentive than on coercion

– No legal sanctions are envisaged– Much latitude is left to businesses as to the practical steps

for compliance– The law triggers a process (progress plan) that aims to

gradually introduce a concept of performance that includes economic, social and environmental concerns

• The question of the integration of national provisions in a context that is fundamentally international

– Other countries (Norway, Denmark and the Netherlands have introduced a legal obligation for environmental reporting

International• No European regulation in sight• However the European commission appears to be

seeking to introduce a European standard for CSR, with a strong incentive to move toward the GRI (Global Reporting Initiative)

– Our reservations with regard to this initiative» The risk of closing the debates (reporting) vs

experimentation and openness to all stakeholders; a formal approach vs a substantive approach

» The risks it poses for the defence of a European business and social model: the GRI is strongly influenced by the Anglo-American culture

2. The development of agreements around CSR International Framework Agreements (IFA)

• Signed in general between the international Trade Union Federations and the multinationals

• In certain cases, there has been an involvement of European Works Councils (EWC)

– Example of Skanska, where the group in charge of monitoring the follow-up of the agreement consists of the HR manager and the bureau/select office of the EWC

• The majority of IFA’s are to do with the respect of ILO agreements

• Over thirty agreements signed as of May 2004– 5 trade union federations involved : ICEM, FETBB, FIOM, UITA,

UNI

• Agreements signed by the IFBWW (May 2004)– IKEA

» Sweden: 75,000 employees

– Faber-Castell

» Germany: 5,500 employees

– Hochtief

» Germany: 34,000 employees

– Skanska

» Sweden: 80,000 employees

– Ballast Nedam

» Holland: 7,000 employees

• These agreements stake out some general principles– Their implementation and and practical outworking is decisive– If not there they run the risk of becoming mere window dressing

for the one sided commitments made by the multinationals

Multiplication of agreements signed with multinationals and their European Works Councils

– General Motors, Accor, Carrefour, Danone, Renault, EDF, …– Predominance of social rights– Presence in most of these agreements of provisions for a socially

responsible management of restructuring operations

Lessons learned from the involvement of European Works Councils in CSR

• The question of the legitimacy of the body– A body still in development,

» Favoured by the Management of multinational firms over national bodies

» On transverse issues that may be treated homogeneously between countries : safety, training, …

– A legitimacy that is nevertheless conditioned by

» The existence of a culture of social dialogue within the company

» A body that needs to be more than a forum for communication by the management

» Operating resources for the EWCs that are in line with the functions they are called to fulfil

» The need to identify the complex articulation required, with regard both to the trade union organisations and to the different levels of involvement (national / European / international)

• A complex process– A long-haul process: investment and rotation of the

mandates

– Non linear advances, trial and error

– Permanent mobilisation required by the implementation of the agreements

– The requirement for increased professionalism on the part of the workers’ representatives

MANAGEMENT

EWC

Different priorities,approaches… COMMON ISSUES

Follow-up Control Evaluation

IMPLEMENTATIONMaturing process

Shareholders Local population Public authorities

Trade Union organisations NGOs

Nature

Modalities

The role of managemen

t

Role of the EWC

Role of other

stakeholders

…

CSR and the role of experts: work in progress

General usefulness Reduce the asymmetry between corporate management teams

and workers’ representatives

Cooperation based on contracts

Various possible approaches Expert technical support for the steps undertaken by EWC’s

regarding CSR• Diagnoses on issues in which the EWC is involved

Supporting expert advice• Consultant role

Training Audits: expert appraisals being developed

• E.g.: social audit