EU governments have made an unprecendented appeal to companies to help tackle social and economic issues. Catelijne Wessels is working for EBNSC to help organise the business response. Here she examines the real issues for companies from a European perspective.
European Heads of State broke new ground this year when they made a special appeal to business to take a leading role in ensuring the success of their new strategy for 2010. The welfare state across Europe is cracking under the strain of rapidly escalating costs, particularly as Europe’s population ages, and the pension burden increases. The new strategy, adopted at the European Council Summit in Lisbon in March, aims to secure economic growth through rapid advancement towards a knowledge-based economy, whilst ensuring social cohesion. Governments want to put corporate innovation and best practice at the heart of this strategy.
On 9-10 November, European business leaders will gather at the first European Business Convention for CSR organised by the European Business Network for Social Cohesion (EBNSC), a business-led organisation promoting CSR, with over 40 member companies. They will aim to respond to this appeal and launch their own action plan for 2005. They will build on their 12 proposals ‘ For an Entrepreneurial and Inclusive Europe, ‘ prepared prior to the Lisbon summit and discussed with the European presidency and the Portuguese prime minister Antonio Guterres, who was hosting the summit. Many of the proposals were in line with the summit’s conclusions.
The new action plan will aim to mobilise over 500,000 business people and partners in Europe.
Social problems vary throughout Europe: in one place long-term unemployment is more pressing, in another it is integration of ethnic minority groups or significant skills gaps in the jobs market. The impacts of globalisation add an addditional layer of complexity.
The following sections highlight issues that companies in Europe are focusing on and management methods they are finding useful to facilitate CSR. EBNSC and its member companies are working together on these issues to feed into the action plan.
Life-long Learning
Across Europe there are challenges in education and training, as knowledge becomes the prime mover for economic growth. There are labour shortages, widening skills gaps and the danger of both young and older people being excluded from education. The challenge is clearly to address how companies, schools, training centres and local authorities can join forces to ensure training and education for anyone, whether 6 or 66, across Europe.
IBM is addressing this issue in a public-private partnership European Schoolnet , an association of 20 Ministries of Education from the EU, the European Economic Area and central European countries, that promotes innovation and best practice in the use of IT in education, through establishing a virtual and multilingual learning-centre: http://www.eun.org . This is just one part of IBM’s programme Reinventing Education , which looks at ways that IT applications can improve education.
Bertelsmann targets the school-age group, by forming a network of schools around particular issues to bring about grass-roots change. The network is kept alive through contact databases, tools that can be shared and awards ceremonies to recognise achievement.
Managing Diversity
In the not-too-distant future 25% of London’s workforce will be made up of people from ethnic minority groups, a trend that is being replicated in capital cities across Europe. In the next 25 years, the number of working age adults will decline by 6.4%, and the number of retired adults will increase by 50%.
Companies have to anticipate and work within this changing environment to meet the needs of _ continued on page 28
this increasingly heterogeneous population.
Groupe Casino , the French hypermarket chain, has taken the lead in working with particular communities that are under-privileged and mostly of ethnic minority origin. Its programme Entreprises d’Insertion has initiated employment projects to help counteract juvenile delinquency and urban violence.
Levi Strauss Europe is vocal about its belief that diversity gives the company a competitive advantage in the global marketplace. Its employee training course aims at creating an environment where differences in styles, viewpoints, cultures and other factors are valued.
Of course it is important to look at the overall performance of a company’s diversity strategy. EBNSC has developed a software tool to help do this, which it will pilot by benchmarking 20 companies’ current practices.
Socially Responsible Investing
Although the trend for investors to look more closely at CSR is particularly strong in the UK (see article by Craig Mackenzie in this edition), there has been quiet growth in many other European countries. Belgium’s first ethical fund was set up by Fortis Bank (ex. CGER) in 1984, and the Triodos Bank , an ethical bank, started in the Netherlands in 1980 and is now in the UK and Belgium.
The challenge of judging companies on their social, environmental and financial performance is considerable given the wide range of cultural influences around Europe. To address this, EBNSC has brought together eight leading financial research groups from across Europe (Centre Info Suisse, AreSe, IMUG, Ethibel, Caring Company, EIRIS, Fundacion Ecologica y Desarrollo and Avansi) to develop a set of common indicators based on the four guidelines of the European employment strategy: employability, adaptability, equal opportunities and entrepreneurship (more information on the web at http://www.europa.eu.int/comm/employment_social/empl&esf/ees_en.htm ). The indicators will be used to screen 50 top European companies and the results presented at the European Business Convention in_November.
Reporting
In turn, companies in Europe are communicating more on CSR_in annual reports and dedicated social reports. Most social reports include an independent attestation by auditors or accountants, but there is not yet a commonly agreed standard across Europe. EBNSC has set up a CSR matrix on the internet which looks at different ways that companies are reporting. Telecom Italia and Volkswagen both feature. Telecom Italia has produced a social report and web information about specific workplace policies, mission, values and vision, the marketplace. Volkswagen has published thematic reports on a range of social issues.
Transparency in communication with stakeholders
Corporate reputation is of growing importance. Research in the Netherlands, UK and Italy shows that consumers are concerned about CSR. EBNSC_has instigated the first European-wide survey on consumer behaviour, currently being conducted by MORI. A group of 1,000 people for each of 11 EU countries will be surveyed and the results launched at the convention in November.
Conclusion – diversity of Europe
It is always tempting to see general trends in Europe and not the diversity, which poses a particular challenge for companies. We do notice that the companies who are most active on CSR issues are mainly in the financial, retail, oil and energy sectors. New networks are being formed to share good practice in Ireland (Business in the Community Ireland), Switzerland – (Philias: Reseau des Entreprises Citoyennes), Greece (Hellenic Business Network for Social Cohesion) and Finland (Finnish Business and Society).
EBNSC and its member companies must take advantage of, while respecting, European diversity. We must involve SMEs in the debate, explore useful common guidelines for Europe, develop stakeholder consultation, and help establish positive incentives for companies to be pro-active. This challenge will be addressed by 400 representatives of the European business community at the convention in November.
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