What do solar cells on an infirmary in Senegal, a geothermal facility in the Black Forest and the Municipal Theatre in Künzelsau have in common? They are all financed by German enterprises. And all three projects are part of what is known as the corporate social responsibility – or CSR – of businesses in Germany. According to the definition published by the European Commission in 2001, “CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” Stakeholders include employees, customers, suppliers and investors.
How far these kinds of initiatives can go is impressively demonstrated by the Bill and Melinda Gates Foundation. With an annual budget of three billion dollars – several times the budget of the World Health Organization (WHO) – the Microsoft founder is supporting equal opportunities, health care and education all over the world. German businesses also have no need to fear comparison when it comes to their CSR efforts. Let us just consider one example of many: Siemens set up complete logistics centres for distributing water filters and medical equipment within a very short period of time after the earthquake in China. Yet corporate social responsibility is much more than spontaneous disaster relief activity. The range stretches from efforts on behalf of employees and the local region to environmental and employment protection measures in Pakistan and Brazil.
Lother Meinzer, Director of the Sustainability Center at BASF, describes the chemical giant’s motivation in this area as follows: “We are dependent on an intact environment, therefore we are contributing to the strengthening and development of this environment.” The subject of sustainability – and therefore also environmental issues – became part of the agenda very early on. Today people at the Ludwigshafen-based company are proud of their climate protection officer, the world’s first, and their own CO2 report. For a long time now, the subject has also been a determining factor in research and development. In 2008 the company was awarded a prize as an environmentally friendly car industry supplier for a new brake fluid that significantly reduces maintenance and waste disposal costs. Meinzer explains: “Then CSR is good for business.”
Others see it the same way, too. According to an IBM study, two-thirds of the 250 top managers it surveyed at international businesses already regard activities in the area of corporate social responsibility as a tool for opening up new sources of income. The BASF expert comments: “We must ensure that we bring small and medium-sized enterprises on board.” In fact, however, they are already acting – if still rather quietly – in a spirit of corporate social responsibility. The industrialist Reinhold Würth, who built up one of the world’s largest screw and fastener manufacturing firms, funds museums and theatres in Künzelsau; Arburg, the maker of injection moulding machines for plastics, has taken up the cause of energy efficiency; while employees of Schott Solar, the photovoltaic cell company, are equipping an infirmary in Senegal with solar modules with the help of their employer.
Although a great deal is done in this area in the small and medium-sized business sector, a study by the Bertelsmann Foundation discovered that only just under 38% of these firms document their efforts in reports and only one quarter instrumentalize their commitment in their PR and marketing activities. Like the big names, smaller companies also use CSR as a means of motivating their employees. That is confirmed by a recent European Commission survey that compares small and medium-sized enterprises in Germany, France and Poland. First and foremost, businesses in all three countries expect their efforts on behalf of the environment and society to enhance their reputation. They uphold the principle formulated by Robert Bosch at the beginning of the last century: “I would rather lose money than people’s trust.” Ultimately, therefore, the desire for a “good name” is a source of corporate social responsibility.
The new demands being made on businesses also occupy Ludger Heidbrink, Director of the Center for Responsibility Research in Essen. He believes they are linked to government’s increasing withdrawal from many areas of responsibility. “There is a growing suspicion that CSR is a fig leaf or a kind of bluewashing,” is his analysis of the present mood. “But CSR is neither a fashion trend nor a pure business strategy,” emphasizes the researcher. He knows that companies that observe corporate governance principles do 20% better on the stock market on average. Corporate governance is understood to mean responsible management of a business. The players on international financial markets are increasingly discovering the profit potential of sustainability.
However, benchmarking remains a problem here because there are still few reliable reporting standards for CSR. For Dieter W. Horst, CSR expert at auditors PricewaterhouseCoopers, the ambiguous documentation situation also points to a deeper problem that he describes in the words of a customer: “When we published the third sustainability report, we noticed that we didn’t have any sustainability management at all.” CSR is taking place in companies, but the systematics, the efficient integration and the strategic ties need to be improved, says Horst.
After the Federal Government has championed the subject of sustainability for many years, a national CSR strategy is now on the agenda. “We need a new form of interaction between business, society and politics,” declared Olaf Scholz, Federal Minister of Labour and Social Affairs, in his opening speech at the first CSR Conference, which was held in Berlin at the end of May. He said that corporate social responsibility was part of this new partnership and represented a modern improvement of the idea of the social market economy. The Federal Government stresses that it affirms the International Labour Organization’s Declaration of Principles Concerning Multinational Enterprises and Social Policy in its CSR policy. Additional policy instruments will be the OECD Guidelines for Multinational Enterprises, the United Nations Global Compact and the Guidelines of the Global Reporting Initiative (GRI).
In a globalized world, CSR does not stop at national frontiers, and now governments are also vying for the best CSR scores. All too often people look to the USA as the birthplace of corporate social responsibility. A misapprehension, believes Thomas Kaiser, Head of Siemens Corporate Responsibility Office. Although the United States is a pioneer in the field of corporate governance, employee issues and social security have strong historical roots in Europe and especially in Germany.
