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| Corporate responsibilty - a key tool in good business management |
| 'An American in Europe' |
Why Corporate Responsibility is a must-have for U.S. corporations operating in Europe
Although a global trend fast catching on in the U.S. and Asia, it is generally accepted that corporate responsibility (CR) is most advanced in Europe. Even within the European continent, the widespread adoption of CR is patchy, with Britain often regarded as leading the way (although Scandinavia, the Netherlands, Germany and France are rapidly embracing it). This growing focus is partly reflected in new laws in some EU member states like the UK and France, which require listed companies to report on their social and environmental impact, and partly in creeping references to CR in key European constitutional documents.
In Europe, CR is on the rise. If in the U.S. much CR activity remains voluntary and largely focused on (often generous) corporate philanthropy; in the EU it is increasingly becoming a must-have, more formally structured within overall corporate stakeholder communications strategy. It is not that Europe is necessarily more advanced than the U.S. in this field, but the European CR philosophy is more likely to regulate and legislate to achieve social and environmental outcomes.
 | It is not that Europe is necessarily more advanced that the U.S. in this field, but the European CR philosophy is more likely to regulate and legislate to achieve social and environmental outcomes. |  |
At the EU policy-making level, the roots of CR began with an environmental focus and lay in the EU Treaty of Amsterdam which came into force in November 1993. After highly effective lobbying from green NGOs like the WWF and Greenpeace, the Treaty added the concept of "sustainable growth respecting the environment" to the European Community's mission. The timing was significant, coming soon after the 1992 Rio Earth Summit, which had for the first time focused global attention on the threat to the planet from unsustainable development and called for action by governments and corporations to change their behaviour.
The Lisbon European Council in 2000 marked a further important step when it appealed to companies' sense of social responsibility to achieve "the most competitive and dynamic knowledge-based economy in the world". A year later, the EU strategy for sustainable development was adopted. Over time, the European Commission broadened its interest in CR beyond green issues and began to speak of companies as more than just profit-making machines, but organisations with wider responsibilities. European Commission discussion papers spoke of respect for employees, supply chain labour standards and integrity to customers.
Increasingly, EU-wide research (such as Eurobarometer, which tracks European citizens' attitudes on a vast range of issues) shows that European consumers not only want good quality and safe products, but they also want to know that what they buy has been produced in a socially and environmentally responsible way. Internet-fuelled activism and growing media attention on CR mean that these issues are steadily moving from the activist's fringe meeting to the consumer mainstream.
For some companies, CR remains a reactive and not always sincere attempt to dilute scrutiny and criticism. For others it is a key tool in good business management, fully integrated across all parts of the company. A new way of making money by doing the right thing. Whether proactive or reactive, in Europe the steady ebb of new legislation and the climate of increased mainstreaming of CR show no signs at all of receding. As always, Europe is much more likely to regulate (and perhaps over regulate) than the U.S.
Although many believe that CR should remain voluntary, there is a feeling in some European quarters that if companies do not speed up the pace on CR, then further legislation will be necessary. There is already a vast amount of environmental protection legislation. It is therefore in the interests of all companies operating in Europe to demonstrate their responsible behaviour in order to avoid that.
| An understanding of the CR landscape in Europe is therefore essential to communicating effectively in the European marketplace. | |
Many U.S. corporations, in part suffering from a slight European consumer backlash which is part of much bigger geo-political tensions in recent years, are concerned with the need to shake off an image as big bad American companies invading Europe. An understanding of the CR landscape in Europe is therefore essential to communicating effectively in the European marketplace. CR is a route through which to engage a whole range of European audiences, from end consumers to policy makers, from NGOs to media. Europe needs American companies.
American companies need to talk to Europe in its new language if they are to thrive. It is not that Europe is more 'moral' than the U.S., or that European citizens take their social responsibilities infinitely more seriously than Americans. It is that Europe's way of achieving the environmental and social progress consumers seek is more likely to place greater boundaries around corporate activity than U.S. companies (Sarbanes-Oxley and anti-corruption aside), are familiar with at home.
In Europe, compliance will be essential in the future. Compliance with a sense of genuine commitment and enthusiasm would be (and seen to be) even more effective.
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Brendan May, head of corporate responsibility, Weber Shandwick in the UK, and Roberto Ferrigno, director, corporate practice, Weber Shandwick in Belgium
Reproduced with the kind permission of PRWeek U.S.
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