European CSR approach a good model for US firms

Although it's a global trend fast catching on in the US and Asia, it is generally accepted that corporate social responsibility is most advanced in Europe.

Although it's a global trend fast catching on in the US and Asia, it is generally accepted that corporate social responsibility is most advanced in Europe.

Even within that continent, the widespread adoption of CSR 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 European Union member states, like the UK and France, which require listed companies to report on their social and environmental impact, and partly in references to CSR in key European constitutional documents.

In Europe, CSR is on the rise. If in the US much CSR 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. Europe is not necessarily more advanced than the US in this field, but its CSR philosophy is more likely to regulate and legislate to achieve social and environmental outcomes.

At the policy-making level in the EU, the roots of CSR 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 World Wildlife Fund 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 focused global attention on the threat to the planet from unsustainable development and called for action by governments and corporations to alter their behavior.

The Lisbon European Council in 2000 marked another key step when it appealed to companies' senses of social responsibility to attain "the most competitive and dynamic knowledge-based economy in the world." One year later, the EU strategy for sustainable development was adopted. Over time, the European Commission broadened its interest in CSR beyond green issues and began to speak of companies as more than just profit- making machines, but entities with wider responsibilities. European Commission discussion papers spoke of respect for staff, supply chain labor standards, and integrity to customers.

EU-wide research (such as Eurobarometer, which tracks European citizens' attitudes on a vast range of issues) increasingly 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 CSR mean that these issues are steadily moving from the activist's fringe meeting to the consumer mainstream.

For some companies, CSR remains a reactive and not always sincere attempt to dilute scrutiny and criticism. For others, it is a key business management tool, 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 CSR show no signs of receding. As always, Europe is more likely to regulate (and perhaps over-regulate) than the US.

Although many feel that CSR should remain voluntary, there is a sentiment in some European quarters that if companies do not speed up the pace on CSR, 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 behavior in order to avoid that.

Many US corporations, in part suffering from a slight European consumer backlash, which is part of much bigger geopolitical 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 CSR landscape in Europe, therefore, is essential to communicating effectively in the European marketplace. CSR 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.

US companies need to talk to Europe in its new language in order to thrive. It is not that Europe is more moral than the US, or that its 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 US 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 even more effective.

  • Roberto Ferrigno is director, corporate practice, Weber Shandwick Belgium. Brendan May is head of corporate responsibility, Weber Shandwick UK.
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