Brussels, 29 November 2012 – Ladies and Gentlemen, Distinguished guests,

What is the very essence of politics? Throughout history, philosophers and political leaders have tried to give a plausible answer to this unabating question. What does the pursuit of the common good, the pursuit of happiness mean?

Whatsoever be the answer given to this question, another question remains: Is the pursuit of the common good a matter only for government, or are other actors in society also under an obligation to serve the common interest? Today, our focus here is on corporations. What is their role in society? Do corporations have an obligation merely not to interfere with governmental policies, or do they have a moral or even legal obligation to pursue societal goals in their daily workings?

One concept helps us to understand this issue: ‘corporate citizenship’, a concept that suggests that corporations have rights similar to those ordinary citizens enjoy. Surely, businesses don’t have voting rights, but they do have the same right of establishment for instance that every EU citizen enjoys throughout the European Union.

‘Corporate citizenship,’ however, is a more profound concept. It is a more than a sheer legal story of enforceable rights. The idea of citizenship is inextricably linked to the very notion of ‘society’. Businesses operate in society and cannot be seen in isolation from it. The link between society and business goes miles beyond the small print of taxation and environmental permits. Corporate citizenship implies that corporations cannot stand on the sideline of society.

‘Corporate citizenship’ has become increasingly accepted. We’ve come a long way from the once popular idea that the best thing corporations could do for society was to maximize shareholder value. Corporate social responsibility is nowadays flying high.

Admittedly, CSR often seems no more than a clever marketing strategy. But these cover up forms of what CSR should be will not hold firm against the streaming critique of consumer organizations. Consumers – or let me call them citizens – prefer to buy goods and services from businesses they trust; businesses they trust because of their compliance with ethical, environmental and human rights standards; apparel businesses selling clothes that have not passed through children’s’ hands; fruit companies paying decent wages to seasonal harvest workers.

Ladies and Gentlemen,
There is a business case to be made for CSR in a world where citizens more than ever question the production cycle of the product they find on the shelves of their local supermarket.

But then, what is our role, men and women of politics? Can we impose CSR? Yes and no.

Yes, in the sense that compulsory CSR is what you would call ‘regulation’, environmental law, health standards and so forth. But there are limits to the force of regulation.

CSR is indeed more than regulation, it’s an attitude. Yes, there is the letter of the law, but there’s also the spirit of the law. And that is in my mind what CSR should be about: A responsibility not only to comply with the black letter law, but also with the societal values that underlie the law.

Take for instance the recent labour market reform here in Belgium. Currently, Belgian workers – among the most productive in Europe – have a career 4 years shorter than the average European career. Thanks to the reform we’ve set on the rails, we’re now closing the gap by 2 years. That is the law in the books. But there’s more to be done. Businesses should also find ways to make sure that older personnel remain on the job. A 60 year old factory worker might not be as good as he once were doing physical labour, but he might be an outstanding coach or be good in a more administrative job.

Can we require companies to look for suitable jobs for older employees? That’s not easy: regulation will always remain imperfect. Is there nothing to be done for government? That’s not true either. Governments can for instance set up incentive schemes for companies to hold older employees on the job. Governments can do a great job in facilitating businesses to meet societal objectives. This is an essential part of CSR: working towards the achievement of objectives on which there is a large political and societal consensus. Defining the precise scope of CSR is not an easy endeavor. Several definitions and tools have been developed by the UN, the OECD, the European Commission and other international organizations. Instruments that provide CSR applications in different contexts. From human rights compliance in the central-African mining industry to labor standards in European inner city office blocks.

These international instruments come at the right time. They come at a time where both consumer and corporate awareness of the importance of CSR is at a peak. At the end of the day, the actual impact of these instruments will be measured by the degree to which they are translated in business models, by the degree to which they permeate the fabric of business cultures. And this is not a remote future. According to the 2011 Barometer of Social Responsibility, the Social Responsibility Standards of the International Organization of Standardization are to a large degree implemented in Belgian businesses and administrations.

All this is very well. But isn’t CSR an expensive perk in an increasingly competitive world? Aren’t we expecting too much of our businesses, both in term of regulation and self-regulation? Aren’t we thus making our businesses move their production chain abroad even more quickly than they would have otherwise?

As I said, there is a business case to be made for CSR. But for CSR to be a lasting success, international cooperation is key. Let’s compare it to the need for a new ambitious chapter in transatlantic trade relations. Already now, the EU and the U.S. are working hard in the Transatlantic Economic Council on harmonizing technical standards; standards for production we have for reasons of environment or public health. By working together, the two biggest economic powerhouses of the world can set the tone in production standards all across the world.

The same is true for CSR. Let’s work together, likeminded countries and likeminded businesses. Sluggish economic growth shouldn’t hold us back. Let’s use CSR as a tool for innovation. Let’s use CSR to get our economy back on track. Society expects nothing less from us. It is a duty we have towards humanity.

 

Source: CSR Europe Enterprise 2020 Summit press release, 04/12/2012