EU Multi-StakeholderForum (MSF)

Highlights Interim Summary Prepared and presented by Prof. Dr. Lutgart Van den Berghe,
on behalf of the Rapporteurs of the MSF

10/11/2003

LVDB/LSO 2003/50

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Organisation of the MSF

 Meeting format - 4 theme-based Round Tables: Knowledge RT:
improving knowledge about CSR and facilitating the exchange of experience and good practice Rapporteur: Prof. dr. Lutgart Van den Berghe

SME RT:
fostering CSR among SMEs Rapporteur: David Grayson

Transparency RT:
diversity, convergence and transparency of CSR practices and tools Rapporteur: Penny Walker

Development RT
development aspects of CSR Rapporteur: Anne Peeters

Progress achieved
 The MSF has proven to be a learning organisation:
the quality of the meetings and the presentations have improved considerably

 The MSF has proven to be a useful and unique platform for dialogue between the business world and its stakeholders
the forum contributed to a better understanding of CSR, its boundaries and the roles and responsibilities of the different players it contributed to a better understanding of views and concerns of the different stakeholders. There are shared views on some specific issues, but fundamental differences of opinion remain

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Points of discussion and disagreement

 Convergence or flexibility in transparency?
Should there be a European (international?) reference standard framework? Should there be full flexibility? Is there a middle ground? Crucial question: how can transparency be the most efficient and effective Accepting internal and external verification? Broad parameters with flexible implementation?

 No agreement on the need for a mixture of mandatory policies and voluntary CSR-approach
Arguments in favour of government intervention & regulation >< arguments in favour of self-regulation or even total voluntarism

Points of discussion and disagreement

 What role for the stakeholder associations?
quite different views critical observers referees advocacy, guiding role partners with the business world to reach the CSR goals
is this endangering their independence, objectivity & impartiality?

 How to manage the tension between doing it well and doing it now?
continue to debate the size of the changes needed

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Drivers: the case for CSR

 Multitude of drivers The case for CSR is broader than the business case CSR is a responsibility of all stakeholders, not just businesses
they all have to show commitment and walk their talk appeal to the responsibility of all: CSR = CR + SR

drivers are broader than competitive advantage and improved sustainable growth Internal as well as external drivers & pressures

Drivers: the case for CSR

 Internal drivers Corporate value system Competitive advantage & better bottom-line results The business case!  External pressures Pressures from consumers, large purchasers, investors & creditors Positive feedback loops & win-win relations Benchmarking can lead to peer pressure

Drivers: the case for CSR

 Public policy drivers actively promoting CSR monitoring CSR compliance in a self-regulatory system setting rules & regulations & mainstreaming CSR into policies

Business Case -Competitive Advantage Competitive advantage through(1/2) ...better reputation, resulting in attracting (committed and motivated) employees (long term) investors ...better reputation, resulting in attracting... customers and suppliers better risk management, resulting in.. risk reduction: licence to operate (in a global perspective)

Business Case -Competitive Advantage Competitive advantage through(2/2)

more innovation and learning

companies with well developed CSR approaches tend to be more forward looking and can therefore better anticipate market changes and opportunities better learning through involvement of appropriate stakeholders (dialogue and feedback) better bottom line results, thanks to a more competitive position & increased productivity through improving quality of infrastructures, employment & living conditions better risk management:

!!! however, linking CSR with bottom line results proves to be a difficult research issue

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Barriers and Challenges for implementing CSR

 Implementing CSR in a competitive world

difficulty to implement CSR simultaneously with other business priorities in a balanced and motivating manner difficulty of clear communication and transparency economic short-termism especially problematic in developing countries especially problematic for SMEs

Barriers and Challenges for implementing CSR

 Complexity of the issues involved
Difficulty to manage the supply chain and to control subcontractors Complex set of issues CSR covers a wide range of direct and indirect business actions and effects the impact of each of the CSR-issues may be quite different from one sector to another, from one business to another Complex set of stakeholders a very broad range of stakeholders (can) appeal to the business world for a CSR-attitude the appropriate stakeholders need to be involved stakeholder involvement is important, yet difficult

Overview of most important issues

 Review of Forum Process & Progress  Points of discussion  CSR determining factors
drivers barriers and challenges success factors

Success Factors for implementing CSR

 Commitment at several levels: commitment of the board all levels of management, especially top management other partners in and around the firm employees/workerscouncil, customers, investors, suppliers other stakeholders government, middlefield (trade unions, employers organisations) NGOs, media  Integration of CSR in day-to-day business evolution from ad-hoc initiatives to mainstreaming  Skills/education and tools training of employees & other stakeholders stimulating role of champions, leaders, innovators, best practices & other multistakeholder initiatives, especially challenging for SMEs & developing countries

Success Factors for implementing CSR

 Reliable transparency
disclosure of a broad set of indicators that go beyond the traditional financial indicators disclosure of comprehensive CSR-information to stakeholders culture of dialogue - reporting as a process not an event disclosure of accurate and relevant information to stakeholders trade off between convergence and diversity in reporting

Success Factors for implementing CSR

Case of SMEs
 CSR for SMEs >< cut-down version of the big company version
specific challenges but also some differential advantages Helping SMEs understand their legal obligations in areas such as employment and environmental issues Clear identification of business case for CSR for SMEs

how to make SMEs more competitive?

Need for CSR-stimulating initiatives tailored to SMEs