Corporate social responsibility becoming significant issue in working life

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In 2002, Finnish debate on the issue of corporate social responsibility (CSR), which has been underway for some years, was intensified by the European Commission's Green Paper on the topic and the activities of the Finnish Business & Society CSR network. The social partners are participating in an 'ethical forum', which promotes the idea of CSR.

In Finland a discussion concerning 'corporate social responsibility' (CSR) has been underway during 2002. A major role has been played by a network, set up in spring 2000, called Finnish Business & Society (subtitled 'Companies reforming working life'), which is part of CSR Europe (a 'business-to-business' network for CSR in Europe). The aim of Finnish Business & Society is to create a partnership between companies, the public sector, citizens and consumers in order to establish socially and economically sustainable development. It seeks to find new perspectives, allowing companies, through networking, to compare effectively their experiences and disseminate good practices.

According to Finnish Business & Society, the traditional role of society in relation to the private sector has been to create and maintain the prerequisites for business by providing various public services (such as infrastructure or education). Society also takes care of people who are left outside working life. Companies, for their part, contribute to the financing of public services. However, despite these various links, the public and private sectors have been perceived as distant from each other. To address these issues, the Finnish Business & Society network aims to meet the requirements of both companies and the society to find a joint forum to promote socially and economically sustainable development. At present, the network includes 28 member companies and representatives from the public sector and non-governmental organisations (NGOs).

Aims of the network

Finnish Business & Society and its members aim to develop and promote socially responsible activities by companies, by:

• developing human resources policy;

• promoting the welfare of personnel;

• increasing 'social and human capital' in companies, thereby contributing to productivity, safety, capacity and joint responsibility;

• developing a 'benchmarking' system of CSR at both domestic and international level

• developing 'cluster' models to enhance sustainable development; and

• acting as a wide network of companies of varying size and from varying lines of business

In terms of human resources, this includes companies adopting a responsible personnel policy dealing with the following themes:

• recruitment;

• working conditions;

• maintaining the ability to work;

• supporting development at work;

• reward;

• termination of employment relationships;

• outplacement and lay-offs; and

• personnel management

EU Green Paper

Although the concept was widely known earlier, the current Finnish debate on CSR has been partly stimulated by discussions based on the European Commission's July 2001 Green Paper on the topic (EU0107228F), which invited the views of the social partners and other interested parties. The Finnish social partners' viewpoints differed mostly on the question of whether some EU norms to regulate company activities in this field should be created or not. According to employers, the best way of increasing CSR is to keep it voluntary, while trade union would like to create at least a minimum set of norms.

The Finnish government's basic response to the Green Paper was as follows:

Finland hopes that the discussion on the Green Paper will lead to recommendations for measures, with the aim of establishing a framework for the development of CSR at the European and national level. However, this does not require the creation of separate EU standards, as codes of practice such as the UN Global Compact for the multinational enterprises and the ILO conventions and recommendations are already in place.

With regard to the voluntary nature of CSR, the government stated:

Finland supports voluntary action which does not prevent the EU from setting out standards of corporate social responsibility at the European level in accordance with the Green Paper. Standards are indispensable. Above all, the shared European framework indicates that the EU will take an active role in invoking and maintaining discussion. The EU should engage in a special task of supporting the SMEs, as their structure and business practices significantly differ from those of large enterprises. The content of corporate social responsibility is sufficiently defined in the UN, ILO and OECD documents.

The government stated that it could be useful to consider whether the EU could give written instructions on ethical investments. Furthermore, 'open dialogue between enterprises, parties in the labour market, officials and NGOs' is described as the key to extending CSR to the local level and day-to-day decisions. The role of the EU and of national governments should involve initiating dialogue and supporting existing projects. The Finnish Ethical Forum (see below) is cited as a good example of this type of project.

The role of the social partners

The Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT) has organised a Finnish Ethical Forum aimed at bringing together different sections of society to discuss topical questions in the field of CSR. The idea of such a forum was originally based on an initiative from the church, Amnesty International and SAK, among others. Commercial organisations, companies, the public sector, trade unions, the church and civic organisations are represented in the forum, which meets a few times a year. In addition, TT has encouraged its members to pay attention to CSR issues on a voluntary basis.

In the light of the comments attracted by its Green Paper, in July 2002 the European Commission launched a Communication setting out a new strategy on CSR (EU0207205F), stating that it is a good tool for carrying out EU policies. One of the new strategy's main innovations is to set up a new 'European multi-stakeholder forum' on CSR. The forum will aim to promote transparency and convergence of CSR practices and instruments (the Commission is concerned that the current variety of instruments is difficult to understand) through exchange of experience and good practice. This will then shape a common EU approach and guiding principles on the issue. The forum will present a report on its work to the Commission by summer 2004. The Commission will then evaluate the report and decide on further action.

In response to these moves, Finnish employers' organisations emphasise the voluntary nature of CSR. According to Martti Huttunen, head of international affairs at the Employers’ Confederation of Service Industries (Palvelutyönantajat, PT), the benefits derived from CSR are the best motivator for companies. In his view, the Commission is forgetting some crucial points in its Communication. First, companies make decisions based on their own needs and, second, companies and not the Commission bear the responsibility for the credibility and comprehensibility of their measures. PT is worried by the Communication and Mr Huttunen fears that the Commission may do harm in this area: 'A competitive factor gained in a socially responsible way is the most important motivation factor and must not be jeopardised by too much conformity.'

SAK raised the CSR issue earlier in 2002 by challenging employers to define 'good work' and its content, in the context of changes in the economic environment and working life (FI0202101N)

Commentary

CSR has increased in importance in the activities of Finnish companies. The European Commission's Green Paper has boosted the discussion and has also helped develop concrete measures. Companies have traditionally taken their responsibility in this area seriously because of strict domestic regulations. However, companies have recently also recognised the positive impact of good citizenship on their image, which can be useful in doing business. This benefit acts as the most important motivating factor for company CSR activity.

The role of the social partners can be seen in practical implementation of CSR in the everyday lives of companies. The social partners have well-functioning cooperation channels, where social responsibility can be progresses effectively.

The aim of the Commission to promote CSR is welcomed in Finnish working life, but at present any additional norms seem to be rejected. Successful companies actively care for their public image. The situation is more problematic in companies which lack sufficient resources or will to take proper social responsibility. (Juha Hietanen, Ministry of Labour)