Company attitudes to corporate social responsibility

In early 2008, a survey was carried out to assess companies’ commitment to practices in the area of corporate social responsibility (CSR). While 10% of companies report that they are implementing CSR practices, 90% believe that they should be paying more attention to wider social and environmental issues.

In early 2008, the Centre for Population, Poverty and Socioeconomic Policy Studies (Centre d’Études de Populations, de Pauvreté et de Politiques Socio-Economiques/International Networks for Studies in Technology, Environment, Alternatives, Development, CEPS/INSTEAD) carried out a study (in French, 895Kb PDF) assessing companies’ attitudes to and implementation of corporate social responsibility (CSR) practices.

About the study

The study’s target population consisted of private law legal entities that were operational in May 2006 and had recruited personnel. The survey covered all sectors of economic activity, with the exception of activities in households employing domestic personnel, companies based outside Luxembourg, government bodies, non-profit organisations and legal entities whose correspondence address was outside the territory of the Grand Duchy of Luxembourg.

A total of 1,509 legal entities took part in the survey, of which 1,399 were validated. The sample population comprised companies with 10 or more employees and face-to-face interviews were conducted.

Adoption of corporate social responsibility

Among the companies participating in the survey covering almost all sectors of economic activity, 90% believe that the company should be paying more attention to wider social and environmental issues, such as the integration of minority groups, gender equality, environmental protection and the impact of the company’s decisions on the local environment.

Although such an approach to the role of companies is directly related to the concept of CSR, only one in five companies (21%) reports being familiar with the concept. According to the CSR concept, a company should focus attention on all of the important social and environmental issues mentioned above.

The proportion of companies reporting familiarity with CSR is much higher among large companies than small ones: of those companies that are familiar with the CSR concept, 62% have 250 or more employees, while 16% have between 10 and 49 employees (Figure 1).

Companies familiar with the concept of CSR, by company size (%)

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Source: CEPS/INSTEAD, ‘Un état des lieux de l’adoption de la RSE au Luxembourg’, 2008

Companies familiar with the concept of CSR, by company size (%)

In terms of economic sectors, companies in financial services are the most familiar with the concept of CSR (52%). At the other extreme, the term CSR is least known among transport companies (8%) (Figure 2).

Companies familiar with the concept of CSR, by sector (%)

Companies familiar with the concept of CSR, by sector (%)

Source: CEPS/INSTEAD, 2008

Companies familiar with the concept of CSR, by sector (%)

CSR initiatives and benchmarks

Numerous initiatives and benchmarks for CSR have been implemented, including:

  • the Global Reporting Initiative (GRI), which offers a way of presenting information relating to CSR activities;
  • the SA 8000 standard, created by Social Accountability International (SAI), which takes into account the principles established by the International Labour Organization (ILO);
  • the OHSAS standard, which is a system for managing occupational health, hygiene and safety;
  • scoring systems for socially responsible investing (SRI), such as those provided by Vigéo and Ethibel.

One company in two is not aware of any of the above four initiatives, and only 5% of companies are aware of all of them. The GRI is the most well-known of the four initiatives: 27% of companies are familiar with it. Overall, 24% of companies state that they are familiar with the scoring systems for SRI, 21% of companies are familiar with the OHSAS standard, and 15% are familiar with the SA 8000 standard.

CSR-related actions undertaken by companies

Of all companies included in the study, one in 10 reports that it has adopted a CSR approach, 8% wish to implement a CSR initiative in the future and 3% have no plans to implement one. As part of the study, companies were asked to identify their three most important objectives. Objectives of an economic nature were chosen most often by companies. In total, 87% of all companies declared that an increase in market share is the most important reason for undertaken CSR-related actions. The second objective for companies to undertake CSR initiatives is to improve product quality, with 67% of all companies giving this answer.

Company objectives relating to the social pillar of CSR, such as training workers (reported by 43% of companies), ensuring their health and safety (40%), and developing the local economy (7%), are less likely to be included among the three most important objectives. Only 6%–7% of companies rank objectives relating to the environmental pillar of CSR among their top three objectives (Figure 3).

Companies according to objectives they identify as the most important (%)

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Source: CEPS/INSTEAD, 2008

Companies according to objectives they identify as the most important (%)

Actions undertaken in the social domain

Improving the quality of life for employees at work is considered important by many companies: 82% of companies stated that they have undertaken actions along these lines during the last three years. Moreover, 29% of companies have taken actions relating to the diversity of their personnel, such as diversity of age, gender and nationality, and 26% are involved in the professional reintegration of employees with health problems and/or disabilities ( Figure 4).

In total, 27% of companies have integrated non-economic criteria into the decision-making process when choosing their suppliers and/or subcontractors. One company in 10 has set up partnerships with non-governmental organisations (NGOs). The proportion of companies involved in these various actions increases with company size.

Companies according to quality of life actions undertaken in the last three years (%)

Companies according to quality of life actions undertaken in the last three years (%)

Source: CEPS/INSTEAD, 2008

Companies according to quality of life actions undertaken in the last three years (%)

Commentary

Despite the low proportion of companies (10%) stating that they are implementing CSR initiatives, analysis of companies’ activities shows that a much higher proportion of them have undertaken actions in the last three years under the environmental or social pillars of CSR. This discrepancy can be explained by the unfamiliarity of the great majority of companies (79%) with the concept of CSR.

When asked about their three most important objectives, companies most often choose objectives of an economic nature. However, it is interesting to note that almost all companies (90%) believe that they should be concerned with major social and environmental issues.

Reference

Poussing, N., ‘Un état des lieux de l’adoption de la Responsabilité Sociale des Entreprises au Luxembourg’ [A survey of the adoption of corporate social responsibility in Luxembourg], Economie et Entreprises, Issue 10, CEPS/INSTEAD, February 2008.

Véronique De Broeck, Prevent

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