New Ethics in Business
Corporate social responsibility – or CSR – is the new trend in the business world. Companies are increasingly relying on non-financial factors such as social affairs, ecology and good governance to be successful.
In a globalized world, CSR does not stop at national frontiers, and now governments are also vying for the best CSR scores. All too often people look to the USA as the birthplace of corporate social responsibility. A misapprehension, believes Thomas Kaiser, Head of Siemens Corporate Responsibility Office. Although the United States is a pioneer in the field of corporate governance, employee issues and social security have strong historical roots in Europe and especially in Germany.
After the German Federal Government has championed the subject of sustainability for many years, a national CSR strategy is now on the agenda. “We need a new form of interaction between business, society and politics,” declared Olaf Scholz, Federal Minister of Labour and Social Affairs, in his opening speech at the first CSR Conference, which was held in Berlin at the end of May 2008. He said that corporate social responsibility was part of this new partnership and represented a modern improvement of the idea of the social market economy. The Federal Government stresses that it affirms the International Labour Organization’s Declaration of Principles Concerning Multinational Enterprises and Social Policy in its CSR policy. Additional policy instruments will be the OECD Guidelines for Multinational Enterprises, the United Nations Global Compact and the Guidelines of the Global Reporting Initiative (GRI).
German businesses also do not need to fear comparison with American companies when it comes to their CSR efforts. Siemens, for example, set up complete logistics centres for distributing water filters and medical equipment within a very short period of time after the earthquake in China. Yet corporate social responsibility is much more than spontaneous disaster relief activities. The range stretches from efforts benefitting own employees and the local region to employment and environmental protection measures worldwide.
The environment is the main concern for BASF. Lother Meinzer, Director of the Sustainability Center at BASF, describes the chemical giant’s motivation in this area as follows: “We are dependent on an intact environment, therefore we are contributing to the strengthening and development of this environment.” The subject of sustainability – and therefore also environmental issues – became part of the agenda very early on. Today people at the Ludwigshafen-based company are proud of their climate protection officer, the world’s first, and their own CO2 report. For a long time now, the subject has also been a determining factor in research and development. In 2008 the company was awarded a prize as an environmentally friendly car industry supplier for a new brake fluid that significantly reduces maintenance and waste disposal costs. Meinzer explains: “Then CSR is good for business.” Others see it the same way, too. According to an IBM study, two-thirds of the 250 top managers it surveyed at international businesses already regard activities in the area of corporate social responsibility as a tool for opening up new sources of income.
“But CSR is neither a fashion trend nor a pure business strategy,” emphasizes Ludger Heidbrink, Director of the Center for Responsibility Research in Essen. He knows that companies that observe corporate governance principles outperform other listed companies on the stock market on average by 20%. Corporate governance is understood to mean responsible management of a business. The players on international financial markets are increasingly discovering the profit potential of sustainability.
The article is an abbriged and edited version written by Regine Bönsch and Heike Freimann for „Deutschland Online“ (www.magazine-deutschland.de).