Stefan Crets is Executive Director of CSR Europe, the European platform for companies and stakeholders to exchange and cooperate to become European leaders in sustainable competitiveness and societal wellbeing. Stefan’s deep knowledge of corporate sustainability challenges brings CSR Europe firsthand experience of developing CSR strategy and practice in a company.
In an exclusive interview with Rusen K, Founder and Editor of INDIACSR, Stefan Crets shares his views on CSR Europe activities, recent development and trends in CSR particularity in Europe, and his approach towards Corporate Social Responsibility (CSR). Stefan Crets says, CSR Europe launched the Enterprise 2020 initiative in 2010; an initiative that promotes highly developed CSR Management and transparency, while putting social innovation at the heart of business strategy. CSR Europe showcases social innovation through Enterprise 2020. Below is a edited transcript of the interview:
Can you give us a brief background and the nature of your involvement with CSR Europe?
I have had a long standing history with CSR Europe, the European platform for companies and stakeholders to exchange and cooperate to become European leaders in sustainable competitiveness and societal wellbeing. I first became acquainted with the organisation in 2003 whilst working as the CSR leader for Toyota Motor Europe. It was at this moment that I signed Toyota up to be a member of CSR Europe and in 2006 I was appointed to the CSR Europe Board of Directors. This involvement means that I am fortunate enough to be able to understand CSR Europe from both sides of the fence – as a Corporate Member and as a Director.
In 2008, I was appointed General Manager for Corporate Planning and CSR, Toyota Europe and after 10 years practical experience of developing CSR strategy and practice in a company, I decided to take the next step in my career and took up the position as Executive Director of CSR Europe. My motivation for applying for the position was to be able to use my CSR expertise to reach out to even more companies, across a wide range of sectors in Europe. I would like to think that my professional experience has helped me guide CSR Europe towards providing real value added services to CSR professionals in Europe.
What is vision of CSR Europe and how Europe is benefiting from it?
CSR Europe has since its inception in 1995 been actively engaged in the European policy debate and multi-stakeholder initiatives. Through its pan-European network, CSR Europe pools together a wealth of services and solutions on CSR. In doing so, CSR Europe has always adopted a proactive attitude of dialogue and engagement with EU institutions, governments, social partners, civil society and academia, both in and beyond Europe.
At European level, CSR Europe has contributed a great deal to ensuring that CSR is part of the European agenda – and we therefore welcomed the launch of the European Commission’s new Communication on CSR, published on the 25th October 2011. Through this Communication on CSR, the European Commission has demonstrated its commitment to supporting CSR and has recognised the potential of CSR to contribute to sustainable development and competitiveness in Europe. This renewed Communication outlines the Commission’s strategy on CSR for the period 2011-2014, and aims to strengthen EU global leadership on CSR by implementing an intensive Agenda for Action with around 30 proposals for CSR commitments.
In October 2010, you launched Enterprise 2020, what is motto behind it?
CSR Europe’s mission is to act as the European platform for companies and their stakeholders to improve economic, social and environmental performance to become both leaders and key contributors to societal well-being. It is against this background that CSR Europe launched the Enterprise 2020 initiative in 2010; an initiative that promotes highly developed CSR Management and transparency, while putting social innovation at the heart of business strategy. It is in this space that CSR Europe aims to support its members: not only by providing insights and allowing for companies and stakeholders to share best practices, but also by creating a platform where companies can work together in a practical way to innovate their business models.
Based on a shared vision of the enterprise of the future, Enterprise 2020 is a reference initiative for companies committed to developing innovative business practices and working together with their stakeholders to provide solutions to emerging societal needs.
In practice, companies and their stakeholders can engage in Enterprise 2020 in a number of ways. At the heart of the initiative are collaborative projects led by companies and coordinated by CSR Europe and its partner organisations. In these collaborative projects, many business practitioners, policy makers, NGO representatives and other stakeholders work closely together to tackle pressing socio-economic and environmental challenges. The existing projects address issues ranging from demographic change to health and wellbeing, ESG disclosure and transparency to financial inclusion, and responsible supply chain management, among others.
Through the various initiatives and collaborations, the companies and organisations involved in the Enterprise 2020 initiative will produce tangible results and models which can be shared externally across industries and thus further the promotion of CSR in Europe.
What you think about relevancy of such kind of program in Asia?
Active engagement in Enterprise 2020 gives companies access to a wealth of experience across many different sectors and from some of the world’s leading players in CSR. In the spirit of trust and cooperation, Enterprise 2020 is an opportunity for companies to discuss CSR issues with corporate peers across a wide range of different sectors. Enterprise 2020 also gives CSR professionals the chance to participate in groundbreaking projects on new approaches to CSR that aim to make a lasting, widespread difference to sustainable growth.
As a source of inspiration and a springboard to accelerated action, the Enterprise 2020 initiative is an open invitation to other countries, companies and stakeholders to join the journey towards a more sustainable global economy. By urging Asian companies of all sizes to join the responsible business movement, the Enterprise 2020 initiative could contribute to sustainable economic growth, more and better jobs, and greater social cohesion in Asia. This can be seen as a compelling reason for companies in Asia to adopt the Enterprise 2020 principles in their own company.
What in your opinion are the ground breaking incidents in the world that has given rise to CSR or ‘save the world’ frenzy in recent years?
CSR is becoming one of the most dynamic and challenging subjects corporate leaders are facing today and one of the most important challenges shaping the future of our world. CSR, social innovation and corporate governance are collectively shaping the identity of companies and are therefore becoming increasingly integrated into the business strategy of today’s most successful corporations.
In addition to public authorities, many other stakeholder groups are playing an increasingly visible role in the CSR debate. Recently, growing emphasis has been put on the role of consumers and investors as drivers of CSR.
Surveys show that consumers across Europe are increasingly interested in ethical and environmentally friendly products and services. However, many consumers feel that they do not have enough information – or, conversely, that they struggle with too much confusing information – about the ethical performance of the products they buy every day. In this respect, companies play a key role in helping consumers to make more sustainable choices.
Investors, for their part, are calling on companies to be more transparent on how they manage risks related to issues such as climate change or water scarcity. A company’s ability to manage and mitigate exposure to environmental, social and governance issues is becoming an important factor for more mainstream investors.
Furthermore, the economic downturn has led more and more companies to recognize that CSR is not just a “nice-to-do” add-on to their core activities, but that responsible business practices can help build competitive advantage and long-term value. A well-planned and well-executed CSR strategy can help companies strengthen brands and reputation, attract and retain talent, achieve efficiency gains and cost savings, meet societal expectations and create new business and growth opportunities.
How would you rate India and China in the arena of responsible business practices?
In Asia, CSR promotion is still at an early stage and needs to evolve to reach a broader public and be incorporated into education and curriculum. To build a better future for all, Asians must secure the foundations for long-term sustainable growth and development. Amongst the many challenges that Asia faces, CSR Europe believes that the key CSR priorities are, (1) Employment creation, economic growth and poverty reduction; (2) Strengthening human capital through education and skills development; and finally; (3) by using academic institutions to play a key role in CSR promotion (as institutions are educating the business leaders of tomorrow).
Lessons from other countries suggest that the government plays an important supporting and enabling role in promoting CSR and that states should create their own CSR agenda. The Chinese and Indian governments should therefore take leadership in giving more credibility to CSR practices and creating incentive mechanisms to reward and acknowledge good CSR practices.
CSR Europe looks forward to strengthening the CSR network in Asia through similar membership networks such as WTO China Tribune in China.
Where do you see the growth of CSR in 5 years time? What would be the way forward?
Traditionally, CSR has been seen primarily as an element of reputation and risk management, but today forward-looking companies are increasingly leveraging it as a source of innovation and new business opportunities – it’s about building a more sustainable basis for competitiveness. The most progressive companies today see CSR as an important driver for social innovation and long-term value creation.
It has long been recognised that social innovation plays a key role in economic growth. Developments in healthcare and the rise of new technologies such as the car, electricity or the internet depended on social innovation as much as they did on the innovations of business. Today, there are signs that social innovation is becoming even more central to economic growth and social innovation is increasingly seen as a process and strategy to solve some of society’s most difficult problems at local, regional, national and global level. This is partly because some of the barriers to sustainable growth (such as climate change, demographic change and ageing populations) can only be overcome with the help of social innovation.
Through Enterprise 2020, CSR Europe looks forward to working with our members to contribute to solving some of the unmet needs of society by advancing social innovation in Europe.
What are the recent trends in CSR particularity in Europe?
In the early and mid-1990s, CSR was still a new concept for many companies. Today, CSR is part of the corporate vocabulary, and companies are increasingly aware of the business impacts of environmental and social issues. Moreover, business leaders believe global threats are a challenge for the long-term success of their companies. Environmental concerns such as fighting climate change, reducing waste and using natural resources more sustainably have become core business issues. In addition to the financial crisis, on the socio-economic side, companies in Europe have had to deal with the challenges associated with an increasingly diverse and ageing population.
Forward-thinking companies are increasingly tapping into the innovation and growth opportunities of CSR. For example, the evolution towards better supply chain management provides a win-win for business and human rights concerns, as well as the environment. As a result, more leading European companies are undertaking “human rights impact assessments” in order to better understand how to deal with their most important “on the ground” issues.
Across Europe, recent years have also seen a growing interest in how companies, policymakers and other stakeholders can work together to develop CSR as a way for business to contribute to sustainable development and societal wellbeing. At the EU level, the European Commission recently highlighted the importance of CSR in building “smart, green and inclusive growth” in Europe as part its new EU 2020 strategy and launched a renewed strategy on CSR in the form of a Communication in October 2011. The renewed Communication aims to strengthen EU global leadership on CSR by implementing an intensive Agenda for Action with around 30 proposals for CSR commitments.
At the national level, many European governments have also taken steps to support the development and uptake of CSR in their countries. For example, the Danish government has launched an ambitious action plan on CSR and the Dutch government has introduced strict goals for sustainable public procurement. Some European countries, such as France and Sweden, have introduced rules on CSR reporting for publicly listed companies or for state-owned companies to push companies to improve their sustainability performance and promote greater transparency towards stakeholders.
The common theme of all these trends is the recognition that successful CSR initiatives take organisations beyond compliance with legislation and leads them to honour ethical values and respect people, communities and the natural environment. In the lead up to 2020, the business response to the CSR agenda will determine the sustainable competitiveness of the European economy. The active engagement of companies in Enterprise 2020 and other European and international initiatives show that there is a genuine business commitment to contribute to sustainable development and today even more companies to consider the importance of implementing innovative CSR strategies at the very core of their strategy and business operations.
Being a CSR leader, how will you define the CSR in modern context?
CSR is an important driver for strategic innovation and long-term value creation. Enterprises that deal with CSR as peripheral issue, mainly related to public relations, risk missing out on potential competitiveness gains and sustainable growth opportunities. In the lead up to 2020, the most successful companies will be those implementing innovative CSR strategies at the heart of their strategy and business operations.
To achieve this, companies should keep the following three elements in mind:
1. Highly developed CSR management and transparency - A company’s ability to manage and mitigate exposure to environmental, social and governance issues is a key driver in determining its viability.
2. Social innovation as business strategy – seize the opportunities in tackling societal issues to simultaneously create business and social value
3. Collaboration - No single company, policymaker or organisation can successfully work in isolation to address today’s complex social and environmental challenges
CSR needs to be embedded into the core of the business strategy. What do you think?
As i said, CSR is an important driver for strategic innovation and long-term value creation. I agreed. CSR must be embedded into core of the business strategy.