Jörgen Hoppe, president of HK Handel, Denmark, vice president of UNI Europa Commerce

Corporate Social Responsibility

The unions in Denmark have a vision of a sustainable society. An important element in such a society is the development of "Corporate Social Responsibility". However, such a vision has no meaning if the unions in Denmark are isolated on that point. The employers and the public sector authorities need to be included.

Nor has the vision any meaning if Denmark, as a country, is on its own. The rest of the world must be included.

Neither production, trading nor pollution respects any national frontiers. We are living in a global society. That is why it is important to be jointly committed to making the companies in particular deal more responsibly with people and nature. The enterprises are to play a more active role in the efforts to ensure a sustainable world.

Luckily the Danish unions and Denmark are not alone with the vision of a sustainable society and Corporate Social Responsibility. As far as we are concerned the work has been on the agenda over the last 10 years, but many, among others OECD, ILO and EU have been working with this theme.

At the EU summit in Lisbon in March 2000 it was decided to concentrate on Corporate Social Responsibility. The EU Commission in view of this produced a Green Paper – amounting to a first draft – on " Promoting a European Framework for Corporate Social Responsibility". It will be followed up this year 2002 by a White Paper – which is a concrete proposal. To back up the interest further EU has made 2004 the European Year for Corporate Social Responsibility.

In UNI-Europa Commerce Sector and the Social Dialogue for Trade and Commerce in EU we have been discussing parts of the subject. We have, among other things, concluded agreements with the employers on subjects such as:

• Fundamental Principles and Rights at Work
• Combating child labour, racism and xenophobia
• Training and employment
• Teleworking
• Needs of older workers
• Violence in work places in the commercial sector

I also wish to draw your attention to the paper circulated. It is a discussion paper from the Danish Confederation of Trade Unions on Corporate Social Responsibility. If you do not want it in English you can have it in Danish.

But what is it we are really talking about – this "Corporate Social Responsibility?"

To me it means enabling governments, companies and employees – nationally as well as internationally – to create a new world order, where all people assume responsibility for making production, consumption and social welfare work in a sustainable fashion.

For the Danish unions –Yes, for all of us – it is important to work with Corporate Social responsibility because we can see that companies not only create growth and employment, but also, for instance, bad working environment and pollution. Such negative consequences of production or services have until now not been regarded as corporate responsibility. A change is needed here.

Every country in the world is today dependent on help from the nation’s industry and from the labour market for creating social welfare and sustainable development. The public sector authorities can or should no longer manage it alone. We need a change in attitude of employers and employees as well as on the part of producers and consumers too. It must no longer be acceptable that the enterprises free of charge can destroy people and nature and then pass the bill to the society. We must all think and develop sustainable solutions.

I therefore appeal to you to think of Corporate Social Responsibility not merely as the responsibility of management, but of the entire workplace. Obviously the owners and the management has the main responsibility, but in terms of attitude we all need to be responsible. That is why I quite deliberately include the employees in the understanding and development of the Corporate Social Responsibility. This does not change the content of the concept, but draw more people into the work in order to successfully create a sustainable development for people, nature and the enterprises themselves.

I do believe that the Corporate Social Responsibility does not only include management and employees in the private workplaces, but also management and employees in public sector workplaces. And it goes without saying that Corporate Social Responsibility must be promoted in workplaces of all sizes –both in small, medium and big multinational workplaces.

Frequent criticism against Corporate Social Responsibility is that it will be too costly for the enterprises, that it is bureaucratic and that competitiveness is bound to suffer. I absolutely disagree with such criticism. On the contrary this is bound to strengthen the corporate competitiveness. I believe this will happen when the company is going to sell its products. Today’s consumers are very interested in seeing social and environmental consideration being given to the production. On the contrary it is typically companies that ignore their responsibility to society that lose their competitiveness. I believe companies cannot evade a sustainable development.

There is a theoretical description of this in the international model; The Triple Bottom Line modelled on the three Ps –People, Planet, Profit. This means that the company has three types of responsibility:

• Firstly sustainable solutions will have to be found for people in the form of a responsibility for employees, suppliers, customers and other partners – i.e. a social responsibility to society.

• Secondly the company has a responsibility for affecting the environment

• And thirdly a responsibility for the economy –both the economy of the individual enterprise, often thought by the companies to be the only area of responsibility – but also in relation to the national economy.

Many – and that includes union people – limit the Corporate Social Responsibility to include the people part, that is what is happening among the employed staff. This is understandable, but I do not believe this expresses the thoughts of real sustainability. What use is it creating good conditions for, e.g., the employees if the environment is destroyed by the production or if the company goes bust? That is why it is so essential to include the environment and the company’s competitiveness in the efforts to ensure economic development, social welfare and sustainability.

The bottom line should preferably be a win-win situation; otherwise it might be difficult to sell the idea to the companies.

A company with a goal-oriented social responsibility gets fully committed employees and through that better products, higher quality and greater efficiency. Inclusion of the employees in the development of the company gives better working conditions and life quality for all.

Some of the aspects of the work to achieve this might be that……

• the company is to develop knowledge and competence for all. The speed of development today is such that permanent education is necessary so that both management and employees can contribute positively to the development of the enterprises and share in the evolution of society in general.
• The company must foster a healthy, safe and developing working environment. This goes both for the physical and mental environment.
• The company must ensure that due consideration be given to both ethical and social aspects. All people have a right to working life irrespective of handicaps or limited working capacity.
• The company must assure equal opportunities both in gender and ethnic terms. No women or men or people with an ethnic background different to the majority must be discriminated against.
• The company must play its part in ensuring human rights by e.g.- abolishing child labour – both among partners and sub-contractors.

As you can perceive I tend to be tempted to emphasise the social side of the Corporate Social Responsibility. Yet, it is important that the environmental and the economic aspects are borne in mind. That is why it is also important that…..

• the company plays its part in developing and ensuring a sustainable environment. It requires that the way the company produces and delivers its services has a minimal impact on the environment. In this connection it is important all the time to welcome new products and the introduction of new working methods.

• Finally the company is to ensure that products and service have a price and a quality that create profit and assure long term corporate competitiveness. Only thus can the company ensure both its own survival and retention of the jobs and contribute to a sound national economy.

A number of other themes can be indicated and I feel like saying that only the imagination knows the limits. That may not be strictly true, but it is important that we think in broader terms than we perhaps normally do in the trade unions.

The ultimate gain is that society ends up with an industrial life and public sector jobs that contribute towards solving problems in our society instead of lumbering the country with social problems and environmental costs.

How do we obtain the best results in the work with Corporate Social Responsibility?

Some of the work is actually carried out by the companies themselves, because they can see a clear commercial advantage in being socially responsible.

Above all many companies have introduced value-based management and value-based worker participation. Here it is important that the individual company has its ethical basis defined and recognises its responsibility and its position as an integral part of society. The individual company and workplace is ready when they have answered the fundamental questions:

• Who are we?
• Why are we here?
• What do we want?

Add to this that it becomes increasingly common to draw up different forms of accounts describing the actions of the company in relation to Corporate Social Responsibility and a sustainable development.

But it would be naive to think that all companies become more responsible by their own efforts.

Do we have to fight the companies to make more of them aim for more sustainability?

Or should we dialogue and collaborate to achieve results?

And which tools do we need to develop to make progress. Are we to get help from the legislators?

Or do we get furthest with agreements – the so-called "code of conduct"?

Nobody should be in doubt that what counts with me is working together with the companies in order to work out the framework for the development of a "code of conduct" in as many areas as possible. I am convinced this is the best way to hold the companies to showing social, environmental and economic responsibility with sustainability as the overall aspect.

Voluntariness, an important code word, but the trade unions will need allies so as to show the companies that we mean business.

As an alliance partner I would above all point to the public sector in our countries. They can really give the development a kick-start by demanding that companies wishing to deliver goods or services to the public institutions must comply with certain social and environmental requirements in order to be considered at all. Such clauses will be very effective because the public sector in many countries is the biggest consumer and because of their purchases alone can decide that the development is to aim for more sustainability.

Another possible alliance partner I wish to mention are the socially aware employers who introduce value-based management and value-based worker participation in their enterprises.

They can be examples for all to follow and show the way by acting more socially responsible.

And then there are the consumers. It is beyond doubt possible today to change the development if the consumers are politically motivated when buying. We certainly saw that in connection with the French nuclear tests some years ago. The consumers of the future are bound to be an important ally in the fight for a sustainable world.

Likewise the NGO’s will in many fields be our natural alliance partners.

Finally let me single out the press. Active media will with their clout be able to show the consequences if the companies do not act in a socially responsible way or do not produce sustainably.

The government authorities, the socially aware employers, the political consumers, the grassroots groups (the so-called NGO’s) plus the influence wielded by the media in our countries – will together with the trade unions be capable of creating a strong fellowship and powerful alliances, able to ensure that the development is heading the right way.

Legislation, as I see it, is only needed to show the thrust of the development and possibly to assure a minimum universal standard. But national legislation may play its part in backing every "code of conduct" whether it is corporate, trade-based, national or international. In this context it is important to adapt our various "codes of conduct" to specific conditions in companies, trades and in the different countries.

One of the big problems with Corporate Social Responsibility is that we in many instances do not know the extent of it. So far the solution has been to develop different measuring tools, and a vast number of different accounts or reports have been developed today:

• Traditional financial accounts
• New social and ethical accounts
• Knowledge- and competence accounts
• Green accounts
• Working environment accounts

So we are not lacking in information. On the contrary. There is often an immense amount of confusing information.

So in Denmark we have decided that the goal must be an All-inclusive report where all the basic information from the different types of accounts is included. Clearly still with the accent on the financial account, but also with high priority for a description and an account of the so-called soft values.

Unfortunately there are no fixed rules for drawing up, in particular, the new accounts and their contents. Consequently many firms take the opportunity to overestimate their own efforts. They do this to create a better corporate image and thus improve their competitiveness. Sadly this is often done on a false basis.

Hence we must work to create common standards for what the different accounts contain. In 1997 UN took the initiative to work out a comprehensive set of standards within the area of Corporate Social Responsibility. This initiative is today poised to become a permanent international institution. Common international standards are the way forward.

The Danish trade unions are very busy working with the many new types of accounts. We believe them to contribute to openness, transparency and to engender dialogue with the companies. The new accounts, therefore, are important tools for developing Corporate Social Responsibility and with common international rules and agreement on what an All-inclusive report is to contain we are taking a big leap forward.

For UNI Commerce it is first and foremost important that we take part in the work of putting Corporate Social Responsibility on the agenda. Mind you – putting it on the agenda in such a way that it covers both people, planet and profit. It is essential to affirm that we all have a responsibility for the development of sustainability.

The next thing to take position on is which concrete areas we are to concentrate on and which strategy to adopt in UNI Commerce. Which way will we be heading? This requires a debate and a decision on our political stand. With this introduction I have given you my view.

This summit is an excellent opportunity for UNI Commerce to discuss how we as a very important sector in the international trade union movement can exert maximum influence on the development of a corporate sustainable social responsibility.

I’m fully aware of that this Sydney meeting is not a decision-making forum, but I hope we can get nearer to a common policy in this area.

Concluding my intervention I would like to refer to the proposal on policy and strategy in this area

that I have taken the liberty to work out and have circulated today. I hope this proposal can form the basis for a decision on Corporate Social Responsibility – at the latest on our next congress in UNI.