Pan-European approach a conceptual framework for understanding CSR

Abstract

In recent years the concept of corporate social responsibility (CSR) has gained unprecedented momentum in Europe. Even the sceptical Martin Wolff, Chief Economics Correspondent of the Financial Times commented that "CSR is an idea whose time has come" (Wolff, 2002: 62). CSR is a cluster concept which overlaps with such concepts as business ethics, corporate philanthropy, corporate citizenship, sustainability and environmental responsibility. It is a dynamic and contestable concept that is embedded in each social, political, economic and institutional context. Notwithstanding this recent flurry of CSR activity in Europe, business social responsibility was traditionally regarded in Europe as a peculiarly American phenomenon, reflecting American traditions of participation, self-help and small or at least indirect government. There is, however, no evidence that those taking a comparative view of business-society relations on either side of the north Atlantic over the twentieth century would necessarily argue, by virtue of the relative low salience of CSR in Europe, that its businesses were socially irresponsible. Indeed there is evidence to the contrary. Vogel concluded that UK business is "more susceptible to social pressure both from government officials and from other forums to behave 'responsibly'" (1986: 50). This raises broad questions about the changing nature of, and the reasons, for European corporate social responsibility. In particular it raises a conceptual paradox: was it possible for business in Europe to be socially responsible in the absence of a language of CSR in Europe. And, to what extent does the recent adoption of a language of CSR in Europe reflect a fashion in management, or something genuinely new in the European corporate landscape. We reserve the term "genuinely new" to describe a situation in which the advent of modern CSR implies a previous disregard by corporations in Europe to live up to a set of responsibilities towards society, however defined. Our argument developed in this chapter is that CSR in Europe, as defined by the majority of recent academic writings and corporate publications, is only "new" in the sense that it represents an innovation in corporate policies. While we would maintain that there is a long tradition of business involvement in many of the issues associated with modern CSR. These have been tackled by corporations in Europe for most of the last century (in some cases even longer). However, this company-social engagement was understood, articulated and performed in different ways.1 We seek to reconcile this contradiction by proposing a distinction between "explicit" and "implicit" CSR. We conceptualise CSR as a way of thinking and a set of practices enacted and addressed by - mostly voluntary - corporate policies, which explicitly circumscribe the responsibilities towards society, which corporations seek to address. On the other hand, the majority of issues which count as corporate responsibilities towards society in a European context are not part of the corporation's explicit policies but they are implicitly codified in the norms, standards and legal framework of Europe and its nations. We use the distinction between explicit and implicit CSR to make sense of: 1. the rise and role of the new CSR in Europe, and 2. the way this approach to CSR interacts with deeply embedded national institutional contexts as CSR transforms from an implicit to an explicit form; and 3. the contextualisation of CSR in different national cultures, particularly those without a history of the Anglo-Saxon system of capitalism. As background, we recognise that twentieth century Europe has experienced a wide range of political and economic systems including systems in which business motivated by profit and open and democratic forms of civil society have been suppressed; those with no independent business sector; those where corruption and irresponsibility flourished. However, we would argue that there are certain similarities between European countries, which manifest themselves in the way CSR is understood and practised and that this understanding is different from, for instance, the USA. We also acknowledge that there are still significant differences among European countries and that most of our thinking is informed by the experiences of CSR in west and north European countries and only to a lesser degree Central and Eastern Europe. The first group of countries have enjoyed extended periods of liberalism, democracy and regulated capitalism in a mixed economy and which, all things being equal, we would expect to resemble American business-society relations.2 Secondly, we recognise that some features of American societal governance have similarity with features of the European model. Indeedin some cases the USA pioneered regulation for social responsibility (e.g. the postcivil war pensions and public sector employment, the New Deal, the regulatory work of the Environmental Protection Agency in the 1960s).