Government policies for corporate social responsibility in Europe

Jeremy Moon
Jeremy Moon

Jeremy Moon, Copenhagen Business School, Denmark reports on the article he has published with Jette Steen Knudsen, Copenhagen University, Denmark, and Rieneke Slager, Nottingham University Business School, UK.

Originally published on the 29/5/14 on the Better Business blog

Traditionally, most authorities on corporate social responsibility (CSR) suggested that, by definition, CSR was about the discretion of companies and unrelated to the requirements of the law and public policy.

Curiously, one of the main CSR themes over the last decade has been the growth of governmental interest in CSR. My own introduction to CSR was in the context of this supposed paradox. Whilst studying public policy responses to UK unemployment in the early 1980s I encountered overlaps with CSR (e.g. through local economic partnerships, the Youth Training Scheme).

For many years I just thought that this was a case of ‘UK exceptionalism’ or the novelty of the Thatcher period. Now, however, I see that government policies for CSR are commonplace, in countries as diverse as Australia, China and India.

Under the European Commission funded FP7 project CSR Impact, colleagues and I investigated policies for CSR among European national governments. Our findings, published in Policy & Politics with co-authors Jette Knudsen and Rieneke Slager, suggest that all European governments, from Ireland to Bulgaria, from Finland to Portugal, had policies for CSR, but these varied considerably.

Policies varied, first in terms of their ‘regulatory strength’. The most common policies tended to be classified as ‘endorsement’ of CSR (i.e. ‘low’ regulatory strength), through support for the concept by means of sponsorship of CSR awards and guidelines.

We identified two sorts of policies which reflected ‘medium’ regulatory strength: ‘facilitation’ and ‘partnership’. Facilitation usually involved some rather more substantive regulatory resources (e.g. the use of subsidies or tax incentives, or public purchasing) to structure markets for CSR purposes. Partnerships usually brought governments’ organizational resources with those of companies or business associations, and sometimes civil society or professions.

The ‘highest’ regulatory strength we identified in policies for CSR was inherent in ‘mandate’. This occurs when governments effect the rule environment in which companies operate (e.g. for environmental, social and governance reporting, for carbon trading).

The second dimension of variation was the policy area in which the government encouraged CSR. As one might expect, broad areas of social and environmental policy are the favorite areas in which CSR is enlisted by governments. But many governments also have policies for CSR which are aligned with broad economic objectives. A fourth policy sphere for CSR policies is international, including international development, issues. Only a few governments had policies across the range of policy areas.

One of our concluding observations was that these two dimensions of government policy for CSR can be integrated so that we can distinguish low, medium and high regulatory strength of policies which are applied to a partial or broad range of policy areas. Hence at one extreme we identified countries such as the UK, Northern Europe and Scandinavia whose CSR policies amounted to ‘systematic institutionalisation’ (i.e. high strength of government policy and broad application). These contrasted most with East European and Mediterranean countries whose CSR policies could be characterised as selective support (i.e. low strength and partial application).

Our findings have implications for businesses operating in countries where CSR is systematically institutionalized, as governments here are becoming an increasingly influential stakeholder. Discretionary CSR activities and those required by law and public policy are likely to overlap as lines become more blurred. Our findings also raise further questions about the desirability and modes of public policy convergence within the EU in the area of CSR.

Jeremy Moon is VELUX Professor in Corporate Sustainability at Copenhagen Business School and Visiting Professor, ICCSR, Nottingham University Business School.

Jette Knudsen is Professor of International Business at Tufts University, Boston. She is a member of the Executive Board of SASE (Society for the Advancement of Socio-Economic Studies) and a member of the Council for European Studies.

 Rieneke Slager is Assistant Professor at Nottingham University Business School.

If you enjoyed this blog entry, you may be interested in a similar article: International governmental organisations and global youth unemployment: the normative and ideational foundations of policy discourses

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