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ESDN Quarterly Report June 2008
policies on CSR in EU Member States:
Overview of government initiatives
and selected cases on Awareness
Raising for CSR, Sustainable Public Procurement and Socially Responsible
Margula & Gerald
Corporate Social Responsibility (CSR) is ‘a concept whereby companies integrate
social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis’ (European Commission,
2001). Since the European Commission has published a Green Book on the topic
in 2001 and a Communication in 2002, CSR has gained significant importance
across Europe, also as a new field of public policies. This report describes
how EU Member States aim to facilitate CSR by raising awareness, by advancing
Sustainable Public Procurement, and by fostering Socially Responsible Investment.
It provides a systematic description of CSR policies in Europe.
This report is based on a 2-year research project on CSR policies in the EU
that was terminated in March 2008. It was commissioned by DG
Employment, Social Affairs and Equal Opportunities, and conducted by RIMAS,
the Institute that operates the ESDN Office. This, the report summarises findings
of extensive empirical research, and it draws evidence-based conclusions. Since
each of the three studies summarised here is longer than this report, we had
to focus on some key findings. The three final reports as well as several PowerPoint
presentations delivered to the EU High-Level Group for CSR can be downloaded
from the project website at www.sustainability.eu/csr-policies.
We thank Robert Strauss and Genevieve Besse from DG Employment, Social Affairs
and Equal Opportunities (Unit D/2) for commissioning the project “Analysis
of national policies on CSR, In support of a structured exchange of information
on national CSR policies and initiatives” (Tender No VT/2005/063), and for
the opportunity to disseminate the findings in this ESDN Quarterly Report and
at the ESDN
Conference 2008 in Paris.
public policies on CSR
The main idea of Corporate Social Responsibility (CSR) can be captured with
the triple bottom line principle, saying that businesses (ought to) serve not
only economic, but also social and environmental ends (Elkington 1994). This
implies that businesses are not only responsible to their shareholders (or
owners), but to a broad variety of stakeholders they depend upon and interact
with, including their employees, customers, suppliers, governments, NGOs and
the public. According to Post et al (2002, 19), “The stakeholders in a corporation
are the individuals and constituencies that contribute, either voluntarily
or involuntarily, to its wealth-creating capacity and activities, and that
are therefore its potential beneficiaries and/or risk bearers”.
On a first glance, the so-called stakeholder view of the corporation (Post
et al 2002) seems to stand in stark contrast with the neo-classical shareholder
view of businesses, asserting, the only business of business is business (Friedman
1970), or less repetitive, that a firm’s only responsibility is to do business
and make a profit. The discourse along these lines has been extensive in recent
decades, with the effect that the stakeholder perspective of businesses, and
with it the concept of CSR, became increasingly popular. This development is
not only due to normative or ethical reasoning about the purpose of doing business.
It is rather based on instrumental grounds, suggesting that there is a so-called
“business case for CSR”, i.e. that CSR also makes business sense.
What does CSR have to do with sustainable development (SD)? Generally speaking,
CSR can be regarded as a voluntary “business contribution to Sustainable Development”
(European Commission 2002). Reproduced from Steurer et al (2005), Figure 1
illustrates how the management approach of CSR is linked with the broader societal
guiding model of SD, and how stakeholder relations management reaches out from
the core of management systems and practices to the wider society (see also
Figure 1: Sustainable Development, Corporate Sustainability
CSR and the role of governments
Before we address public policies on CSR across Europe in detail, let’s explore
why governments care about CSR, given that the concept is widely regarded as
a voluntary business or management approach? This question can be answered
with at least five explanations:
- Since CSR is concerned with managing business relations with a broad variety
of stakeholders, the concept obviously reshapes not only management routines,
but also the roles and relations of all three societal domains, i.e. businesses,
governments and civil society. Consequently, CSR is not only a management
approach that can be left to the discretion of managers, but it is also a
highly political concept that entails societal conflicts as well as a considerable
scope for new government activities.
- The widely shared view that CSR is voluntary does not contradict the fact
that respective activities are often a response to stakeholder pressure;
it emphasises that CSR practices are not required by law but go beyond legal
standards. Thus, governments inevitably define CSR negatively with regulations,
and they want to define it also positively with softer, non-binding policy
- These CSR policies coincide with a broader transition of public governance
altogether, away from command and control towards more network-like and partnering
arrangements. In this respect, CSR policies can be seen as a key component
of a broader transition to new governance forms that is observed in several
- In addition, governments care about CSR because respective business activities
can help to meet public policy goals of sustainable development without making
use of often unpopular (or even politically infeasible) regulations.
- In this context, some authors emphasise that CSR and respective public
policies can help to compensate for the failure of governments to achieve
public policy goals or solve problems with regulations. Some scholars argue
that in the contemporary neo-liberal age, relationships between corporations
and societal groups are less likely to be the subject of state interventionism
than they were in the Keynesian age, which ended in the late 1970s. A decrease
of state interventionism “might open up the possibilities for more ‘responsible’
forms of interaction between stakeholder groupings, devolved to enterprise
level” (Mellahi & Wood 2003, 190f; see also Rondinelli & Berry 2000,
74; Banerjee 2002, 8).
Consequently, many European governments have assumed an increasingly active
role in promoting and shaping CSR in recent years, turning single government
initiatives on CSR into a new policy field. Characterising it systematically
by exploring some key themes and instruments of public policies on CSR is the
key purpose of this report.
Themes of public policies on CSR
As mentioned above, this report characterises public policies on CSR by describing
the policy instruments Member State governments employ in the context of particular
CSR policy themes. By doing so, we follow a simple and systematic approach
that distinguishes between themes and instruments. Other attempts to characterise
public policies on CSR, such as the “CSR
Navigator” published by Bertelsmann Stiftung and GTZ (2007, see in particular
pp 208-214), do not always keep themes and instruments systematically apart
and consequently provide confusing rather than clarifying accounts of the relatively
new policy field.
The activities of governments in the context of CSR are manifold, not only
with respect to policy instruments (see below), but also regarding the themes
addressed. Based on a systematic analysis of several, often-unsystematic stocktaking
efforts of CSR policy making, we have derived a list of five major CSR policy
themes that help to characterise the policy field regarding contents. The analysis
was guided by two rules. First, (contents) themes and (procedural) instruments
have to be kept apart. Secondly, the aim was to discriminate as few themes
as possible (to keep the typology lucid) and as many as necessary (to allow
for adequate differentiation). By following these two rules, the following
five CSR policy themes were identified:
- Raise awareness and build capacities for CSR among companies and stakeholders;
- Foster philanthropy and charity;
- Foster disclosure and transparency on economic, social and environmental
issues of business activities;
- Foster Socially Responsible Investment (SRI), that is investment practices
taking social, environmental and/or other ethical criteria (such as the exclusion
of companies producing tobacco, alcohol or weaponry) into account;
- Lead by example (or “walk the talk”), in particular by
- Making public procurement more sustainable;
- Applying SRI principles to government funds;
- Adopting CSR management systems (like EMAS) and audits in government
- Reporting on the SD performance of government bodies.
In addition to these five CSR policy themes, some governments also coordinate
CSR policies across themes, for example by appointing a government body responsible
for CSR (such as a Minister in the UK), and/or by adopting CSR policy strategies
and action plans. Moreover, it is to note that traditional economic, social,
environmental or sustainable development policies can also facilitate or (negatively)
define the scope of CSR. However, since CSR is by definition about voluntary
business practices, mandating policies should be kept conceptually apart from
soft and voluntary CSR policies. This does not imply that the themes above
are improper for mandatory laws and regulations, quite on the contrary. It
means that laws that are both mandating and enforced should be regarded as
traditional (social or environmental) policies that curtail the scope of the
softer CSR policy field, not the other way round.
Policy instruments in the context
Traditional typologies of policy instruments cover informational, financial
and mandating instruments, metaphorically also referred to as “sermons”, “carrots”
and “sticks” (Jordan et al 2003). According to Fox, Ward and Howard (2002),
governments that address CSR or any of the themes mentioned above make use
of the three conventional instrument types, plus a relatively new one that
emphasises networks and partnerships. They show that in the context of CSR,
governments make use of
- Soft legal (rarely mandating) instruments, such as regulations, directives,
laws, and decrees;
- Financial or economic instruments, such as taxes, tax abatements, subsidies
- Informational or endorsing instruments, such as websites, brochures, campaigns,
guidelines, trainings, conferences or labels, and
- Partnering instruments, such as networks with other government bodies,
public-private-partnerships (PPP), voluntary agreements, dialogues and stakeholder
In the first study on CSR awareness raising initiatives (Berger et al., 2007)
we found several initiatives that combined different other instruments, requiring
a fifth type:
Although legal instruments usually have mandating character, in the context
of CSR policies they most often don’t (“soft-law approach”) because of the
voluntary character of CSR. If legal CSR instruments go beyond recommendations
and do have a mandating character, they either do not apply to all (businesses,
for example, don’t have to obey laws and regulations on sustainable public
procurement because they can avoid public tenders), or law enforcement is weak,
if not non-existent (see, for example, the law against anti-personnel mines
and cluster munitions in Belgium below). If economic instruments are employed
in the context of CSR, they are not concerned with taxes or tax breaks (the
most powerful instruments of this type), but rather with granting subsidies
and awards (many of the latter unfolding economic incentives only if they are
Figure 2: CSR policy instruments
The remainder of this report shows how EU Member States use the different
instruments for raising awareness for CSR, making
public procurement more sustainable,
and fostering Socially Responsible Investments.
research behind this report: project and method
This report is based on a tripartite study on CSR Polices in EU Member States
commissioned by the DG Employment and Social Affairs (Tender No VT/2005/063).
The project was conducted by RIMAS (the Research Institute for Managing Sustainability
that operates the ESDN Office) between March 2006 and March 2008. The aim of
the study was to support a structured exchange among the members of the EU
High Level Group on CSR. The HLG consists of EU Member State representatives
who meet on a regular basis to exchange information on CSR-related policies.
According to a decision taken at the meeting of the EU HLG on CSR, the three
empirical studies explored
- CSR Awareness Raising initiatives (conducted between August and October
- Sustainable Public Procurement (SPP) (conducted in March and April
- Socially Responsible Investment (SRI) (conducted between November
2007 and January 2008)
The following parts of the report are based on these three empirical analyses.
All deliverables of the project can be accessed online at www.sustainability.eu/csr-policies.
Public policies on the three topics were analysed by using a three-step
policy analysis format that is also reflected in the structure
of the reports on CSR Awareness Raising and Sustainable Public Procurement:
In the first step a systematic review of the existing
literature was conducted. Based on this review, a telephone survey among public
administrators from the EU Member States dealing with the topic in question
was conducted. Some of the surveyed experts also provided additional written
information via email. The key objectives of the surveys were
- Amend the information given in the Compendium
- Characterise different policy instruments and approaches used in the Member
- Derive a typology of different policy approaches,
- Identify interesting or good practice cases and to
- Get a first idea about success factors and challenges.
Based on the survey results and in co-operation with the European Commission,
three interesting or good practices on Awareness Raising and Sustainable Public
Procurement from different Member States were chosen and analysed in more depth
in a second step. Here, relevant policy documents
were analysed and further telephone interviews with the responsible administrators
and with key stakeholders of the initiative were conducted. The key
objectives of documenting selected practices were to
- Facilitate an in-depth discussion of different approaches,
- Facilitate the discussion on policy transfer and coherence among Member
States, and to
- Highlight relevant obstacles, drivers and success factors.
In a third step, the survey and the case studies
results were synthesized. The key objectives of the synthesis were
- Derive conclusions;
- Facilitate an in-depth discussion by the CSR HLG and to
- Lay down the path to subsequent in-depth analyses and assessments.
This three-step study design provides both a general overview on governmental
initiatives on CSR in the EU Member States, and in-depth information on selected
cases and initiatives. In the third study on Socially Responsible Investment
(SRI) we had to go a slightly different way. As government initiatives on SRI
were found to be comparatively scarce (only 14 initiatives were found for the
27 EU Member States), we have documented all initiatives in brief instead of
conducting in-depth case studies.
Overall, the studies provide a good but certainly not complete picture on
CSR policies in the EU Member States. One limitation we faced was that it was
not possible to survey all Member States; another is that the surveys reflect
the (sometimes incomplete) knowledge of the persons interviewed. Furthermore,
the surveys focused only on initiatives that were initiated by national governmental
awareness for CSR
CSR implies that businesses exceed social and environmental minimum standards
on a voluntary basis. Consequently, the CSR performance of companies depends
essentially on how important social and environmental CSR issues are perceived
by companies themselves on the one hand, and by their stakeholders (such as
investors, employees, consumers and Civil Society Organisations, etc.) on the
other. If companies and stakeholders are unaware of how businesses can contribute
to sustainable development by incorporating environmental protection, social
responsibility and consumer interests into daily management routines, CSR will
remain a phrase (European Commission, 2002). For this reason, raising awareness
for CSR among both businesses and their stakeholders is a key task for governments
as far as they assume that CSR is a promising complementary approach in achieving
societal objectives. However, since CSR is relatively new for most EU Member
States (with the exceptions of the UK and Denmark), raising awareness for CSR
also helps to enhance a common understanding of what CSR is about across the
This section documents government initiatives at the national level that
aim to raise awareness for CSR in EU Member States. As outlined above, it consists
of the following three analytical steps:
of 85 CSR awareness raising activities in the EU-27
The survey of governmental CSR awareness raising initiatives was based on
telephone interviews with public administrators that are experts on the topic.
In total 24 interviews have been conducted with public administrators from
20 EU Member States between August and October 2006. Five countries (Luxemburg,
Czech Republic, Cyprus, Italy and Slovakia) were not included in the survey
for various reasons. Figure 3 shows the EU Member States that were covered
by the survey (in green) and the ones that are not included (in grey).
Figure 3: EU Member States covered in the survey
(green: covered; grey: not covered)
In total, the interview partners mentioned 85 CSR awareness raising initiatives.
On average, each surveyed country has 4.3 CSR awareness raising initiatives
in place. However, the number of initiatives ranges from zero (Poland and Estonia)
to nine (Spain and Ireland).
If we take a closer look at the types of the 85 initiatives on CSR awareness
raising, it is apparent that most of them are informational instruments (48.3
percent), followed by hybrid tools or others combining, for example, informational
and partnering instruments (25 percent). About 15 percent fall into the categories
of partnering and financial/economic instruments. Legal instruments are not
employed in the context of awareness raising. Figure 4 provides a graphical
illustration of the shares of the different instrument categories.
Figure 4: CSR awareness raising initiatives grouped along
the different public policy instruments
Selected CSR awareness raising
To make it more concrete what Member State governments do to raise the awareness
for CSR, this section describes selected initiatives for all types of instruments
Knowledge and Information Centre on CSR in the Netherlands: www.mvonederland.nl
In 2000, the Social and Economic Council (SER), the main advisory body to
the Dutch Government and Parliament on social and economic policies, advised
the government to set up an independent centre for CSR. Three issues were considered
- The need to centralise the then emerging governmental CSR initiatives and
to further develop CSR in the Netherlands;
- To establish an independent institution for CSR awareness raising that
is not directly linked to the government or the business community;
- To foster collaboration between the different stakeholder groups on CSR
In 2001, the Dutch government decided to set up the independent “Knowledge
and Information Centre on CSR”. It aims to disseminate knowledge on CSR to
companies (in particular SMEs) and to encourage companies in implementing CSR.
Due to political and legal reasons, the centre started to operate in April
2004. The Centre is managed by an organisation called CSR Netherlands (MVO
Nederland), consisting of a director and 15 staff members (12 full-time equivalents).
It is independent from the government, businesses as well as stakeholder groups.
The funding for the Centre was € 1 Mio in the first year (2004). For the
period 2005-08, the total budget of the Centre is € 4.9 Mio, provided by the
Ministry for Economic Affairs. If the Centre undertakes projects for other
ministries or stakeholder groups, it allocates additional funding from these
sources. From 2008 onwards, it has not yet been decided how the Centre will
be financed. However, as a formal requirement for the budget provided by the
government, the Centre must develop an annual work plan, which is then presented
to the Ministry.
The activities of the Centre are organised around the following programme
- To collaborate with existing regional and sectoral institutions for the
private sector (e.g. chambers of commerce or sector trade organisations)
in order to create synergies with their (communication) activities;
- To address the practical needs of companies and to offer demand-driven,
tailor-made approaches and solutions;
- To promote CSR activities with an international scope with a focus on international
trade relations of companies and international supply chain management;
- To disseminate information about specific CSR topics, like transparency,
CSR and marketing, human resource management, etc. (for details, see the
Centre’s website at www.mvonederland.nl).
Along these programme lines, various activities are undertaken by the Centre.
It, for example, organizes conferences on CSR, publishes reports about the
situation of CSR in the Netherlands, and it contributed to the toolkit “CSR
in emerging markets”, which offers practical advice to Dutch companies operating
in China, Brazil, South Africa, Russia or Indonesia.
The Centre was set up as a multi-stakeholder initiative with the aim to link
the different parties and their various interests. Although the main target
groups of the Centre are SMEs, the Centre also collaborates with business associations,
chambers of commerce, trade unions, consultancies, NGOs, as well as regional
and local communities. Currently, about 275 organisations are partners of the
Centre. Among them are 20 major companies, 75 SMEs, approximately 60 CSR consultancies,
25 trade organisations, 20 NGOs, a few government bodies and other stakeholder
groups. On the one hand, these partners of the centre receive up-to-date information
on CSR. On the other hand, they are willing to share knowledge and experience
on CSR with the Centre, for example through workshops.
Overall, the factors that contributed to the success of the Centre can be summarised
- It helped to centralise and coordinate the various activities on CSR in
the Netherlands and to have a structured flow of information on CSR with
- The Centre’s collaboration with trade organisations and chambers of commerce
made it easier to approach SMEs.
- Providing tailor-made, practical and understandable information on CSR
in a sector-specific way is key to communicate the business-case of CSR.
Among the challenges the Centre is facing currently is the concern about continued
funding after the current budget provision from the Ministry of Economic Affairs
will end with 2008. Furthermore, the lack of resources (personnel, budget)
is increasingly difficult to match with the increasing demands the Centre faces.
In addition to that it is challenging to combine CSR awareness raising for
average companies (that need basic help and information) with providing valuable
help to front-runners (that need more specific and in-depth support).
People & Profit in Denmark: http://www.eogs.dk/sw26505.asp
The project “People & Profit” (P&P) was operational from 2005 to December
2007. The main objective of the project was to enhance the competitiveness
of Danish companies, mainly SMEs, by providing knowledge, training and practical
tools on how to integrate CSR strategically into their business activities.
Although P&P was a ‘coordinating initiative’ which involves several activities
and actors, raising awareness on CSR among SMEs was one of its key purposes.
Thus, the programme was comprised of the following activities:
- Research, carried out by independent research organizations, aimed
to provide an overview of international and national CSR activities and to
generate knowledge about the link between CSR and practical business activities
in SMEs. Examples are studies mapping CSR activities among Danish SMEs and
identifying CSR activities with potential economic or competitive value (in
April 2008, a voluminous “practical guide to CSR” has been published, it
can be downloaded here);
- Trainings, P&P set out to train 12,000 managers, employees
and CSR teachers from vocational schools on how to integrate CSR more strategically
into business activities;
- Dissemination/awareness raising, including widespread dissemination
of P&P research throughout the country, mainly through SME networks,
SME in-house training, event strategies, vocational schools, the reference
group and regional channels.
P&P was managed by the Danish Commerce and Companies Agency (DCCA), which
is part of and responsible to the Ministry of Economic and Business Affairs.
DCCA is also responsible for the registration of Danish businesses and administers
legislation that regulates businesses. On average, DCCA manages 30-40 projects,
one of which is P&P. The total budget of the project was € 2.5 Mio, provided
by the European Social Fund (ESF) and the Danish National Labour Market Authority
Fund (50:50 match-funding). P&P involved four full-time employees, one
half-time employee and one special advisor. Furthermore, the DCCA provided
funding for the National Research Panel on CSR and SMEs, a group of 15 researchers
from different Danish universities, responsible for discussing the results
of P&P research and to give advice to the project management.
Among the success factors of the initiative were an increased attention in
SMEs regarding how to strategically integrate CSR into their business development.
This success was particularly due to the media coverage and the large number
of SMEs approached. Another point was the successful anchoring of P&P in
the regional and local network of existing business organisations. Moreover,
the development of practical CSR management tools used by SMEs, together with
the ability to identify growth potentials for Danish SMEs through CSR were
highlighted as other success factors of P&P.
Concerning problems and challenges faced by P&P, it was difficult to
recruit company managers for CSR trainings because of their lack of time. Consequently,
the project managers had to admit that the target of training 12,000 managers
and employees was very ambitious.
Globalt Ansvar in Sweden: http://www.regeringen.se/sb/d/2657
Several years ago, there was concern in Sweden about several trends of globalisation
and the coherence between trade policy, aid policy and foreign policy. This
concern fostered an investigation into these issues by the Swedish Parliament
called “Our Common Responsibility”. One conclusion of this investigation was
that it is necessary to include the private sector, especially Swedish multi-national
companies, into strategies for greater social responsibility in a global context.
Consequently, “Globalt Ansvar”, the Swedish Partnership for Global Responsibility,
was launched in March 2002 by four ministries (foreign affairs, trade, development
cooperation and environment) in order to foster CSR in a global context.
Globalt Ansvar is managed by a team of five staff members from the International
Trade Policy Department of the Ministry of Foreign Affairs. The secretariat
of Globalt Ansvar works closely with other ministries and has established a
network on CSR issues in the Government Office. The operational budget of the
partnership is of about € 88,000 (SEK 800,000), not including personnel and
office costs, which are covered by the general budget of the Ministry of Foreign
Affairs. The budget is negotiated on a yearly basis.
The homepage of Globalt Ansvar (http://www.regeringen.se/sb/d/2657)
provides information for target groups and stakeholders (in Swedish). Some
background material is also available in English.
The main goals of Globalt Ansvar are threefold:
- Swedish companies should be made familiar with the OECD Guidelines and
the UN Global Compact;
- Swedish companies should be won as ambassadors of human rights, decent
labour conditions, environmental protection and anti-corruption security.
- The inclusion of CSR in business activities should enhance the competitiveness
of Swedish industry.
Globalt Ansvar undertakes several key programmes and activities aiming to
provide Swedish companies (mainly MNCs) with information about CSR:
- Seminars and workshops on various CSR issues are co-organised
together with companies, academic institutions or UN organisations. So called
“open seminars” usually attract between 100-130 participants from companies,
academics, journalists and NGOs. In addition, Globalt Ansvar organises customized,
“closed workshops” for selected company executives only.
- Training and education: in cooperation with Swedish embassies
inter-governmental training sessions for (new) diplomatic personnel are being
organized as well as bi-lateral development co-operations and trade promotion
programmes with China, South Africa and Vietnam.
- Awareness raising comprises several activities as seminars, workshops
and trainings described above, it is being fostered throughout the partnership’s
website and also plays a role in the bi-lateral collaborations through the
Companies can join the Globalt Ansvar partnership by expressing their will
to adhere to the OECD
Guidelines and the UN Global
Compact, and by committing to describe an example of their work on CSR.
The company names are displayed prominently on the partnership’s website. Currently,
18 Swedish companies are members of the Partnership for Global Responsibility.
Many large companies and an increasing number of SMEs who do not belong to
the partnership but have signed the Global Compact also consult the Globalt
Ansvar office with questions on importing from different parts of the world
and show concern for supply chain issues.
Although the main target group of Globalt Ansvar are companies, other stakeholders,
such as business associations, trade unions and NGOs, are also involved in
various activities of the partnership. Additionally, the partnership has established
a research platform in which it cooperates with universities on research and
According to the interviewees, the partnership’s success is achieved by a
‘non-discriminatory’ approach, meaning that it not only works with companies
that have signed up to Globalt Ansvar, but also with other companies (including
SMEs) that are interested in CSR issues. Furthermore, Globalt Ansvar benefits
from possessing a common view on CSR with the Swedish Government. It acts as
the national focal point for CSR and, therefore, attracts all related issues.
In addition, approaching important topics with different formats (open seminars
and closed workshops) guarantees both, broad discussion and information distribution
on the one hand, and in-depth and confidential discussions on sensitive issues
on the other.
Regarding challenges it is to mention that the Globalt Ansvar faces a rather
low number of signatories to the partnership and weaknesses regarding monitoring
CSR activities, which are particularly important with regard to implementing
Informational and endorsing instruments:
The three initiatives summarised above are based on three case studies documented
in the CSR Awareness Raising Report in detail (for more information click here)
To complete the picture of CSR Awareness Raising initiatives, we briefly illustrate
two more types of instruments with examples that were not covered by case studies.
Guidelines for SMEs in Austria: http://www.respact.at/content/site/projekte/kmu/article/2182.html
In 2006, the Austrian Ministry of Economics and Labour, the Austrian Chamber
of Commerce and respACT Austria (the Austrian
platform for CSR) have developed 11 sector-specific guidelines for SMEs, e.g.
for the wood-production or the tourism industry. The guidelines have been distributed
among a target group of 120,000 companies during 2007. The total funding for
this initiative was approx. € 100,000.
Financial or economic instruments:
Export credits in Sweden
Swedish companies are confronted with CSR when they want to export or invest
abroad. Export credits and state guarantees for foreign investments are provided
only if companies sign an anti-corruption agreement. By linking foreign investments
to CSR, the government raises awareness for CSR among companies usually hard
CSR awareness raising initiatives
By synthesising the findings of the survey and the case studies, the following
conclusions can be drawn:
CSR instruments applied
Policy makers can choose from a broad
spectrum of CSR policy instruments (from informational to legal instruments).
Although most interviewees agreed that CSR awareness raising is an important
political task, and that a mix of instruments should be applied, some emphasised
that CSR policy making is more than this. Therefore it can be concluded that
awareness raising is an important, but overall rather soft CSR policy approach.
The role of small and medium sized enterprises (SMEs)
the one hand, the interview partners considered SMEs as the most important
target group of CSR awareness raising initiatives. On the other hand, the
survey showed that only 12.4 percent of the 85 awareness raising initiatives
specifically address SMEs, whereas 40.3 percent are aimed at companies of
all sizes. Thus, we conclude that the target groups of the surveyed CSR policy
initiatives do not match with the general prioritisation of target groups.
Future CSR awareness raising initiatives should focus on SMEs to correct
Lack of cooperation with the media
Although the media is
regarded as an important target group for CSR awareness raising in general
terms, only very few initiatives (such as the Austrian CSR guideline initiative
for SMEs and the Danish programme “People & Profit”) target it explicitly.
We conclude that awareness raising initiatives would be more effective if they
cooperated more closely with a broad variety of media channels, including business-specific
magazines or newsletters of chambers of commerce, as well as trade and labour
The success factors for effective CSR
awareness raising initiatives mentioned were diverse, and the most prominent
ones are the following two:
- CSR initiatives should focus on the specific needs of companies of different
sizes from different sectors;
- New platforms or centres for CSR should cooperate closely with existing
institutions and structures (such as chambers of commerce or regional trade
The obstacle stated most often is, not surprisingly,
resource constraints in governments and businesses. This obstacle can have
serious implications because it interferes negatively with one of the success
factors identified above, i.e. the need to offer tailor-made resources for
different companies, which is often a time-consuming exercise.
Public Procurement (SPP)
Public procurement is an important area of the European economy. In the EU,
spending on public procurement amounted to about 16 per cent of the gross domestic
product (GDP) of the Member States, or €1,500 billion in 2002. This sum equals
the GDP of several smaller EU Member States, or half the GDP of Germany (European
Commission, 2004). Therefore, the purchasing power of public institutions can
have significant impacts on the market.
For a long time, public procurement had to be economical and efficient only.
Due to the growing acceptance of SD as an overarching guiding model, environmental
and social aspects have become increasingly important, also for public procurement.
The UK’s Sustainable Procurement Task Force (2006), for example, defines SPP
as “a process whereby organisations meet their needs for goods, services, works
and utilities in a way that achieves value for money on a whole life basis
in terms of generating benefits, not only to the procuring organisation, but
also to society and the economy, whilst minimising damage to the environment”.
If both social and environmental aspects are taken into account, one can speak
of SPP. If only environmental aspects are taken into account, one can speak
of Green Public Procurement (GPP), and it can be regarded as a contribution
The rationale behind Sustainable Public Procurement (SPP) is not only that
governments can use their purchasing power as an economic incentive for SD
in general, and for Sustainable Consumption and Production (SCP) as well as
CSR in particular. In addition, SPP gives them the opportunity to “walk the
talk”, or to “lead by example” in achieving SD and sustainable consumption.
Both SPP and SCP are increasingly taken into account in the EU policy and
legal framework. References to SPP/GPP can be found in the Presidency Conclusions
of the European Council of March 2006, in the renewed EU SD Strategy, and in
two EU Directives on public procurement, i.e. Directive
2004/18 (the so-called “procurement directive” addressing contracting
authorities) and Directive
2004/17 (the so-called “utilities directive” addressing special sectors
of contracting authorities). Although the two directives do not prescribe SPP,
they open possibilities to consider social and/or environmental issues at an
early stage of the procurement process in transparent ways so that the rules
of the European Single Market are not violated (McCrudden, 2007; van Asselt
et al, 2006). As will be shown below, both directives have facilitated the
renewal of public procurement laws in the Member States in recent years, resulting
in a high share of legal instruments in the context of SPP.
This section on SPP consists of the following three analytical steps:
Overview of 103 SPP initiatives
in the EU Member States
The survey of governmental SPP initiatives was based on telephone interviews.
In total 24 interviews have been conducted with public administrators from
24 EU Member States in March and April 2007. By taking into account existing
benchmark/overview studies and surveys on SPP/GPP initiatives in Europe, two
additional countries were covered (Latvia and Italy). Figure 5 shows the EU
Member States that were included in the survey (in green with telephone interviews
and in orange with existing studies and surveys), and that Greece was the only
country not covered (in grey).
Figure 5: EU Member States covered in the survey
(green: covered with telephone interview; orange: covered with written information;
grey: not covered)
The survey revealed details about 103 governmental SPP initiatives in 26 EU
Member States. Therefore, the average number of SPP initiatives per country
is 3.96. The number of initiatives is, however, very different across Europe,
ranging form one (Latvia, Luxemburg, Portugal, Romania, Slovak Republic and
Spain) to nine in the UK.
The 103 initiatives for SPP identified in the survey are mostly legal (35
percent), hybrid (33 percent) and informational instruments (31.1 percent).
Partnering and financial/economic instruments hardly exist in this context.
However, all SPP initiatives provide economic incentives for CSR in an indirect
Figure 6 provides a graphical overview of the instrument categories.
Figure 6: SPP initiatives grouped along
the different public policy instruments
Most of the laws we found in the survey are a direct response
to the EU Directives 2004/18 and 2004/17, and as the directives they do not
prescribe SPP but open possibilities to consider social and/or environmental
issues in public procurement (McCrudden, 2007).
Most of the hybrid instruments are national action plans (NAPs)
and programmes on SPP. Figure 6 in the final
report on SPP shows that nine Member States have adopted NAPs and seven
are currently drafting their NAP, most of them focussing on GPP. The European
Commission (2003) encouraged Member States to adopt NAPs on GPP in its Communication
on integrated product policy in 2003.
Selected SPP initiatives
To make it more concrete what Member State do with regard to SPP, this section
describes selected initiatives for all types of instruments found.
The legal framework on SPP in France
In France, more than 50,000 public authorities from all political levels
summing up to about 200,000 purchasers are responsible for public procurement.
France established a legal framework that aims to guide these actors towards
SPP. Like many other EU Member States, France decided to include SPP in general
procurement instead of issuing particular SPP laws or decrees. The two major
legal texts that include SPP are the Public Procurement Contracts Code (“Code
des marches publics” in French) and the Ordinance 2005-649, both of which implement
the EU Directives 2004/17 and 2004/18. In addition to that, two circulars are
directly linked to SPP.
The PPCC was first issued in 2001 and provides general legal provisions for
public procurement in France. Legally, it has the status of a decree, defining
the public procurement rules for central state authorities, central administrative
bodies and several local authorities. The PPCC was amended twice, in 2004 and
in 2006. In 2004, some provisions on environmental and social issues were included.
With the last amendment of the PPCC in 2006, SD objectives were included. Regarding
social issues, reference is made to the employment of previously unemployed
persons by companies awarded with a public contract and also to public procurers
reserving parts of the contract to companies that employ disabled persons (Article
15). Regarding environmental issues, the technical specification in the PPCC
enables procurers to specify their needs by using eco-labels. EMAS certifications
can be used only when selecting suppliers and only in work and service contracts.
Moreover, Article 53 states that criteria of “global costs of utilization”
can be applied when awarding public contracts.
Another legal text that includes provisions for SPP is the Ordinance
2005-649 that was issued on 9 June 2005. The law complements the PPCC
in its goal to offer legal provisions including SD in public procurement
processes. It targets public institutions with a commercial purpose that
do not fall under the PPCC, such as the French electricity company, French
Railways, the Banque de France, and various business associations.
Circulars complement the legal SPP framework in France. Although they have
no mandatory character, state administrations are compelled to comply with
them. Circulars are used to specify the general provisions laid out in the
legal texts and usually include practical advice and recommendations on how
to implement them. Currently, two circulars are directly related to SPP, i.e.
the Circular on wood and wood-based products and the Circular
on energy efficiency, both from 2005. The latter gives guidance on how
to purchase energy efficient vehicles and equipment as well as construct energy
efficient public buildings. Additional circulars on food and on the implementation
of the National Action Plan on SPP have been developed in 2007.
In the case study we found that the EU procurement directives and the “Charter
for the Environment”, an annex to the French Constitution from 2005 that requires
all ministries to include SD in their policies, were two important driving
forces for including SD prominently in the French procurement laws. Regarding
success factors, developing guidelines that specify the general legal provisions
in terms of practical application was mentioned as important. Furthermore,
it was stated that the national level could learn from good SPP practices at
the local level. For instance, some municipalities (like the city of Nantes)
pay particular attention to employment issues in procurement contracts.
Regarding challenges, the complexity of SD and its application in the context
of procurement, the perceived costs of SPP and legal uncertainties were mentioned.
Overall, the interviewees stated that fostering SPP crucially depends on training
public procurers so that they gain legal certainty and understand the fact
that the cheapest product may not always be the best and most durable one.
Strategies and action plans for SPP in the UK
Public sector purchasing in the UK amounts up to approx. £150 billion per
year, or 13 per cent of the country’s GDP (DEFRA, 2006). The major impact of
the public sector in procurement and its potential contribution to the delivery
of SD objectives was recognised in the UK’s national SD strategy from 2005,
which sets the goal that the UK should be one of the leaders in SPP within
the EU by 2009. For achieving this goal, the UK has developed several strategies
and action plans, including the “UK Government Sustainable Procurement Action
Plan”, the strategy document “Transforming Government Procurement” and SD Action
Plans of individual government departments.
The development of the national action plan for SPP benefited essentially
from a Sustainable Procurement Task Force that was established in May 2005.
It consisted of 33 members with different backgrounds, including supply chain
practitioners, suppliers to the public sector, central government departments,
local governments, NGOs and trade unions. Their task was to develop a report
and provide recommendations to the UK government on how to make public procurement
Based on the report from the Sustainable Procurement Task Force and responding
to the European Commission’s communication on integrated production policy,
the “UK Government Sustainable Procurement Action Plan” (SPAP) was issued in
March 2007. It is an overarching action plan that describes actions to be undertaken
collectively by the central government and its departments. The SPAP describes
actions in eight key areas: Comprehensive spending review, priorities and future
plans, strengthening leadership, budgeting and accounting practices, building
capacity, raising standards, market engagement and capturing innovation, scrutiny
and reporting. Local authorities and the health sector are expected to publish
their responses to the Task Force report in the form of respective action plans.
In January 2007, the strategy document “Transforming Government Procurement”
was issued by HM Treasury. It focuses on building capacity and capability among
procurement professionals and must be seen in close context of the SPAP. The
document comprises two parts: Part one on ‘setting the scene’ offers an overview
of general public procurement and the challenges to include SD as well as mapping
out new structures for the Office of Government Commerce (OGC). Part two outlines
the transformation in procurement that will consistently deliver high quality
public services at good value for money.
The UK’s national SD strategy also includes the commitment that each government
department has to draw up its own departmental SD action plan. These action
plans specify what individual departments will do to deliver the national SD
strategy, including efforts for SPP.
Three main success factors were identified in developing the SPAP, namely
- The involvement of stakeholders (including businesses) through consultations
and a cross-departmental board;
- The strong sense of ‘learning from experience’ by listening to what businesses
can or cannot achieve; and
- The political commitment to make SPP a government priority.
Regarding challenges of implementing the strategies and action plans, uncertainties
about costs and benefits of SPP were mentioned. In addition, several financial
barriers hindering SPP had been identified by the Task Force, in particular
short-term budgeting and insufficient facilitation of the transfer of benefits
and savings between departments.
Guidelines on GPP/SPP in Austria
Informational instruments, such as guidelines, are regarded to be key instruments
for the implementation of SPP and GPP. In Austria, three main guidelines on
GPP, namely the General Government Guidelines on GPP, the criteria catalogue
“Check it” and “Greening Events” have been developed in recent years. They
all aim to inform procurers about GPP. The guidelines can be understood as
a device for implementing the latest amendment of Austrian
Public Procurement Law of 2006, which was a response to the EU directives
2004/17 and 2004/18.
The General Government Guidelines on GPP inform public authorities on environmental
issues in public procurement. The first version was developed in 1998, following
the OECD recommendations on “improving the environmental performance of government”.
Due to developments at the international and national levels, the General Guidelines
were updated and revised in 2004. The guidelines comprise two parts. Part A
offers general guidelines for GPP including general requirements that apply
to all products and services. This section refers to the Austrian Public Procurement
Law as well as to the significance of eco-labels and environmental management
systems for purchasing decisions. Part B outlines the main terms for GPP and
provides specific requirements for nine product groups and services (such as
office equipment and material, the building industry, cleaning material, etc.).
However, the updated guidelines have an informal character only because the
Austrian council of ministers did not adopt them due to unclear follow-up costs
The criteria catalogue “Check
it”was published in 2001 and provides environmental information for various
products, services and systems. “Check it” comprises 11 modules with background
and legal information, recommendations and suggestions on how to formulate
tender specifications. Additionally, planning and evaluation instruments are
defined in order to support public authorities when integrating ecological
issues in the purchasing process.
The guideline “Greening
Events” was developed specifically for the organisation of events during
the Austrian EU Presidency in the first half of 2006. It offers advice on how
to organise socially and environmentally friendly events at low costs. The
booklet covers 10 environmental topics (including waste management, energy
and climate, and mobility, etc.) and two social topics (accessibility for disabled
people and gender mainstreaming). For each of the 12 topics, the guidelines
contain key principles and recommendations.
Asked for the success factors of the various GPP guidelines, the interviewees
mentioned that the level of expertise that went into the development of the
General Guidelines and “Check it” was very high. Regarding the criteria catalogue
“Check it” it was mentioned that it offers clear and readily applicable parameters
One of the challenges identified in the case study was concerned with the
practical usefulness of GPP guidelines. One interviewee mentioned critically
that the guidelines are rarely used because they are too detailed and a bit
remote from practice. Therefore the aim should be to make them as detailed
as necessary and as simple as possible, also by involving affected stakeholders
and practitioners. Another challenge is the cost-benefit ratio of GPP. As public
procurement involves large amounts of money, the decisive factor is most often
value for money, and it is not always clear whether the benefits of GPP are
worth the often higher costs.
The three initiatives summarised above are based on detailed case studies (for
more information, see the final report on SPP). To complete the picture of
SPP initiatives, we briefly describe a partnering initiative that was not covered
as a case study.
Network for Public Procurers in the Netherlands: www.pianoo.nl
The Network for Public Procurers (PIANOo) is an important network for public
procurement in the Netherlands. It was established in 2005 as a follow-up to
the increasingly professional approach to public procurement in the context
of the two EU directives. The network fosters the exchange of information mainly
via its homepage. Although the network focuses on public procurement in general,
SD issues are covered as well.
By synthesising the findings of the survey and the case studies, the following
conclusions can be drawn:
Number and type of SPP initiatives
The number of SPP initiatives in EU Members States is significant (103 in total,
or about 4 per country surveyed). While CSR awareness raising, for example,
depends on a broad mix of policy instruments (including economic and partnering
instruments) (for details see above), policies on SPP are dominated by laws,
action plans and informational tools such as guidelines and websites. Each
of the three types of SPP instruments accounts for roughly one quarter of all
initiatives found in the survey. Twelve of the 26 surveyed EU Member States
make use of all three types of SPP instruments, and eight countries of two.
Therefore, it can be concluded that legal provisions, action plans and guidelines/websites
on SPP are complementary instruments that have developed into a standard set
of SPP policy-making across the EU in recent years.
SPP is dominated by GPP
The survey and the case studies both confirmed that many SPP initiatives still
focus on integrating environmental issues into procurement, neglect social
issues. About half of the 16 newly developed National Action Plans, for example,
focus entirely on GPP.
Key success factors of SPP
Among the most frequently mentioned success factors of SPP initiatives were
- High-level political commitment (as the French case shows, legal or constitutional
provisions for SD can help as a concrete expression of political backing);
- Bottom-up ownership and a commitment to learning among those who are responsible
for public procurement;
- The involvement of public procurers, businesses and NGOs in developing
SPP initiatives in order to obtain new, demand-driven and practical ideas
on the one hand and to secure the ownership of practitioners on the other;
- Informational SPP instruments (such as guidelines, trainings and websites)
can change procurement routines only when the information provided is compatible
with existing day-to-day routines of public procurers, i.e. they must be
up-to-date, have to speak a similar language and take (legal) uncertainties
and (economic) concerns of public procurers into account.
Key obstacles of SPP and possibilities to overcome them
Among the most commonly stated obstacles for SPP were
- Overall weak or missing political commitment to SPP;
- Perceptions that SPP/GPP is more expensive than conventional procurement;
- Lack of awareness and limited qualifications of public procurers regarding
- Time pressure hindering public procurers to gain expertise on SPP (e.g.
by participating in trainings).
Consequently, it appears to be vital that SPP initiatives address the value
for money argument pro-actively, and that public procurers are trained regarding
SPP in application-oriented and time-efficient ways.
Socially Responsible Investment
This section describes public policies in the EU-27 that aim to promote SRI,
a concept that combines investors’ financial objectives with their concerns
about social, environmental and ethical (SEE) issues (Eurosif, 2006). SRI can
be regarded as an application of CSR and sustainable development principles
in investment decisions. It is a potentially powerful concept as it merges
the concerns of a broad variety of stakeholders with shareholder interests.
SRI embeds CSR in the functioning of shareholder capitalism.
The market for SRI is currently in a stage of rapid growth, making it difficult
to estimate future developments (Flotow et al., 2001). A detailed analysis
of the European SRI market shows an increase of 36% over the time period of
2003-2006. In 2006 responsible investments by European institutional investors
(excluding the Nordic region) accounted for EUR 1,138 billion (Eurosif, 2006).
Many of the major stock markets have established SRI or sustainability indices
that assemble companies with an outstanding CSR record. Among the most significant
SRI or sustainability indices are, e.g., the Dow
Jones Sustainability Index (DJSI), the FTSE4Good
Index, and the DAXglobal
Sarasin Sustainability Index.
Overall, the current market share of SRI is estimated to be around 10-15%
of total investments in European funds under management. Thus, SRI is still
a niche market, although it is a significant and rapidly growing one (EIRIS,
2007; Eurosif, 2006). Significant growth rates on SRI investments in Europe
are primarily observed in Great Britain, Belgium, the Netherlands, Italy, Spain
and Sweden (EIRIS, 2007; CSR Europe et al., 2003).
Although SRI has gained importance across Europe at a considerable pace,
this development is not fully reflected in the political debates and actions
at both the EU and Member State levels. In May 2000, the European Commission
organised the First European Conference on Triple Bottom Line Investing in
Europe in Lisbon (European Commission, 2001). Shortly afterwards the European
Commission invited trustees of pension schemes and retail investment funds
to disclose to what extent they considered social, environmental and ethical
issues in their investment decisions (European Commission, 2002). Furthermore,
in its first communication on CSR the European Commission (2002) expressed
itself as being in favour of CSR-monitoring and benchmarking initiatives with
regard to pension and investment funds. Therefore, the Commission called on
the EU Multi-Stakeholder Forum on CSR to establish principles on a common EU
approach on disclosure of SRI pension and retail funds practices. These and
other pro-active initiatives came to a halt with the new communication on CSR
(European Commission, 2006), which does not even mention SRI.
In recent years, SRI was also addressed by the UN. In 2005 the United Nations
Secretary-General launched the Principles for Responsible Investment (PRI)
(UNEP FI et al. 2005). They represent a menu of possible actions for increasing
transparency and for incorporating environmental, social and governance (ESG)
criteria into mainstream investment decision-making.
This section on SRI consists of the following four analytical steps:
Overview of 14 SRI initiatives
in the EU Member States
Between November 2007 and January 2008 we have contacted more than 90 public
administrators that are experts on the topic from all 27 EU Member States to
learn more about what national governments do regarding SRI. Finally, 16 Member
States provided us with detailed information on more than 40 initiatives. However,
more than 30 of the initiatives did not fit into the scope of the study and
we were not able to consider them as governmental SRI initiatives (countries
we had to exclude at this step are displayed in orange in figure 7). Finally,
14 initiatives on SRI from 7 countries remained (see the green countries in
figure 7). The number of initiatives ranges from one (Austria, Spain, and Sweden)
to three (the Netherlands and the UK).
Figure 7: EU Member States covered
in the survey
(green: SRI initiatives in place; orange: no SRI initiative found; white: not
The 14 initiatives for SRI identified in the survey are mostly legal (42.85
percent), followed by financial/economic (28.58 percent), informational (21.43
percent) and hybrid initiatives (7.14 percent). Partnering instruments do not
exist in this context. Figure 8 illustrates this finding graphically.
Figure 8: SRI initiatives grouped along the
different public policy instruments
Selected SRI initiatives
As government initiatives on SRI were found to be comparatively scarce, we
have documented all initiatives in brief instead of conducting in-depth case
studies. The 14 initiatives are documented in the Socially Responsible Investment
Report in detail (for more information click here).
To make it more concrete what Member State do with regard to SRI selected SRI
initiatives are summarised below.
Informational and endorsing initiatives:
Online platform for SRI in Austria: www.gruenesgeld.at
In 2001, the Austrian Society for Environment and Technology (OEGUT) together
with the Austrian Ministry of Agriculture, Forestry, Environment and Water
Management established the website www.gruenesgeld.at (“green
money”), an online SRI platform on “ethical-ecological investment” (“Ethisch-ökologische
- Clarifies the term SRI and provides an overview of different types of investment,
investment products (e.g. investment funds or life insurance), and pension
- Aims to foster SRI by pointing out its added value for investors, including
positive ecological and social effects;
- Lists certifications of SRI products and funds (e.g. pension funds) and
offers several links and reading suggestions.
The main target groups consist of potential investors in general, though initially
private investors were considered to be most important, as they often perceive
financial topics to be very complex and have difficulties in choosing suitable
investment products. Given that the financial capacity of this target group
is limited, the focus was broadened to Austrian institutional investors (e.g.
One of the main success factors of this initiative is considered to be the
experience built up over many years, constant exchange and communication within
working groups, as well as good relationships with institutional investors
(mainly pension fund managers). The main challenge for this initiative is to
reduce the complexity of SRI by offering up-to-date guidance.
Sustainable Money Guide in the Netherlands
Money Guide” is an informational initiative introduced by the “Vereniging
van Beleggers voor duurzame Ontwikkeling (VBDO)” in 2002 and sponsored by the
Dutch Ministry of Environment. It contains an overview of Dutch SRI funds that
are available for private investors, who are regarded to be the primary target
group of the initiative.
The Money Guide’s main objective is to promote transparency by providing
detailed information on SRI and respective funds. In addition, the guide aims
to present different screening methodologies applied by various Dutch institutions
for their funds (e.g. positive vs. negative screening criteria, etc.). It is
pointed out that SRI funds often have different foci, some focusing more on
social aspects and others concentrating more on environmental ones.
Overall, the Sustainable Money Guide helped to increase the popularity of
SRI funds amongst individual investors within the last few years.
Law against anti-personnel mines and cluster munitions in Belgium: www.netwerkvlaanderen.be/
In 2007, the Belgian government published a law that prohibits the financing
of the production, trade and use of anti-personnel mines and cluster munitions.
According to this law it is forbidden to finance or invest in any Belgian or
foreign company that produces, uses, repairs, offers, sells, distributes, imports,
exports or stocks the weapons mentioned above. The law is applicable to any
Belgian investor (i.e. Belgian citizens, banks registered in Belgium, investment
funds or insurance companies operating under Belgium law).
The Belgian government helps (major) investors by publishing a list of producers
of anti-personnel mines and cluster munitions, and it expects them to develop
and apply screening methods which enable them to fulfil the regulation. However,
the effectiveness of the regulation is limited because (i) transparency requirements
for investment portfolios of professional investors are rather limited and
(ii) no penalties are foreseen for offenders.
The Public Pension Funds Act in Sweden: http://www.ap3.se/en/
The Public Pension Funds Act (2000/192) was developed and finally adopted
by a group of five political parties (centre-right and as well as the big social
democratic party) in the year 2000. It requires all Swedish National Pension
Funds (AP1-AP5 and AP7) to dispose an annual business plan expressing how environmental
and ethical issues are considered in the pension fund’s investment activities
and what impact such considerations have on the management of the funds. The
regulation also states that the AP funds should consider environmental and
ethical issues without compromising their return objective.
In 2007, four of the Swedish AP funds (AP1- AP4) established a Joint Ethical
Council in which they were represented by one member each. Primarily, the Ethical
Council engages in a dialogue with foreign companies, in which the AP funds
wish to engage. Through the Ethical Council, the AP funds aim to influence
those foreign companies in which they invest to act responsibly and to focus
on environmental, social and governance issues. The Ethical Council can make
recommendations to the respective funds if it believes investments are compromising
the funds policies. If the engagement process turns out to be ineffective and
desired results cannot be achieved, the individual AP fund may decide to divest
its holdings in concerned companies.
In December 2007, an investigation committee was established to evaluate
the implementation of the regulation. Its terms of reference and composition
were prepared by the Ministry of Finance and decided on by the government.
Its report is scheduled for November 2008.
SRI Pension Disclosure Regulation in the UK
On 3 July 2000, the Secretary of State for Social Security introduced the “SRI
Pension Disclosure Regulation”, an amendment to the 1995 Pension Act. According
to paragraph 2 (4) of this legal enactment, trustees of occupational pension
schemes are required to disclose additional content to their Statement of Investment
Principles, with regard to: “The extent (if at all) to which social, environmental
or ethical considerations are taken into account in the selection, retention
and realization of investments; and their policy (if any) in relation to the
exercise of the right (including voting rights) attaching to investments" (the
wording of the law can be obtained at http://www.opsi.gov.uk/si/si1999/19991849.htm).
In other words, the law requires pension funds to explain their investment
principles, also with respect to SRI.
Due to the new regulation, pension funds started to demand more accurate
information from companies regarding social, environmental and ethical performance.
The SRI Pension Disclosure Regulation is considered to be a major driver for
the growth of SRI in the UK.
Economic or fiscal initiatives:
Kringloopfonds in Belgium: www.kf-fesd.be
In May 2003, the federal government of Belgium established the Kringloopfonds
(KF-FESD), an initiative that fosters social and sustainable funds. Initially,
the main objective was to grant investors focusing on social issues easy access
to credits and venture capital below the market interest rates. By the end
of 2005, the Secretary of State for Sustainable Development widened the focus
of the KF-FESD to the financing of sustainable matters. This allowed the KF-FESD
to open up its portfolio to undertakings concerned with fair trade, biological
food, renewable energies, etc. Furthermore, the KF-FESD aimed to stimulate
banks to develop ethical investment products, as close cooperation with financial
initiatives undertaken by banks (e.g. Triodos Bank) are perceived to be of
great value to the KF-FESD. The activities of the KF-FESD are currently limited
to national initiatives although foreign investors may also receive better
conditions, as long as they establish an office in Belgium.
A considerable challenge for the KF-FESD is to maintain the government's
belief in the importance of KF-FESD as a financial facilitator for SRI. Another
challenge is seen with regard to weak CSR reporting standards and requirements.
The KF-FESD is currently working on CSR reporting requirements for its clients.
The Green Funds Scheme in the Netherlands: http://www.senternovem.nl/-greenfundsscheme/Contact.asp
The Green Funds Scheme was developed jointly by the Dutch Ministry of Housing,
Spatial Planning and the Environment (VROM), the Ministry of Finance and the
Ministry of Agriculture, Nature and Food Quality (LNV), and it was introduced
by the Dutch tax office in 1995. It aims to foster green investments in the
Netherlands (such as investments in wind farms or organic agricultural businesses)
with tax exemptions, and to make stakeholders understand that green investments
are profitable both for investors and the environment.
Interested persons can take part in the Green Funds Scheme, either by saving
money or by borrowing it for green projects. Projects accepted in the scheme
have to meet environmental, technical and financial terms and they must be
innovative. If projects comply with these premises they are certified by VROM.
In most cases, certificates are valid for 10 years. If the government considers
a project to be eligible, it grants tax reductions for both savers and borrowers.
Tax reductions for investors are 1.2% on capital gains tax, and borrowers receive
a tax reduction of 1.3% on the value of the green investment. The investment
volume is limited to a maximum of € 52,579 per person (2006) and investments
can be made nationally or internationally.
As usual, banks act as intermediates between savers and investors also in
the Green Funds Scheme. On the one hand, they offer green bonds, green certificates
at fixed value, terms and favourable interest rates for savers. On the other
hand, they grant green loans at lower interest rates to investors (the interest
rate for loans is between 1-2% lower than commercial rates). By doing so, banks
that receive tax-exempt funds are obliged to invest at least 70% of the respective
assets in certified green projects. The remaining 30% can be invested in other
projects in order to spread the risk and to compensate for projects that are
financially less profitable. So far, the Green Funds Scheme has attracted about
200,000 savers and enabled around 5,000 green projects accounting for up to
5 billion Euros.
The Pension Reserve fund in France: http://www.fondsdereserve.fr
In July 2001, the French Pension Reserve fund (Fonds de réserve pour les
retraites - FRR) was separated from the French Old Age Solidarity Fund (Fonds
de Solidarité Vieillesse – SV), which had been established in 1999. Since then,
the FRR is an independent, publicly owned administrative agency that is funded
and controlled by the French ministries in charge of social security, economy
and budget. The FRR sees its role in investing its financial resources on behalf
of the public and to use its assets to support finance the general old age
insurance plan and affiliated plans as of 2020. By doing so, it applies an
SRI investment strategy.
In its latest SRI investment strategy from June 2005, the FRR refers to the
following two main objectives:
- “to maximize investment returns over the long term and under the best possible
conditions of security”;
- to pursue “certain shared values that promote economically, socially and
environmentally sustainable development”.
Before the FRR invests in companies it examines them with regard to their
social and environmental performance by following the UN Principles for Investment.
In order to safeguard its own commitments towards SRI, the FRR has developed
five SRI principles companies should fulfil.
By synthesising the findings of the survey of public administrators and SRI
experts from the financial services sector (for the latter, see part III of
report on SRI), the following conclusions can be drawn:
Number and type of SRI initiatives
Compared to CSR awareness raising and SPP initiatives, SRI is clearly the least
developed theme of CSR policies because respective initiatives are comparatively
scarce. However, many of the few existing SRI initiatives are quite significant
in qualitative terms.
SRI and governments “leading by example”
Pension funds obviously play an important role in the context of SRI. On the
one hand, 5 of the 14 initiatives are concerned with SRI in pension funds.
On the other hand, the interviewed SRI experts from the financial services
sector emphasized that pension funds are by far the most important target
group of governmental SRI initiatives because they are by definition long-term
investors, and because they have large amounts of money at their disposal.
Furthermore, it was mentioned, that governments could use public pension
schemes as flagships to demonstrate their commitment to CSR and SRI. In other
words, “walk the talk” or “lead by example” in achieving SD is a motto not
only applicable to SPP, but also regarding how governments invest their own
or public pension fund assets.
SRI and disclosure requirements
SRI experts from the financial services sector emphasise the importance of
reporting and disclosure requirements because SRI strategies require reliable
information on the social and environmental performances of companies. Thus,
government initiatives on reporting should be regarded also as key instruments
to foster SRI.
Drivers behind SRI and the role of governments
Asked for the key drivers behind SRI, several interviewees mentioned that governments
should play an active role, but they fail to do so. In conclusion, governments
in the EU are followers rather than driving forces behind the SRI agenda.
This conclusion is based not only on the perception of those working on SRI
in the financial services sector, but also on the fact that we found relatively
few government initiatives on SRI.
Comparison of the three studies
The three studies on CSR awareness raising, Sustainable Public Procurement
(SPP) and Socially Responsible Investment (SRI) summarised above show that
EU Member States facilitate CSR with a broad variety of soft policy instruments.
Thus, one can indeed speak of CSR policies as a relatively new policy field.
On closer inspection, however, the following four conclusions become apparent.
Conclusions on the use of policy instruments
Informational, legal and hybrid instruments dominate CSR policies, while partnering
and economic instruments are relatively scarce (for details, see figure 9).
Although partnering features are sometimes hidden in, for example, informational
and hybrid instruments, their overall rare occurrence is a surprise because
CSR policies are by definition characterised by voluntary and partnering relations
between governments and businesses. Obviously, the partnering character of
CSR policies materialises rather in the way (non-partnering) initiatives and
instruments are developed and applied than in the type of the instrument itself.
Figure 9: Distribution of types of policy instruments
across different CSR policy themes (n=212) *
Conclusions on different levels of activity across Europe
If we explore how the total of 212 CSR policy initiatives we found in the
three surveys* are distributed across the EU, the survey results show significant
differences between single EU Member State (the initiative count ranges from
0 to 9), but considerable consistencies within the same socio-economic models
(corresponding loosely with EU regions) as described in the welfare state literature
(see in particular Esping-Anderson 1990, 26-33; Sapir 2006; Pierson 1998, 173-178
and Aiginger & Guger 2005). Figure 10 shows the distribution of the 212
CSR policy initiatives across five European socio-economic models.
Figure 10: Distribution of 212 CSR policy initiatives
note that figure 10 groups countries not geographically, but based on the literature
on socio-economic models in Europe (see in particular Esping-Anderson 1990,
26-33; Sapir 2006; Pierson 1998, 173-178 and Aiginger & Guger 2005). The
lines reaching out of the bars indicate the range of initiatives found in the
different countries, and the letters at the upper end of the range indicate
the countries with the most initiatives.
Some groups of EU Member States are obviously more active in CSR policies
than others. Table 1 below emphasises that countries from the Anglo-Saxon socio-economic
model (i.e. Ireland and the UK) are most active in all three CSR policy themes,
followed by those that share features of the Scandinavian model, and those
that constitute the Continental model. Obviously, Mediterranean and Transition
countries from Central-Eastern Europe pay the least attention to CSR (for an
in-depth exploration of the “CSR gap” between Western and Central-Eastern Europe,
see Steurer 2008).
Table 1: Ranks of 5 socio-economic models based
on the distribution of 212 CSR policy initiatives
||Rank based on
number of initiatives
If we take this benchmarking exercise further to the Member State level, the
following picture emerges (see the colour-coded map in figure 11). Figure 11
also highlights some exceptions to the observations made above. While Spain
has adopted some far-reaching CSR initiatives in recent years, the Continental
country Luxembourg seems to pay hardly any attention to CSR policies. Of course,
these two exceptions help the Mediterranean and hamper the Continental socio-economic
model in the benchmarking exercise above.
Figure 11: Overview of CSR policy initiatives
in EU Member States
(green: more than 10 activities; yellow: 6-10 activities; orange: 1-5 activities;
white: not covered)
Conclusions on the institutionalisation of CSR and SD policies
EU Member States organise and coordinate CSR policies in very different ways.
While in most countries several actors pursue a variety of initiatives in a
decentralized way, some (mostly leading) countries approach CSR policies in
a more coordinated way. The UK, for example, has appointed a Minister for CSR,
and the Netherlands and Sweden have established CSR platforms that bundle several
government activities. Overall, it seems that centralised approaches help to
better coordinate and focus activities, and to capture the attention of the
media and companies more effectively.
Although SD and CSR both aim to better integrate economic, social and environmental
issues, joint efforts still face sectoral and institutional barriers. While
the SD agenda is often dominated by environmental issues and ministries, expertise
on CSR policies is mainly affiliated with Ministries of Labour and Social Security.
For SD, this conclusion is based on the institutional affiliation of ESDN members
and ESDN conference participants; and for CSR policies it is based on the institutional
affiliation of the experts we have surveyed for the three studies summarised
above. As figure 12 shows, experts from Environment Ministries were encountered
only in the context of Sustainable, or rather Green Public Procurement.
Figure 12: Institutional affiliation of the
The weak institutional link between SD and CSR policies is certainly one explanation
for the fact that CSR is hardly mentioned in SD strategies across Europe. A
look into a database on SD strategy objectives revealed that 8 out of 19 SD
strategies from across Europe do not contain a single objective on CSR, and
most of the remaining 11 SD strategies contain only one vague reference to
“promoting CSR” with unspecified means (for methodological details of the underlying
here). The close conceptual link between SD and CSR given (for details
see the introduction of this report by clicking here), ignoring CSR policies
in SD strategies is a missed chance of bridging the obvious gap between the
two closely related policy fields.
Conclusion on the political scope of CSR policies
Although all EU Member States agree on the voluntary character of CSR and the
soft-law approach of CSR policies, the scope governments have is nevertheless
considerable. As the policy change of the European Commission from Prodi
to Barroso has illustrated more vigorously than policy changes in Member
States, the public sector can facilitate CSR either pro-actively and challenging
(as expressed in the first Communication on CSR from 2002) or passively and
unaspiring (since the second Communication on CSR from 2006). In other words,
like other, more traditional policy fields, CSR is a politically contested
issue, and actual CSR policies are determined not only by socio-economic
features (see above) but also by government majorities and respective political
positions and ideologies.
the telephone surveys we have found 202 CSR policy initiatives as described
above. After the surveys were completed we have added 9 awareness raising
and 1 SPP initiative, bringing the total number to 212.
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