Corporate responsibility – like a bridge over troubled water
The companies with the best chances to weather a global recession are those that have inherently woven corporate responsibility into their operations.
Poorly managed corporate responsibility is one of the reasons for the worldwide financial crisis that originated in the USA.
- Banks took enormous risks and acted ignorantly. The packaging and sale of subprime mortgages to international investors corresponds to the activities of a company that releases a substance whose toxicity is unknown into nature, describes Matti Kamppinen, Adjunct Professor and Head of CORECO, a multidisciplinary research project that focuses on corporate responsibility at the University of Turku.
A global recession set off by the financial crisis may affect the ability of companies to shoulder their social responsibility, including their employees and environmental matters, and even their interest in doing so.
- This may happen in companies that do not consider such matters to be a natural part of business. In their view, they are only responsible for ensuring financial performance, say Project Manager Piia Nurmi and Researcher Nina Aarras, who provide economic competence in the project.
- According to a survey carried out among entrepreneurs, companies that have acted responsibly in good times continue to do so during an economic downturn. They have not ‘pumped the company dry’ during the boom period, but have put buffer resources aside for tougher times.
Scraping through is not worthwhile
According to researchers, companies that take care of their corporate responsibility also prepare for future challenges.
- It is a strategy of reasonable precaution. A company that looks after its employees and the environment ensures that it has good operating conditions in the future and can react quickly when the next upswing begins, says Kamppinen.
Provisions on corporate, and especially environmental, responsibility have been laid down in various acts. However, exceeding the minimum requirements is not automatic proof of true social responsibility.
- If a company only tries to meet its legal requirements, it cannot be said to excel in future planning. Legislation will become increasingly stringent. Companies that clearly exceed the targets defined in legislation will also ensure unobstructed operations in the future, says Piia Nurmi, who works as Project Manager at the Centre for Responsible Business at the Turku School of Economics.
Green responsibility boosts business
Corporate responsibility has figured prominently in the headlines in the 21st century. It is anything but a new phenomenon, however, seeing as the concept was first discussed in 1972 at a large UN conference held in Stockholm. In 1987, the World Commission on Environment and Development expanded the concept of corporate responsibility to encompass economic and social aspects. This categorisation is also used in the Green Paper published by the EU Commission in 2001.
-Subconcepts sometimes overlap, but in the end, it’s all about the same thing. Companies often portray their responsibility in a way that suits their business. For example, a company that has a big ecological footprint might emphasise its focus on environmental matters. This may take the form of automobile advertisements, each greener than the other, which often seem quite exaggerated. It’s as if they were trying to conceal the fact that private driving and the related infrastructures are highly polluting, says Nurmi.
- Advertisements portray products to consumers in such a way that their acquisition causes as little guilt as possible, adds Kamppinen.
In addition to advertising, companies can also communicate their attention to environmental matters indirectly.
- Nokia, for example, has not made much use of environmental issues in consumer marketing. Nevertheless, it has done well in the ‘greenness’ comparisons of electronics manufacturers made by Greenpeace. In this case, the environmental organisation communicates information to consumers on the company’s behalf, says Aarras.
Big corporations are putting more and more emphasis on their environmental responsibility. This enables them to prove to consumers that their operations are ethically sustainable, but also to other interest groups, such as co-operation partners. On the other hand, small companies may be unfamiliar with the concept as such, but have complied with the strictest environmental responsibility criteria for quite some time.
- Between these extremes, we find a great number of companies that select the elementsbest suited to themselves from the ‘toy store of responsibility’ – polish their image, so to say. However, environmental concerns should be seen as a real opportunity, since ultimately all companies depend on their environment, says Aarras, who has studied recycling as a business opportunity.
Work for the future done in co-operation with companies
The acronym of the CORECO project comes from Corporate environmental responsibility and the ecosystem approach. The project, financed by the Academy of Finland’s Research Council for Biosciences and Environment, focuses on corporate responsibility from the point of view of economics and natural sciences, as well as cultural research. CORECO involves a wide range of enterprises from SMEs to large forest companies.
For example, Petteri Vihervaara, one of the project’s researchers, is currently in Uruguay studying the ecologic sustainability of forest company Stora Enso’s tree plantations.
- A multidisciplinary approach enables us to examine how the different viewpoints contribute to corporate responsibility. We and the companies involved can also discuss the types of corporate responsibility that are possible, desirable and profitable in the future, says Kamppinen.
Text: Tuomas Koivula
Photos: Alaska Stock/Lehtikuva, Vesa-Matti Väärä