Structure

1. Corporate Social Responsibility and RelocationRelocation – Challenges and Opportunities 28-29 June 2006European Economic and Social Committee Professor Nigel Roome: Daniel Janssen Chair of Corporate Social Responsibility, Solvay Business School, ULB

2. Structure • Background and Definitions • CSR issues raised by relocation • Management challenge arising from diversity in CSR encountered in relocation • Conclusions

3. Corporate Social Responsibility – A definition The principal purpose of enterprise is the creation of value for shareholders. CSR is seen as the voluntary management of relationships with ‘stakeholders’ (social, environmental and economic) as a way to provide for the continued ‘existence’ of an enterprise so that it can pursue its chosen purpose However, CSR activities do affect the way an enterprise fulfils its purpose as it offers: • a basis forprotecting the value of the existing assetsof the enterprise • a stimulus forcreating value through innovation in the activities of the enterprise - technologies, products and services, management know-how and business models

4. Contention In managerial/enterprise terms CSR as ‘relationship’ management involves: • a recognition of the relationships between an enterprise and others in society • an awareness of context and trends, and a sensitivity to issues CSR is therefore measured through the ability of an enterprise to: • anticipate and contextualise its activities, • develop effective and coherent systems to control risks and to spur innovation and change • engage with stakeholders Through this an enterprise is responsive to these complex relationships and to the stakeholders that represent them

5. Shareholders, socially responsible investing, agencies, employees, suppliers, agents, & competitors • Customers • Environmental interests and concerns • Neighbours, societies, governments & their departments, NGOs • Media, Codes and CSR Institutions Key stakeholders Economic Non-Economic

6. Policy background European Commission Communication March 2006* • Establishing CSR as part of the European competitive landscape • CSR seen as the business contribution to a more competitive, sustainable and cohesive social market economy • CSR as the voluntary contribution of business enterprises to issues such as: • Integrated labour markets and social inclusion • Skills development • Improvements in public health • Innovation performance • More rational use of natural resources • Better image of enterprise • Respect for human rights, environmental protection and labour standards • Reduction of poverty in developing countries in line with Millennium Goals • (regional policy - EC cohesion) * Implementing the Partnership for Growth and Jobs: Making Europe a pole of excellence on CSR (COM(2006)136 final of 22.03.2006)

7. Shareholders (competitiveness) • Employees (job security, development, retraining & out-placement & retraining, inclusion) • Customers (product provenance and tracking) • Environmental interests and concerns (protection of global and local key resources and sinks) • Neighbours (local value added and retained, minimum nuisance and protection of environmental assets, maintenance and improvement of social cohesion) • Governments (inward investment, economic multipliers, cultural and environmental asset protection, development of local know-how) • NGOs (labour and human rights, environment) Types of CSR issue from relocation

8. But relocation has many CSR poles… Beyond EU Developing Economies Within EU Entry Policy for Developing Economies* • Entry Policy* Location (To B) EU ex-EU B B Exit Policy From EU plus Entry Policy for Developing Economies* Exit & Entry Policy* Relocation (From A to B) EU X ex-EU A B X A B (* This does not take account of market expectations of CSR)

9. Entry Policy EU • Understand local CSR context in host and home country expectations of CSR activities in host • Entry and Exit Policy EU • Understand local CSR context in host, home country CSR expectations in host as well as home country CSR expectations on ‘closure’ • Entry Policy for Developing Economies • Understand local CSR context, home country CSR expectations on operations in developing economies • Exit from EU and Entry Policy for Developing Economies • Understand local CSR context, home country CSR expectations on operation in developing economies as well as home country CSR expectations on ‘closure’ Poles of issues

10. ‘Regional blocks’ and countries have different views on the role of business in society • Countries have different CSR policies and institutional support for CSR practices • Countries have diverse CSR agendas • Enterprises have different managerial understandings of CSR and CSR has many different positions in their strategies Relocation confronts diversity in CSR globally, regionally and nationally

11. North America Shareholder Capitalism China & India New Capitalism Japan Network Capitalism Europe Social Market Capitalism Emerging models of the role of enterprise in society

12. North America • Philanthropy & community involvement • Human rights & labour standards • Diversity at work • Transparency & anti-corruption • Selling products to the poorest - Bottom of the Pyramid (BOP) • Jobs and outsourcing Africa & South America • Adding & retaining value in country • Health & welfare • Child work with education • Social & institutional development • Appropriate technologies Asia • Growth with minimum environment damage • Employment • Value added & retained • Access to energy & water Europe • Environmental sustainability • Labour conditions • No-child or forced labour • Supply-chain responsibility • Overseas development • Social cohesion Developed & developing world perspectives on enterprise & CSR * Some of the distinctions between developed & developing countries maybe found within the enlarged EU

13. UK • Full-spectrum CR • Shareholders, customers, neighbours, social & environmental responsibility & governance 360° stakeholder view Sweden • Overseas operations • Human rights • Selling to responsible business customers Poland • Enterprise in society • Corruption • Loss of employee provision as it is seen as part of central planning Netherlands • Environmental sustainability • Overseas trade • Human rights • Immigrant inclusion France • Labour contracts & rights • Community relations • Environmental sustainability • Product safety • Social inclusion Germany • Relations with neighbours • Training & education • Environmental sustainability • Product/chain security Within Europe – Mosaic of CSR Policies & Agendas

14. Managing the CSR aspects of (re)location is an incredibly difficult process because of the many contexts, and local as well as global issues to address • Relationship management is difficult to measure • Engaging with stakeholders is not a core competence of most enterprises, especially not at pre-project assessment stage (even for companies like mining, oil & gas which are familiar with following location) • Yet, CSR issues will not go away and the possibility of managers to misunderstand context and CSR issues is more probable in new contexts that arise from relocation Conclusions

15. EndThank youNigel Roome nroome@ulb.ac.be