A matter of balance? The local public institution as key player in the diffusion of CSR practices

1. A matter of balance? • The local public institution as key • player in the diffusion of CSR practices 5th Forum on CSR Politeia, Milan 22-23 May 2008 Massimiliano Monaci Department of Sociology Catholic University of Milan

2. Foreword • Dwelling upon the public sector • as a stakeholder, a modest contribution: • focus on the local public institution; • focus on its role in supporting corporate uptake of CSR practices (no space for the underlying basic issue of the evolving economy-politics nexus in global society); • insights from a firm-centered field study.

3. The public actor as promoter of CSR (1):a common position The adoption of CSR as, primarily, an investment and opportunity for firms’ competitive advantage THE “BUSINESS CASE” VIEW … a pull-approach congenial to mainstream business practice BUT at the risk of fostering an excessive rationalisation of corporate ethical choices

4. The public actor as promoter of CSR (2):a divergent position Regulating and legally binding devices as the most suitable way of tackling structural determinants of social indifference in business THE “IRRESPONSIBLE ENTERPRISE” VIEW … a push-approach, adequate for coping with corporate malpractices and mimicry in basic ethical domains BUT at the possible expense of voluntarism as key to firms’ social commitment

5. The qualitative research project:CSR practices in 10 selected firms operating in an Emilian district … with the aim of exploring the reality of both larger companies and SMEs SIZE VARIETY … with a specific focus on the key local sectors of engineering industry, agribusiness and construction BUSINESS VARIETY … with the intention of grasping formalised and institutionalised routes as well as more informal and intuitive tracks EXPERIENCE VARIETY

6. The main stakeholders 1. HUMAN RESOURCES 2. ENVIRONMENT (7. PUBLIC AUTHORITIES) CSR 3. CUSTOMERS/ CONSUMERS (6. OWNERS/ INVESTORS) 4. SUPPLIERS 5. LOCAL COMMUNITY

7. Obstacles to CSR actions (1) • The cost of formalised CSR tools (certification, ad hoc units, etc.) • Of difficult access for the small-sized enterprise • Employees and suppliers’ resistance to change • Learning ≠ knowledge Economic & organisational difficulties

8. Obstacles to CSR actions (2) • Deregulation de facto of basic professional standards underpinning competition • Heterogeneity and contradictions in large buyers’ requirements for total quality products • Risk of “invisibility” due to weak recognition of CSR investments from economic/financial partners • in business-to-business with limited exposure to end-consumers Market difficulties

9. Obstacles to CSR actions (3) • As for public-exposed sectors themselves: • Restricted knowledge and recognition of corporate engagement in CSR • Awareness on the added value of responsibly produced goods & services? • Understanding of the average citizen’s role in shaping the social impact of firms? • Persistent centrality of economic concerns in purchase decisions Difficulties from consumers’ conducts

10. Obstacles to CSR actions (4) • Bureaucratic logics & politicisation • Failures in regulation and control of requisite standards of business activity • Low recognition of social performances beyond compliance • the gap between rhetorics and reality at the expense of CSR credibility Difficulties from the public sector

11. The local public authority: a regulatory agenda Enhancing effectiveness of rule definitions, monitoring and sanctions in prerequisite areas of CSR (e.g.: employee, consumer, environmental protection) Enforcement of CSR regulative underpinnings Giving not-only-symbolic recognition to the development of CSR formal tools, yet preventing the vicious outcomes of binding reward systems Incentives for (formalised) engagement in CSR Contribution to the development of shared CSR frames Playing an active role in the articulation and promotion of common points of reference (if not schemes and standards) for CSR tools

12. The local public authority:a cultural agenda Dissemination of basic knowledge Initiatives for circulating information and strengthening understanding about CSR  Scenarios, issues, practices … Initiatives for encouraging firms’ attention to CSR issues as relevant to their business  i.e., as both long-term investments & based on values and ethical considerations Awareness-raising amongst firms Awareness-raising amongst consumers Initiatives for increasing citizens’ sensitivity to the social contents of goods/services and stressing their role as co-producers of sustainability Initiatives for: a) drawing attention to efforts already developed or in progress; b) bringing tacit practices to surface  Yet, defusing the homologation traps of best-practice approaches Promotion of available experiences

13. The local public authority:a technical agenda Information point A dedicated department delivering general information to firms and their stakeholders Direct assistance services (in certification) In particular, advice and accompanying for helping SMEs to simplify the administrative burden Initiatives tailored to specific issues and audiences (e.g.: industrial sectors, medium-sized firms as opposed to small ones) CSR training modules Strategic partnership building Non-contingent dialogue & cooperation with firms and intermediary organisations on CSR-related projects and policy planning

14. What balance in the role of public actor as promoter of CSR? • Toward an enrichment of the business-oriented approach, • YET with a commitment to respecting the voluntary nature of CSR: • Proposing, inspiring, legitimating ethical practices … • without imposing conducts (beyond regulation) • Supporting firms in the access to relevant solutions …  without taking over their efforts and investments Providing guidelines in concrete areas …  without pursuing a homologising standardisation Encouraging and recognising the use of formal tools … without fostering isomorphic cerimonialism (and opportunism)