“The true challenge is the prosperity gap”

[ Interview with Jürgen Thumann ]

What exactly does Corporate Social Responsibility (CSR) mean?
CSR is about businesses considering the social implications of their activities. The idea is not entirely new, of course. After all, companies have been acknowledging their social responsibility for a long time – both at the local and global levels. CSR relates to the principles of sustainability. Decisions should not only reflect business interests, but also pay attention to social and environmental needs. Any CSR programme will always stem from the specific commitment of the company concerned, it will depend on that company’s intiative and on its individual responsibility.

To what extent should a company’s commitment go beyond commercially-relevant objectives?
I don’t see any contradiction between the two. CSR is not about charity, it should always be part of a company’s overall strategy. Like investments in new plant, it pays off. An entrepreneur thinking long term and, perhaps, outside the box, will see CSR measures as investments to improve his company’s outlook. They can enhance the relationship with employees, improve the company’s standing as a supplier to other companies, or boost consumer trust. Ultimately, they will help to improve the company’s reputation as a trustworthy social actor. Any CSR programme should include a business case.

Who should monitor that promises are kept?
What matters is deeds, not promises, and deeds usually speak for themselves. But of course, businesses are interested in monitoring their objectives. Companies implement various internal monitoring regimes, which must fit in with their systems of management. Some businesses, however, rely on external monitoring or certification. What method is best differs from project to project.

What role is there for civil society?
Civil society plays a significant role for any company that wants to make a difference, of course. No single entity can tackle overarching social challenges on its own. In practice, however, the question often arises as to who exactly constitutes “civil society” as specific activities are always directed at specific target groups. Fortunately, businesses can draw on their own experience in this area, because one of the first questions all successful companies ask themselves is: who are our customers?

What is the role of state authorities in various countries?
Businesses need a sound regulatory environment. They cannot operate in a vacuum. Therefore, the business-friendliness of any specific environment matters a great deal. Only companies that are competitive internationally and healthy in economic terms are in any position to help to solve social problems.

What role can - and should - trade unions play?
Trade unions have no special role in CSR. Just like the businesses themselves, they are a part of civil society. Trade unions, however, have considerable expertise in social matters and have many years’ experience of cooperating with business.

How can and should businesses be held accountable for their actions in public?
The main instrument of corporate accountability is the business report. But companies regularly publish far more information, including CSR reports, than is legally stipulated. However, there are many other tools of communication. Which path is ultimately taken will always depend on what public a company wants to reach.

What does CSR mean in large, emerging economies – for instance in China or Inida, where corruption is rife and the rule of law anything but guaranteed?
Social contributions by businesses can only complement, not replace, the action of government agencies. It is the responsibility of governments to ensure that their social and environmental legislation is duly enforced. Moreover, it is also their duty to promote such causes at the international level. In this context, it is quite relevant that German businesses are voluntarily making contributions to implementing human rights as well as social and environmental standards, and that they are engaged in fighting corruption. Let me comment on the role of emerging powers such as China in Africa and elsewhere in the developing world. I believe it is important to raise awareness among Chinese, Indian and Brazilian leaders that they, too, bear global responsibility. Their primary task in this area, of course, is to strictly adhere to legal standards and international regulations. But companies from emerging powers must gradually understand that it is in their own best interests to voluntarily commit to CSR principles.

What does CSR mean with respect to poor – possibly even fragile – states, where profitable investment is hardly possible?
For good reason, more than 90 % of our foreign investment is flowing into advanced nations with stable political cultures and elaborate legal systems. The problem is not so much that German businesses are not interested in becoming involved in Third World markets. All too often, however, the risks are simply to high and the uncertainties too great. A combination of two processes is required to solve these problems. Development of the private sector is part of the bottom-up process that builds up local business opportunities, with benefits for the people and social cohesion. But that is unlikely to happen without a top-down process that creates the governance structures as well as political and legal environment needed for economies to thrive.

Who is responsible for sensitising employers in developing countries, who are not interested in workers’ health or environmental protection?
In respect to such issues, German companies active in developing countries often exceed the local requirements. Most apply German standards, and, accordingly, promote the ideas of workplace safety and environmental protection. Of course, these are only isolated measures, but one should not under-estimate their multiplier effects. But let us be patient. Low standards do not result from a lack of interest, but from a lack of prosperity. The true challenge is the prosperity gap.

Questions by Hans Dembowski.