Can CSR Kill Your Competitiveness?

A country hit hard by the economic crisis is not the most fertile ground for highly idealistic talk about philanthropy and environment friendliness. Especially if many businesses are struggling to survive and see investments as an unaffordable luxury. Or is it? With this in mind, the American Chamber of Commerce in Latvia, in cooperation with SSE Riga and the Latvian Chamber of Commerce and Industry organized an Outlook event trying to answer the question if CSR kills competitiveness.

Four speakers were invited to give different perspectives on the topic. Inga Sina, chairperson of the board of Rietumu Charity Fund highlighted the importance of charitable initiatives. Apart from enumerating an impressive list of projects, the most provocative statement of her presentation concerned the press. The activities are, apart from media outlets that are partnering in the projects, not reported on. Basically, the press attitude in Latvia boils down to news about charity projects of businesses, even if executed by an independently operating foundation, being seen as advertisement. That certainly is an attitude that needs to change. Sure, one of the benefits of corporate philanthropy for a company is free publicity, but at least they’re giving back to society by doing so. And media can, and should, report on that. In that reporting, they can take a critical point of view as much as they like, but paying for the renovation of a children’s hospital should not be published about only if advertising space is bought.

Next on the agenda was a look into how benchmarking and transparency of CSR efforts is made possible through the Global Reporting Initiative. An insightful presentation by Malin Lindfors-Speace of Swedish CSR experts Ethos International, making very clear the process of coming to a good CSR strategy, and then reporting on it in a globally recognized manner. For some in Latvia, this might seem a challenge for a far off future, but the pragmatism preached by Ms Lindfors-Speace was appealing. Start with what your first concerns are, and report to those that want the information in a way that is suited for that. Posting it in your shop, or on your website, for example. Very hands-on, and also very achievable for small businesses.

Sandis Steins of Statoil then gave insight how CSR is done the Latvian way, and why. The basic competitive advantage gained by the CSR programme of Statoil was risk mitigation and avoidance of costs related to scandal and accidents. In a company that deals with highly explosive goods as their main line of business, that is very understandable. But the CSR efforts at Statoil are already many years in the making, and have become part of the company DNA. By extending their demands to suppliers and their subcontractors, Statoil is one of the companies taking a leading role in Latvia.

The shortest, but maybe most provocative speach was by Zaneta Jaunzeme-Grende of the Latvian Chamber of Commerce and Industry. A quick poll around some of the businesses she has daily contact with, lead her to a personal conclusion that CSR is a luxury Latvian companies cannot afford now that they’re struggling to climb out of the immense crater created by the economic crisis, in a country where the only ones with money are the government and EU funds.

Dr Roberts Kilis moderated the ensuing discussion that was a good reflection of sentiments and business best practices, where only between the lines the key question of the day was answered. By the pragmatism of Malin Lindfors-Speace and the practical experience of Sandis Steins. But also by some of the contributions from the audience. Does CSR kill your competitiveness? Maybe, if you see it as something that is imposed by others on your company. And if you’re the only one bidding for a government project that duly pays taxes, and then lose the tender because your competitors can offer a lower price because of that, you might be led to believe that social responsibility kills your competitiveness. Especially if the government is slow in putting regulation in place to create a level playing field, and does not play by rules that promote fair competition.

But if you listen carefully to what was said, there is another story. Switching off lights, reducing travel costs, reducing waste all are examples of how social responsibility is a sustainable way of doing business that directly delivers cost reductions. And if your key competitive edge over the competition is that you are better in paying off decision makers, well, that is an advantage that does not get you anything in key export markets like Scandinavia and other EU countries. So, to paraphrase the British Ambassador, CSR does not kill your competitiveness, it can certainly boost it.

This post was published also on the CSR in the Baltics blog.

Tags: , , , , , ,

Comments are closed.