Thai firms may need CSR for European ties. Sweden, for one, looks for social responsibility in the companies it does business with.
It is widely believed that while big companies involved in exporting know a lot about the importance of corporate social responsibility (CSR), smaller companies don’t care very much.
The biggest challenge in Asian countries can be explaining what CSR is, especially when small companies and investors look at it as a cost, as they are likely to equate it with philanthropy.
But now that CSR plays a larger role in global development, it is also a tool for free trade as businesses that do not take responsibility for their actions might face sanctions.
Some Swedish journalists are keen to find products that are made at factories with poor conditions.
Marianne Bogle, operations manager of the leading business network CSR Sweden, said the government not only takes CSR very seriously, but businesses also see CSR as an opportunity to find new products and services.
“The big challenge is to understand that CSR is not about communication,” she said.
Lisa Emelia Svensson, ambassador of the Ministry of Foreign Affairs’ international trade policy department, said CSR from the Swedish perspective is purely integrated into a company’s business model, consisting of four pillars: anti-corruption, human rights and freedom of expression, labour and the environment.
“This is not PR, and it is not philanthropy,” she said, adding that Sweden does not have a tradition of giving away money, as taxes are already high.
“We don’t want to have companies saying, ‘We built this school but we’re polluting rivers.”‘
Dr Svensson said the start is for the government to work with corporations.
“The most widely used guideline for CSR in Europe is the OECD guideline. Our department works with seven ministries to coordinate and integrate our policies.”
Asia has more state-owned organisations, so working with them can require a longer feeling out period.
The Industry Ministry of Thailand adopted the ISO 26000 standard last year for schools and state and local government, though it cannot be certified.
Dr Svensson said more young European businesses put solving social problems as a higher priority than making money.
Lars Andreasson, director of trade and investment at the Ministry for Foreign Affairs’ department for Asia and the Pacific, said CSR meshes well with economic development.
“The companies know you must have certain standards, otherwise the brand image could be hit,” he said, admitting some Swedish companies run into problems. “We have people coming here picking berries from China and Thailand who are badly treated by employers. For instance, when autumn comes they don’t have adequate clothes, food, lodging and sanitation.”
Goran Noren, head of industrial policy and external relations at the Confederation of Swedish Enterprises, which consists of 60,000 member companies, said CSR is a helpful tool to recruit potential employees that share the company’s values.
He said more small and medium-sized enterprises are conducting CSR as they are involved in a large supply chain.
“You can sometimes make a profit being short-sighted. But if you want to be in the market 100 years from now, you have to take the more difficult road,” he said.
In around five years, he expects there will be some kind of binding regulations on some aspects of CSR in Europe.