‘Socially responsible behaviour is a strong business motive’

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Employment, Social Affairs and Equal Opportunities Commissioner Vladimír Špidla discusses corporate social responsibility (CSR) and ‘flexicurity’ with EURACTIV Czech Republic. These concepts, while frequently promoted by the European Commission, are still relatively unknown to new member states.

To read a shortened version of this interview, please click here.

As a part of your recent visit to Prague, you gave a speech on corporate social responsibility (CSR). Firms who follow this approach seek to act in responsible way both inside and outside their enterprise. Nevertheless, this concept, while supported by the Commission, seems to be relatively unknown in new member countries. Can you say why?

In my opinion, it is related to our economic and political history and to a certain underestimation of various aspects of business itself, because the result of doing business, if it is to be successful and effective in the long run, is not only a high-quality product, but also a high-quality environment, and high-quality relations to social networks and people themselves. In the end, doing business is a human thing, not a natural phenomenon.

It is multinationals that predominantly bring socially responsible behaviour to new member countries. Do you think they have a chance of inspiring locally owned enterprises to adopt the same policy?

Of course they do, because multinationals that, within their branches, adopt social responsibility, have a certain combination of motives. One of these, in my view, that is always present and very deeply grounded is an ethical one – because business ethics do exist, and doing business in a way that is pitiless towards people or the environment is simply unethical and uncreative. It is not in line with either a modern interpretation of doing business or even the classical basis from which liberal capitalism was built, the so-called protestant ethic. An ethical part is simply there and it is strong. It cannot be underestimated and we cannot ignore it.

On the other hand, there are also business motives and it is absolutely clear that firms who apply this principle are more successful. As an example, there is still a lack of equal opportunities between men and women in respect of their careers, their status and so on. I had a discussion with a large French firm that applies the concept of equal opportunities very intensively, especially with respect to equality between men and women, and they told me: “Look, we can count: 60% of people who graduate from universities are women. Above all, the population is getting older and we will need qualified workers. When we build up the image of being friendly towards women, we will reap the competitive advantage.” This is a very strong business motive.

While the benefits of socially responsible behaviour are large, it may seem the costs are very high in the short run. Does this fact create barriers for SMEs? Is the approach perhaps suitable only for large enterprises?

It is not, because it is simply a question of approach. And let me refer to another example. When you decide, as a socially responsible firm, to open your doors to disabled people, it naturally means that you have to make some adjustments – both organisational and technical. It will be logically reflected in costs, but costs are overweighed by the benefits you will get, because people you will recruit as an additional resource will have extra abilities and you may even be able to gain a comparative advantage in the market. 

This is not fiction. Recently, I came across an example of a Danish IT company, Specialisterne, that only employs autistic people. In short, they concentrate on people who are frequently able to assert themselves at an even higher level than people who do not have the condition, such as in the routine controls of computer systems or data. In this respect, Danish Specialisterne became very successful – they are about to enter the Swedish market and they expect to create a further 1,000 jobs for people with autism around world.

But let us go back to your question: when you make the concept of equal opportunities a long-term and strategic one, the costs are relatively small – much smaller than we tend to think. There is another example of a Czech town that intended to remove barriers – they wanted to make their square and town barrier-free in general, because it is touristy and also a health resort, and I asked: “Did it cost you a lot of money?” They replied: “In fact, no, because when we dug up the road to lay a duct we made also barrier-free kerbs.” So, if you incorporate the principle of equal opportunities in the general plan, costs fall sharply. I am not saying they do not exist, but it is an investment. Every cost is balanced by a benefit and when this approach is a part of a strategy, the cost-benefit balance is biased towards benefits – markedly, in fact.

In March 2006, the European Commission came up with a plan to “make Europe a pole of excellence on CSR” and launched the Alliance for CSR, uniting socially responsible firms. What have been the results of this initiative so far?

I can say that the results have been quite good. An initiative keeps running, it develops and it is reflected in the various business operations of individual firms. To give an example, I took notice of an enterprise – a large supermarket chain – that began systematically to address the problem of bridging pay gaps between men and women. They chose a concept, a socially responsible one, to pay the same rates for jobs with similar levels of complexity and quality. While CSR seems somewhat abstract and sometimes hard to apply, in fact, it is in fact quite easily applicable. The company I mentioned found that checkers, mostly women, were paid significantly less than auxiliary staff in the shop who were usually unskilled, and who worked no doubt less intensively, and who were mostly men. Therefore, they increased the salaries of those women to balance out the unjustified pay difference, and it was reflected in the fact that they hired better checkers. This is important: a good checker is an asset for such a supermarket chain! 

In past two years ‘flexicurity’ (flexibility on labour market and security for both workers and employers) has become the most frequently quoted term of your policies. The meaning of the term itself indicates there must be an extremely complex approach behind it. What are its prerequisites?

It is indeed an extremely complex matter. Technically speaking, you can put both terms – flexibility and security – in three different positions. First, they can be contrary to each other, i.e. flexibility contradicts security. Second, they are parallel, they neither contradict nor promote each other, and the third concept is a synergy: flexibility promotes security and vice versa. And that is the idea of flexicurity – synergic connection between flexibility and security. 

Why it is so important and what is the basic idea? Besides the idea that security and flexibility are in mutual synergy also indicates that society is fundamentally changing, and that what we must give people in the first place is not the security of having a single job, but a security of career and especially support during a change. This approach is therefore very complex and it requires a certain structure to the education system, a certain structure to on-the-job training systems, flexible but at the same time reliable labour law, and also the modernisation of social security systems to make them effective.
The third idea is that this policy’s goal is to prevent and reduce fragmentation of the labour market, when the system achieves flexibility by pushing people into an insecure and bad situation in which they stay for life.

In your June Communication on flexicurity, you placed great emphasis on co-operation with social partners. This can be quite easily envisaged in EU-15 countries that have a long tradition of collective bargaining, but what about the new member states in which such relationships are not sufficiently developed for this approach to be applied successfully?

Effective social dialogue is a very important part of flexicurity – Danish experiences are often referred to, and you can easily look to Germany and Austria, which can be also seen as a good example. Truly effective social dialogue plays an important role in these countries. However, it does not mean that new member countries, where the capability for social dialogue is still underdeveloped, will not achieve such a capability in the future. Part of our efforts to implement the concept of flexicurity is also, among other things, the promotion of social dialogue through the European Social Fund. We finance projects with goals of promoting social dialogue in which European social partners (both employers and employees) are involved, in order to help build required capacity.

Is there support for flexicurity all over Europe? Some countries have voiced their concern that such a policy cannot be universally applied.

In a certain sense, it is applicable in every system. For instance, nobody dares to claim that within a European system, economy is incompatible with principles of liberal capitalism, or that the social state is inapplicable in individual member countries. Of course, it depends on the particular case, but do not tell me that some countries cannot apply, say, lifelong learning. In the same way, there is not a single country that could not adapt its pension or social security system. Nor can it be claimed that safety and security at work are not applicable.

They are, but I am more interested in a society-wide approach. While social models have some tradition in old member states, in new member countries there is not yet any consensus on the concrete form of their social models.

The consensus is never expressed by any ideology or even a norm. It does not work anywhere this way, but there is still a consensus on key elements that are not discussed, not even in the Czech Republic. Nobody in this country considers scrapping universal access in the pension system or repealing universal access to healthcare. It is unthinkable that the unemployed who have worked all their lives do not get corresponding relief. Similarly, no one thinks that education should not be generally available.

And these are the fundamental elements of the European social model that are not yet common to all countries outside the EU. In the same way, nobody doubts that labour law relation is ruled by the contract. On the contrary, there are only 2% of workers in India covered by a contract. It is a reminder that, very often, the things that we tend to think are as natural as water running down a hill are in fact common only to our cultural space.

EURACTIVCzech Republic

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