In this publication we have tried to describe how the world is changing from an energy and environment perspective.  Especially in energy and climate policy, change is afoot—that much should be clear. What yesterday was an ideological fringe movement today has become international law.  As Luc Van Liedekerke, Professor at the University of Antwerp, argues, the gradual change in people’s values is a key driver of real change in the way we do business. The pressure on companies and organisation is partly internal (the values of managers and staff) and partly external (stakeholders such as customers, local communities, NGOs, government).  But as emerging values (such as concern for the environment, human rights) become increasingly mainstream—and lead to the creation of pressure groups, commissions and committees, and ultimately law—the pressure on business increases. Today there is no legal obligation to use root filters; tomorrow there probably will be. Today there is no legal obligation to save energy; tomorrow high energy prices (due to the EU’s Climate Package) will compel us to save energy.  

 

Yesterday we could sell goods without knowing much about what they were made of; today we need to know exactly which chemicals go into our products and tomorrow we will have to clean up those products (as we begin to learn more about the 97,000 chemicals circulating in Europe that today we know almost nothing about). To repeat, change is afoot. Companies and organisations, therefore, are well advised to anticipate how the social, economic and legal context in which they operate is changing. Again, the question poses itself: how do you do that? A socially responsible—or sustainable—approach to business offers one answer.  

 

Everything discussed in this edition is ultimately concerned with sustainability. A climate that is able sustain humanity for the long term; energy sources that are renewable and hence sustainable; goods that are manufactured with closed material loops and hence are sustainable; food production methods that can outlast fossil fuel depletion and meet the demands of a growing world population. But sustainable development is so much more—in this issue we haven’t even touched on issues like biodiversity, poverty and social exclusion. But they matter and will matter more in the years to come. As Dirk Fransaer states in his opinion piece in the first section of this publication, “there is no future unless it is sustainable.”  Best we prepare for sustainability then.

 

‘Corporate social responsibility’, ‘corporate citizenship’, or simply ‘sustainable business’—most people are familiar with the terms but what does it actually mean? Sustainable business has its roots in the broader concept of sustainable development, a topic that hit the global agenda when the World Commission on Environment and Development, otherwise known as the Brundtland Commission, was convened by the United Nations in 1983. The resulting Brundtland report was published in 1983 and accepted by the UN’s Generally Assembly.  It in turn led to the United Nations Conference on Environment and Development (UNCED), better known as the Earth Summit, held in Rio de Janeiro in 1992 (another Earth Summit followed in 2002 in Johannesburg). At the Rio summit the Framework Convention on Climate Change was formulated, which in turn led to the Kyoto Protocol. But sustainable development covers much more than energy and climate. The key objective of the Brudtland report was to explore a vision of economic and social development that avoids environmental degradation and over-exploitation of resources. Its oft quoted definition of sustainable development (see the opening quote of this article) sums it all up nicely, but also immediately makes clear that we are talking about many things: the environment, resources, poverty, and much more. In the mean time the concept of sustainable development has been translated further into government policy, at both a European and national level. In Belgium, the federal government is preparing its third plan for sustainable development (covering the period 2009-2012) and in 1997 the Interdepartmental Commission for Sustainable Development was set up to coordinate execution of the plan across government. In this country typical themes addressed include social exclusion, the ageing population, health risks, pollution, climate change and renewable energy. 

 

The business world reacted soon after the Rio Summit by setting up the World Business Council for Sustainable Development, still one of the most influential business forums on sustainability matters. Operating as a platform for best practice sharing it recommends a number of key principles for business, such as ‘business has to earn its licence to operate’ and eco-efficiency—‘doing more with less.’ Other organisations, both internationally and locally (Business & Society, Kauri, Vlaams Netwerk voor Zakenethiek, etc), and related concepts (e.g. Socially Responsible Investing) emerged in the wake of these developments, leading gradually to an increased professionalization of Corporate Social Responsibility or CSR as it has become known.  

 

In Belgium, the adoption of CSR has been very gradual. Today it is still associated mainly with a small number of well-known companies led by what one could describe as ‘inspired leaders’: Colruyt, Van De Velde, Boss Paints, Ecover, ASAP Photographic Services, etc. These are companies where CSR has its roots in the founders’ values.  Boss Paints, for example, is a vertically integrated paints manufacturers (own manufacturing, own brands, own retail chain) led by the Bossuyt family, and one the last remaining independent paint manufacturers. Its success some commentators ascribe to its strong value-driven strategy. The core values of the company centre on people, quality and the environment—the idea being that profit will automatically follow if one pays due attention to the other three (in contrast to the triple bottom line principle of people, planet AND profit). Boss Paints is reputed in the market for the quality of its products and the service it provides to its customers, both professional and private.  

 

Also more generally the company’s reputation is outstanding. In the business community the company is recognised for its strong management skills and organisational culture. But also in the local community, the company is regarded as a great place to work. Boss Paints achieves this because it invests in its products and its people—more so than the norm. It has a dedicated lab staffed by 20 full-time people who work on new environmentally friendly products—that is a lot given the small size of the company. Staff members enjoy a range of services including child care, organic fruit and soup, a fitness programme, stop-smoking programmes, a generous bicycle programme—all elements that make the company an attractive employer. Its environmental measures include an investment project in solar panels (the objective is to cover 25% of the site’s electricity needs from solar), root filters on cars, trucks on Euro 4 and ultimately Euro 5 engines, and the onsite treatment of its waste water.

 

Most of these measures have a direct impact on the local residential community, i.e. on the local air and water quality.  Similar tales can be told about Colruyt, Ecover, ASAP Photographic Services and others. What these companies have in common is the way they have integrated ‘sustainability’ principles in the core operations of the business—the values come from the founders/owners/managers of the company (it is not the remit of a CSR or communications department)—and the way it is focused on the needs of the companies’ stakeholders: staff, customers, local community.  It also is interesting to note that these pioneers tend to be family businesses. As Karel Van Eetvelt, managing director of UNIZO, makes clear in his article, sustainability principles often come naturally to small businesses and independents (think of bakeries, butchers, plumbers etc) since they are so reliant on their local community.  

 

Not everybody, however, is blessed with such inspiration. As a result, the values-driven CSR pioneers in this country are a minority.  But the situation does seem to be changing of late, driven by two key trends. On the one hand an increasing number of companies are reacting to climate policy and volatile energy prices by making investments in energy efficiency projects, renewable energy and CO2 ‘neutrality’ programmes (e.g. of the sort facilitated by Co2logic). The drivers can be particularly strong: there is opportunity to save energy costs, to benefit from various subsidies and support schemes, and off course the positive PR does not hurt. On other hand, however, there is the gradual professionalization of corporate social responsibility, both as a discipline within companies and as a policy issue for government. This is a positive development, since it offers a methodology of sorts for companies to begin thinking systematically about their stakeholders.

 

Closely aligned with the broader concept of sustainable development, CSR too has emerged as a concept over which there is broad consensus on what it is and how it should be addressed in government policy. At EU level, for example, following much work by the European Multi-Stakeholder Forum on Corporate Social Responsibility , there is consensus that CSR is a “concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” (1)  The conclusions of the CSR Forum form the basis of government policy in Belgium, both at a federal and regional level (2), and also inform the work of organisations like Business & Society, Kauri, and others.   

 

Without going into detail here, a number of key principles are embedded in the CSR definition. Firstly, CSR is concerned with the voluntary integration of environmental and social considerations into business operations, initiatives that go beyond legal obligations. This is an important point because many international companies operate in areas where the law pertaining to environmental and social issues is either very different or very ineffective compared to the company’s home country.   But it is more than too. There is explicit recognition that CSR is about going beyond the law, not simply replacing a legal vacuum, since the law cannot cover everything.  Secondly, CSR is concerned with the core business activities of a company; it is about strategy, not idealism. Hence, the engagement of top management and operational management is critical; it cannot simply be delegated to the communications department. Thirdly, the process of CSR (it is a process, an ongoing learning process) is best informed via stakeholder dialogue. This is the way to keep the initiatives relevant, to anticipate change, and to earn commitment from one’s stakeholders. Finally, CSR is a systematic process. It is not about once-off projects; instead it is about setting clear strategic objectives and putting systems in place to ensure projects are managed professionally and progress is monitored.  For larger companies, this often culminates in formal CSR reporting.

 

It is via CSR that business can contribute to sustainable development, but in the process also ensure that business itself is sustainable. While fluctuating energy prices and climate policy today are the great drivers of ‘sustainability’ initiatives, companies are well-advised to position such initiatives within a broader CSR framework since it is in this way that strategic depth is given to such investments.