Climate change has become hot item for European companies (July 16, 2007)

Climate change has become hot item for European companies
While the world is clamouring for measures to combat climate change, the corporate community is actually taking a growing number of initiatives to tackle the problem. Likewise, climate change, which took 8th place on the 'social agenda' of major European companies in 2002, has now jumped to 4th place. In fact, the corporate community expects the issue of climate change to top its agenda within the next five years. This has become clear from a survey held among the 200 largest European companies this spring. The research focused on the issue of Corporate Social Responsibility (CSR).

Asked about their policies regarding a wide variety of social issues -including corruption prevention; climate change; fair trade and fair procurement; labour rights and poverty - companies are saying that they still see corruption prevention as their top priority, as has traditionally been the case. Runner-up is transparency of business practice. Number three on the list of corporate social concerns is health and safety. This is closely followed by climate change and labour rights. Lower down the agenda are issues such as income equality and fair wages; fair trade and fair procurement; ecological diversity; and education. And businesses are now giving the lowest priority to the general issue of poverty reduction.

Especially enterprises that have been able to connect social issues with their own financial performance are very active in the sphere of CSR. In turns out that a growing number of European companies are taking their civic responsibility very seriously. The more socially engaged companies are more inclined to hold their managers to account for delivering on social issues.

The researchers say, "In the past, a company's attention for CSR very much depended on the enthusiasm shown by a single executive or CEO. But at present, a growing number of European companies are willing and able to act as good corporate citizens in a structural fashion. Increasingly, businesses regard CSR as an opportunity and not so much as a threat. That is a very encouraging development."

Previously, pressure on companies to improve their CSR performance was coming from advocacy groups and NGOs. But these days, companies are feeling almost as much heat from their own shareholders and consumers. On top of that, CSR is becoming evermore important to companies in recruiting and retaining good-quality employees; as well as in distinguishing themselves from the competition in the marketplace.

The research shows that major European companies are using a very broad range of tools to improve their civic performance. Almost all large companies have drawn up their own code of conduct, while more than half of them have their staff follow training in CSR. Businesses are increasingly teaming up with external parties to become more socially active. An impressive example: a third of big companies engage in stakeholder dialogue about climate change.

The leading European companies expect climate change to move the top of the corporate agenda in the near future. In their view, poverty reduction, education and income equality must now take a back seat to the problem of climate change. The research was conducted by Prof. Dr. Muel Kaptein, Prof. Dr. Rob van Tulder, Linda Kooning and Laurens van Vliet of the Department of Business-Society Management at RSM Erasmus University. Muel Kaptein and Linda Kooning also work for KPMG.

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About RSM Erasmus University

RSM Erasmus University is an internationally top-ranked business school renowned for its ground-breaking research in sustainable business practice and for the development of leaders in global business. Offering an array of bachelor, master, doctoral, MBA and executive education programmes, RSM is consistently ranked amongst the top 10 business schools in Europe. The Department of Business-Society Management, which is part of RSM Erasmus University, focuses on the relationship between business and (global) society.

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