While the importance and recognition of Corporate Social Responsibility (CSR) in companies is rising, it is often seen as some kind of self-regulation whereby companies “integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (Green Paper 'Promoting a European framework for Corporate Social Responsibility'). With the Directive 2014/95/EU, this self-regulation moved more towards regulation. However, the directive only seems to apply to certain large EU companies, leaving out the predominant share of small and medium-sized enterprises (SMEs) in Europe.
In the light of the current framework conditions, the Interreg Europe Road-CSR project (A Roadmap for Integrating Corporate Social Responsibility into EU Member States and Business Practices) is making the case that the integration of CSR into business practices of SMEs is not only a question of responsibility but also brings clear gains of competitiveness.
As stated by Dr. Eudokia Balamou, Operations Manager at Larnaca and Famagusta Districts Development Agency, the Lead Partner of Road-CSR:
“Being responsible is no longer just desirable but it is required since governments, activists and the media are holding companies accountable for the social and environmental consequences of their activities. For companies to embark on CSR does not necessarily mean doing more than they are doing but doing the same things better, in a more efficient manner. This is considered an important factor in increasing their competitiveness, as it can bring benefits in terms of risk management, cost savings, access to capital, customer relationships, human resource management, and innovation capacity”.
Those potential contributions of CSR to an increased competitiveness of SMEs are well illustrated by the Road-CSR partners in their report Making the business case: The effects of corporate social responsibility on SME competitiveness.
Going one step further, Road-CSR provides also useful guidance for an efficient uptake of CSR in SMEs’ business practices:
- a report on the CSR Best Practices identified by the project, providing a great learning opportunity and replication potential
- a step-wise model for supporting the actual implementation of CSR principles in SMEs’ business processes:
- understand the relevance of CSR in the four areas of workplace, market, environment and local society,
- outline objectives and expected benefits in these areas,
- specify the actions to be taken,
- identify the related obstacles and opportunities,
- incorporate CSR into management, process execution and business culture processes,
- develop performance indicators and
- communicate the CSR actions and results both within and outside the company.
The analysis of the effects of CSR on SME competitiveness as well as the report on the CSR Best Practices constitute jointly an insightful and hands-on approach to the topic for policy makers. The Policy Learning Platform is looking forward to put CSR further on the agenda, for instance by showcasing one the good practices from the Road-CSR project.
Sources and further reading
Knudson, H. Making the business case: The effects of corporate social responsibility on SME competitiveness. Road-CSR, Norwegian University of Science and Technology.
Weber, M. (2008). The business case for corporate social responsibility: A company-level measurement approach for CSR. European Management Journal, 26, 247-261.
Image credit: Photo by Tirachard Kumtanom from Pexels
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