CSR - Better tools for globalisationCSR - Better tools for globalisation- why industry needs better tools for - why industry needs better tools for

globalisationglobalisation

Presentation 1 November by Henriette Søltoft

Director International Trade and Market PolicyDI

The Three Issues at handThe Three Issues at hand

TRADE

DEVELOP-MENT

CSR

When governments fail...When governments fail...

””CSR is a pragmatic CSR is a pragmatic response to government response to government failure”failure”

Georg Kell, UN Global CompactGeorg Kell, UN Global Compact

Trade and development

The African countries have the same income level now as they did 40 years ago.

Korea and Thailand had the same level of income in 1960 as the African countries. 0

2500

5000

7500

10000

12500

1960 1970 1980 1990

BNP pr. capita, USD

Sydkorea Thailand Ghana

Kenya Zimbabwe

The Drivers of CSRThe Drivers of CSR

Political Pressure in home country -> Forces Political Pressure in home country -> Forces companies to focus on CSRcompanies to focus on CSR

Pressure from Clients - Code of ConductsPressure from Clients - Code of Conducts

Market pressure leads to longer supply chains and Market pressure leads to longer supply chains and outsourcing -> more exposure to bad governanceoutsourcing -> more exposure to bad governance

ALL THESE FACTORS LEAD TO INCREASED ALL THESE FACTORS LEAD TO INCREASED COMMERCIAL RISKS!COMMERCIAL RISKS!

CSR as a risk minizing strategyCSR as a risk minizing strategy

• Companies have to learn to deal with ethics -> Companies have to learn to deal with ethics -> this means new areas of controlthis means new areas of control

Accounting

Evironmental accountingand certification

Occupational healthand safety

Human rights

Corruption

Time/maturity

Ethics in the age of globalisationEthics in the age of globalisation

• EthicsEthics is a general term for what is often described as is a general term for what is often described as the "science of morality". In philosophy, ethical the "science of morality". In philosophy, ethical behavior is that which is "good".behavior is that which is "good".

• What is good and moral is totally different in different What is good and moral is totally different in different countries and cultures. Therefore Danish standards countries and cultures. Therefore Danish standards and values cannot be used by international and values cannot be used by international corporations. corporations.

• We need global standards - not national!We need global standards - not national!

Where are we?Where are we?

Defining goals

Defining indicators

Implementing control systems

Monitoring andevaluation

In Human Rigths we are only here!!

Conclusions - 1Conclusions - 1

• Companies need tools for CSR Companies need tools for CSR

• These tools will strengthen the link between These tools will strengthen the link between trade and development - some countries risk trade and development - some countries risk loosing business because of government failure loosing business because of government failure

• CSR is only an ad hoc solution to what is in CSR is only an ad hoc solution to what is in essence government failureessence government failure

Conclusions - 2Conclusions - 2

• We don't need CSR clauses in trade agreements We don't need CSR clauses in trade agreements - this will for sure break the link between trade - this will for sure break the link between trade and developmentand development

• We don't need national standards or legislation We don't need national standards or legislation for CSR. CSR is international, volutary and for CSR. CSR is international, volutary and market driven.market driven.

DI PublicationsDI Publications

• The company as citizen of the worldThe company as citizen of the world

• Business and Human RightsBusiness and Human Rights

• Avoid corruptionAvoid corruption

• Guide to Global CompactGuide to Global Compact

• HRCAHRCA

• Code of ConductCode of Conduct

• Dealing with HIV/AIDSDealing with HIV/AIDS