March 2015 ISSUE no. 2 SPECIAL ISSUE on corporate social responsibility by guest editor hanna mäkinen Juha väätänen How to make the Guy Ryder world a better place? Corporate Social Responsibility and decent work Dolores Gallardo-Vázquez Does Corporate Social François Passant Responsibility motivate Which role for capital competitive success of firms? markets in promoting sustainability? To receive a free copy, register at www.utu.fi/pei The Pan-European Institute publishes the Baltic Rim Economies (BRE) review which deals with the development of the Baltic Sea region. In the BRE review, public and corporate decision makers, representatives of Academia, and several other experts contribute to the discussion. Pan-European Institute ISSN 1459-9759 Guest Editor | Hanna Mäkinen This BRE is part of MNEmerge project, fund- ed by the EU’s FP7 Programme for research, technological development and demonstra- tion under Grant Agreement No. 612889. University of Turku Turku School of Economics Pan-European Institute Rehtorinpellonkatu 3 FI-20500 TURKU, Finland Tel. +358 2 333 9567 www.utu.fi/pei 31.3.2015 Baltic Rim Economies ISSUE # 2 expert articles Guy Ryder 4 Matthias S. Fifka 20 Corporate Social Responsibility Corporate Social Responsibility in and decent work Russia – the long and winding road in between western influence and juha väätänen 6 Russian tradition How to make the world a better place? Maxim a. Storchevoy 22 Business ethics and CSR in Russia François Passant 7 – an outlook of 2015 Which role for capital markets in promoting sustainability? Marzena Strzelczak 24 Polish CSR in brief Dolores Gallardo-Vázquez 9 Does Corporate Social Linda Piirto 26 Responsibility motivate competitive The Finnish CSR policy – aiming success of firms? to be forerunners Liisa Rohweder 10 Mikko Routti 27 The next wave of innovation is How is Finnish business creating clean, big and profitable sustainable and inclusive growth? janne sivonen 11 Vappu Kunnaala-Hyrkki Fairtrade’s growth strengthens the & Olli-Pekka Brunila 29 corporate social responsibility trend Corporate social responsibility trends in maritime logistics Xiaolan Fu & Jun Hou 12 China’s direct investment in Africa Neil Bellefontaine & Tafsir Johansson 31 and its impact Ocean governance and the EU “macro-regional” strategy for the Shyama V. Ramani 14 Baltic Sea Region Sanitation – providing safe toilets through public-private partnerships Hanna mäkinen 33 Concluding remarks on the Vidhi A. Chaudhri 16 Special Issue on Corporate Social The promise and challenge of Responsibility collaboration for CSR – corporate- NGO engagement Valerie Nattrodt, Leonardo E. Bremermann & Mauro Rosa 18 The Light for All Programme – the Brazilian case of the MNEmerge project 3 www.utu.fi/pei 31.3.2015 Baltic Rim Economies ISSUE # 2 Guy Ryder Corporate Social Responsibility and decent work Expert article • 1760 orporate Social Responsibility has the stated aim of en- But is this sufficient to ensure a fair globalization? The MNE Dec- couraging the positive contribution of business to socio laration brings a unique perspective as governments, employers and economic development and reducing the risk of possible workers agreed that policies should not only aim to minimize and re- negative impact, including along the complex systems of solve difficulties to which operations of multinational enterprises may global supply chains, thus becoming an intrinsic part of give rise in the countries of operations but also to encourage their Cthe way business does its business. This approach recognizes that positive contribution. In 2011 the EU defined CSR along these same enterprises have a responsibility to ensure that jobs are decent, work- lines as “the responsibility of enterprises for their impacts on society” places are safe and inclusive, proper wages are being paid and work- underlying the responsibility of enterprises for their positive and nega- ers have a voice to come up for their rights. At the same time genuine tive impacts, in their own operations and in interaction with other ac- CSR seeks to encourage the positive impact of the private sector as a tors. Today’s world requires the active participation of businesses to major player in society creating jobs that provide incomes and learn- find sustainable solutions to socio-economic challenges, including the ing opportunities. To fully harness the potential of the private sector, high unemployment numbers, especially among young people and the ILO was one of the first international organizations to adopt an women. instrument that introduces a social dimension to the forces shap- The European Commission President recently launched the In- ing globalization, The Tripartite Declaration of Principles concerning vestment Plan, a three-year initiative (2015-2017) that aims to lever- Multinational Enterprises and Social Policy (MNE Declaration). In the age the contribution of the private sector to job creation and support 1970s it was ahead of its time and today it is more relevant than ever skills development. The latter concept is important not only for Eu- to engage with business and achieve a fair globalization. rope but all countries and at all development levels; clearly, adequate Many commentators agree that in order for markets to deliver education and skills increase the ability to innovate and adopt new generally shared benefits, govern- technologies. This stands to ments need to assume their role in make the difference between protecting rights and fostering de- Today’s responsible businesses “inclusive” growth providing op- velopment. This is of particular im- portunities for all lifting people portance in the context of emerging need a comprehensive rights- out of poverty and purely “eco- markets experiencing rapid economic nomic” growth that leaves large growth: to achieve inclusive develop- based approach responding segments of the society behind ment, governments need to put in to national development and leads to inequality, another place adequate legal frameworks and challenge in today’s globalized policies geared towards sustainable priorities. world. enterprise development. And na- Over the next five years an tional laws protecting workers’ rights estimated 213 million people need to be enforced through national labour inspection systems. will enter the labour market, and they will need jobs. Many compa- However, maximizing the benefits of development goes beyond nies are supporting efforts of governments to design and implement governments alone. Strong social dialogue platforms at the national more effective policies to promote youth employment, including vo- and sectoral levels provide solid foundations for employers and work- cational training, apprenticeship and entrepreneurship programmes. ers to find sustainable solutions to often systemic issues and engage The MNE Declaration advocates exactly such an engagement where with the government on adequate legislation and policies. Enterprises enterprises, governments and workers address issues of mutual con- themselves have also taken initiatives to address challenges in their cern and identify how enterprises can make meaningful contributions operations through the formulation of policies in the areas of human to national development priorities. resources, CSR, suppliers’ codes of conduct, as well as programmes Today’s responsible businesses need a comprehensive rights- that look at identifying and possibly addressing compliance issues, based approach responding to national development priorities. In especially in global supply chains. Many of these private policies ref- concrete terms, it means that responsible and sustainable businesses erence ILO standards, especially the Fundamental Principles and obey laws and respect internationally agreed principles, and seek to Rights at Work, and the ILO operates a Helpdesk for Business on contribute to national development priorities, as outlined in the five International Labour Standards. areas of the MNE Declaration (general policies, employment, train- The ILO runs a number of programmes that involves all these ing, conditions of work and life, and industrial relations). This is part different actors (multinational enterprises, governments, employers of a fair globalization where all women and men can find decent and and workers) to address workplace challenges especially in devel- productive employment opportunities and children have access to oping and emerging markets. These programmes focus on decent education. work challenges such as elimination of child labour and forced labour, improving working conditions and industrial relations, occupational safety and health, social security, gender equality. 4 www.utu.fi/pei 31.3.2015 Baltic Rim Economies ISSUE # 2 Expert article • 1760 The sustainable development goals being proposed for post-2015 Guy Ryder include promoting “sustained, inclusive and sustainable economic Director General growth, full and productive employment and decent work for all”. International Labour Organization Recognizing that enterprises hold the potential for more and better jobs, the private sector will be increasingly seen as a critical partner in reaching these new sustainable development goals. The MNE Dec- laration sets out the role of enterprises and government in fostering greater synergies between public and private action on decent work and inclusive growth while affirming the essential roles of employers’ and workers’ organizations. I see the private sector as an important partner for the ILO to achieve