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January 31, 2011

Home » Paris: City of Insights

Newsflash: Europe is not America. Breaking News: Europe is not one country.

My European colleagues like to tease me with this little bit of geographic trivia... I like to tease them back when they say "North America" when they really just mean, the USA.  Teasing aside, some 50 years after the Treaty of Rome, these facts bear recalling every now and again.  People often ask me to compare and contrast CR in the States with CR in Europe, and I always struggle with the answer because it's really not a good comparison.  Even though there is a European Union, there still is not a United States of Europe.  And CR varies from country-to-country.  Knowing this, as we look at how to help our members, particularly multinational companies (MNCs),  with their global CR strategy, I decided to go directly to the source: the CROA's Steering Committee for Europe, which convened for the first time in Paris last week.
My Travel Journal
I spent my time in Paris doing a lot of listening... and not just because my French is so rusty.  I really wanted to learn from my European colleagues and they certainly delivered.  Here are a few of the things I picked up:

Governance & Green are table stakes.  The Europeans have looked at our governance debacles from Enron to the financial sector melt-down with the bemused concern of someone who's "been there, done that."  As US legislators have struggled to close the barn door with laws like SarBox and the more recent Financial Reform bill, the Europeans, particularly the Benelux, French, and Germans, have moved beyond these compliance issues.  The Brits are still playing some level of catch up, but on the Continent, these are considered settled issues.  Also thanks to a long running green party movement in most Western European countries, so called "green policies" are mostly old hat as well.

Development Durable.  In the US we have this ongoing debate about Sustainability vs. sustainability vs. Responsibility vs. responsibility.  Sustainability with a big "S" and Responsibility with a big "R" continue to compete for the overarching title of all things related to the way companies comport themselves as responsible members of a human society coming to grips with its role in sustaining the Earth as a habitable place to live.  Sustainability with a little "s" in some circles means just environmentalism and responsibility with a little "r" for some just means compliance. 

The French say "development durable" to mean "Sustainability" with a capital "S", which, as an erstwhile etymologist, I find just fascinating.  The world "durable" implies something -- at least in English -- of a sense of lasting permanence.   I really fell in love with the idea that all our actions -- not just the CR strategy, but the entire business strategy -- should be built to last... built for the ages.

These semantic debates aside, at the end of our discussion we all agreed that whether we called it Responsibility or Sustainability, we had common ground in improving governance and risk management, environmental impact, and social responsibility.

We gave at the office.  In the US we defined four pillars of CR:  governance, social responsibility, sustainability (with the little "s"), and philanthropy.  In most European countries, only the first three apply.  They simply have a different social compact all the way around concerning philanthropy.  In part by quirk of tax code, US companies often find it advantageous to set up foundations and/or "dual hat" their CR officers with overseeing philanthropic activities.  Not so in Europe.  Many of the things we rely on private charity for in the US are handled directly by the state.  Companies still play a vital role in the social fabric of their communities, just not through direct philanthropy.  As a result, corporate philanthropy doesn't really factor into the CR portfolio.

HR & CR.  Perhaps because of the different social role of companies in Europe, the Human Resources function plays a much bigger role in CR strategy than it currently does in the US.  Ensuring the sustainability of the workforce is viewed as part of the sustainability strategy and HR directors are often tapped to lead at least this plank of the strategy and sometimes more.  As in the US, workforce diversity at all levels, but particularly at the leadership and board level continue to get increasing interest and are fast becoming a standard part of the overall CR strategy.
A Strategy for the CROA in Europe
So from all that debate, we settled on the following strategy for the CROA in Europe:

Focus on global MNCs.  Given the differences from country-to-country, and the prevalence of already strong country-level CSR organizations, the Steering Committee recommended CROA focus on providing value to global MNCs that have operations in the US and one or more European country.  Helping these types of organizations to bridge the differences on both sides of the Atlantic will provide a unique service.  It also allows the CROA to partner with country-level peer associations to help members delve into specific issues in each country.

HR & CR.  We have a long legacy of working on global HR issues.  From this heritage, we can add more value to our global members for their HR-related CR strategies in Europe.  With that in mind, the Steering Committee recommended launching an CR/HR work stream before September 2010.

Initial Industry Focus.  Given our existing strengths in the US and based on the Steering Committees recommendations we will initially focus on the IT industry, moving from there to Oil & Gas, Financial Services, Telecoms, and Pharma.
Keeping up the Momentum
All in all this was a very good trip and I really want to thank my European colleagues, specifically Faye Holland and Cynthia Lawton on our team as well as the entire European Steering Committee for all their time and insights.  I can't wait to go back to keep our momentum building.

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