Finnish Business & Society

This month, CSR Europe interviews Mikko Routti, executive Director of Finnish Business & Society on the latest trends of CSR in Finland and on the new challenges arising at a European Level. In Occasion of its 10th anniversary the interview unveils the hopes and expectation of the Finnish network for CSR and some of its main achievements through the years.

The role of SMEs in the complex CSR environment and the developments in the European dimensions are also explored in the interview.

Finnish Business and Society will soon celebrate its 10^th anniversary. What have been, in your opinion, the main CSR issues amongst Finnish businesses?

Looking backwards, last decade has seen major growth of consciousness and actions about sustainable business in Finland (as most companies prefer to call CSR here). Environmental issues related to forest industry and power generation were the most important CSR-related challenges in Finland, and they are being gradually solved through technological innovation. A major issue has been the globalization of Finnish enterprises; many are leading players globally and often have their most impactful operations in Emerging Markets. As in other OECD countries, we have seen the physical factory work moving to China and other parts of Asia. These developments required Finnish companies to have a more consistent approach on e.g. human rights and ethical trade practices in order to manage the related risks. This leads to internal codes of conduct or codes of trading. On reporting area, international investors required more openness also in CSR reporting. Similarly modern European consumers are more conscious about sustainability and lifecycle impacts of their choices, and thus require openness. These developments affect the attitudes in companies, and are visibly seen in CSR reporting. Currently roughly 2/3 out of 100 biggest companies do some sort of developed CSR reporting.

How do you see the Finnish business approach to CSR evolve in 10 years time?

How will the Finnish business approach to CSR evolve in 10 years time? On the surface level we will see the CSR reporting along the GRI guidelines to be more popular. I also expect the ISO 26000 to get a sizeable role. Will this increased standard and reporting availability affect the behaviour of the companies when it comes to making tough business decisions weighing the long-term sustainability aspects versus short-term profit. My answer is yes; even though CSR reporting is reflecting history, the related commitments push the decision makers to "walk the talk" and take leaps towards more radical thinking. One development is the growing importance of accounting and audit industry in quantifying also non-financial inputs into relevant calculations.

By 2020 there will be major challenges for our society and business, e.g. carbon constrained future in a cold climate. Additionally demographic change e.g. ageing of population is challenging us. Consumer attitudes will push both industry and public sector to develop more innovative ways for dealing with these issues. CSR community can help also; there are many encouraging examples how new thinking and push from interest groups have enabled an attitude change in society ; one of them is the environmental victory for our lake and river system, which was quite polluted on 1970's but now cleanest in Europe. A small but visible opportunity for CSR is also the nomination of Helsinki as a Design Capital of Europe for 2012; sustainable design has also been in FiBS agenda. Trend towards more systematic CSR approach needs infrastructure, enablers, tools and networks, and we in FiBS want to be the top provider of those for our companies.

It Is often said that CSR has been taken on board by most of multinational companies, but it hasn't reached Small and medium businesses , which employ most of the working population. What is the level of CSR awareness among Finnish SME's?

According to a recent member study of the Federation of Finnish Enterprises (SY), a SME industry association representing 110.000 entrepreneurs, the main duties of entrepreneurs towards the society were considered to be the employment of themselves and others, paying taxes, legal compliance and environmental compliance. These are of course important causes, but as the study shows there is still lots of work to do to gain SME's appreciation of more systematic approach to CSR.

What actions is FiBS taking to promote CSR in SMEs?

About 30% of our members can be qualified as SME's in various businesses; we do get input from them and they affect our strategy e.g. as FiBS board members. We are also working closely with our Ministry of Economy and Employment and other government departments to support CSR activity between SME's. A good example is SME key tool for developing sustainability in SME's. We also work closely with SME industry associations. One positive force here are the bigger companies who are already committed to CSR, and also require their smaller suppliers develop to consistent approach to sustainability.

FiBS has offered to the members of its network, throughout 2009, workshops dedicated to the three main dimensions on CSR: Economy, people and the environment. What is the approach that has been taken in presenting these issues?

First, we arrange one major high-level seminar-type of event each year; last year it was called CSR Forum Finland 09. The theme was how to make a profitable business model based on inevitable trend towards carbon-constrained world. There were prominent speakers e.g. a government minister, a board member from Nokia Corporation, a CEO of a technology company, a CEO from insurance company and 140 other participants. In the seminar also the winners of CSR Reporting in Annual Reports were published; Outokumpu Corporation was the overall number one. We arranged the competition for the listed companies, together with e.g. the Finnish Institute of Authorized Public Accountants.

Apart from that, we had in October 2009 a senior executive level workshop together with SITRA (the Finnish Innovation Fund). The theme of the workshop was "Human Leadership as a Source of Competitive Edge". We had five separate breakfast meetings for our members: the themes related e.g. to sustainable public procurement, international practices of corporations, CSR commitments and tools, ethical operations as a source of competitive edge and corporate funding in public elections". We also had three Workshops around themes on responsible employee dismissal, on communicating CSR and on sustainable design.

What kind of feedback have you received on these activities?

As a takeaway from all these activities we can conclude that the 30-40 biggest Finnish companies have already mainstreamed the CSR thinking. The leaders have been having major international operations, or are domestically in a business field which as such requires a strong emphasis on sustainability. Typically forestry, chemicals and energy are this kinds of fields. Also foodstuff and clothing retail industries with their big sourcing operations from emerging markets are leaders in this field. In financial industry, sustainable investment has been a growing phenomenon in Finland and the biggest groups are involved one way or another. However, FiBS has lots of potential interest by 150-250 major Finnish companies whose interest in CSR has been lagging or has developed only in one area, typically in environment.

The European Alliance for CSR is based on the commitment by the EU and member states to strengthen a business friendly environment for businesses to grow and develop in a socially responsible way. What do you think Finland could learn from other European Countries in terms of CSR?

One thing that is relatively new in Finland is the major role of EU in all kinds of development of initiatives and regulations. We must better learn how to utilize the huge financial and intellectual resources of EU, both inside EU but also in other parts of the world, as the EU is a major global player in terms of trade and new ideas. Additionally, lots of CSR initiatives have been already tested in bigger EU countries and markets, and we can re-use many of the learnings. One example, which comes to my mind, is how the financial institutions can help citizens get proper access to new financial services through financial literacy campaigns. FiBS is strongly involved in the Finland-EU co-operation.

What do you think European countries could learn in the area of CSR from Finland?

Traditionally Finns have been quick to adapt new working models and new technologies for innovative business operations. Also our pragmatic way of combining the resources between the private, public and the third sector have been a source of major strength. Results include relative economic equality, world class basic and higher education, access to justice, access to public healthcare, design and innovation, just to name a few areas. We have been also able to create benefits for also people developing countries through technology e.g. in creating equal access to communication and banking services for all through modern mobile communications solutions. We in FiBS can help all CSREurope members and partners access this kind of innovative solution areas.

More information:

Read More about FiBS at : http://www.fibsry.fi/

Previous interviews:

More interviews with our National Partner Organisations