Eastern Europe catching up on CSR

We're used to thinking of Eastern Europe as lagging behind the UK on sustainability, but I returned from a recent trip with a more complex picture – and with greater optimism than I had before.

A few weeks ago I gave the keynote speech at a Harvard Business Review conference in Poland - “CSR: New challenges for crisis times”. All day I heard other speakers telling me “the UK is three years ahead”. There were indeed similarities with the UK CSR scene of 2006, but I was also struck by the critical differences.

The first parallel was the focus on reputation. The main drivers for companies to adopt CSR were protecting brands and the keeping the ‘licence to operate’ - society’s approval for their activities. The same is still true for many UK companies, but the leaders have moved on to addressing how sustainability affects the core business through innovation and strategy.

The role of sustainability reporting was also similar. The Global Reporting Initiative (GRI) has just published the G3 Guidelines in Polish, so people were working through how to apply them. Here in the UK we are thoroughly bored of reporting, but that is because we got the full value from it a while ago. Putting out a CSR report forced companies to create management information systems and engage with difficult opinions from stakeholders. Clever change agents used the annual cycle to make public commitments that kept the company moving forward. Now the systems are bedded in there is little extra change to wring out of each year’s report.

But there were several key differences. First, in Poland more of the larger companies are subsidiaries of global corporations headquartered abroad. These subsidiaries are trying to make their way with locally relevant but centrally directed CSR. For some, that was a straightjacket. For others, it was an opportunity to experiment and lead the whole group.

Second, any conversation about the ‘role of government’ is coloured by the legacy of communism. You have to be really clear that any government policy promoting sustainability is through market devices – like cap-and-trade, product standards or taxes – not through direct planning and picking winners.

Third, they can see where the debate is headed because of what has happened in the UK, US and elsewhere. They can bypass the dead ends and go straight for best practice. So, I was able to tell them how CSR in the UK – with its focus on licence to operate and reducing negative impacts – has become sustainability, with a growing focus on opportunity and increasing the benefits to business and society.

Finally, the recession is not nearly as bad in Poland. Their banks were conservative and they didn’t have a housing boom. There is a great deal of uncertainty – especially around how recession in the neighbouring countries will affect them – but also cautious optimism that Poland will not have the worst of it. Which should make it easier for them to accelerate through to sustainability.