ADERGRÜN at the European Parliament in Brussels
ADERGRÜN was invited to a conference at the European Parliament to take part in a debate on the Economy of the Common Good. On 19 February 2015, the European Economic and Social Committee decided to draw up an own-initiative opinion on the Economy for the Common Good (ECG), which was adopted on September 17th by 144 votes to 13 with 11 abstentions.
Corporate Social Responsibility (CSR) began to address the issues of the economic and social impact of businesses over a decade ago, but is often criticised of not achieving real change but remaining on the surface. Unlike CSR the new concept of the ECG goes further. The ECG model is placing high demands on companies to act as social and environmental agents. Christian Felber’s ECG Matrix and Point System offers a framework to rebalance the economy by rewarding ethical actions of companies and giving them incentives to act for the benefit of all. In Felber’s opinion the “ethical balance sheet of a company should be as effective as the financial balance sheet” and businesses should be held accountable by proving, in how far they contribute to the goals of the constitution and the common good as well as the Gross Domestic Product (GDP).
As people demand more transparency in the digital age, companies have to be honest or they run the risk of being punished by consumers and investors. However the question arises, if relying on responsible consumer purchasing decisions and on society as agents of change is enough or if we need binding legislation to regulate the social impact of companies?
One of the main points made at the conference was that there is no direct equation for CSR, no punishments for bad behaviour, no incentives or rewards for good behaviour. CSR remains voluntary and there is no general standard to compare results. Despite increasing CSR marketing budgets and efforts by many companies to research the social and environmental impact they have on the environment, CSR still seems to fall short. Carlos Trias (Member of the European economic and social committee) said “ the information provided by companies is often incomplete or irrelevant… there are no proper standards of reporting techniques or real understanding of the overall impact of the business.”
The economy of the common good offers a holistic approach to end the separation between economics and society. It also aims to provide a unified framework of measurement, which is relatively easy to understand for the consumer. This unified approach would allow the consumer to choose objectively between companies.
What does this mean for the future of ethical marketing and CSR communications?
What became clear in the conference is, that there is a demand for unified standards and comparable information that is currently not met. We need a more scientific approach to measure the social and environmental impact of business. Consumers want to have a better overview of companies’ social and environmental activities and they want to be able to compare the results between companies. Values have to be instilled deep within companies, employee engagement and internal communications are as important as external marketing and communication. We are interested to see now, how far Europe will achieve to agree on a binding legislation and universal tax reliefs. First steps seem to have been made. In the long-term there will be a move from voluntary to mandatory, this is due to the fact that more and more companies will need to provide information on their social and environmental impact as there is increasing pressure by society for real-time change.
