The recent formal recognition by the European Commission of the important role corporate social responsibility plays in both economic competitiveness and sustainable development is a “sign of the times,” says Dr. Simon Zadek, chief executive of AccountAbility, a UK-based international institute which develops tools and standards around stakeholder engagement and corporate social responsibility.

“This was a welcome communiqué,” says Zadek. “The heart of responsible competitiveness is to integrate values into capitalism.”

AccountAbility (see also: Organizational values invigorated by strategic stakeholder engagement), along with two of Europe’s business schools and the European Policy Centre, has launched an initiative aimed at exploring ways to strengthen the link between value-driven, socially responsible business practices and European competitiveness.

The initiative – which will focus on the three leading sectors of finance, information/communication technologies, and pharmaceuticals – will identify the potential of corporate social responsibility as a business driver in Europe.

“In Europe you are not going to succeed [using methods like] lowering labour costs,” says Zadek. “We want to look at identifying agile, flexible and coherent business practices. When business is done with respect to human rights and is socially responsible there is a certain dynamism there.

“Corporate social responsibility practices can
play a key role in contributing to sustainable
development, while enhancing Europe’s innovation potential and competitiveness”

– European Commission President Jose Manuel Barroso

The partners entering this consortium with AccountAbility, adds Zadek, show a “maturing of the area” of corporate social responsibility, and coupled with recent European Commission acknowledgements of the importance of socially responsible business practices, show a “shift in orientation and perspective” regarding CSR.

“CSR used to be seen far more from a compliance approach, but should we introduce regulation to ensure it? How does this contribute to the region’s productivity?”

AccountAbility examined the CSR-competitiveness link in their December 2005 report ‘Responsible Competitiveness,’ which included an index measuring this relationship in 80 countries worldwide.

The index, examining criteria including corruption, civic freedom, environmental management and corporate governance sought first to determine the level of corporate responsibility in each nation. It was then combined with the World Economic Forum’s Global Competitiveness Index, producing the Responsible Competitiveness Index.

According to a recent AccountAbility press release, “the results suggest that corporate responsibility may indeed be a driver of a country’s – or a region’s – competitiveness.”

Those dominating the top five were all Nordic countries, with Finland in first place. Canada placed thirteenth.