One of the reasons for the success of corporate social responsibility (CSR) in Sweden is that big Swedish companies are taking responsibility, because they understand that they have to build trust among stakeholders if they wish to continue doing business in the long run, and they also see CSR as a business opportunity.
What can Singapore companies learn from the businesses in Sweden? The following 4 Swedish companies – Swedbank, ICA, Scania and SEK, provide some lessons on embracing and implementing CSR, including 3 key lessons:
- Understanding that CSR is a journey and not a destination
- CSR must be integrated into the business
- Follow international guidelines on CSR principles and reporting
Swedbank is the leading bank in Sweden, Estonia, Latvia and Lithuania, and offers financial services to individuals, companies and organisations. Swedbank has about 9.8 million retail customers and 631,000 corporate customers, and has about 17,000 employees in the Nordic region.
Mr Staffan Dahlbeck, Head of Corporate Social Responsibility at Swedbank, explains that the bank promotes a sound and sustainable financial situation for the many households and enterprises, and is committed to sustainable development based on the conviction that sustainability makes business sense.
Swedbank has a Sustainability Policy adopted by its Board of Directors and applies to the bank and all subsidiaries and employees, and which guides the bank on its sustainability actions based on the following approach:
- Integrated: Sustainability is integrated in the business
- Values and actions: Ensure that values, vision and principles are consistent throughout the business
- Sphere of influence: Use sphere of influence within the organisation and with customers and suppliers to promote sustainability both locally and globally
- Transparency: Actively seek a dialogue and interaction regarding sustainability performance and obligations
- Guidance: Use scientific findings, agreements and frameworks to guide the way to sustainability
Staffan shares that the bank’s CSR policy follows the principles of the UN Global Compact, and that the bank is ISO 14001 certified. The bank also reports in accordance with the Global Reporting Initiative (GRI) guidelines on a C level.
Swedbank is involved in sustainable banking with its investment fund company having 30 billion euros in socially responsible investments (SRI), which screens companies based on their social, ethical and environmental risks.
The bank also takes measures to reduce the environmental impacts of its operations, such as paper usage, electricity consumption, and travel. Swedbank has set a 2013 target to reduce carbon emissions by 10% from the 2009 level.
Staffan shares that CSR is an evolution process for companies, starting from profit to philanthropy to community affairs (strategic giving) to corporate community investment (strategic partnership) to sustainable business (integration). There are challenges along the process but it is important for companies to develop their business model so that it includes sustainability.
The ICA Group is one of Northern Europe’s leading retail companies, with more than 2,000 stores in 5 countries, and has about 29,000 employees. ICA aims to be the leading retailer focused on food and meals.
Ms Maria Smith, Senior Manager for Environment and Social Responsibility at ICA, shares that the principles of the UN Global Compact forms the basis of the company’s code of conduct that describes its corporate responsibility and guides its policies and operations, which is called “ICA’s Good Business” and means that ICA will:
- be driven by profitability and high ethical standards
- listen to customers and always base decisions on their needs
- nurture diversity and growth among its employees
- maintain an open dialogue internally and with the community
- ensure quality and safe products
- promote a healthy lifestyle
- adopt sound environment practices to promote sustainable development
ICA helps its customers to be green by offering a wide range of eco-labelled, organic and locally produced products in the stores. This includes its own brand – ICA Gott liv for healthy products, ICA I Love Eco for organic products, and ICA Skona for environmental labelled products.
ICA is expanding its range of products with third-party eco labels such as the MSC (Marine Stewardship Council), FSC (Forest Stewardship Council), Fairtrade and EU Organic labels. ICA also charges for plastic bags in its stores to encourage consumers to use less plastic bags.
ICA is also reducing its environmental impacts from its product range, warehouses, stores and offices, transports and business travel. ICA’s energy and material audit for its internal operations illustrates its energy consumption, use of transports, carbon dioxide emissions, and waste generated. ICA looks at sustainable trade and suppliers, and considers how products are produced. In addition, ICA has set a target of reducing greenhouse gas emissions by 30% by 2020 compared to 2006.
Maria shares that ICA is involved in several social campaigns, such as the “We can do more” project to create jobs for people with functional disabilities in ICA stores, and the “Buddy with Your Body – 5 a day” project to encourage children to eat more fruits and vegetables. Another project is “One Tonne Life” to help a family live a climate-smart life for 6 months, and reduce their carbon emissions to 1 tonne per person per year.
Maria shares that ICA’s CSR work is reported in accordance to GRI guidelines on a B+ level. ICA is also using ISO 26000 as an informative library and benchmark. She thinks that integrated reporting is the way to go and ICA is trying to integrate both financial and non-financial statements into an integrated report, although they are not there yet.
Maria advises companies interested on CSR to find a network to learn more and learn from other companies, and to understand that this is about small steps and focusing on what is important. This is a journey and not a destination, and it takes time.
ICA’s work on corporate responsibility will continue forever, and since the issues are often not black and white, it is important to learn from others and share experiences, says Maria. ICA also has the responsibility to encourage consumers to take responsibility. It is also important for the management to be involved, if not, CSR policies will be toothless and only on paper. There is a need to get everybody to feel involved.
Scania is a leading manufacturer of heavy trucks, buses, and industrial and marine engines. Scania operates in about 100 countries, with more than 1,000 sales outlets and about 1,500 service workshops, and has more than 37,500 employees.
Mr Hans-Åke Danielsson, Press Manager, Corporate Relations at Scania, shares that Scania has no CSR policy because CSR is built into the company and this makes business sense. For example, the company reduces costs with environmental improvements, and when the company treats employees well, the employees deliver better. Scania’s core values of customer first, respect for the individual, and quality, forms the basis of its corporate responsibility work.
Scania delivers sustainable transport solutions through Ecolution by Scania – a package of products and services for customers such as optimising vehicles, training and coaching drivers, and maintenance, thus helping customers save fuel, money and the environment. Scania is also producing vehicles that use alternative fuels such as bioethanol, biodiesel and biogas.
Hans-Åke adds that Scania is dedicated to reducing the environmental impacts from its operations, including reducing the consumption of materials and chemicals, reducing emissions and discharges into the natural environment, and avoiding the use of hazardous substances when possible. Scania has also lowered its energy consumption in manufacturing, and over the past decade, has reduced its energy consumption per vehicle produced by 50%. In addition, every Scania production unit, as well as its research and development units and corporate units, are ISO 14001 certified, and the company’s CSR work is reported in accordance to GRI guidelines on a C level.
Hans-Åke shares that Scania’s policy on respect for the individual has resulted in productivity improvement, with more vehicles produced per production employee. The employee healthy attendance has also increased over the years to 96.7% in 2010, which is unique for the manufacturing industry. The key is dedicated employees, who undergo continuous professional development, feel a sense of participation and feel well, thus contributing to higher efficiency and quality.
Mr Anders Tholerud, Director for Safety, Health and Environment at Scania explains that Scania provides employees with free medical and occupational healthcare at the facilities in its head office at Södertälje, which results in employees spending less time on seeking medical help outside, and being able to go back to work faster. This has helped to reduce sick leave by at least 2% to 3%, and every percentage reduction in sick leave results in 75 million SEK saved. Now, employees’ family and relatives can also enjoy the healthcare facilities.
Anders adds that this is not common among Swedish companies, but Scania believes in taking care of its employees to be successful. If an employee is feeling well, the employee will produce at a high quality and deliver better. The employee turnover rate has reduced from 20% to 5% over the past 25 years.
Swedish Export Credit Corporation (SEK)
The Swedish Export Credit Corporation (SEK) is a state-owned company providing financial solutions on a commercial basis for the Swedish export economy since the 1960s.
Mr Johan Henningsson, Head of CSR at SEK, shares that SEK is integrating CSR into all its business units, and have specific people looking at CSR issues, although there is no CSR department. SEK supports and applies the principles in the UN Global Compact, the OECD Guidelines for Multinational Enterprises, and the OECD Recommendation on Common Approaches on Environment and Officially Supported Export Credits.
In addition, SEK adopts the Equator Principles, a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions, when financing projects. Projects undergo screening and classification, and high risk projects with potential social and environmental impacts require an Environmental and Social Impact Assessment (ESIA) report done by an independent consultant.
SEK is also reducing its environmental impacts, which consist mainly of energy consumption at the offices and carbon emissions from business travel. SEK has offset carbon emissions that is not possible to eliminate, by investing in carbon credits from the Clean Development Mechanism (CDM) projects.
Johan adds that SEK is promoting the export of Swedish environmental technology or cleantech, including energy efficiency, renewable energy, recycling and waste-to-energy. SEK works with other government agencies to support Swedish companies in the cleantech sector with financing, venture capital and risk mitigation.
Since 2008, SEK has reported its CSR activities based on the GRI guidelines on a C level. Johan shares that he is thinking of a B level reporting for GRI and also looking at integrated reporting. He adds that integrated reporting is the way to go, but admits that they are not there yet.
Key Lessons on CSR
Singapore companies can learn from the mentioned Swedish companies on embracing and implementing CSR. The first lesson is to understand that CSR is a journey and not a destination. CSR is an evolving and continuing process for a company, and it is important to engage stakeholders regularly and keep a constant lookout for risks, opportunities, and changing local and international regulations along the journey. Companies can also learn from each other and adopt best practices. In Singapore, companies can join the Singapore Compact and learn more about how to embrace and implement CSR.
The second lesson is that CSR must be integrated into the business. The company’s top management must be committed on CSR, and preferably appoint a dedicated team to drive and ensure that CSR is an integral part of its day-to-day operations. The company should consider the environmental and social impacts from the company’s internal operations, products and services, and supply chain, and also improve the well-being of employees and the community. It is also important to understand that CSR is more than charity and philanthropy.
The third lesson is for companies to follow international guidelines on CSR principles and reporting. There are existing recognised guidelines that a company can adopt and follow, which adds credibility to the company’s CSR efforts and allows for some form of comparison between companies following the same guidelines. For Singapore companies, they can adopt the principles in the UN Global Compact and the new ISO 26000, and follow the GRI reporting guidelines.
If your company is not currently embracing and integrating CSR in your business, it is never too late. Start now and take small steps, it will be a long journey but the rewards for society and the environment will be great.