03 November 2004

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Responsible entrepreneurship and Corporate Social Responsibility

Malta Chamber of Commerce and Enterprise President Louis Apap Bologna speaks at last week’s conference on the topical subject of ‘Responsible Entrepreneurship’ organised by the Chamber and Eurochambres under the auspices of the European Commission’s DG Enterprise. Following are extracts from his address

It is my great pleasure to welcome you to this conference entitled “Responsible Entrepreneurship”. In holding today’s event, the Malta Chamber of Commerce and Enterprise is participating in an important pan-European campaign aimed at raising awareness about corporate social responsibility (CSR). In fact, today’s event is one of the first out of 65 that will be held in cities across the 25 EU member states, candidate countries and Norway. The initiative is financed by the European Commission’s DG Enterprise to whom we are indebted.
At the outset, in fact, please allow me to thank Eurochambres who invited us to participate in this campaign and assisted us all through the way.
Corporate Social Responsibility is a complex-sounding word that translates itself into a straight-forward idea. The European Commission’s definition of CSR is: “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis.”
To borrow Erkki Liikanen’s words (the outgoing Commissioner for Enterprise and the Information Society) responsible entrepreneurship equates to running a business in such a way that enhances its positive contribution to society whilst minimising negative impacts on people and the environment. It means the way in which entrepreneurs interact with their stakeholders on a daily basis: customers and business partners in the marketplace, employees at the workplace, the local community and the environment. Responsible entrepreneurs:
• Treat customers, business partners and competitors with fairness and honesty;
• Care about the health, safety and general well-being of employees and consumers;
• Motivate their workforce by offering training and development opportunities;
• Act as “good citizens” in the local community;
• Are respectful of natural resources and the environment.
There is a fervent debate within the EU in favour of more companies embracing good CSR practice. There are ample discussions about the opportunities which CSR brings to businesses and SMEs as well as the resulting benefits to the social environment. At the EU level, CSR is also being linked to the Lisbon Strategy and the broader EU-policy objective of promoting economic competitiveness whilst protecting and improving our quality of work and living standards.
At this stage it would be pertinent to report the Eurochambres stance on CSR – a position to which our Chamber closely adheres.
• Corporate Social Responsibility must remain voluntary and business-driven
• Reporting should be done on an individual basis and must remain a voluntary initiative without constraining companies to comply with specific reporting rules
• SMEs can learn from bigger companies but SMEs should find their own way to do CSR
• Exchange of experience on CSR should continue
• The right balance between sustainable development initiatives and the over-reaching objectives of the competitiveness agenda must be ensured.
The relevance of this conference to the local business environment is clear. Our commercial community is and has always been renowned for conducting business with a conscience and with utmost responsibility for society in which they operate. The speakers who shall later present their case studies shall provide living proof of this.
CSR is nothing new to our country therefore. Local businesses have applied socially responsible practices long before CSR became a fashionable term. CSR has been around for years although we may have never thought about it terms of the specific definitions and the categories in which every practice is subdivided in the EU manual. A similar situation exists in the rest of Europe where many companies both large and small apply progressive social and environmental policies but without referring to CSR and without communicating what they do.
Ladies and Gentlemen, we now form an integral part of the European Union. Therefore, we are entitled to participate in the debate shaping the evolution of CSR and the benefits accruing to those businesses and SMEs that embrace the concept with “good practice”.
By holding this conference, our Chamber has taken a pro-active role - together with the European Commission - to create the necessary awareness of the costs and benefits of Corporate Social Responsibility. Our speakers will – over the course of proceedings – highlight some of the best and most up-to-date CSR policies and practices. In the process, they would also be demonstrating whether CSR is merely an added burden to their business or whether it translates into tangible and intangible business advantages. We will also get an insight of the impact of CSR practice on the productivity and profitability of business operating within the local context.
Indeed, responsible companies incur costs to exceed their legal obligations in terms of environmental, consumer affairs and industrial relations considerations besides charities, donations and sponsorships. Beyond the obvious costs, we are keen to find out what concrete benefits result in terms of savings on resources as may occur in the case of packaging materials, water and electricity. We are interested to discover the impact on employee motivation - hence company productivity - customer perception, relations with government and society and other advantages that may ensue. Most importantly, we are eager to learn how to utilise the CSR concept as an effective management tool to the benefit of long-term sustainability of our SMEs.
We as a Chamber are convinced that CSR is a win-win situation for the business environment, society and most of all for the SMEs that practice it. A little common sense leads us to the conclusion that environmental friendliness reduces costs. Numerous studies leave no doubt as to the positive impact of CSR measures on consumer perceptions. Suffice to mention that a study conducted in Europe revealed that 70 per cent of sampled consumers declared that they would be prepared to pay a little extra premium if they knew that the company they are buying from is socially responsible.
Besides our positive stance on CSR, I am still duty bound to sound a little warning signal. Whilst stating that business can help in enhancing living standards in our society, we must not fall in the trap and think that business can solve all issues in society. In line with the stand taken by Eurochambres, I stress that CSR must remain voluntary in nature. It is the same voluntary nature that makes CSR successful. We must bear in mind that businesses – like the people who run them - come in all shapes and sizes and CSR practices must reflect this reality. Compulsory, or one-size-fits-all measures are harmful to business and SMEs and therefore do not make sense.
We as a Chamber go through great lengths to emphasise that “profit” is not a dirty word. It is profits that drive SMEs and the entire private sector to provide jobs in the community and pay salaries that contribute to a multiplier effect in the economy. It is profits that encourage businesses to undertake research and implement innovation and to invest in the development of human capital through training. It is the bottom-line that convinces SMEs to seek efficient ways and means to minimise waste. Besides, businesses – particularly SMEs - maintain close relations with society and take special interest in the welfare of their employees – again because it pays them. Therefore, if we believe that this is a win-win situation, we must find the right formula to foster and support this practice and not distort the process.
Throughout this conference, we shall discuss the sustainable economic success of local enterprise through the voluntary integration of social environmental considerations into business operations. Responsible enterprises aim to satisfy customers’ demands whilst also managing the expectations of other people, such as employees, suppliers and neighbours. This Conference is about assessing the benefits of positive contributions to society and managing the environmental impact of any enterprise. Put differently, we will be replying to the direct question of whether CSR helps in bringing direct benefits to businesses and securing its long-term competitiveness.
The conference will provide an opportunity for us people in business to learn from each other and from the experiences of our colleagues. After all, we business people tend to learn more from the “real world” than we do by receiving information from the outside sources.
The case studies have been purposely chosen to cover the four main pillars of the Maltese economy namely; the manufacturing industry, financial services, information and communication technology and tourism. For this purpose we are delighted to welcome four business leaders in their respective fields who shall enlighten us with their invaluable experiences on behalf of their respective companies. I am referring to Louis A. Farrugia, Albert P. Mamo , Ing. Sandro Pisani and Winston J. Zahra.
Prior to the case studies, Thomas Dodd from DG Enterprise will present a background of the European debate on CSR and Ms. Marlene Mizzi will present a keynote speech to explain in detail the theoretical aspects behind Corporate Social Responsibility. Today’s proceeding shall be brought to a close by the Hon. Mr. Censu Galea, Minister for Competitiveness and Communications, who will present the Government’s perspective.
Before closing, please allow me to show my appreciation to this distinguished line-up of speakers who kindly accepted our invitation to share their knowledge and experience with us all and in particular Mr. Tom Dodd who travelled especially from Brussels to address this event. I shall introduce all speakers to you one by one as they take the stand to deliver their address.
Finally, I would like to thank you all for your kind participation. I look forward to a healthy discussion during today’s proceedings and to discover more about profitability with responsibility!

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Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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