VIEWS: Comparing CSR actions in the US and Europe

Thanks to our fall intern Heather Shand for the following comparison of corporate social responsibility in the US and Europe:

A recent study done by Germanwatch, an independent environmental group, has found that out of the 56 nations doing the most polluting, the United States ranks at the bottom of the list in its actions to protect the climate (just one country above Saudi Arabia).

In contrast, the top 10 nations who are doing the most to counter climate change are mostly European nations. Although the Germanwatch study was focused on countries as a whole and the impact they are having on the environment, the same trend follows with regard to CSR actions in Europe and the United States. Why is this?

Of course, not all European companies are picture perfect with their triple bottom lines, but in general the Europeans are significantly ahead in the race. Regulations are one reason for this. The European Union and its individual nations create and follow more stringent regulations than the United States. For instance, products such as toys, electronics and cosmetics that contain specific plastics, toxins or chemicals are not allowed into the EU. The European Union has found that these toxins or chemicals are either already harmful to people and the environment or MAY be harmful. This is a prime example of the EU taking a more pro-active approach through regulatory actions. They react to potential hazards and long term affects, whereas the U.S. government waits for absolute scientific proof before banning anything dangerous.

This type of forward thinking can be paralleled here in the States as recently proven by the state of California. Beginning in 2009, any product containing phthalates cannot be distributed, sold or manufactured in California. This will force companies to change their sourcing to become more environmentally friendly, resulting in fewer harmful chemicals ending up in both people and landfills.

Moral attitudes may be another driver of action versus inaction. US companies still need a financial incentive for becoming more sustainable, while European companies are more likely to make their financial, social and environmental commitments equal to one another. Even with the stricter regulations CSR reporting is still voluntary in the European Union, but individual countries and companies still show strength in their own progressive actions. France, for example was the first country in the world requiring public companies to produce CSR reports.

However, these attitudes are beginning to change in companies throughout the United States. Obviously the media has started making climate change a priority in their reports, which has helped the public learn that our personal actions and choices affect people and the environment around the world. The growing belief that producing goods and services with fewer negative social and environmental impacts can actually create a positive financial outcome is finally changing the attitude of larger U.S. corporations.

With regard to wide-spreading and possibly powerful regulations, we as citizens tend to have more influence on the state level as shown with California and its restriction on phthalates. Rather than waiting on the federal government to take steps, state level governments can begin their own campaigns to protect the environment and people. Consumer choice can force the hand of companies reluctant to jump on the green bandwagon. With consumers becoming more and more aware of where and how a product is made, many are beginning to make sustainable purchases and investments a priority.

So, while Europe has had much success due to regulations and being pro-active, it appears that one of OUR biggest assets in the United States for strengthening CSR is the individual. Many of us feel the importance of CSR and we have the opportunity to do as much as possible to incorporate it into the companies where we work. Many owners and employers are too busy to think about their eco-footprint, often allowing employees to take the initiative. Many times this begins with small steps, but an employee’s actions can gain rapid momentum resulting in a strong impact on co-worker and stakeholder actions. It is this chain of events currently being set in motion by individuals that will have a powerful influence on reducing our overall corporate environmental impact.


The State Of Responsible Business; EIRIS;

The Communication of Corporate Social Responsibility: United States and European Union Multinational Corporations; Department of Management at DePaul University study published summer 2007;