A shining example

Sweden tops corporate social responsibility league and is an example to others.

Sweden leads the world in corporate social responsibility (CSR), according to an influential report from the non-profit organisation AccountAbility. Dr Simon Zadek, the organisation's chief executive, explains why others should follow Sweden's lead.

AccountAbility's Responsible Competitiveness Index (RCI) ranks Sweden as the country that is doing most to advance its business competitiveness through responsible business practices, ahead of Denmark, Finland, Iceland and the United Kingdom (for the RCI top 20, see fact box on the right). In other words, Swedes know how to do business while taking climate change, gender, human rights and anticorruption into account.

Sweden leads the world in corporate. In other words, Swedes know how to do business while taking climate change, gender, human rights and anticorruption into account.

Zadek is calling on other nations to follow Sweden's example on CSR. "There needn't be a conflict between compassion and competitiveness, and Sweden is a shining example of this," says Zadek, who is seen as one of the architects of the CSR movement. He says that recent history plays a key role in Swedish companies' approach to responsible business.

"Fifty years of development have delivered a cohesive society where Sweden's business community is embedded in a set of social norms that the country is now exporting when it does business elsewhere. So much of this business responsibility comes from the way Swedish society has evolved since the Second World War."

Equally important, Zadek says, has been the speed at which Swedish businesses react to the calls for CSR that have been growing in strength since the 1970s. He cites furniture retailer Ikea as a prime example. "I think ten or 15 years ago Ikea was as unaware and as unresponsive to labour standards issues in their global supply chains as everybody else. But today Ikea would be considered one of the best players out there in the way it deals with environmental and labour issues."

Zadek says the Ikea example teaches two important lessons. "One is that when new issues emerge, Swedish businesses are often as poorly placed as anyone else. But secondly, once those issues become central to what a business needs to deal with, it seems to me that Swedish businesses move very quickly in addressing them."

Among these are many of Sweden's largest and best-known companies, such as Electrolux, H&M and Husqvarna, which have put considerable efforts in recent years into balancing commerce with conscience in their respective industries. Another proof of the high Swedish standards is to be found in the Dow Jones Sustainability Indexes, which in 2007 included Swedish companies Atlas Copco, Castellum, Electrolux, SKF, TeliaSonera and Volvo.

AccountAbility's report ranks countries according to 21 factors ranging from how many businesses are using environmental management systems, to levels of perceived corruption within the business community, to the vibrancy of civil society.

Zadek admits to having gone through the report's data to try to find an area of CSR where Sweden was performing poorly. "I've been looking for as many weaknesses as possible, but overall Sweden scores extremely well, not just in the aggregate of the 21 data series, but it scores really very high across all 21. In all honesty I couldn't point to one specific area and say this is the dark side of Sweden. It has a surprisingly balanced score."

Zadek claims that the reasons for a nation's success with CSR include not only efforts by its business community but also by its government and society as a whole. "Corporate responsibility is part of a coherent foreign policy strategy, of a trade and investment strategy, as well as of a domestic social cohesion strategy," he says. "I see the Swedish government right now grasping those linkages more than many other governments out there. That is very rare, and exactly what others need to do."

- Courtesy www.sweden.se