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Corporate Social Responsibility in a governmental perspective

An analysis of public policies for CSR in Finland
Heidi Finskas

Master Thesis

Institute for Political Science, University of Oslo October 2007

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ACKNOWLEDGEMENTS

As always, I tried to do it all alone, but this thesis had never been accomplished without support from Bent Sofus Tranøy, my supervisor and Associate Professor at the Institute for Political Science. Choosing a topic and a research question for the thesis was quite a confusing process and I had my doubts. Therefore, it was a great relief when I realized that there actually are researchers out there with precisely the same research interest: thanks to Maria Gjølberg, Research Fellow at SUM, the Centre for Development and the Environment at the University of Oslo, for valuable comments and for introducing me to the research network Nordic Centre for Corporate Responsibility. Thanks also to Arno Kourula, Research Assistant and Minna Halme, Associate Professor, both at the Helsinki School of Economics, as well as to the others in the research network Nordic Centre for Corporate Responsibility for showing interest in my thesis. I am grateful to all persons I have interviewed for sharing their time and thoughts with me, as well as to SUM for providing me with a working spot and nice colleagues during these months.

Oslo, in October 2007 Heidi Finskas

Number of words: 32 422

ii ACRONYMS BITC CME CR CSR DFID DTI EC EITI EK EMAS ETI EU FCO FDI FiBS FNCSD ILO ISO GDP GRI LME ME MF MFA MOL Business in the Community Coordinated market economy Corporate responsibility Corporate social responsibility Department for International Development Department for Trade and Industry European Commission Extractive Industries Transparency Initiative The Confederation of Finnish Industries Eco-management and Audit Scheme Ethical Trading Initiative European Union Foreign and Commonwealth Office Foreign direct investment Finnish Business & Society Finnish National Commission for Sustainable Development International Labour Organisation International Standardisation Organisation Gross domestic product Global Reporting Initiative Liberal market economy Ministry of the Environment Ministry of Finance Ministry for Foreign Affairs Ministry of Labour .

iii MONIKA MSAH MTI NCP NGO OECD SD SME TNC UK UN UNCTC VoC WBCSD WSSD Committee on International Investment and Multinational Enterprises of Finland Ministry of Social Affairs and Health Ministry of Trade and Industry National Contact Point for the OECD Guidelines for Multinational Enterprises Non-governmental organisation Organisation for Economic Co-operation and Development Sustainable development Small or medium-sized company Transnational company United Kingdom United Nations UN Centre for Transnational Companies Varieties of Capitalism World Business Council for Sustainable Development World Summit on Sustainable Development .

....................................................1 4............ 2 International influence or path dependency ― two contrasting views on policy outcome ......... 3 The public policy case for CSR................3......................................................2 Demonstrating....2 4.............................................................................................14 Institutions explaining policy outcome ..............................3............18 2.................................................................1 Resource allocation ........2....................................................4 Partnering................................5 Endorsing ............40 CSR as a way of re-embedding social concerns ........................................................33 CSR initiatives and policy style .......................3..3 2..........................................2......................5 Endorsing .........2 The importance of national institutions .............................................20 2........................................................................................................................ framing and style ..........2 Framing...................................................................................3 A synthesis for tackling the theoretical challenge .......................1 The internationalisation hypothesis .....36 3..............................................iv CONTENTS ACKNOWLEDGEMENTS.48 CSR initiatives and policy style .................................................................................... ii CONTENTS ...................59 2.............3 ......1 Mandating................52 4...........18 2................................................ 6 Preconditions and delimitations .....11 Measuring CSR policy.......2...3.............................................33 Resource allocation...........3....................45 A new policy area for the government ............................1 Interviews and documents as the empirical basis ..............................................................................58 4...............................................3.....2........ iv LIST OF FIGURES.....................4 Partnering...................... 9 Outline ..................................2...................... vi 1 1.............................4 4 4..............................................................................................................35 3......................14 2...10 THEORETICAL FRAMEWORK AND RESEARCH DESIGN................2 Demonstrating..............................................................................................2......................................45 Resource allocation.........54 4..............................1 Resources.........35 3...................................................1 1..........................................................................4 1...............................................2 3...4.......2...........................................................................................................................................41 THE FINNISH GOVERNMENT AND CSR.........................................................52 4.......................29 THE UK GOVERNMENT―A CSR ADVOCATE .......3 3.......................................................................2....3.....................................39 Framing ..................................1 2.......11 An expanded regulatory toolbox ..............35 3.......................13 2.......................................................3 Policy style...4 3 3.... vi LIST OF TABLES....................................................28 2.............................38 3............25 Methodological reflections........1 3....................5 2 2.............................3 1..................................................................3 Facilitating ........................................i ACRONYMS .........................................................................56 4...3 Facilitating .......................2 INTRODUCTION ......................13 2........2 1................3..1 Mandating........................................................................

3 6.............71 5............4 4....................................................................90 CONCLUSION ....6 Further comments on policy style: CSR seen as a complement to traditional regulation.......3 6 6.............................................................66 EXPLAINING THE FINNISH CSR APPROACH .................................2..............2 4.2.1 6.......................................................................................................76 5...95 International influences............95 From a slow start to status quo ..........................................4 REFERENCES....................................1..................................................4......71 5....v 4..............................................................2 Domestic versus international .........................................................2 The EU and the OECD ..................79 5.........................................................................................................................................71 Triggered by international influences.....................60 Framing: a competitive Finland . 103 5..62 4....................... national constraints..................121 .....74 Combining CSR with features of a coordinated market economy.........1.....................................................64 Summary.......................105 APPENDIX 1 APPENDIX 2 Informants ........................................ informal rules and history ................3............................................86 Prospects: The government’s interest in CSR is increasing.....2.....98 The way ahead .......................1 5...........................62 4......2 6.............4...................5 5 5.................................................119 Interview topics .....76 5.3 The role of culture....................................1 Regulatory traditions ................................................1 Normative versus instrumental .................1 Internationalisation of the economy ...................................2 The role of institutions and organisations.............. 101 Further research ...........................

........... 19 The Responsible Business Finland programme .................................... ........................... 2............. 80 LIST OF TABLES Table Table Table Table 1.................................. ............. ............. 66 ................................................................ 2..................... 72 Organisations in the CSR field in Finland............................................................. 4. Three aspects of public policy for CSR...... Three regulation mechanisms .... .......................... 14 CSR in the Ministry of Trade and Industry........... 12 Two dimensions for framing CSR policies... 46 Summary of the CSR policies in Finland and the UK.........vi LIST OF FIGURES Figure Figure Figure Figure Figure 1....... 17 The life cycle of norms ...................... 5............................................ 49 The outward FDI stock in Finland and the UK........................................... 3................................................. 3.. 4..............

This thesis is an analysis of the Finnish government’s policy for CSR. whereas the UK government was one of the very first governments to promote CSR and did so already in the 1990s. in this case―to absorb exogenous influences and gradually adopt them as their own. CSR has been all the rage for some years now. The focus here. the policy style employed and how the CSR policy is framed. Moreover. The explanation of the phenomenons is mechanisms of socialisation that make actors―governments. But the question is to what degree is this perspective sufficient for explaining policy outcome? When CSR policies are studied empirically.Chapter 1 1 1 INTRODUCTION Most research projects concerning Corporate Social Responsibility (CSR) address company policies. The varience in policy is here described along three aspects: the resources allocated to CSR. however. The question is what role governments try to play in the development of CSR. In terms of formal acknowledgement and adoption. CSR has gained ground in the Finnish government only during the very last few years. This leads up to another question: can then differences in CSR policies be derived from differences in national institutional frameworks? . but governments. motivations and strategies. the Finnish and the UK policies contrast on all three aspects of policy that are analyzed. contrasted to the British. is not business. substantial differences are found. across organisations and across states. Sociological institutionalism is an analytical approach that addresses fashions that emerge and take root in different contexts. It is a trend that has spread across companies.

http://www. the government is merely seen as a part of a bigger picture (e. 1 See the Finnish CSR research network for examples. but also compared to other Nordic countries (Munkelien et al. framing and style Public policy is a multidimensional variable to operationalise and measure.g. Panapanaan 2006. which it is not only compared to the UK. which is also the case in Finland. . While Finland has not been the object of a similar study before. the UK has―as a pioneer in the field―attracted a lot more research attention. is that they all reflect the government’s commitment to CSR. the organizational structure put in place for CSR and the personnel working with CSR. I believe that a study focusing on the governmental perspective. and the reason for studying Finland. Therefore. 2005). Resource allocation is defined as CSR instruments that the government has undertaken. is worthwhile. i.tukkk. Munkelien et al.1 In a few previous studies that do address government. The interesting aspect.fi/~pnurmi/. 1. This gives me the chance to conduct a more in-depth study of Finland and use the UK as a contrast instead of an object of study in itself.2 Introduction Most literature on CSR addresses the business case for CSR. 2005). The common demoninator and the reason for focusing on these. Korhonen & Seppälä 2005. What I will focus on is three aspects of it: resources.e.1 Resources. framing and policy style. seeing CSR from a political perspective. is to find out why the Finnish government is a late comer in CSR.

facilitating business involvement in CSR. Finnemore & Sikkink 1998). The rationale is that normative structures in the international community lead to the symbolic diffusion of CSR nationally. I will look at the creation of a national CSR policy in the light of these two perspectives and see to what degree they can explain the outcomes. I see framing along to axes: a normative-instrumental. demonstrating in terms of leading by the example in its own operations. the policy style. 1. This view emphasises policy mimicing and expects a considerable similarity between policies.2 International influence or path dependency ― two contrasting views on policy outcome Regarding the international trend towards CSR at present. These norms are assumed to overrule the differences between norm receivers.Chapter 1 3 Framing is the government’s vision and objective with its CSR policy. the new institutionalism school offers two contrasting expectations as to how it will be received in different national contexts: sociological institutionalism and historical institutionalism. . partnering is about promoting stakeholder dialogue. and endorsing is providing political support for CSR initiatives. Finally. The starting point for the sociological view is thus ideas and norms that are being transferred to national contexts (e. is five different roles that a government can play in CSR: mandating which is the state with its traditional mandatory means. thus constituting the arguments and justification for promoting CSR. What is highlighted here is a theoretical framework rather than single theories. which is helpful in terms of tracing and systematising explanatory factors emerging in the empirical data.g. and a international-national.

Hamish et al. the state is the key object here. Although sociological institutionalism might explain similarities between the two countries. This is an approach that addresses the interactions and mutual expectations between societal actors. the next task is to identify relevant institutions. Matten & Moon 2004) and this comparison confirms that assumption. 2006a. Thus. Peters 2005). which also calls for a theory addressing the varying role of the state. National legacies. all constrained by the framework that the state provides in terms of its . what is needed is a theory identifying institutions mediating and influencing these interactions. such as government. However. And by choosing countries with different political-economic characters. in terms of political and economic institutions. A scholarly tradition within the historical institutionalism school that matches these needs is the varieties of capitalism (Hall & Soskice 2001). will influence how the message is translated and paid forward in the particular national context. This fact gives reasons to believe that sociological institutionalism cannot alone explain the policies. Having said this. Further.4 Introduction The empirical implications of this is that the international community and the international organisations that Finland and the UK are members of are expected to shape both countries’ CSR policies. historical institutionalism perhaps is better suited for explaining differences. the attitude towards CSR is affected by path dependency. I believe I will increase the opportunities to say something about the variables that have actually affected the policy. 2005. Demirag 2005. The historical institutionalism approach argues that there always will be differences in policy choice (Thelen & Steinmo 1992. labour and civil society in general. it is the state’s actions or inactions that are being investigated. earlier studies indicate a diversity of CSR practices among countries (Albareda et al. Because CSR is about business’ interactions with societal actors. and that they both will respond in a similar way to these influences.

As I will further elaborate in Chapter 2. An LME government on the other hand. due to corporatist feature.). informal rules and history) (Hall & Soskice 2001). With this follows also more reliance on coordination through binding rules in CMEs. the government can use another tool for governance instead of little popular binding regulations. a CME government is likely to appraise that it has no need for CSR. while LMEs are more prone to deregulation. because the added value provided by CSR is already safeguarded in the existing system. but still not an as a tight coordination as in CMEs. Thus. CSR can be used as an arena for a wider societal dialogue than is otherwise present in the system. Voluntary approaches suit a system that is mainly coordinated by market mechanisms well. because with a strong legislative tradition it prefers this means of governing instead of voluntary approaches. the UK and Finland represent two ways of organising the relationship between the state and business: a liberal market economy (LME) and a coordinated market economy (CME). . According to the varieties of capitalism school (VoC). Furthermore. is likely to put more emphasis on CSR. In simple terms. the influence of organisations as well as informal institutions (culture. while companies in CMEs depend more on non-market and collaborative relationships (ibid. The differences between these institutional frameworks result in a range of different features that might be of relevance for CSR. A few propositions can be derived from the different regulatory traditions. varieties of capitalism call our attention to three institutions: regulatory traditions. A CME government is likely to deem CSR unnecessary. companies co-ordinate their activities mainly via hierarchies and competitive market arrangements in LMEs.Chapter 1 5 political-economic system. actors in CMEs are used to co-ordinating policies and balancing their interest. Furthermore.

as the case is with the UK. which is for instance seen in Finlands development aid policy (Selbervik & Nygaard 2006:1. Hence. From the 1970s onwards. under no circumstances do they want more guidelines from the government and other societal actors than they already have through the coordinated system. the more instrumental will the framing be. the greater the pressure from NGOs and trade unions. The main expectation here is that Finland will have a pragmatic approach. culture. 2005). The hypothesis is that the more active business is in defining the agenda. has been challenged. Koponen 2005). Sweden and Norway (DFID 2003. The state-centric. In CMEs.3 The public policy case for CSR Today. Munkelien et al. informal rules and history are pointed out.6 Introduction Institutions and organisations are expected to have an influence on framing. it is widely acknowledged that private actors play an important role―not only in the economy but also in politics. I expect the framing to be instrumental and not normative. The pressure from civil society is likely to be more distinguished in LMEs. with an instrumental framing. the more normative a framing. and on the contrary. Lastly. The reason is a self-perception as being very pragmatic and a political culture which is less idealistic than others. which was the predominant perspective in international political economy for a long time. also due to the political-economic system: business is more steered by market conditions than long-term societal concerns and CSR is their chance to influence and make demands on business. realist perspective. 1. as CSR policies in countries with a strong international commitment and strong traditions of development aid. companies―as well as other non-state actors―have increasingly been included as significant political . my expectation is that it is business that is awake.

” 3 CSR is an umbrella concept for three pillars―the social. not only as one norm. Nonetheless. because it neglects the environment. the local community and society at large to improve their quality of life. labour rights. corruption. CSR is often called the business contribution to sustainable development (EC 2002. 2 Of course. human rights. small and medium-sized companies do not identify with the word corporate. WBCSD 2006). which in the 1990s resulted in the idea and concept of CSR. The number of CSR instruments has increased tremendously during the last decade (Tully 2006). diversity. It is defined with the premise that it is something business does voluntarily. 3 Another oft-quoted definition. Yet. Today the actors make up a significant epistemic community 2 CSR. The European Commission (2006. in which the voluntariness is implicit. 2002). that CSR entails activities beyond laws. In sum. Corporate Responsibility (CR). Stopford & Strange 1991). CSR is not a completely new phenomenon. corporate citizenship and sustainable business are terms used interchangeably. CSR is the most widespread and therefore used here. but a part of an ongoing discussion about business’ interaction with other parts of society. health care. their families. Sally 1995. it makes sense to talk about CSR as a cluster of norms. defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. as we know it today. pollution. while others object to the social part. it was in the late 1990s that the CSR debate.Chapter 1 7 actors in the theoretical framework (Keohane & Nye 1972. The increased role for private actors was followed by a debate about their power and responsibility. the term is easy to criticize. is WBCSD’s (2000:10): “the commitment of business to contribute to sustainable economic development. (EC 2003:9). environmental and the economic―which all hold a wide range of issues: resource use. for instance. supply chain management etc. For instance.” . working with employees. flared up on the agenda and it is this context I am concentrating on in this study.

Furthermore. With . 2002). just to mention a few. In effect. a PR ploy and a way for companies to ease their conscience. UN Global Compact. as well as the fact that several governments have actually incorporated CSR into their policies. CSR has been accused of being a craze. CSR is a policy field testing out new forms for governance and it is at the heart of the debate about the role of business in society. governments committed to “actively promote corporate responsibility and accountability” (UN 2005:31). Voluntariness and CSR could thus be one mode of governance―or as Lerberg Jørgensen (2006) puts it: “CSR should be viewed as a means for public policy rather than a replacement for it. programmes. Gunningham & Grabosky 1998.8 Introduction on CSR. e. Jordan et al. Fox et al. it is difficult to dispute that CSR today is a public policy case. OECD. a great number of think-tanks and NGOs can be added. it was for long argued that CSR a priori is a business case and a no-go area for governments. Nevertheless. Together have actors like these contributed to the creation of a wide range of instruments. It is often stressed that it is far from clear where CSR is heading (Sahlin-Andersson 2006. It is in relation to this debate that I will frame my research questions. the dichotomy of voluntarism and regulation has loosened up and the traditional command and control-regulation is today accompanied by new kinds of governance instruments (Ayres & Braithwaite 1992. governments’ attitudes and policies are essential parts of the further development of CSR. Global Reporting Initiative (GRI) and OECD guidelines for multinational enterprises. Examples are CSR Europe. the Dow Jones Sustainability Index. Yet. To this.g. With reference to definitions about voluntariness. UN and World Business Council for Sustainable Development (WBCSD). the development of CSR is a most relevant element of the broader regulation debate. FTSE 4 Good. schemes. indexes and guidelines. 2003).” Given this. too. at the World Summit on Sustainable Development (WSSD) in 2002.

4 Preconditions and delimitations Comparative public policy analysis is “the study of how. i.e. /…/we should concentrate on the generic tools of government action/…/. however. not public policy for CSR related issues. I would like to clarify that the CSR policies I am talking about are policies in relation to which CSR is mentioned explicitly. the general approach to CSR as a phenomenon in itself. shed light on the status of a trend that is well into its second decade. as is now done. Here. I hope to contribute with some insight on governmental approaches to CSR and with that. There are many issues related to CSR on the broad political agenda that one could look closer into. or even collections of programs grouped according to major “purpose”. This choice also finds support in Salamon (1981. 1. One could also for instance look more closely at CSR in a specific sector. Although a narrower analysis would perhaps make more sense in an analysis of the UK where the explicit CSR policies are more numerous. why and to what effect different governments pursue particular courses of action or inaction” (Heidenheimer et al. I limit myself to “how” and “why” and will not evaluate the policy. . [A] systematic body of knowledge about the alternative tools of public action is the real “missing link” in the theory and practice of public management. Both approaches would probably have deepened the analysis. and misses some of the CSR characteristics: the complexity and the combination of several dimensions. quoted in Vedung 1998:21). the Finnish initiatives and policies are too few to provide enough data for such a study. who argued that a major shortcoming in policy studies is the wrong unit of analysis: Rather than focusing on individual programs. 1990:3). However. a narrower focus does not capture the focus of this study.Chapter 1 9 this. such as sustainable development in general.

I will also comment on the use of the theoretical perspectives. I conclude the chapter with some comments on prospects for CSR in the Finnish government. have been crucial in its development are sketched out in Chapter 5. the chapter discusses the research design and methodology. .5 Outline First out after this introduction is an elaboration of the theoretical framework in Chapter 2. Chapter 6 provides a summary of the empirical findings. I will discuss how I define public policy for CSR as the dependent variable and how it is measured. as well as make suggestions for further research. The Finnish government’s public policy for CSR is described in Chapter 4. The story behind the Finnish public policy on CSR and the factors that. I will continue by providing an account of the two institutionalism varieties and which institutions that according to these analytical models might have an impact on the national CSR policies.10 Introduction 1. Additionally. In this chapter. according to the empirical data. policy style and framing. Chapter 3 presents the British government’s CSR policy as well as the explanatory factors that are suggested. focusing on the three aspects that were outlined in the introduction: resource allocation.

The second part is about the operationalization of CSR policy and about measuring public policy. I would like to place this whole discussion in a broader context: the context of the governance debate and the role of government in society. including non-state processes and whoever is exercising them (see figure below). . according to Baldwin et al. When the government earlier was associated with regulation. which is “measures taken by governmental units to influence people by means of formulated rules and directives which mandate receivers to act in accordance with what is ordered” (Vedung 1998:31). (in Jordana & Levi-Faur 2004:3–4). 2. The third part is a further elaboration of the sociological and historical institutionalisms and a closer look upon which institutions they direct our attention to and what impact they are likely to have on the public policies for CSR. but even wider to all mechanisms of social control. not only all modes of state intervention. the notion of regulation has widened considerable in other definitions.Chapter 2 11 2 THEORETICAL FRAMEWORK AND RESEARCH DESIGN This chapter begins with a brief discussion about regulation and the governmental role in society. For instance.1 An expanded regulatory toolbox Before throwing ourselves into operationalizing and measuring public policy. regulation ranges from targeted rules to. The fourth part contains some comments on the research design and methodological choices.

standards and guidelines. Three regulation mechanisms (Baldwin et al. Governance instruments are today often developed in co-operation with industry representatives. is today more mixed. Regulatory instruments today range from traditional command and controlregulation to self-regulation initiatives of branch organisations to educational and informational strategies (Gunningham & Grabosky 1998). there are more instruments available for intervening. 1998. the state is no longer the only regulating actor. What is clear is that states do exercise new . The categorisation illustrates how the spectre of governance for the government has broadened. Djelic & SahlinAndersson (2006)? What is clear is that the discussion that has long revolved around the dichotomies of voluntarism and binding regulations. is it de-regulation? Or is the state widening its governing repertoire or even a transformation of regulatory patterns with new regulatory activities and actors (Strange 1996. is it a hollowing out of the state. such as legally non-binding soft rules. since companies now have to consider a range of other actors in order to get their “social license to operate”. Firstly. as well as private and public.12 Theoretical framework and research design I Regulation as authoritative rules II Regulation as efforts of state agencies to steer the economy III Regulation as mechanisms of social control Figure 1. Ohmae 1995. Secondly. civil society and state officials. in Jordana & Levi-Faur 2004:3–4). There is a debate going on in the literature as to what this really is about.

the more CSR. it would be difficult to determine how much is “much” or “little” spent on CSR and at the same time. Still. However.2 Measuring CSR policy CSR policies are operationalized by three aspects: resource allocation. This can. and should. a more purposeful focus in this study is to compare resource allocation in different countries and establish which one stakes more and which less on CSR.1 Resource allocation The purpose with resource allocation is to try to specify the government’s emphasis and level of activity for CSR. 2. easily be problemized.2. applying this broad operationalization of resources. it is not within the frame of this thesis. Resource allocation refers to the number and range of policy initiatives undertaken for the purpose of promoting CSR. I do not want to take on a normative standpoint by signalling how heavily involved a government should be. I also refer to personnel working with CSR and the organisational structure put in place for CSR. it seems like an underlying supposition in most studies is that CSR is something positive. . The ideal would be to provide detailed data. Jordan et al. that is not possible as governments themselves do not have specific figures or information. As a matter of fact. policy style and framing. I find the information which was available useful in order to present a broad picture and compare the governments’ emphasis on CSR. the better. 2003) and governments’ involvement in CSR is one example of this development. 2. but unfortunately. In any case.Chapter 2 13 modes of governance (Gunningham & Grabosky 1998. but should be a task for evaluating research. Thus.

2005:194. For instance. while CSR in Denmark has dealt with social and employment issues at home (Munkelien et al. then. partnering and endorsing. Bredgaard 2003). are there for the public sector to play in promoting CSR? I will here present five roles.14 Theoretical framework and research design 2. 2.3 Policy style What roles. CSR in Norway and Sweden has mainly been about their companies’ operations in developing countries. image building and competitiveness. (2002) and Bell (2002): mandating. I include these dimensions because earlier studies have shown that CSR policies are framed differently.2.2 Framing Framing refers to the vision and values the government links to CSR: what are the arguments? What are the objectives and priorities in CSR initiatives? I focus on four ways of framing a CSR agenda: national or international. inspired by Fox et al. International Instrumental Normative National Figure 2. while the instrumental dimension interprets CSR as risk management. demonstrating. for instance. I will use these . Two dimensions for framing CSR policies. The normative dimension of CSR promotes values. normative or instrumental. such as human rights or social inclusion.2. facilitating.

mandated CSR is no longer CSR. I find it important to highlight this because of the important role the state has as a business itself. programmes and strategies―and implicit CSR. chiefly coded and mandatory (Matten & Moon 2004:8–9). some scholars distinguish between explicit CSR―which is CSR explicitly mentioned in corporate policies. At first.Chapter 2 15 categories for identifying and mapping the CSR initiatives. I still include mandating as a platform for discussion. both approaches implicit and explicit are approaches to deal with the same kind of issues. which is actually close to the core of the research question. CSR as a concept has now reached a point when also governments are increasingly getting involved. namely social issues in the relations of corporations to their stakeholders. As a matter of fact. But according to the definition of CSR as activities beyond law. The demonstrating role is not included in the Fox et al. albeit the dividing line between the categories is not very strict. norms and rules. pension funds make the state a large investor and furthermore. the government exercises its traditional command and control-regulation power. Yet. this indicates the emphasis that the government places on CSR instead of on other means. the fact that CSR does not mean exactly the same thing in each country is not as problematic as it might first appear. which result in requirements for corporations. Additionally. framework but is added by Bell (2002:11–15). Fox et al (2002:4) includes a mandating role in their classification of public policy styles in relation to CSR. the state is a significant share holder in . Yet. because on the other hand. because there are huge differences in what is incorporated in laws and what is not across nations. blurring the line between voluntary and mandatory even more. Therefore. For instance. Thus. and I therefore apply the definition of CSR as voluntary. This is also the view of both the UK and Finland. which consists of values. In this role. it might appear difficult to compare public policy on CSR. this view fails to take into account how CSR initiatives can evolve into regulations over time. However.

government enables companies to engage with CSR. the classification above provides a broad spectre and covers all initiatives.) (Fox et al. represents a significant share of the national economies. The widespread ISO standards are one example of a private regime that is adopted by states. It creates incentives and provides support by funding. there are alternative ways of classifying public sector roles. consumers etc.16 Theoretical framework and research design companies. investors. Endorsement can take various forms. Shared monitoring by the state and civil society is also an example of a partnering initiative. However. And most important. the underlying purpose with this policy style is to form an idea of the government’s commitment to CSR: how much effort is it ready to put on promoting CSR? Bearing this in mind. these five policy styles can to some extent be seen as a sliding scale on how far the state is willing to go. publicity and praise to CSR initiatives. working with awareness raising and capacity building. partnering is about opportunities for the public and private sectors as well as civil society to combine resources and enter dialogue. The last and fifth role. In its partnering role. public procurement. which might . for example. is about giving political support. for example policy documents or award schemes. but still requires quite some effort. Doing sustainable business at the governmental level may encourage business to follow the government’s lead (OECD 2006a) and furthermore. the government is also relying on business and civil society as partners. For instance. In its facilitating role. one could look to which government departments that are involved or which target the government aims at (foreign or domestic companies. and through that it becomes possible to gain in strength and legitimacy (Falkner 2003:77). It plays a supporting role. 2002:31). Partnering is about facilitating dialogue and multi-stakeholder processes. Facilitating is not as a demanding role. Of course. endorsing. Both mandating and demonstrating are policy styles that indicate a serious commitment from the government. In general. for instance providing forums for debating.

A theoretical definition of public policy is “whatever government agents do or choose not to do” (Dye. The table below is an overview of the operationalization of CSR policy. and on the weight of CSR initiatives. in Imbeau 1996:2). Thus. and measuring policy is indeed a complex endeavour. And above all. The role for promoting CSR that takes least effort is endorsing. public policy is multidimensional. just as commitment was the key word for policy style above. commitment is also what runs all through the way I have chosen to measure CSR policy by.Chapter 2 17 mean less effort from government. policy style and framing―is that they reflect the government’s commitment to CSR. . Table 1. Thus. which spends less on CSR. The underlying assumption is that the degree of commitment will reflect on the governments’ allocation of resources. Three aspects of public policy for CSR. the rationale for focusing on these three―resource allocation. on whether its framing is selective or all-embracing. ASPECTS Resource allocation INDICATORS • CSR initiatives • Organisational structure • Personell Policy style • CSR initiatives undertaken by government • Mandating • Demonstrating • Facilitating • Partnering • Endorsing Framing • Arguments • CSR initiatives • Normative or instrumental • Domestic or international VALUES • Which country spends more. The aspects that I focus on are aspects that emerge in both literature and in practice as relevant for highlighting characteristics.

historical institutionalism is likely to have more explanatory power for variation in policy choices (John 1998:200). see Peters (2005) for this debate.). The process at work is policy learning. .18 Theoretical framework and research design 2. but a range of others. is a wide definition of institution also including norms.1 The internationalisation hypothesis The sociological approach emphasises the role of norms. 2. instruments are adopted to fit new policy requirements and policy paradigms. for instance rational choice institutionalism. a significant degree of similarity in policy is expected (ibid.3. Norms are understood as “standard[s] of appropriate behaviour for actors with a given identity” (Finnemore & Sikkink 1998:891).3 Institutions explaining policy outcome I concentrate on two broad theoretical perspectives―the sociological and historical institutionalisms―which both belongs to the new institutionalism approach. An institution is seen as “a relatively stable collection of practices and rules defining appropriate behaviour for specific groups of actors in specific situations” (March & Olsen 1998:948). However. Nations are affected by the cognitive lenses that dominate internationally and will gradually come to adopt them as their own. 4 Some scholars distinguish not only between the historical and sociological variants. to choose countries that in several ways are contrasts in this study is a signal that historical institutionalism will be put more to the test than its sociological counterpart. exogenous conditions and influences. 4 These two varieties make different predictions about the policy outcome when an international phenomenon (such as CSR) is incorporated into national policies. What they have in common. though. Finnemore & Sikkink (1998:895) understand the influence of norms as a three-stage process: norm emergence. norm cascade and internalisation (see figure below). Consequently.

institutionalisation. From a few norm entrepreneurs. networks Legitimacy. reputation. of which some were mentioned in the introduction chapter. as norm leaders attempt to socialise others to become norm followers. As far as Finland is concerned. the number and width of actors have increased. making the principles of CSR into a matter of legitimacy. international organisations. The second stage is characterised by imitation. The tipping point between the first and second stage is when a norm is adopted by a critical mass of relevant actors. 1: NORM EMERGENCE Actors Norm entrepreneurs with organisational platforms Altruism. In accordance with this internationalisation hypothesis. The question in this thesis then is how this socialisation process has worked on governments.Chapter 2 19 Table 2. professions. empathy. they have been successful in bringing CSR to the second stage. according to Finnemore & Sikkink (1998). commitment Persuasion 2: NORM CASCADE States. there are two main empirical processes to follow. Thus. ideational. institutionalisation The characteristic mechanism of the first stage is norm entrepreneurs trying to convince others to embrace the norm in question. The drive behind this socialisation mechanism is that states are jealous of their identities as members of the international community (ibid:902). At the end of a norm cascade. norm internalisation might occur. The life cycle of norms. internationalisation . demonstration 3: INTERNALISATION Law. esteem Socialisation. there is the tremendous growth and the increase in degree of internationalisation that Finnish business has experienced since the 1990s. On the international level. bureaucracy Motives Conformity Dominant mechanisms Habit. which means that the norm that once was heavily debated is gradually being taken for granted. one can say that CSR has reached the second stage. Firstly. reputation and esteem.

the effect of a nation’s own institutional settings is emphasised and the same pressure on different political systems is likely to result in different policy choices. What I will look to here is the role the EU and OECD. The second process is the process of international organisations as norm entrepreneurs. The green paper of the European Commission (2001) was then seen as a turning point for the legitimisation of government action to promote CSR in Europe. which is just the opposite of historical institutionalism. Another initiative that has been important for bringing the government into the CSR policy field is the OECD guidelines for multinational enterprises. The weakness of this constructivist approach is that states are seen as homogeneous and that it only is focusing on exogenous influences.20 Theoretical framework and research design would encourage Finland to adopt the norm and thus activate within this policy field. The guidelines are the only multilaterally endorsed and comprehensive code that governments are committed to promoting. 2. This was the first call for CSR at an official level. and additionally. It stressed the dialogue between public authorities. two important norm creators that Finland is a member of. business and NGOs.2 The importance of national institutions The historical variety of institutionalism on the other hand stresses that nations do not automatically adopt or learn from external impulses (Thelen & Steinmo 1992).3. strictly the only international organisations promoting CSR from a governmental perspective. Instead. Policies are institutionally bounded. the politicaleconomic system rewards policies that correspond to the current system. and thus corresponding policies are likely to be adopted. The basic idea here is path . This is because the policy is likely to be adjusted to the system’s traditional policy style.

or rather the strategic interaction. what I will make use of from VoC here is the aspects of the political-economic system that are relevant for the relationships between the CSR stakeholders. The first type of institution that VoC directs our attention to is regulatory traditions―the core of VoC. In a historical institutionalist point of view. governments and other stakeholders. that policy choices will have a continuing effect and also influence future policy choices. but encompasses a wide spectre of national features. The merit of the approach is that it tries to go beyond earlier descriptions of domestic structures. The rationale for using it for this purpose is that the VoC approach focuses not so much on institutions or actors in themselves as on relationships. This corresponds to the idea of CSR as a relational system between business. for instance being too state-centred seeing the state as the actor. for instance welfare strategies (e. Nonetheless. which makes it suitable for an explorative study like this. this approach is still useful for a government focused study like this. the institutional framework shapes actors’ interests as well as the power relations between the political actors. Based on the above.g. I turn to the school of varieties of capitalism (VoC).g. Katzenstein 1985). between them (Hall & Soskice 2001:5).e. focus only on societal actors and their roles in policymaking. due to the focus on interaction between actors. . This school does not provide a narrow model. an important question to now consider concerns which national institutions may matter for the CSR policy. or on the other hand. VoC has in a sense managed to come up with a combination of several approaches in political economy literature. Esping-Andersen 1990) and literature on corporatism (e.Chapter 2 21 dependency. Thus. Hall and Soskice put firms in the centre instead (explaining industrial strategies is the origin of VoC). i.

deregulation has been far-reaching the UK. networking and reliance more on collaborative rather than competitive relationships―all of which create a predictable environment for all actors. and by a comparatively strong tradition of legislation. CMEs bear resemblance to what simply has been called corporatism. Here competition. Consequently. Theoretically. which Finland is an example of. one can assume that the government finds CSR (given its definition as voluntary) unnecessary. The coordinated market economy (CME) is characterised by non-market relations. due to the strong legislative tradition. How is this regulatory tradition then likely to influence Finland’s approach to CSR? The suppositions are ambiguous in this case and both suppositions can be theoretically substantiated. but less extensive in Finland (Hall & Soskice 2001:59). Therefore. And as the comparative advantage of the economy as a whole is dependent on market efficiency. Finland is a clear case of this kind of coordination. such as relational contracting. the government will attach less importance to . cooperative regulation of conflicts over economic and social issues through highly structured and interpenetrating political relationships between business. On the one hand. price signals and supply and demand steer the market (ibid:8). The differences between these two are the degree and method of coordination in a capitalist system. and the liberal market economy (LME). With its tripartite arrangements. CMEs and LMEs also have different approaches to the type of regulation. the government is prone to agree. The fact that companies in LMEs mainly co-ordinate their activity through the market makes deregulation desirable to them. which describes the UK. the regulation tradition in Finland can be described by a high degree of coordination. and the state. trade unions. Thus. augmented by political parties” (Katzenstein 1985:32). referring to “the voluntary. formal contracting. To conclude.22 Theoretical framework and research design VoC distinguishes between two traditions: the coordinated market economy (CME). A liberal market economy (LME) rather relies on market incentives.

Chapter 2 23 CSR. where CSR is assumed to play a smaller role. as CSR adopts the current style of the political-economic system. which means that explicit CSR is less urgent and that the government therefore has a less active CSR policy. the national-international dimension. A second group of institutions highlighted in VoC is the role of traditional institutions and organisations (ibid:9). There is more to add to this hypothesis about regulatory tradition: The interdependence between state. one can also expect that the strong legislative tradition results in mandatory rules also in this policy area. the more normative a framing. where the role of the private sector is more emphasised than in Finland. as well as for the coordination in CMEs. In relation to Finland and CSR. CSR is expected to primarily be framed in an international context. the national framing of CSR is clearly stronger. Civil society groups object to the union’s CSR strategy. but only on how companies can become more . business and labour is crucial for CSR. Also the framing. saying that CSR is no longer about improving the environmental and social impact of European companies. This polarisation of the two sides is indeed symptomatic of for instance the CSR debate on EU level. can be seen as a consequence of the regulatory tradition. the stronger trade unions and NGOs. They are important because they provide capacities for the exchange of information. the more instrumental a framing. In Finland. One can argue that these long-term relationships hold business in CMEs accountable to a higher degree than in LMEs. these are not only strong labour market organisations. The supposition is that this variable will explain whether the policy has a normative or instrumental framing: the stronger business. but also NGOs are important actors in the debate. monitoring and sanctioning within the system. These are institutions that reduce uncertainty and resolves co-ordination problems. On the other hand. consensus building and balancing of interests. The trio is used to dialogue. In the UK. on the other hand.

The question then is: which organisations are most active and most influential on the CSR arena? Civil society in the UK is likely to push CSR harder than civil society in Finland. In CMEs.24 Theoretical framework and research design competitive and profitable (Hamdan 2006. This is because business in LMEs is more steered by market conditions than long-term societal concerns and CSR is their chance to influence and make demands on business. but they nevertheless open the way for them. The result was a Communication with an instrumental rather than a normative focus. my expectation is that it is business that most active. informal rules and history (ibid:13). Not only were NGOs and trade unions uneasy with the increasing instrumental focus. Civil society groups were strongly disappointed and even boycotted the European Multi-stakeholder Forum in the end of 2006 (ibid). but the final Communication was still written by the Commission and industry representatives behind closed doors (Howitt 2007). or in Hall & Soskice’s words: the role of culture. It is argued that actors often have some sort of shared understanding about what other actors are likely to do and the behaviour is often based on logic of appropriateness (March & Olsen 1989). Howitt 2007). . They all participated in the consultation process. The third institution that VoC directs our attention to is informal institutions. The rationale here is the same as in historical institutionalism in general: actors are path dependent and learn the common culture from previous experiences. Hall & Soskice themselves do not ascribe these much importance in the original VoC work. because under no circumstances do they want more guidelines from the government and other societal actors than they already have through the coordinated system. they were also uneasy with the fact that any reference to regulation or mandatory measures on CSR was excluded.

development aid and human rights work―aspects that have been important in these countries’ history and political discourse. John suggests a way of tackling this challenge: to separate causes of action and constraints on action. Policy studies have traditionally been focused around approaches such as institutions. Finlands own private sector interests are expected to be the motivation for CSR involvement. 2. ideas or rational choice. However. Furthermore. however. the interest determines which ideas are selected. they reflect a history of international contacts. thus providing causes for action.3. for instance the UK. preferring to merely describe them instead (ibid. private sector interest have to a great extent been important motivations for the development aid work (ibid:3). Sweden and Norway. Then institutions . However. Finland is called the “odd man out” (Selbvik & Nygaard 2006:1). The result is. in John’s point of view. that new institutionalism is a multi-theoretical framework simply adding aspects that are missing in order to increase the explanatory power. the development aid that Finland carries into effect is less idealistic than in the others. compared to these. for instance its widened definition of institutions to include also norms and culture is seen as a symptom of this. Given the exploratory and interpretative approaches of this study. too. New institutionalism can be seen as an attempt to combine several approaches to policy analysis. John 1998). the single approach has often failed to explain policy choices. interest groups. because of much less emphasis on development aid.:167–168). When lookin to other examples of public policies for CSR.g. Thus. it will be a theoretical challenge to not end up with an ad hoc explanation. socio-economy.3 A synthesis for tackling the theoretical challenge New institutionalism is criticised for being ad hoc (e.Chapter 2 25 I expect also this last variable to have an influence on the framing. Such an approach is ad hoc rather than parsimonious. Among all ideas in the public sphere.

what I am looking for is the interaction of ideas and international influence on the one hand. the so-called spiral model (Risse et al. In effect. this refers to how governments may experience a different demand for learning depending on the institutional context. John argues that ideas are causes for action. national challenges in the UK made the government promote CSR. causal relationships in the study are more clearly defined. This is important. and national institutions on the other. This is an aspect that John does not address. and gradually. But while the decision of talking the talk was based on rational calculations. it also starts walking the walk. but calls for institutionalists to specify the function of the variables that they are focusing on. There are also scholars within the constructivist traditions that have worked with the same train of thought. I would like to argue that John is not very far from the new institutionalism. 1999) shows how a rational interest motivates actors to start “talking the talk” after international pressure. However.e.e. By recognizing . the decision itself brings the actor into a socialisation process which changes ideas and contributes to an internalisation of norms over time. institutions constitute constraints on action. and that other circumstances are constraining action. With this separation.g. i. e. merging “a logic of appropriateness” and “a logic of consequences”. At this general level. socio-economic structures and so on) provide the setting in which the actor chooses the strategy. i. For instance. as well as the kind of ideas that are available. I will argue that this causal distinction is purposeful also when looking at features of the national economic-political system and that also these can constitute causes for action. because focusing on only one of the analytic models at a time might limit the understanding.26 Theoretical framework and research design (interest-groups. But this illustrates one way of linking sociological institutionalism and historical institutionalism. In this context. In this empirical context that could be a government starting talking about CSR because it feels pressure from others to do so. carrying through what was only window-dressing in the first hand.

2003). The dividing line between international and domestic politics is blurred and as a consequence. the causes and constraints way of thinking here contributes to making decomposition possible. Combining levels of analysis in this way is richer in descriptive detail. Moreover. However. international relations and comparative politics are no longer separate research fields. Middle-range theory can also be justified by the fact that it can at least be regarded as an advance in theory development. as often in social science. research on policy formation also needs to take into account diffusion processes. it is difficult to specify causality. I do not find it very relevant to specify which is which. there is the problem of observational equivalence where different causes lead to the same outcome and it is difficult to isolate the impact of specific variables.Chapter 2 27 that variables from both sides can be at work in different phases over time. I do not have limited theoretical ambitions with this thesis. at least to some extent. Because this complexity is difficult to handle―and can hardly be sacrificed in favour of more general theories―the theoretical ambitions of new institutionalism are often limited to middle-range theory. tend to lack explanatory power as many variables are included in the analysis. Another bridge building endeavour that is necessary to discuss in this analysis is the combination of domestic and international factors. Policy formation on CSR is a clear case where both domestic and international factors are at play. Another problem with the rich theoretical approach is that it highlights many variables that I assume will have an impact on the policy outcome. but again. However. middle-range theory is closer to empirical policy-making than more parsimonious theories are. temporal sequencing (Caporaso et al. Consequently. Apart from domestic structures. However. we can gain a more truthful picture.e. The goal is rather to analyze the empirical data by utilising these middle range theoretical approaches to shed light on important aspects of the creation of public . but rather see them as a whole. i.

). in Andersen 1997:131). A deductive approximation of theory. 1994:13)―and how they are interrelated in this particular project.4 Methodological reflections To provide an account of the research design. To start with. In addition. 2.28 Theoretical framework and research design policy for CSR in Finland. not compelled and dictated by an a priori theory (ibid. is criticised for risking preconceived assumptions: “the paradox of theory is that at the same time it tells us where to look. data collection and data analysis (King et al. Thus. this study can be described as exploratory. they are needed as a first step as few similar studies have been conducted. A case study can provide an understanding of how these concepts relate to one another. with deduced hypotheses and conceptual lenses. The data should make the theory meaningful and not the other way . grounded theorists assert that theory should be based in the field. CSR is a policy field where descriptive studies should not be underrated. a case study is especially useful when the boundaries between the phenomenon of study (which here is CSR policy) and the context (which is the political and economic context in Finland) are not evident (Yin 2003:30). the study is also primarily motivated by an empirical interest and not by theoretical ambitions. An exploratory research question allows for a wide approach to the object of study and relates to making sense of a phenomenon. Given the definition of a case study as “an empirical inquiry that investigates a contemporary phenomenon within its real-life context”. I will comment on its analytical components―research questions. studying CSR and governmental approaches to CSR is a fairly new endeavour and has therefore no robust empirical or theoretical base. theory. Thus. it can keep us from seeing” (Vaugham. As the research questions reveal.

One could say that theory constitutes a model with which I study the public policy outcome from different analytical perspectives. and most important. Two cases provide an even deeper understanding by opening up the way for a comparative approach (Frendreis 1983. Therefore. Using several forms of data is a method for triangulating. Yet. while more detailed information about background.4. Most of these are available on the internet and I have included their URL in the reference list in order to increase the transparency and reproducibility. 2. Ragin et al. First of all. The written sources are of various kinds: policy documents. theory has been helpful in structuring the analysis and the empirical data. and they are both among the top scorers on CSR performance (when looking at companies according to nationality) (Gjølberg 2006). But relying on documents alone would not be enough for this project. seminar reports and websites. it is important to complement these official statements and visions with more informal information from people . research reports. official documents give a general picture. Yet. 1996:755).Chapter 2 29 round. Moreover. and this study can be classified as an interpretative case study (Andersen 1997). The two countries have several common features: both are for instance Western European and members of the EU. the number is quite limited. even if I do not depart from theory. The approach does not demand defining strict variables or hypotheses in advance. is needed. but secondly. all documents are written for a certain purpose and official documents are likely to be characterised by rhetoric and official statements. I have borne this in mind. they differ on features that were discussed earlier in this chapter and that might be of great relevance in explaining the difference in policy outcome. which is one of Yin’s most important principles for reliable data collection (Yin 1994:92–93). preceding discussions etc.1 Interviews and documents as the empirical basis This study is based on both interviews and documents.

many of this other group have been or still are. Using interviews as a method involves a risk that the research result is limited to these particular informants. And as far as personal views are concerned. triangulation of data and sources as described is one way of avoiding a too narrow empirical basis. I also attended a conference on CSR organised by the Finnish government as a part of its EU Presidency in 2006. directly involved in the government’s CSR work. they are not as much of a problem in this .30 Theoretical framework and research design actually working with these issues. Moreover. Another criteria is that they are familiar with CSR―not only in a position where they should be―and that they are first hand sources talking about their own experience (Rubin & Rubin 2005:64–66). others contribute with valuable information as they see the issue from other angles. only confirming their views and recording how they justify their own actions or decisions. Moreover. a company and NGOs―this selection of informants follows the principle of source triangulation. The total number of informants is 25 (see Appendix 1). However. for instance as members of MONIKA. they are the persons that are most relevant with regard to CSR in their organisation. Furthermore. a business network. trade unions. every person I asked accepted being interviewed and provided me with the information I asked for.). employers’ organisations. The reliability is also increased by source triangulation (ibid. Informants were chosen with reference to their working tasks. Representing different organisations and functions―relevant ministries. Even if government officials are the most important sources as the government is the object of study. which contributes to a truthful picture. This is done by using both documents and informants from several different organisations. in one way or another. What I find important for the reliability of the data collection is that this list of informants includes most of the most important persons in the CSR field in Finland at the moment―from this governmental perspective.

Chapter 2 31 case. Rubin & Rubin 2005). the interviews were ongoing processes where questions were left out and new ones added as the interviews proceeded. but to also learn about views. It was not possible within the scope of this thesis to go into detail in the UK case as I try to do with the Finnish case. The respondents are of course affected by their tasks at work. Nevertheless. A beloved child has many names. and so has the interview strategy I have chosen: semi structured. The interviews are not regarded as objective accounts. the purpose of using interviews was to not merely collect facts. This limits the comparative value. Themes were prepared in advance (see interview guide in Appendix 2). . my overall impression is that the interviewees were open and honest. the purpose is not to study and explain the British case. but the basic idea is the same. but again. on the contrary. interview guide approach or responsive interviewing (Mikkelsen 1995. The data collection for the UK is naturally much more limited. but as what in literature on source evaluation is called remnants (Dahl 1967:41). the discourse they are used to using when talking about CSR (Yin 2003:86). The empirical data that constitutes the basis for the descriptive part is my own. 5 Nevertheless. but to use it as a contrast to the Finnish case. the picture of their organisation that they want to convey. but I have only one British informant and the explanatory part of the UK case is based on previous studies. understandings and discussions. This was necessary due to 5 Dahl uses the Norwegian terms levning and beretning. but only to a certain extent. what they think they are expected to say. what they regard as politically correct. as they seriously reflected upon the questions and also mentioned negative aspects. when analysing the statements I have tried to be aware of the characteristics of a research interview and the fact that CSR is a value-laden topic.

attaching the interview guide and including plenty of quotes. . Quotes are from government officials unless otherwise stated. To strengthen the reliability. though. which can be seen as a weakness for the reliability. The length and scope of the interviews also differ of the same reasons. it is possible to remain clear about what has been said in the interviews and what my interpretations are (Rubin & Rubin 2005:76). I do not deem it relevant to know exactly who said what and the quotes are therefore not attributed. but by and large were the same questions and themes discussed.32 Theoretical framework and research design the informant’s different working experiences and involvement in CSR. I have tried to make the research process transparent by describing the process: the choice of interviewees. neither is the interpretation of them. NGOs or trade unions. In this way. Interviews are not reproducible. is to point out which sector the informant represents after each quote: business. What I do. This might also allow informants to speak more freely.

an NCP for the OECD guidelines is established. The CSR activities are extensive 6 DTI is from June 2007 called the Department for Business. Since the appointment of the first CSR minister in 2000. CSR belongs to the Minister for Competitiveness. the Department for International Development and the Foreign and Commonwealth Office (FCO).Chapter 3 33 3 THE UK GOVERNMENT―A CSR ADVOCATE The British government has the most outspoken CSR strategy in Europe and has in many ways been a pioneer in incorporating CSR in the public policy (Moon 2004. 6 Since June 2007. The NCP has previously consisted of only DTI officials but was revamped in autumn 2006 and is now a tripartite body comprised of officials from the DTI. as the time frame of this paper is earlier than that and in order to avoid confusion with different names in text and in references. As far as personnel resources are concerned. Enterprise and Regulatory Reform (BERR). the government has not any detailed information (Griffith 2007[informant]). However. Ward & Smith 2006). There is also an interdepartmental group on CSR meeting on a regular basis with the aim of furthering the government’s CSR policy. all part of the Department for Trade and Industry (DTI). The government established a CSR Academy in 2004 to support the development of CSR skills across business (DTI 2004:4). . 3. country to appoint a minister for CSR. I use the department’s previous name. when it comes to organizational aspects.1 Resource allocation The UK was the first. Furthermore. and so far only. The minister has two key roles: making the business case for CSR and co-ordinating government activity to promote CSR in companies of all sizes. several ministers have had CSR in their portfolio.

plus small percentages of officers overseas (FCO 2006:2). This was to present a picture of the resource allocation in terms of personnel resources and organisational structure. but also other departments have their own CSR programmes and initiatives. In addition to a Minister for CRS. He chose to appoint a CSR Minister. Environment Agency. In addition. Dep. 120%[sic]. 25%. Thus. also regional and local governments and devolved administrations are supporting CSR in various ways. The FCO and the DTI are two key departments. Dep. CSR has been on the agenda at the highest political level. 55% with CSR policy. and in fact are becoming increasingly significant innovators in the CSR debate and policy (Ward & Smith 2006:34). which is the topic of the next section. 20%. launched initiatives and emphasised CSR in speeches to provide some examples (Moon 2005:57). Dep. Home Office. Food and Rural Affairs. Also the DTI has officers working full-time with CSR plus a great number of officers devoting parts of their working time on CSR policy: there are for instance officers working specifically with the OECD guidelines. Office of the Deputy Prime Minister and Her Majesty’s Treasury (UK Government 2004). there are other officers working 10%. Media and Sports. Tony Blair.34 The UK Government and spread over many departments and only FCO has more specific information: here one officer deals with CSR policy full-time. for International Development. Dep. Health and Safety Commission and the Health and Safety Executive. Foreign and Commonwealth Office. Furthermore. more can be said about CSR initiatives. for Work and Pensions. 7 Besides central government. It is also worth pointing out the political level of CSR. the former Prime Minister. for Environment. also took an active stance on this issue. for Transport. . for Education and Skills. 7 The following government departments have CSR related projects and programmes: Department for Culture. Dep.

but should do justice to the government’s effort in terms of showing the number and varieties of instruments. In order to systemise the overview. facilitating. nor are there any .2 Demonstrating Secondly. 3. there is the demonstrating role.Chapter 3 35 3. The same criteria are applied to the overview of the Finnish initiatives in Chapter 4.). The Minister of Industry said that this law was “a start in tightening the controls imposed on companies when it comes to environmental and social issues” (ibid.1 Mandating Firstly. an example of a voluntary CSR instrument has become mandatory: CSR reporting.2. 3.2 CSR initiatives and policy style This overview of the British government’s CSR initiatives includes most of the CSR initiatives I have come across. these are initiatives that are explicitly communicated as pro-CSR in interviews. making it mandatory for business to “report anything concerning the welfare of the employees. In November 2006. a new Companies Act was passed (entering into force in 2008).2. demonstrating. partnering and endorsing). CSR is not mentioned in relation to the UK government’s role as owner or shareholder in companies. on governmental websites or in publications. community. The accounts are not claimed to be exhaustive. environment and the company itself” (Sustainable Development International 2006). CSR initiatives are classified by five policy styles which were explained in Chapter 2 (mandating.

36

The UK Government

ethical guidelines to be found on the government’s website (UK Government 2007), but then are state-owned companies not very common in the UK. 8 As an investor, on the other hand, the government has been on the forefront: the UK was the first country to require SRI reporting of pension funds (in the Pensions Disclosure Regulation from 2000). Trustees of occupational pension funds are required to disclose the extent to which social, environmental or ethical considerations are taken into account in the Statement of Investment Principles (Social Funds 2002). The Export Credit Guarantee Department (ECGD) will check on the consistency of the operations of its customers, both in the UK and overseas, with the recommendations of the OECD guidelines for multinational enterprises (OECD 2005). When it comes to public procurement, the UK has made a commitment and an action plan to be “amongst the leaders in sustainable procurement across EU member states by 2009” (UK Government 2005:55) and from 2003, all new contracts by central government departments must apply minimum environmental standards. The government must also report annually on its own operation in relation to sustainable development (Sustainable Development in Government 2006).
3.2.3 Facilitating

As far as the facilitating role is concerned, the government has put quite some effort on awareness raising and information. For instance, it published government reports on CSR in 2001, 2002 and 2004 (DTI 2004). These outline the government plan on CSR, including initiatives to develop the business case,

8

The Shareholder Executive currently manages a portfolio of 27 businesses, with a combined turnover of

around £20 billion, equivalent to 1.6% of GDP (UK Government 2007).

Chapter 3

37

engage a wider range of businesses, encourage good practice, promote CSR internationally, and co-ordinate CSR policies across the government. There are quite extensive resources on CSR to be found on the internet. The government, for instance, has a CSR website, serving the role as a knowledge and information bank on CSR in the UK. 9 Also the UK NCP has a website where they publish their annual reports and statements on business cases. 10 Several initiatives have been aimed at capacity building, such as the already mentioned CSR Academy that was initiated by the government. The government has promoted CSR by training embassy and consular staff (OECD 2005) and has organised international conferences, of which one was part of the UK EU Presidency in 2005. 11 When it comes to funding, the government, for instance, is an important contributor to Business in the Community (BITC). The Small Business Consortium has, with governmental support, developed a practical-guidance toolkit for SMEs, and the SIGMA project―a partnership between the British Standards Institution, Forum for the Future and AccountAbility―has developed a framework and guidelines for management sustainability, giving advice to organisations looking towards contributing to SD (DTI 2004:4). Other examples include research funding to the Royal Institute of International Affairs and a government commissioned studies on the views of private, public and not-forprofit organisations on the potential added value of CSR; on how to engage SMEs in community and social issues, and on business investment in under-served markets (ibid.).

9

URL: http://www.csr.gov.uk (7.4.2007).

10

URL: http://www.dti.gov.uk/europeandtrade/trade-policy/oecd-multinat-guidelines/page10203.html (5.4.2007). Conference: “Investing in the Future: a European conference on CSR and the finance sector.” London,

11

December 2005.

38

The UK Government

There are also a range of economic incentives, such as the Community Investment Tax Relief, which is a tax relief to individuals and corporate bodies investing in accredited so-called Community Development Finance Institutions, which in turn finance profit-distributing enterprises, social enterprises or community projects (DTI 2004:14). Payroll Giving is another example of what the government counts as CSR: a scheme established, promoted and financially supported by the government for employees to donate to charity by authorising a deduction from their gross pay before tax. 12 A similar example is the Corporate Challenge, an initiative promoting support for both corporate and employee donations and voluntary work (DTI 2004:14).
3.2.4 Partnering

The UK government has launched some internationally recognised CSR initiatives together with business and NGOs, thus exercising its partnering role. These, for instance, are the Extractive Industries Transparency Initiative (EITI) launched by the Prime Minister in 2002 (other governments were also involved). Its aim is to increase transparency over payments made by companies and revenues to governments in the extractive industries and bring together business, non-governmental organisations and governments. Another is the Ethical Trading Initiative (ETI) from 1998, a tri-sector alliance of companies, trade unions and NGOs, working to improve labour conditions in the supply chain of its corporate members that the Department for International Development (DFID) helped to set up. 13 The biggest initiative perhaps is the Voluntary Principles on Security and Human Rights, principles that the British government launched in 2000 together

12 13

URL: http://www.payrollgivinggrants.org.uk (7.4.2007). URL: http://www.ethicaltrade.org (7.4.2007).

The Business Broker project is a further example.5 Endorsing Lastly.4. 14 There are also partnerships like the Partners for Water and Sanitation. there is the endorsing role. It is also encouraging business to use international standards such as ISO 14001 and EMAS. the government administers and promotes the European Ecolabel. a UK initiative bringing together the private sector. such as the OECD Guidelines for Multinational enterprises. primarily to oil companies for ensuring respect for human rights and security in their operations in areas of conflict. The government also supports the ACCA annual Sustainability Reporting Awards. Norwegian and Dutch Governments. The UK actively endorses all the main international CSR initiatives. the British BS8555.2007). which seeks to engage businesses in the social and economic regeneration of the most deprived areas of England. The Principles provide practical guidance.2. and the National Strategy for Neighbourhood Renewal. civil society and government departments in a water and sanitation partnership (DTI 2004:13). both initiated by the BITC (Moon 2005:58).voluntaryprinciples.org (7. the ILO Tripartite Declaration on the Multinational Enterprises and Social Policy. . Furthermore. and it has also launched a standard of its own.Chapter 3 39 with the US. which has been developed to encourage companies to work with their local communities to tackle deprivation and boost local economies (DTI 2004:15). the Forge I & II guidance for the financial services sector and has also 14 URL: http://www. launched in 2001. 3. The government sponsors the Annual Award for Excellence as well as the CSR index. the UN Global Compact. which is designed primarily for SMEs (DTI 2004:19).

section 4. meaning that while the DTI is a focal point. the UK government has initiated a wide range of CSR instruments. community investment.40 The UK Government published a series of voluntary guidelines for reporting (DTI 2004:21. I will discuss the CSR initiatives and the policy styles further in Chapter 4. and acting to address the key sustainable development challenges based on their core competences wherever they operate―locally. framing CSR to fit their objective. covering a great number of policy areas. The DTI is not as decisive for UK policy as we will later see is the case with the Finnish Ministry of Trade and Industry (MTI). 3. The DTI is regarded as “the gateway” to the UK public policy for CSR. poverty reduction.5 in a comparison with Finland. the Department for International Development as well as the Foreign and Commonwealth Office (FCO) are other key departments with an outspoken . the UK has a broad agenda. it is still not steering the whole government’s CSR policy. together all these initiatives show that CSR is a policy field the government has actively promoted and used a considerable amount of resources for.3 Framing The UK government has a vision for CSR that itself calls ambitious: “to see UK businesses taking account of their economic. A great part of the other departments have their own CSR programme or initiatives. regionally and internationally” (DTI 2004:2). UK Government 2004). since it is the co-ordinator of CSR policy. social and environmental impacts. governance and workplace (DTI 2004:2). For instance. environment. And indeed. To sum up. of which several are quite significant on the UK CSR arena. These goals are both nationally and internationally oriented. Thus. The government lists five areas where it expects its CSR policy to deliver results: competitiveness.

.Chapter 3 41 agenda for CSR (DTI 2005. urban decay and social unrest. a key actor for CSR in the UK today. and as the strategy document states: “Rather than being approached as a separate subject in its own right with its own specialists and debates. Many of the CSR instruments also address business involvement in the community. was set up in 1982 against a backdrop of enormously high levels of youth unemployment and inner-city riots (BITC 2007). As a consequence. one could say that the framing is all-embracing. we need to tackle inequalities and deprivation in communities across the UK” (DTI 2004:4). CSR policy is spread all over the government. 3. the Finnish equivalent Finnish Business and Society is a result of the debate that started on a European level. As a contrast. although CSR also is seen as a means for securing UK business success abroad (instrumental). The international framework is strongly linked to poverty reduction and the Millennium Development Goals (normative framing). for instance the community development tax relief.4 CSR as a way of re-embedding social concerns The origins of the UK’s CSR policy go back to the early 1980s. One concrete example of this is that Business in the Community. the UK has also launched a framework specifically for international CSR where it outlines its goals internationally (DTI 2005). A British economy in crisis created high unemployment. CSR has a clear national framing in which the social aspect is important: “At home. The Department for International Development also strongly advocates CSR (DFID 2003) and the FCO has also put its own CSR strategy on paper (FCO 2007). we believe that a key strength of CSR is in providing a more holistic view of businesses and their activities” (DTI 2004:7). and the government had to find new solutions to social governance problems (Moon 2004:1). Thus. On the one hand. FCO 2007). On the other hand.

both the Conservative and the Labour governments chose to go for the CSR option in order to renew the societal relationships―of course along with a variety of other measures (Moon 2004). Business is therefore likely to try aiming at deregulation and the government is likely to be understanding to the call for deregulation. However. Tomorrow’s Company and the Institute for Public Policy Research. The New Labour was anxious to avoid being seen simply as “Old Labour”. for instance AccountAbility. Vilsted 2003). Wilson 2003:12. Chatham House. just to mention a few that have done extensive work on CSR. instead of applying regulation or coordination of the same style as CMEs. Furthermore. Forum for the Future and Amnesty International are . A fact that speaks in favour of this interpretation is that CSR has largely been a function of the government in the UK. An important comparative advantage for the CSR agenda in the UK is the epistemic community. Many of the internationally leading actors in the CSR field are based in the UK. There are numerous think tanks. associated with very strong links to trade unions.42 The UK Government In an LME. the UK was ready to place a new emphasis on social concerns in the balance between state and market (Moon 2004). the UK has turned to CSR as an attempt to try to promote the same values (Ward & Smith 2006:5). However. Campaigning NGOs like Friends of the Earth. taxes and regulating business rather than promoting economic growth. the development of CSR policy really gained speed when the Labour party and Tony Blair came to power in 1997. research institutes and CSR vanguard organisations. it is mainly market mechanisms that steer the relationship between government. So what is argued in this case is that after a period of deregulation and privatisation and a strong negotiation position for business during the 1980s. CSR was thus an alternative way of profiling social issues (Moon 200. because the effectiveness of market mechanisms is seen as the comparative advantage for the system as a whole. business and labour.

at the time when the state was looking for new governance solutions. their significance is hard to tell. They have been working with an ideational motivation. All these actors have been instrumental in putting pressure on both business and government.) have arguably been important norm entrepreneurs. it is seen as a question of legitimacy and is in the beginning of becoming institutionalised. the UK does endorse the OECD guidelines and yes. the UK’s BITC and International Business Leaders Forum (IBLF) are organisations that are heard also outside Britain. the state itself is trying to lead by example. the UK was itself earlier on the stage (in the 1990s) than the EU . These are all explanations based on the national institutions. in policy design as well as in implementation of government initiatives. What then about sociological institutionalism? Bearing the life cycle of a norm from Chapter 2 in mind. The emphasis on (national) CSR is also explained by the country’s early industrialisation and the system of philanthropy that became very important in after industrialisation (Moon 2005:53. the CSR agenda from EU circles is seen in UK policy as well. Another aspect of the UK history that is ascribed great significance is the long time period of international contacts: colonialism.Chapter 3 43 examples of very strong NGOs and when it comes to business networks. Ward & Smith 2006:5). CSR has clearly experienced a norm cascade in the UK: the state is promoting it. when looking at the influence of international institutions on the UK government. Also extensive coverage on CSR in British media is counted to the competitive advantage (Ward & Smith 2006:5). persuading the government to put CSR on the agenda. trade and as a political power (ibid. Furthermore. However. Yes. The concept of CSR was thus emerging somewhere out there.). the great variety of pro-CSR organisations (NGO community and think-tanks etc. However. a CSR consultancy industry has now emerged. of which 62% of the consultancies have been created since 1995 (Moon 2005:57).

. than the UK being inspired by the EU. in its earliest policies. but to some extent also a norm sender itself. This makes the UK case slightly different to Finland.44 The UK Government (in 2001). and it was rather the EU. that referred to what the UK already had done. and also somewhat problematic in a comparative perspective: the UK is not only a political-economic system being influenced by an international norm.

4. Government officials recounts: We started talking and thinking about our role in CSR around the year 2002―it was FiBS that contacted us. However. For instance. Informants confirm that the CSR discussion has been raised quite recently in the ministries: a few years ago or at the beginning of the 21st century. researchers have met obstacles such as the fact that no one in the ministries had any information or knew which ministry was in charge of CSR. policy style and framing―each discussed in the sections 4. The chapter begins with a few words on the time line in section 4.Chapter 4 45 4 THE FINNISH GOVERNMENT AND CSR The objective in this thesis is twofold: to map and to explain the public policy for CSR and this chapter will address the first. The interviews have been conducted in Finnish or in Swedish. much of the government’s CSR related activity is of an even later date.1. The researchers also had difficulties in attaining documents. 2005:191–192). surveys and academic papers on CSR in Finland (Munkelien et al. 15 15 All quotes from here on are from informants. .1 A new policy area for the government Earlier studies have shown that the awareness surrounding CSR has been low in the Finnish government. in 2003.2–4.4. The policy is summarized and compared to the British policy in the last section. even if their investigation was conducted quite recently. CSR has found its way through. As mentioned in the introduction. and the translations into English are mine. CSR policy will be measured by three policy aspects―resource allocation.

It’s new and undeveloped compared to pioneers in Europe. although it is somewhat problematic when it comes to what the government can actually do. Of course. The common view is that the CSR agenda in general. no doubt about that. • Promotion of partnership projects. after the recent events [industry shut downs] and this China-Asia phenomenon in general. public authorities and consumers―underlie the rest of Western Europe. is immature and on a somewhat lower level in Finland than in many other countries. The content of the Finnish government’s Responsible Business Finland programme (Vastuullinen YritysSuomi). • Develop reporting./…/ In that sense. but at least the discussions are much stronger elsewhere. that it has been given publicity.46 The Finnish Government You could say that this came to the fore from 1999 onwards. It’s young. the MTI also drew up a programme called Responsible Business Finland (see table below). • SMEs needs and characteristics. EU and other international cooperation. everybody in Finland―companies. • Promotion of codes of conducts (e. OECD guidelines and UN Global Compact). (Trade union representative) The first policy document in Finland concerning CSR was adopted in 2004: the guidelines for CSR were drawn up by the Ministry of Trade and Industry (MTI 2004). In relation to this. • OECD. • Promotion of corporate governance principles. in reality it’s quite another matter. PUBLIC AUTHORITY ACTIVITY • MONIKA (Committee on International Investment and Multinational Enterprises of Finland). We started talking about CSR five years ago and today we discuss it almost daily. . but it is perhaps just now. Source: Paaermaa (2004). It is an interesting field. Table 3. STAKEHOLDER CO-OPERATION • Promotion of ethical investment. • Following the develpoment in the voluntariness-regulation discussion.g. and consequently also in the government. • Consumer aspects.

CSR has been mentioned in few policy documents. The ministries hope that it will be easier to profile CSR and have an impact outside the government as a unified actor. a merged MTI and MOL. CSR is mentioned with one sentence in relation to the balance of usage and protection of natural resources. In May earlier this year. Whether it was to be presented in a so-called Government evening session or in any of the Cabinet Committees was at that point not yet decided. The government as a whole has no joint strategy or standpoint on CSR.5. a draft position paper was prepared by the MTI and MOL and sent out for consideration. although the process has been ongoing until recently. 16 The plan was to get the paper approved during autumn 2007. but as this is a working paper I do not have the permission to quote: “Hallituksen kannanotto vastuullisen yritystoiminnan edistämiseksi. 16 I have read the draft. . saying that “Corporate Social Responsibility will be emphasised”. The Ministry of Labour (MOL) drafted a memorandum in autumn 2006. which was discussed and revised by the other ministries and in the Committee on International Investment and Multinational Enterprises of Finland (MONIKA) during spring 2007.” Translated: The government position for promoting CR. 66) is one case. To adopt a position paper that is backed by the whole government and not only by the MTI is seen as a natural development of the escalation of the ministries’ CSR related activities during the last government term.Chapter 4 47 A part from that. the paper is now put on ice (for reasons that will be discussed in Chapter 5) at least until 2008 when Finland will get a new ministry. A standpoint with the whole government behind will also facilitate funding and co-operation within the government on CSR related matters. The latest National strategy for sustainable development (2006:17–18. After discussions in several MONIKA meetings. 17. Draft.2007. In this document.

However.2 Resource allocation Exact figures for the resources used on CSR can unfortunately not be obtained. but rather allocates these on an ad hoc basis. The MTI is the coordinating ministry and an MTI Chief Counsellor is the key figure for CSR in the government. using 10–50% of his working time on CSR matters. The ministries involved in CSR are the Ministry of Trade and Industry (MTI). the Ministry for Foreign Affairs (MFA). Yet. the Ministry of the Environment (ME). Neither is any one working full time with CSR. However. It launched its joint strategy already in 2001 and updates in 2002 and 2004. . the Ministry of Social Affairs and Health (MSAH) and the Ministry of Finance (MF). I will try to provide as detailed account as possible. 4. All these are represented in MONIKA. In the UK the government was active in this policy area already in the 1990s. there is no specific CSR department or group in any of the ministries.48 The Finnish Government Compared to the UK government. Finland’s government is lagging behind. also others run into CSR occasionally and are seen as important contributors. the Ministry of Labour (MOL). He is one of two officials having CSR specified in their job description. as the government does not specifically allocate funds for CSR. and included CSR in various policy documents even earlier than that.

. There is no specific CSR department or group in the Ministry of Trade and Industry. ME 316. Of course. a few officials (basically the informants) in each ministry are involved in CSR due to their personal interest and nature of their tasks. The MSAH and MF follow the discussion but keep a low profile.12. while the ME and MFA are more involved in terms of resources. it appears that other ministries do not wish to take on a more active role. taken on the task to draft the position paper.2006). that totally depends on what is expected from us and if 17 This is to be compared with the total number of employees: MTI 322. MOL 338. Nevertheless. MFA 1028. which have. Thus. 17 A Counsellor in the MFA estimates the use of time to be 15–20%. and I don’t think that we will put a lot of resources on this in the near future. For the rest. looking into the resource allocation of the ministries the emphasis varies. the two most active ministries in discussing and pushing the issue are the MTI and MOL. We don’t seek a more active role. The second person with CSR in the job description is an official in the MOL. and as long as they push the issue.Chapter 4 49 Minister of Trade and Industry State Secretary Permanent Secretary Industries Department Energy Department Trade Department Technology Department State Shareholdings Unit Figure 3. using about 25% of the working time on these issues. while the rest of the governmental informants’ estimates range from a minimal share of their working time to a few percent. for instance. but the focal point for CSR is in the Industries Department. The total number for the 13 ministries is 5 000 (31.

the Service Centre for Development Cooperation and the Finnish Consumers’ Association) (MTI 2007).50 The Finnish Government we from political quarters are urged to bring it about. as long as other ministries are working on it. it’s fine like this. as well as bilateral agreement networks and multilateral arrangements. 18 Normally. MONIKA holds meetings every second month. MONIKA has now become the key body for CSR in Finland. 1 represents trade unions (SAK) and 2 members represent NGOs (KEPA. . As of today.19 By taking FiBS under its auspices in autumn 2006 (MTI 2006a). 2 represent business organisations (EK and ICC). in 2002./…/ However. When looking to the organizational structure put in place for CSR. The other important body in relation to the Finnish government and CSR is the business network Finnish Business & Society (FiBS). MONIKA has 12 members (including the Secretary-General) of which 7 represent ministries. At the time of its establishment. a national partner organisation of CSR Europe. adding the Consumers’ Association. MONIKA is a meeting forum and thus. MONIKA also handles wider issues concerning international investing and multinational enterprises within the framework of internationalisation development. Adopting FiBS was regarded as a way for the MTI to step up the promotion of CSR. the government augmented its commitment to CSR. but CSR in general. It was established in 2001. However. the focus is shifting more and more onto promotion of not only the OECD guidelines. does not add up the number of staff. when the OECD required the countries adhering to the OECD guidelines for multinational enterprises to establish so-called national contact points (NCP) for promoting the guidelines. Finland and Greece were the only EU member states where CSR Europe had not found partner organisations. the government established a new body for CSR. MONIKA. There was no network or organisation with a profile that corresponded to the purpose (informant). especially 18 19 The composition of members was renewed earlier this year.

travel expenses in relation to conferences and payments for conference venues. which Promoting Innovation and Competitiveness. or Sweden’s Globalt Ansvar (established 2002) or Norway’s KOMpakt (from 1998) for that matter. the former prime minister strongly fronted the issue and the UK’s focal point for CSR is a minister. CSR is every now and then addressed in speeches by ministers.fi. 20 The spending on CSR is ad hoc and there is no high-profile initiative. we see that CSR is mostly a discussion on the official level. 21 are thus indirectly are supported by the government. The MTI’s contribution amounts to approximately 2/3 of FiBS’ budget. However. Another example is courses on CSR reporting (TTI 2007). The international conference during the EU Presidency is perhaps the biggest and most resource-demanding initiative.csr2006. 21 Altogether. the governmental CSR initiatives are not numerous. An example of this is a research project on CSR in the food production chain initiated by by the National Consumer Research Centre. When looking to the political level of CSR in Finland. and as other initiatives are quite sporadic this focus is not misrepresenting public policy for CSR in Finland. but no minister has really fronted the issue and the focal point for CSR policy in Finland is a government official. FiBS is not a big commitment for the MTI economically. As we will see in the overview in the next section. the focus here is on the central government. In the UK. and definitely not resource-demanding. . MTT Agrifood Research Finland and five Finnish companies in the food sector (MTT Agrifood Research Finland 2007). like for instance with the UK’s Extractive Industry Transparency Initiative (EITI). Developing CSR policy is not only a question of 20 The topic of the conference in Brussels in November 2006 was “Corporate Social Responsibility Policies There are CSR projects initiated by other public actors and agencies. but is still an escalation of CSR. such as research institutes.Chapter 4 51 among SMEs and gain more direct contact with firms (informants).” See http://www. the government’s scarce resources are mentioned as a restraining factor for commitment to CSR. As the main budget item is only the employees’ salary costs (informant). The costs are basically publications.

These recommendations (KILA 2006) are the government’s tool for fostering good reporting practices. the financial accounts should be accompanied with an annual (chairman’s) report where information about personnel and environmental issues. In the Finnish Accounting Act. Both the Accounting Act and the recommendations are based on the EU Accounts Modernisation Directive. on governmental websites or in publications. 4. are concerned. it is also due to the fact that CSR is not a prioritised policy field and has to battle against other policy areas for the same limited financial resources. should be mentioned (KILA 2006:5). As far as matters like remaking the website. 4. It is stated that today’s best practice .3 CSR initiatives and policy style The aim of this section is twofold: to empirically map CSR initiatives undertaken by a government and to describe the nature of the government’s engagement.3. Qualified initiatives are initiatives explicitly communicated as CSR initiatives in interviews. we always run into financial and personnel issues. the account is not claimed to be exhaustive.52 The Finnish Government possessing an interest to implement it. giving further instructions on the information companies are expected to provide. The Accounting Act is complemented with new recommendations from the MTI. aimed at homogenising and promoting good reporting practices in the EU. what policy style is predominant? Again.1 Mandating As we saw in Chapter 3. It is also a question of the eternal lack of resources. that might affect the economic situation and results. there are no detailed instructions on what information on CSR issues that should be included. according to the act. producing material etc. However. More resources are also said to be crucial for further development of CSR policy. voluntary CSR reporting has become mandatory in the UK.

there is what has been called changeover security (Act 457/2005) which improves the position of the employee in cases of notices of dismissals (previously the Act on Co-operation within Undertakings 725/1978). Nevertheless. 22 This act requires the employer to make up a plan of action together with the personnel. First. . Furthermore.fi for more information on Finnish acts. it gives employees the right to further training at the expense of the employer. there is no legislation that can directly be seen as a result of CSR discussions. The purpose is to guarantee that subcontractors and recruitment companies―both national and international―comply with legislation (Finnish Government 2006). although required ratios are not specified. A second example is the act specifying co-operation practices between a firm and its employees (Act 334/2007). The act was recently passed and is still not translated into English. the right to a trade union representative and how to work out education plans together. besides reporting.finlex. See http://www. A third example is the Act on the Contractor’s Obligations and Liability when Work is Contracted Out (1233/2006). These recommendations are seen as an important signal from the government. It addresses various aspects such as extensive negotiation rights. there are a few examples of recent legislation that are linked to CSR issues. the act was extended to companies with at least 20 employees earlier this year (MOL 2007). The reporting practices are seen as an example of how CSR issues are slowly being incorporated into legislation.Chapter 4 53 should be the point of departure for reporting and it is also referred to Global Reporting Initiative (GRI). as well as paid time off to apply for a new job. However. 22 The Finnish title is muutosturvalaki. it establishes some benchmarks for reporting on personnel and environmental issues. From having applied to companies with at least 30 employees. which specifies what a company has to verify when hiring outsider manpower.

the state has continuously reduced its share holding. According to informants. As of today. and that state-owned company activities must be responsible in view of the environment (Finnish Government 2004). The Finnish government has not brought out CSR as company owner. employment etc.2 Demonstrating The Finnish state is an important owner. the objective is to run these companies just as other companies and not linked to CSR or any other political commitments. which is “based on respecting legislation. of which less than half are on the stock market (MTI 2007b:2–3). However. adhering to ethical guidelines or the like are not mentioned.54 The Finnish Government These examples are mentioned by informants as examples of how mandating is often seen as the best solution. international agreements and the justified expectations of the various stakeholders.3. the Finnish ownership policy is deliberately nonpolitical. 4. 23 Thus. apart from “justified expectations”. Only its holding of shares in stock market companies amounts to about 10% of the total value of the stock market (MTI 2007b:2–3). .” Thus. The ownership policy states that the staff’s position must be taken into account. CSR is only one fragment. using this ownership to promote CSR would have a tremendous impact on Finnish business. If we once started to pursue politics. The environment policy is aiming towards responsible behaviour. the state is a significant share holder in 54 companies. activities beyond the law. 23 Yet. the state-owned firms are said to be aware that their image is at greater risk. there wouldn’t be any limit for what policies we could pursue: regional.

gambling. the fund chooses the one that is best rated in a sustainable development index.Chapter 4 55 As an investor. as it is an export credit agency. the environmental policy is being reviewed in order to further integrate social issues (ibid. Further. Furthermore. pornography. the state is active in the name of at least three institutions: the State Pension Fund. However. According to the State Pension Fund’s investment policy (SPF 2006). forced labour or child labour. Finland has been criticised for a rigid interpretation of the OECD guidelines.” It also wishes to “enhance accountability through the public disclosure of as much information as possible. especially regarding the environmental impacts of the projects financed” (Finnfund 2005). This was when Finland was asked to consider Finnvera's compliance with the OECD guidelines as one of the financiers in a pulp mill project (CEDHA 2007. which brings the OECD guidelines (OECD 2006b) to the attention of applicant companies. arms or gambling industries. drugs. it avoids making direct investments in companies which derive a substantial portion of their turnover from the alcohol. alcohol. this means that in the choice between two otherwise equally valuable companies. the national export credit agency (Finnvera) and the Finnish Fund for Industrial Cooperation (Finnfund). At present. the fund observes sustainable development indexes in making direct investments. In practice. Finnfund’s vision is to “emphasize social and environmental issues through impact assessments and the conditions attached to its financing. MTI 2006c). Finnvera introduced a set of environmental and other environmental principles and other values.). The same pertains to countries and enterprises that do not respect human rights and the fundamental rights which . when stating that the guidelines apply only to companies and not to Finnvera. In 2001. Finnfund has had an environmental policy since 2005. tobacco. it does not finance companies “substantially involved” in activities such as weapon trading.

such as reports commissioned by ministries.). as well as dissertations and theses from universities.3. The state can also lead by example when it comes to public procurement. has been suggested and discussed. Kupi (2006). in which they are opening the way to also consider labour rights.5 million euros in 2005. Public procurement in Finland amounted to more than 22. the Finnish government has undertaken a range of awareness raising and information activities. Moilanen & Haapanen (2006). . 4.3 Facilitating In order to facilitate CSR.56 The Finnish Government the ILO has confirmed on a trilateral basis. (2004). Such an investment policy is. labour rights have not been considered in Finland’s public procurement and Finland has not had any requirements for the suppliers (Pöyhynen 2006). according to the State Pension Fund. Niskala et al. which equals 15% of the country’s GDP (MF 2006). there are different views in the ministries as to whether it is necessary to uphold such an information bank and they have 24 CSR related publications from the government: Kuisma (2001). and that way also contribute to the creation of a market for ethical products and services. A previous government programme for sustainable has stated that environmentally-sound choices “will be encouraged” development (Finnish Government 1998:6). such as a web portal for CSR. Taipalinen & Toivio (2004) and Uimonen (2006). Yet. well founded “since companies that adhere to this ideology have often proved to be successful in their own field” (ibid. 24 The provision of an internet forum. The ministries have for instance issued a number of publications. although economic aspects are the primary consideration when considering tenders today (Nissinen 2004). According to FinnWatch. The Regional Environment Centres have published a guide for environmentally-friendly procurement. however.

and as of today. not only between the ministries’. informant) and some research programmes. The information on CSR from governmental sources is thus very brief and spread out.phtml?s=888 http://www.fi/index.Chapter 4 57 concluded that the ministries do not have the capacity to maintain it. not as CSR initiatives or through some kind of CSR budget.6. These are. 15. but also on individual ministry websites.tyosuojelutietopankki. however.fi/mol/fi/02_tyosuhteet_ja_lait/0181_sosvastuu/index.ktm. this is the most comprehensive website on CSR in Finland.4. Funding is a further way of facilitating CSR. To date. approximately 18 agreements 25 The ministries’ internet sources on CSR (24.ktm.g.ymparisto.phtml?s=957 http://www. The most significant commitment in terms of facilitating was to link Finnish Business & Society (FiBS) to the MTI. it takes some effort to form a true picture of the government’s CSR efforts.ktm. CSR related initiatives have been given support. These have been used for a long time in Finland in environmental policy-making in Finland. 25 Therefore. However. but plays a limited role in Finland. the use of agreements has mainly been based on ad hoc practices and on individual cases rather than on strategic decisions made at the ministerial or governmental level. and FinnWatch for producing reports (FinnWatch 2006.fi/index.fi/?l=en&s=890 http://www.jsp http://www.phtml?s=962 http://www. Another means that fits the facilitating role is negotiated or voluntary agreements. through the information budget of the MFA.2007).ktm. for example.fi/default.fi/corporate_responsibility MONIKA: http://www.asp?contentid=166159&lan=fi http://www. the Ethical Forum at the time of its establishment. since it became clear that there will not be a joint website.ktm.mol. the MOL launched one of their own. However. http://www.fi/index. but e.fi/good_practice/yhteiskuntavastuu MTI MOL ME MSAH .

chaired by the prime minister.58 The Finnish Government have been included. CSR was also the topic of a meeting of the Finnish National Committee on Sustainable Development (FNCSD 2004). Branch associations undertake to promote energy efficiency and participation in the agreement scheme among their members. the seminars have been organised around topics such as the role for public authorities in relation to CSR (MONIKA 2003) and international CSR norms and standards as well as the link between CSR and competitiveness (MONIKA 2006). but a part of a European campaign (the Business Marathon Campaign) launched by business leaders after an appeal to business at the European Summit in 2000.3. but was in fact not a government initiative. This is the energy efficiency agreement between branch associations.4 Partnering A part of the partnering role is to establish forums for dialogue and facilitate multi-stakeholder processes. business and civil society. draw up an energy efficiency plan and implement cost-effective savings measures. The government has organised a few seminars and conferences about CSR during the last few years with the purpose of discussing the role of CSR in Finland. Companies and communities undertake to carry out energy audits or analyses in their premises and production plants. the Finnish government was a co-organiser and the slogan of the Finnish conference was “A Responsible Company is Successful. The most high-profile event by the government was the international . 4. one agreement in particular is given as a successful example and as a concrete example of CSR. The first conference was organised in 2002. Yet. companies or communities on the one hand and the government on the other. most of which have been initiated by companies rather than by the authorities (Sairinen 2003:85).” Since then. while the government provides subsidies (MTI 2006b). Yet. and promoting awareness and dialogue among government.

Finland mentions its endorsement of the UN Global Compact and the ILO tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. however. is also an initiative facilitating dialogue. . which in turn is not linked to the CSR agenda. state. In the MTI guidelines for CSR. but also in the accounting recommendations. 4. its commitment is strongly linked to the OECD guidelines for multinational enterprises. The UK did so in autumn 2005. There is also a reporting competition. this is not unique to the Finnish Presidency.5 Endorsing The Finnish government endorses all the major international CSR related initiatives. organised as a part of the EU Presidency (Finnish EU Presidency 2006). Organisers have varied and so has the role of the government (as financier or co-organiser). It is pointed out that the MFA has a number of them. business and labour―MONIKA can be described as a multi-stakeholder forum with the aim of discussing public policy. and Portugal does in autumn 2007. these are mainly linked to the development aid work Finland does. Finland has also endorsed GRI. 26 The establishment of the government body MONIKA (the Committee on International Investment and Multinational Enterprises).Chapter 4 59 conference in Brussels. With wide representation―it consists of representatives from government.3. not only in the guidelines. As already mentioned. described in a previous sub-section. 26 However. organised by the MTI and ME and five other institutions. The state was not the initiator and has become involved in later years (LTT-Tutkimus 2006:1–2). Also public-private partnership projects belong to this policy style.

3. or a question of less mandating and more voluntariness. from companies’ own starting-points. The general view is that companies should be in the driving seat and that public authorities not should intervene or steer too much. 4. ISO 26 000 (SFS 2007). Yet. CSR is seen as a significant form of governance. “then the business’ intentions are genuine”. The point of departure is that CSR is activities undertaken by companies. and voluntariness is seen as a prerequisite: What is in question is something new―in addition to legislation and mandating. the voluntariness of CSR is strongly emphasised in the government.6 Further comments on policy style: CSR seen as a complement to traditional regulation On the whole. as one informant says. and this is seen as a signal of .g.60 The Finnish Government Furthermore. Many express their opinion that legislation is not the ideal governance model and that CSR in that sense can be a substitute or a complement to the mandating role. mandating. if CSR is not working the space for legislation grows. but as I said. In two recent cases the dismissing companies voluntarily supported their employees (e. financially and through retraining) to an extent that has probably not been seen in Finland before (informant). Informants do not see the discussion as a question of voluntariness vs. the ME is heavily involved in the use of the EU scheme EMAS. The act addressing employees’ rights in cases of note (457/2005) is mentioned as one example of a law that perhaps would not have been necessary had there been a better culture for (voluntary) CSR in Finland. The ministries have also endorsed the ISO standards and the MTI has one representative of 16 in a committee established by the Finnish Standards Association for working on the new CSR standard. There’s space for both CSR and legislation.

The framework was developed as a non-prescriptive checklist of issues for consideration by governments aimed at creating an environment that is attractive to both domestic and foreign investors.Chapter 4 61 changing concerns among businesses. waiting to see what CSR will become. The argument is that the basic problem is other states not complying with international conventions and that the main role of the state is to be active on the international level and contribute to raising the standard of the level playing field. No matter how responsibly Finnish companies operate. the benefits of it will not spread if other companies don’t or if the host country’s legislation doesn’t work. One example of how Finland will try to do this is the OECD policy framework for investment. The framework was endorsed by the OECD member countries in 2006 and carrying it into effect is 27 UPM Kymmene and Perlos are two companies whose large-scale dismissals attracted a lot of attention in late 2006 and early 2007. one which enhances the benefits of investment to society (OECD 2006c). informants see as signals that CSR actually works when media takes on the monitoring function. . 27 Informants see the increasing attention these issues attract in the Finnish media as signals that CSR actually works when the media. and how the Finnish understanding of the concept will be developed. Nevertheless. Our point of departure is to support the investment atmosphere through development aid projects and international organisations. there is no unanimous enthusiasm for CSR. rather than to push business into doing it by promoting CSR. perhaps pending approach. There is rather a careful. Several informants express the view that the primary role for the state in relation to CSR is to form the framework within which business operates.

62 The Finnish Government seen as essential in promoting CSR. For instance.4 Framing: a competitive Finland 4. 4. which gives it authority over the policy field. The MTI guidelines strongly link CSR to the Lisbon targets for developing Europe to become the world’s most competitive regions and most dynamic knowledge economy. FiBS undertakes concrete projects on company level and the state focuses on national agreements and tasks that are natural for the state to take care of. EK coordinates activities for the EU alliance. The implementation of the framework has not yet started and it is still to be seen what Finland will focus on.4. The ministry regards CSR as a way of co-operation for business and governments to work towards the goals in the Lisbon strategy. there is no doubt how CSR is justified: competitiveness is the key word in each and all documents in relation to CSR and is the main argument for promoting CSR.1 Normative versus instrumental If one looks at the policy papers that are written on CSR so far. The MTI guidelines for CSR (MONIKA 2004) state that CSR is a competitive factor which helps companies to promote their business operations. is called “a great platform for ensuring that Finnish companies remain among the world’s best” (MONIKA 2003). CSR is increasingly a matter for business. as well as sustainable development. Furthermore. The focus on competitiveness is secured by the fact that the MTI (the Ministry of Trade and Industry) is the so-called coordinator for Finnish CSR policy. it declares CSR as a natural part of the national competitiveness . CSR. The following quotation sums up the Finnish approach: CSR is primarily a matter for business and business undertakes concrete initiatives while the state focuses on what it normally focuses on: It seems like our sharing of work will continue and will do so automatically.

And 28 According to the responsible competitiveness index. in terms of use of natural resources and employees’ well-being. Finland is number one (AccountAbility 2005:108). the climate change and calls for environmentally-friendly technology in order to export its know-how. That was something we actively worked for [during the presidency]. 28 When you know the persons [officials in the MTI] and know what they think about the issue. One of our most important tasks is also to nationally find good business examples. Finland has realised that it can take advantage of the CSR discussion. (Business representative) An important element of competitiveness is the advantage Finnish business can arguably gain from the CSR discussion. CSR is also seen as risk and reputation management. In relation to the internationalisation of business activities. Firstly. Thus. The MTI also sees it as one of its most important task to find examples of best practices from Finnish business and call attention to them. That is how they see the issue and that is how it driven. The MTI often refers to AccountAbility’s term responsive competitiveness. Several of the summits during the EU presidency period have. also tried to involve companies and explicitly link this to sustainable development. Secondly. In relation to that. . responsive competitiveness has been discussed in seminars and responsive competitiveness was the focus of the Brussels conference. AccountAbility has been invited to talk about this in Finland. Finnish businesses are used to strict regulation and requirements at home. which makes it easier for them to behave accordingly also abroad and maintain a good reputation. in addition to placing emphasis on climate issues in general. and says that CSR can improve companies’ performances. we have been active and participated in the commission’s activities. this aspect is always pointed out.Chapter 4 63 strategy. then it is an honest/genuine idea that CSR brings competitiveness.

A few politicians have commented on CSR. but the comments have been ad hoc and random. the focus of the debate is domestic. We have had difficulties because we don’t have any direct responsibility and there is no decision giving our ministry any responsibility for the policy. MOL 2005:37. just as the MTI primarily shares the view with business.4. The MOL is trying to add and bring more focus on normative aspects. 4. personnel policy). Also the MFA would add a normative perspective.g. I have not seen any political debate. it is mainly the result of large-scale dismissals and company relocations (e. the MOL shares its perspective with the labour unions. this is not the case. For instance.64 The Finnish Government a couple of years ago. However. The fact is that because the MTI is responsible for developing CSR it is mostly the interest of employers that rule. And the ministries have divergent views as to what degree the dimensions should be emphasised. such as working conditions and integration. In that sense. we placed two companies from Finland in a European-wide publication.2 Domestic versus international When CSR is brought out into public discussion. the normative aspect is weakened. it is very much stressed that this framing does not exclude normative aspects. The informants and the government however. Some companies (mainly forest and electronic companies) have moved their production from Finland and it is questioning whether that is responsible behaviour. but since the ministry does not want to take on an active role. The framing could be seen as normative if CSR would be linked to any ideological or political debate. Riksdagsspörsmål 2005). these are rather parts of competitiveness (such as e. However.g. do not agree with that .

However. the committee is explicitly called the committee for international investments and multinational enterprises. so there is a lot that could be done in addition.Chapter 4 65 common view. This is the domestic aspect that the MOL tries to advance: how CSR can contribute to developing working life in Finland: How can we improve work for all kinds of people? And how do we promote tolerance for immigrants and respond to the multicultural challenges we have? There is some legislation. and because Finnish produced products are consumed in other countries (Finnish Government 2006:17–18. the MOL is having difficulties in getting this social view through to the business organisations and to the MTI. Employers are not very anxious to talk about this social side of CSR in Finland. the focus on competitiveness is primarily thought of in an international context since the effects of globalisation have become noticeable in Finland and the question is how to keep up with the competition on a global market. of course. This states that CSR will be emphasised because the raw materials used by Finnish industry and the consumer goods utilised in Finland increasingly come from other countries. it is more about child labour and minimum wages in developing countries.66). but that is minimum conditions. . CSR is not whether places of work stay in a community or not. Furthermore. It is also stated that the most important challenges in relation to CSR are related to responsible behaviour in developing countries (MONIKA 2003:13). rather how the process of giving employees notices is handled. The fact that MONIKA is the focal point for CSR in the government indicates a clear international focus. it is also in an international context. according to its own statement. When CSR is mentioned in the latest strategy for sustainable development.

• Endorsing Endorses the main international CSR initiatives.). international) Policy style • Mandating CSR reporting incorporated into legislation. Table 4. 4. Summary of the CSR policies in Finland and the UK. UK Resource allocation Framing Considerable FINLAND Modest All-embracing (instrumental and normative.66 The Finnish Government Thus. EITI. plus a range of national award schemes etc. Ambitions to be the leader in sustainable public procurement. capacity building. the government focuses on facilitating dialogue. framing and policy style―the British in Chapter 3 and the Finnish in Chapter 4. investor or public procurement. • Demonstrating Does not mention CSR in relation to its own operations as owner. implicit CSR. such as ETI. Endorses the main international CSR initiatives. was the first country to require SRI reporting for its pension funds. tax incentives etc. This section and the following table provide a summary. • Facilitating Very few facilitating initiatives. Many acts on CSR related issues. no large-scale initiative. thus. However. • Partnering Most initiatives are within this category. . Large-scale initiatives. as one informant formulates it: “everything is nowadays connected with this spectre of globalisation”.5 Summary Public policy for CSR has thus been measured by three aspects―resource allocation. these constitute the basis for the policy for CSR. otherwise by and large voluntary measures. but no formal multistakeholder forum. Extensive use of its facilitating role (awareness raising. national and international) Selective (instrumental.

mainly through seminars. . Furthermore. these differences show that CSR has a higher priority in the UK than in Finland. Seminars are. both have an international framing. but the focus still differs. in general. given the ministerial steering group. CSR is a high-level issue in the UK.Chapter 4 67 If we focus on resource allocation. while combating poverty and social exclusion at home as an explicit goal with the CSR policy in the UK. when focusing on resources. CSR is more clearly emphasised in the British organisational structure. Thirdly. The general impression of the Finnish government’s engagement is that the initiatives are random. and apparently so also in the CSR field. considered its minister for CSR. Both countries have both a national and an international focus. Secondly. even when the difference in the size of governments and economies is taken into account. Firstly. In general. In sum. the most important CSR initiative). the UK has undertaken more as well as more extensive CSR initiatives. The government has focused on information and promoting dialogue. the UK also links CSR to combating poverty in developing countries and refers for instance to the UN millennium development goals (DFID 2003). The national focus is much less marked in Finland. the NCP and more personnel resources. but while Finland primarily sees CSR as a way to handle globalisation and assert oneself on a global market. the preceding chapters have shown that the UK devotes more resources to CSR than Finland. The government emphasises dialogue between stakeholders (through seminars and through MONIKA. However. a main emphasis is quite clearly emerging: the partnering role. more areas are identified within the range of support measures for CSR in the UK compared to Finland. an important way for the Finnish government to acquire knowledge irrespective of the policy field (Helander & Johansson 1998:108).

aiming at becoming best-inclass in considering sustainable development in public procurement. I think that the network approach that we’ve had is the best model. The demonstrating role is quite characteristic for the UK.e. Due to the scope of CSR activities. There are several tax incentives. is that the UK policy is more government centred. it supports the principles and endorses others’ initiatives (UN Global Compact. Finland’s government has not . i. and philanthropy and social programmes constitute a significant share of the initiatives. It seems like the mandating role is not prominent in any of the countries. the general picture here and also in previous studies (Albareda et al. you could do as much as you like. through legislation. such as EITI and ETI.). but you also have to think about the public authorities’ added value. the government has not initiated any kind of formal multi-stakeholder process. while the Finnish government exercises a network approach. was that it given the definition of CSR not is easy for the government to find its role.68 The Finnish Government It is worth noting that an oft-heard comment among the informants. all categories. The endorsing role of the Finnish government is conspicuous. as a long history of philanthropy has set the stage for current CSR practices. is strongly linked to international initiatives. The facilitating role is also more prominent in the UK than in Finland. for instance. its pension funds to give an account of their ethical considerations. This kind of initiative does not occur in Finland within the CSR context. This contrasts with the policy style in the UK. Much of what the government has done. I think that a relatively low profile is adequate. The UK has in stead launched several large-scale initiatives together with other actors. There. The British government is much more of a driving force itself. as well as demands. However. but that promoting dialogue is what is most natural. 2006b). The UK has worked extensively with capacity building for business and has many initiatives aiming at awareness raising. OECD guidelines etc.

if these policy styles then are seen as the sliding scale. as well as through the policy styles. but does not have any vision. facilitating in the middle and partnering and endorsing below. as is the explicit case in the UK and by the way also in Denmark. with mandating and demonstrating on the top. The government listens and informs.Chapter 4 69 undertaken initiatives to the same degree as the UK. joining and supporting others’ initiatives instead of launching its own.29 The ambition is rather to keep at the same level as other international players: “at least. but does not do anything of significance and nothing that gives any results. Informants outside the government support this view: The state tries to be there.e. Thus. i. It is clear that the Finnish government is no visionary. thus indicating a stronger commitment to CSR. is an indication of a government’s commitment to CSR. . a government official said about the public policy for CSR. 29 Denmark has pronounced the goal to be internationally leading in the CSR field in 2015 (Vallentin 2007). It was earlier said that what runs all through these three aspects of the public policy. we are on the same level as they are internationally”. nor has it any leadership ambitions with its CSR policy. the UK is much more active higher up on the scale. This might signal that the government lacks a vision to develop CSR itself. It is difficult to say what the state wants. and a comparatively large share of the initiatives are linked to the endorsing role.

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Chapter 5 71 5 EXPLAINING THE FINNISH CSR APPROACH The conclusion of the foregoing description of the public policy for CSR is that the policy has been less pronounced and was activated later in Finland than in the UK. international ownership in Finnish companies also increased from less than 10% in the beginning of the 1990s to more than 70% around the year 2000 (Tainio 2006:67). this chapter and its classification of explanations are based on the two broad sets of theories: sociological institutionalism and varieties of capitalism. Foreign trade hit an all time high in 2000 with an increase of 36% compared to the previous year (Moen 2002). which opens up for more international influences.1 Triggered by international influences The data clearly points out international influences to be crucial for Finnish CSR policy. As outlined in Chapter 2. Not only did activities abroad increase. . The discussion surrounding CSR gathered momentum in the Finnish government in the beginning of the 21st century and the two reasons for increased learning are the internationalisation of the Finnish economy and international organisations such as the EU and OECD. but passed ten percent in the early 1990s and even drew near half of the GDP at the beginning of this century (see figure below). 5.1 Internationalisation of the economy Finnish business is much more international today than only a decade ago. The aim with this chapter is to tell why and explain the policy outcome in terms of its resources. 5. framing and policy style.1. the share of the Finnish outward FDI stock was not more than about one percent in 1980. For instance.

/. The outward FDI stock has increased significantly from 1990 until 2005 both in Finland and the UK.72 Exaplaining CSR policy O utward FDI stock 70 % of GDP 60 50 40 30 20 10 0 Finland UK 1980 1985 1990 1995 2000 2005 Figure 4.. Yet. it was a rather slow development. Perhaps it was the fact that CSR was discussed elsewhere and that we heard what was going on. The international boost to the economy in the 1990s is not unique for Finland./ I do not remember that there would have been a special event that boosted the discussion. In comparison. it is important to note that for Finland this change was not only an increase in internationalisation. Finnish companies entered international markets on a much larger scale than they had previously. A form of logic of appropriateness. was at work. . This internationalisation is seen as the most important reason for placing CSR on the Finnish agenda. the international signals were that these issues had to be paid attention to. but more of a start of internationalisation. or social learning. too. At this point.. but the UK was strongly involved internationally even before. and consequently an explanation why it was not paid more attention to earlier. Source: UNCTAD 2006. the augmentation in international investments was significant for the UK during this period.

It is also quite clear how ideas are transferred from other countries. but especially this kind of strategic approach to CSR. France and Italy. But the Nordic countries. international organisations and co-operation are important to us. the government also activated because of the fact that a lot of companies realised the importance of CSR when operating abroad. has probably come from these countries. except for Denmark. The CSR focal point in the government is following the development of CSR policies especially in other Western European countries like Sweden. The diffusion perspective is quite evident―both as far as the CSR debate in general as well as the government’s action on CSR are concerned. there is also a wish for more direct co-operation with the equivalent public authorities in other countries in order to acquire ideas and inspiration: I would like to see more discussion with representatives from other countries.Chapter 5 73 According to the informants. Belgium. making Finland to “talk the talk”. however. in order to keep up with the others. . Of course. and that is a problem for us too. the Netherlands. have not done much on this. Also in that sense. the international agenda is seen as crucial. and of course also in order not to strain our companies more than it is nationally regarded necessary. which we have good relations with. this kind of programme to work within. the UK. either. When looking to specific ministries. it is the MTI’s starting point to try to follow what competitor countries are doing so that Finland can keep to the same level. It is difficult to mention something specific. and got the feeling that “we have to do something about it”. The general impression is that actors in Finland saw what was going on in other countries.

Every ministerial informant mentions the significance of CSRactivities on the EU level. 5. 30 30 They are recommendations on responsible business conduct addressed by governments to multinational enterprises operating in or from their territories. firstly concerning globalisation and secondly about climate change. for instance.2 The EU and the OECD The EU agenda has been crucial in introducing CSR to the Finnish government. In effect.1. adhered to the OECD guidelines for multinational enterprises since they were established in the 1970s. that the environmental policy has been “Europeanised” since Finland became a member (Sairinen 2003:76–77). but a common feature of Finnish policy. the influence of the EU is not specific for CSR./. It is said that these EU initiatives put life into the whole CSR discussion in the ministries. Finland has. the CSR agenda on the EU-level may also be part of the explanation regarding the Finnish instrumental framing. It is said. that have also contributed to lift CSR onto the Finnish agenda. It was very important in the sense that the issue got an official base./ A lot of things here have gained speed from the European reference framework..74 Exaplaining CSR policy Much weight is also given to international discussions. After the revision in 2000. The OECD is a second international organisation that is of utmost importance for the Finnish government’s involvement in CSR. the guidelines are . as an OECD member. However. The EU is clearly placing CSR within the context of the Lisbon goals and increasing the EU’s competitiveness (EC 2006). these guidelines have constituted the key framework for CSR in the government and constitute the single international bench mark that is endorsed the most. such as the launch of the first Green Paper on CSR in 2001 and the subsequent communication. Although endorsed by governments..

the MONIKA committee was established in 2001 as a result of an OECD requirement: the adhering governments are required to establish a national contact point (NCP) for promoting and implementing these guidelines. They both address the international recommendations carefully and regard them as important. WTO and UN as arenas for developing and adhering to the CSR principles.” as one informant puts it. This framework is “perhaps not the bible. voluntary and can be described as supplementary principles and standards of corporate behaviour of a nonlegal character. they are absolutely crucial for CSR activity in Finland. but at least the authority in the field. are the unchallenged most important policy sources as far as CSR is concerned. combating bribery. the MTI guidelines and informants also stress the importance of international organisations. However. However. and will guide especially the MFA in fostering a sound international investment atmosphere. The NCP is also investigating allegations of company behaviour (OECD 2000:35). . These two. as these influences have resulted in CSR initiatives among others in the UK. the EU and OECD. The guidelines contain advice for business in areas such as employment and industrial relations. the international forces have had a great influence on both Finland and the UK. And now the new OECD policy framework for investment (PFI) is pointed out as an important future reference that will allegedly give CSR a more visible profile in the government. To conclude.Chapter 5 75 Furthermore. such as the ILO. consumer interests and taxation. treaties and conventions in general.

or will one deem CSR to be unnecessary in an already regulated system? The empirical material confirms that the two CME characteristics that were discussed―a strong tradition of mandating and legislation and a great emphasis on dialogue and stakeholder influence―are important.1 Regulatory traditions I asked how the regulatory tradition might have influenced Finland’s approach to CSR: will it result in a mandating policy style also for CSR. informal rules and history. In comparison to the UK. CSR appears dispensable because the society is relatively well-functioning and actors are satisfied with the results of the regulatory tradition. and they therefore . I gave the interaction between actors as the grounds for why VoC is a relevant theoretical approach when explaining CSR policies. CSR is perhaps not as well promoted in the business sector in other countries as here. I identified three institutions that VoC directs our attention towards: regulatory traditions. 5. This section shows that the result of the rule-based. My impression is that we [the government] in Finland are not in the fore. and culture. A recent study has for instance shown that Finnish companies appreciate the Finnish model and do not call for any substantial changes in the current system (Uimonen 2006:iii). traditional institutions and organisations.2. the role of government in Finland has been extensive rather than limited in directing the economy (Korhonen & Seppälä 2005:13) and it is often stated that the strict legislation in Finland leaves little room for CSR. Besides.2 Combining CSR with features of a coordinated market economy In Chapter 2. The following three sections discuss what impact these institutions have had on the public policy for CSR in Finland. corporatist system in Finland was doubts about to what extent CSR is actually something applicable or useful.76 Exaplaining CSR policy 5.

because many at that time said that we pay the tax and comply with legislation―that is our responsibility and there’s nothing more we can do. which would result in a society taking less responsibility in general. In the beginning. It is like a new label on something we already do. which result in centralised national agreements between the state. (Trade union representative) When I first heard about CSR. Not only do stakeholders participate actively in the legislation process. The stakeholder groups are contributing to the drafting in the ministry. Various new policy instruments have been developed. another notable feature of the Finnish system is the tripartite negotiations. And of course. I think they are even more important here than in Sweden. I thought that such an attitude and the voluntariness would imply that companies could decide whether they would like to accept responsibility or not. the confederations of employers and trade unions. such as voluntary environmental agreements. The society is quite well managed in Finland. the policy-making system in Finland has strong corporatist features.Chapter 5 77 have to do more./…/ CSR is no brand here. It was quite different than in the UK where they have more charity. we had to talk about why CSR mattered in Finland. The argument put forward is that the traditional regulation. The sector has chiefly been steered by legislation and mandatory regulations. as far as environmental and working protection is concerned. But that society would develop in that direction was perhaps an exaggerated misgiving. To me. The same logic has been at work for instance in the environment sector. We have a long tradition of working with stakeholders. so they are participating from the start. but without becoming especially popular. The big issues are under control. As mentioned. There has . the Finnish system works quite well. which has followed the consensual policy style or negotiated rule-making. This is another reason for the government to feel that CSR is not very urgent in Finland. we have a strong trade union movement and no special needs. Now I see CSR as a complement. CSR is not as problematic as I first thought. has given quite good environmental results. for instance.

this is another variable on which Finland and the UK differ. the committee consists of government officials. The corporatist traditions are also evident in the composition of the governmental bodies. business organisations and NGO’s. . Just as the satisfaction with this legalistic style can be argued to have prevented a more active development of new policy instruments in environmental protection in general. trade unions. such as MONIKA. which is one of the theory traditions that Hall & Soskice (2001:3) arguably try to go beyond by incorporating several aspects of societal relations (they say that VoC and welfare strategies correspond. This caused initially sceptical reactions in Finland. though). given its corporatist tradition. The UK’s Central European welfare strategy (Noll et al. and another variable that according to this study is essential in the institutional setting that shapes public policy for CSR. it seems to have delayed the embracing of CSR as well. 2003) means more space for the private sector to fill. This is related to CSR in the sense that also CSR is about how companies can contribute to society. but on a voluntary basis. while Finland’s Nordic European welfare strategy implies a more extensive role for the public and obligations for the private. This is closely linked to welfare strategies. The result is that the welfare strategy is somewhat neglected in VoC. the main emphasis is on promoting dialogue between stakeholders. because the talk signalled a return from today’s welfare system to the old days when large companies were important for the societies’ welfare. This is very typical for Finland. Nonetheless.78 Exaplaining CSR policy therefore not been an acute need for voluntary approaches (Sairinen 2003:73–74). We saw earlier that the predominant policy style in the CSR policy is facilitating. A consequence of the differences in the regulatory systems in CMEs and LMEs is different expectations on the role of the public and the private sector.

It is rather companies having stretched the boundaries than the government loosening them. The boundaries for responsibility. nor is it a way of exchanging binding regulations into voluntary measures. even though they should be. CSR is rather seen as an opportunity for business to use on a competitive market. the picture is quite clear in the ministries. have not been discussed. companies. As we will see in the next section. the stronger NGOs and trade unions. NGOs. about six years ago. /…/ The CSR language at that time. . The expectation is the stronger business. and how the features of the Finnish system have influenced their relation to CSR policy. 5. the stronger the normative framing. The figure below is an overview of the most important organisations and working groups working with CSR in Finland. CSR is not either seen as a tool for increasing the role of business where the state would fail. it is rather business than government that has been active on the CSR arena. to industrial patrons that took care of everything from school to health care. as well as state and non-state actors. the stronger instrumental framing. The boundaries have changed because companies here do look after these issues. sent somewhat old-fashioned signals. divided into an international and a national level. in relation to regions.2.2 The role of institutions and organisations The second of the three institutions that the varieties of capitalism approach points out is the role of institutions and organisations. however. This section is an account of the actors that have been active in shaping the CSR agenda in Finland. CSR is not about shifting responsibility from itself on to business.Chapter 5 79 It sounded like going back to old times. Today.

The EK has knowledge.NGO community . organising CSR related events.80 Exaplaining CSR policy STATE BUSINESS AND CIVIL SOCIETY UN Global Compact Nordic Network International level ILO EU CSR Europe EU alliance OECD ISO GRI MONIKA EK National level MTI ML FiBS Chamber of Commerce FinnWatch Other influencing actors Ethical Forum Other ministries . divergent views. The EK was early out in the CSR discussion (TT 2001) and have maintained its high activity level since. Business associations.Labour market organisations . experts. The EK have a considerable influence on the MTI for instance: making contacts. experience and resources to use on CSR. especially the Confederation of Finnish Industries (EK) and the International Chamber of Commerce (ICC). MONIKA and the Ethical Forum. such as the EU Alliance on CSR. An overview of the most important organisations explicitly involved in the CSR field in Finland. play a decisive role.Church Figure 5. wide business networks and . EK have its own group working on CSR and are involved in all relevant fora.

business organisations opposed it. CSR should be voluntary. informants bear witness to active standpoints from business. but still. but of the same reasons they didn’t get any consensus there. but the problem was the employers’ organisations. Business associations’ view was that CSR should be left to them. the government’s policy paper on CSR. It is said that the MOL was so anxious about getting the paper accepted. A similar paper was discussed a couple of years ago. We [the Ethical Forum] thought in the beginning that the state should give some clear guidelines on how to proceed. because the business organisations didn’t want it to. The EK and ICC still hold the view that a government policy paper on CSR is unnecessary. is the second attempt to adopt a common CSR policy. that was eventually put on ice (presented in Chapter 4). They think that it’s enough that business takes care of it itself.Chapter 5 81 resources. because businesses have naturally only something to lose if they are regulated. We were very close to get a policy declaration. but never put into effect. The EK is active. they have strongly opposed the policy paper in MONIKA with the result that also this second attempt and second paper is put on ice this autumn. It is difficult to find other roles for the governmen than dialogue. or couldn’t. CSR should be kept as voluntary business endeavours without interference from the state. as we know. proceed. (Business representative) Therefore. without involvement from government officials. Two government officials say the the business associations try to down every . But they didn’t want. and even undesired. also by business organisations. Also if looking a few years back when CSR was first introduced in Finland. Then we thought that the multi-stakeholder forum on the EU level could be a solution. that there was not even much substance left. (Trade union representative) Moreover. they were almost hostile and didn’t like such a declaration.

this means that very different governments tend to end up with same policies (Korhonen 2005:221). However. Nor is there any formal decision procedure saying for instance that the MONIKA committee. where this is discussed. Finland has a strong consensus-based way of policy thinking. business is the decidedly most important sector for the CSR agenda in Finland. the ideas of corporatism and consensus are indirect reasons why the Finnish government has still not approved a policy statement for CSR. In practice. one has tried to reach a position on CSR in consensus. Wilenius 2006:221. Or ConsensusFinland can also be described like this with the words of an informant: “there’s always room for only one truth at a time in this country”. seeking to attain consensus is an important feature in Finnish politics. . It seems as though we will not get it approved. A further example of this way of thinking is numerous coalitions across parties on the political scale that by most would be viewed as major political divisions. On the whole. has to be unanimous. in accordance with the corporatist tradition. opinions of stakeholder groups are important in Finnish policy-making. at least not with the spirit of consensus. The support for focusing on the economic policy in the 1990s is also seen as indicator on how societal actors put their controversies aside for the sake of common goals (Korhonen & Seppälä 2005:13. with their strong objections business associations have succeeded in restraining the government from adopting a common position on CSR. As this last quote shows. Moen 2002). the EK is of utmost importance for shaping the CSR policy. Thus.82 Exaplaining CSR policy proposition relating to CSR: is it too concrete is it too much involvement from government. This really became a quarrelsome issue. hence. Of course. is it a general declaration is it meaningless anyway. A natural consequence of this is the instrumental framing of CSR policy. Thus. the ministries can do as they like without permission from the business organisations. To conclude.

With a representative from the MTI. not for Trade and Industry. MONIKA is the central arena for CSR policy. while NGOs and labour market organisations expect more concrete directions. Thanks to the EK’s competence. Their main forum for influence is the Ethical Forum. The other members feel that business organisations are reluctant to develop the forum further and that way has put a stance to the CSR agenda. and the business sector is emphasizing that CSR is a business matter and is voluntary. is that they [NGOs and labour organisations] are so anxious about the control mechanisms that it creates unnecessary problems for the good cause. but also . This is probably linked to the divergent views on in what direction CSR should be going. which they call for. follow the CSR discussion actively. Another weakness. As the situation is today. two major Finnish labour organisations. There is apparently a lot of disappointment as far as the forum is concerned. resources and CSR related activity. Business emphasises voluntariness. A government official describes the cleavage like this: The only problem. this forum is another sign of business dominance is the Ethical Forum. these organisations would get a direct link to MONIKA. However. it is criticised for being a closed forum leaving non-members with little information and small opportunities to influence. corporatism can be inclusive. there is little public authorities can do. is that the government is represented by the Ministry for Foreign Affairs. their primary role is in promoting dialogue. Thus.Chapter 5 83 The government is eager to develop it together with business. Therefore. However. it has managed to get the preferential right of interpretation. which is the ministry which actually works with CSR issues. Other members―labour organisations as well as NGO's―feel that business has taken over the agenda. there have even been informal discussions about discontinuing the forum. as I see it. according to forum members. Both the SAK (Central Organisation of Finnish Trade Unions) and AKAVA (Confederation of Unions for Professional and Managerial Staff in Finland).

It is mentioned in some ministries as the actor that introduced the CSR discussion to them. if organisations without admission to this arena experience difficulties influencing. FinnWatch is the only NGO working specifically with CSR. it should be mentioned that all sectors. One example is the seminar about the role of government in CSR when one NGO representative was present (MONIKA 2003:52–53). but their personnel are very skilled. and then also anti-globalisation organisations that criticise everything that moves. That is the field. They have good resources in that sense. government. a business network promoting CSR is in many regards seen as an important actor for pushing CSR in Finland. Other actors that are mentioned include the media and it was pointed out that it is only during the last couple of years that much more attention has been devoted . Nor is there any other NGO that is especially active in the CSR field.84 Exaplaining CSR policy exclusive. Neither have NGOs been very active or emphasised this issue. it is limited how much impact this one person strong organisation actually has compared to the BITC. However. The FiBS. I wouldn’t say that something common and something broader for CSR exist. with approximately 360 employees (BITC 2007). Yet. especially as far as environmental issues are concerned (Ilmonen 2006:119). The lack of NGOs in the CSR discussion is also confirmed in interviews: I would say first and foremost that it is environmental organisations and development NGOs. labour and NGOs are represented in MONIKA. business. One consequence is probably that only 7% of Finnish CEOs consider NGOs as a very important driver for CSR (CCC 2003:4). NGOs in Finland have been active and influential. I don’t know how strong they [NGOs] are. but a limited number of representatives for each. For instance. its British counterpart. very few NGOs have participated at the CSR seminars organised by the government.

But who would have pushed it? There are interesting issues that could be more developed in Finland/…/. it is quite clear that the UK has a much vaster community than Finland. For one thing. compared to the UK. the relative lack of active stakeholders can also be seen as a consequence of the policy-making system and the characteristics of LMEs and CMEs: The consensual policy style in CMEs has provided possibilities for informal actor relations inside the regulatory system. the low NGO activity is a consequence of the lack of resources. but the basis is quite small. There are of course the big companies. to the extent that . for instance with the elections approaching [general election in March 2007]. many of the British actors reach out internationally. the British think tank AccountAbility’s work and views is often referred to by the Finnish government. For instance. and the variety of actors involved in CSR is narrower. Yet. For instance. there is no think tank dealing with CSR issues (there are few think tanks in general). some government officials. if the scope of actors on the national level is seen as an epistemic community. This relative lack of actors is a likely explanation to explain the feeble debate and CSR related pressure in Finland: There have been several cases of downsizing in companies and things that could have triggered the discussion. The difficulty is perhaps the fact that few know much about CSR. has its own SRI guidelines and has organised events. nor has a consultancy sector working with CSR emerged as it has in the UK (Moon 2005:57). Also the church has to some extent promoted CSR: it is a co-founder and member of the Ethical forum. the NGOs keep a relatively low profile. such as the Church’s Responsibility Week with seminars and debates on CSR. some knowledgeable NGO representatives.Chapter 5 85 to CSR related issues. Thus. the NGOs that would be possible drivers for CSR are very small in Finland. However. In addition.

in a CME. business and civil society) have not been very interested in promoting CSR. Furthermore.2. There are four general characteristics of the Finnish society that stand out in relation to the shaping of a CSR policy. informants often refer to the Finnish political culture. In a LME. and CSR is one of them. And indeed. Finland is seen as less idealistic than many other countries. CSR consultancies are likely to emerge in a LME. rather than dialogue and stakeholder co-operation to the same extent as in a CME. since any kind of formal multi-stakeholder debate forum for strategic thinking about CSR does not exist in the UK (Ward & Smith 2006:1). According to the same line of reasoning. thus being more active in order to be seen and heard. where dialogue and stakeholder influence are important aspects of policy-making. Secondly. even if many actors feel that they are left outside the government’s CSR forum (MONIKA). Finland is a small country with small circles and high trust. the reason being that CSR awareness is expected to be enhanced by market mechanisms. the kind of actors that have emerged within the policy field on the national level can also be seen as an effect of the nature of the economies. Finland is seen as always being practical and pragmatic in its policy style. Thirdly. informal rules and history When talking about and explaining CSR. on the other hand.86 Exaplaining CSR policy stakeholders (both government. civil society and other stakeholders can expect to be part of the governmental networks and develop the policy field within the governmental system. civil society has to find other ways to influence policy. 5. provides these actors with an opportunity to influence policy. For instance. the overall objective in Finnish politics―enhancing competitiveness― has become the rationale for a wide range of policies.3 The role of culture. the fact that MONIKA exists and is composed the way it is. Some of these four characteristics . Fourthly. Firstly. This is something that their British counterparts do not have.

that Finland at all can be regarded as an economic power. They devote considerably more money to development aid than Finland. (Trade union representative) The other Nordic countries are always more idealistic than us. Germany. as well as its relatively short period with international contacts and large international companies. Perhaps it is this international responsibility as a way of thinking… If the other Nordic countries are forerunners in that sense. Since they have worked actively with these issues for decades. they have become a natural framing for CSR policy. the UK and the US have had large international companies operating in developing countries. CSR is thus being linked to these countries’ general attitude to development countries. plays a great role. and first and foremost through Nokia. in Finland we invest much less on development aid than other Nordic countries. the Netherlands. We haven’t seen our own companies have any great impact internationally.Chapter 5 87 are pointed out as likely explanations as to why CSR has met some scepticism in Finland. some of it being directed to the instrumental framing. I do not think that Finland would have been ready to do it that clearly. When discussing framing. whose CSR policies are focusing more on developmental aspects and human rights etc./…/ Perhaps it has to do with the social climate on the whole. it is argued that the nation’s short history. for instance. (Trade union representative) This short international period is seen as a likely explanation to explain why the emphasis is instrumental rather than normative. To start with. Finland is more like the other Europeans. France. and therefore have a consumer consciousness that we don’t have in Finland. It’s not until now. Sweden. For instance. many informants compare other Nordic countries. and are thus to be regarded as more normative. Another explanation for this . too. and as a consequence boycotted Wal-Mart. Especially Sweden and Norway are described as more idealistic than Finland. It is also referred to how Norway used state money to advance its political standpoint.

some would say. the circles are small and consequently the social control is strong. which was very lively debated in 2007. thus scandals are not a driving force for CSR (CCC 2003:1). is the generous bonuses for the top management in Fortum. In relation to this. always has a very practical mind. a state-owned energy company. (Business representative) A consequence of the practical tradition is that the Finnish view is that CSR should be a genuine and essential part of companies’ business activities. For a country that for long was poor. and business too. but when they try to do something they try to do it the best way they can. but don’t do very much. they often talk a lot. They don’t talk very much. everybody knows everybody and also the power of the example. I think that the Finnish economy is quite compact. A third general feature in Finnish culture and politics that is emphasised is that it is pragmatic and practical. In other cultures. Compared to the UK and other Nordic countries Finland became a welfare state and obtained a strong economy much later. and the 31 The closes to corporate scandals in Finland.18). a governmental informant notes that the government perhaps does more than it seems like. its own development and well-being therefore has been prioritized. (Business representative) It is said that in such a small country. which is why it has not been very urgent with any increasing focus on holding business accountable. the trust is significant and there is no common suspiciousness. and that it could be better in marketing what it actually does. Also. significantly higher than the UK and the European average (Eurobarometer 60:B. The Finnish state. Finland has not experienced any major corporate scandals. .88 Exaplaining CSR policy approach to development aid that is emphasised is Finland’s history. A second feature is that Finnish society is characterised by a high degree of trust in institutions. 31 There have not been any skeletons in the cupboard.

that CSR isn’t only for social reformers. The focus on competitiveness is also a consequence of globalisation and the fact that Finland now has to find strategies in order to be able to compete with emerging producer countries such as China and India. This is how CSR is best communicated. Also areas that have not usually been framed in these terms started using this as an argument and justification.Chapter 5 89 focus on competitive advantage in the policy is the link between the government vision and tangible business activities. /…/The MTI’s language is a language that companies understand. This policy discourse is evident in the government programmes: competitiveness has been termed the most successful concept of the government programmes (Kantola 2006:165). Lilja 1998). This way. Matti . 12 times in Paavo Lipponen's first government in 1995 and 16 in his second in 1999. This crisis resulted in a paradigmatic shift in its economic policy during the same decade. the policy discourse changed from social and regional equality to economic performance. the worst Finland has experienced as a nation. but a way for companies to find new strategies. (Business representative) It is probably realism. According to Kantola (2006:168). competitiveness has become a key argument in a wide range of policy areas. just as in CSR policies. innovation. competitiveness. the unemployment rate was close to 20% and the bank system almost collapsed (Moen 2002. A fourth feature is that there has emerged a clear discourse in Finnish politics. competitiveness and growth (Heiskala 2006:36–37). Perhaps they have tried to avoid that CSR becomes something extra or unfamiliar for companies. The keyword is. The background is the major economic crisis in the 1990s. Finland almost became bankrupt. CSR can be sold to companies. And indeed. the word “competitiveness” was used 9 times in Esko Aho’s government programme from 1991. a discourse which most public policies are conformed to. This is important so one can talk to business in terms that are familiar to business.

Technology and innovation have become key areas in Finnish policy. . However. the task of the state is to promote competitiveness and economic activities. I find it important briefly comment upon what seems to be the common view: CSR will attract increasingly more attention. but also in the government. mentioning it 31 times and even proclaiming competitiveness as the key objective (ibid. public policy for CSR is moving target. more than ever. Consequently. Vanhanen’s second government mentioned it 38 times in its programme (Finnish Government 2007). but still. If there was an increase at a steady rate from the start. 5. and my general impression is that a lot is about the change at the moment.90 Exaplaining CSR policy Vanhanen's first government emphasised it even more in 2003. Today. this was for instance also the theme of the Finnish EU Presidency in 2006. it is within this discourse that CSR is being framed. I am not talking about any turnround. earlier this year. A Finnish globalisation report (Väyrynen 1999:5) states that instead of diminishing the role of the state. CSR is about to become mainstream. and then explained why. one could say that during the autumn we’ve seen a leap in the curve chart. rather than restricting them.). globalisation has only changed it. competitiveness and innovation has become the Finnish governments’ branding. (Business representative) The informants are talking about more media attention on these issues and an upswing of the climate debate.3 Prospects: The government’s interest in CSR is increasing I have just shown that the Finnish government’s commitment to CSR is quite modest. not only in Finland in general. in 1999 no other European country used more on research and development than Finland (Moen 2002). Accordingly. The emphasis has not diminished.

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The general picture is that the ministries find CSR helpful. The concept has brought new tools, such as reporting, and in general widened the discussion. A valuable contribution is that CSR gives the state a strong argument in discussions about environmental and social performances with business.
From our point of view, CSR is a good complement. It gives a good balance to international diplomacy and a concrete base for implementation. With CSR as an argument, the state can urge business to action. CSR can be a way of building responsible-business thinking. CSR has potential, but it has to have substance. CSR can be used in the discussions between the state and the industry, and the state can lead by example.

As of today, none of the informants in the ministries take a reluctant standpoint against CSR. The slight objections concern what CSR actually means, or if CSR is something new at all, or simply an old means with a new label. Several informants express their views that CSR is, and should be, something else in Finland than elsewhere. For instance: at ILO seminars, where it has been discussed whether the Baltic States and Eastern Europe should promote CSR or go for legislation instead, a dichotomy arises that does not fit the situation or discussion in Finland. However, many hope that CSR will gain a stronger foothold:
It has to do with the fact that legislation has its limitations. Legislation cannot go into every detail and there will always be small companies that cannot manage things the same way as larger companies do. Therefore, it might be good with legislation as a minimum level and CSR as space for visionaries to go further. CSR as a passing trend? No, it rather seems to constitute an abundance of opportunities in the climate sector./…/ I think that from this ministry’s point of view, there are no reasons to doubt that CSR will be a priority.

Other factors that indicate more attention on CSR from the government:

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There are many examples from other countries on how governments actually have a systematic policy on CSR, so it will be difficult to keep the deadlock in Finland. And I do think that CSR will remain on the EU’s agenda, so it cannot be removed from the table.

As already mentioned, Finland has not experienced any major corporate scandal that would have triggered the CSR discussion. However, it appears that the recent debate surrounding the Finnish company, Botnia, whose Uruguay project attracted a lot of international attention, will increase the focus on these issues. The case in question deals with a pulp mill constructed by Botnia ―the largest pulp mill in Latin America and the biggest investment in Uruguay’s history―that will be taken into use later this year. However, the project is strongly criticised by environmental movements in Uruguay and Argentina for the consequences they expect both on air and water quality. It is also criticised for ignoring the locals’ opinions (CEDHA 2007). Furthermore, the mill has caused a diplomatic issue between Uruguay and Argentina, as Argentina claims that Uruguay broke a bilateral treaty on the use of the border river. This case has been submitted as a complaint (a so-called Specific Instance) to MONIKA twice, first with regard to Finnvera’s role as a partial financer, then with regard to Botnia as a Finnish company. 32 The first complaint was rejected with the motivation that Finnvera is an export credit agency, not a company, and that the OECD guidelines therefore do not apply (MTI 2006c). The second complaint was accepted, but MONIKA’s conclusion was that Botnia has not been proved to violate the OECD Guidelines (MTI 2006d).

32

CEDHA and the Norwegian organisation Bellona submitted a complaint to the Swedish and the

Norwegian NCPs too, as the Nordic bank Nordea is an investor in the project.

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Even if the Botnia case―according to informants―was clear and the committee quite unanimous, it has been discussed a lot in MONIKA. It has arguably increased MONIKA’s awareness substantially.
Altogether, the CSR issues are discussed more now than before. The government will probably continue developing its CSR policy and rendering the coordination more effectively, for one thing in consequence of the Botnia case. Here, we don’t think that the state plays a role in this and there was no disagreement in the discussion [in MONIKA meetings]. Perhaps it was too distant there in Uruguay on the other side of the world, but it was a tangible case of CSR. Perhaps this case awoke something more extensive as well, that this [CSR] has to be taken seriously.

.

due to this system. bearing the coordinating feature of the Finnish system in mind. as CMEs are systems with strong co-operation traditions and corporatism. This. The mapping of the policy shows that resource wise. has sustained an approach to CSR with the question. CSR is no prioritised policy field. in combination with the fact that Finnish legislation arguably leaves little space for voluntary initiatives. for the whole trio consisting of the government. the performance of the existing governance system has by and large been satisfactory. what’s it in it for us? In sum. This is not to say that the government has performed badly or been too inactive. and that societal considerations. the amounts are small. All in all. rather that CSR was introduced as a policy field later than in many equivalent countries. This investigation shows that the fact that CSR has not gathered momentum earlier can be explained by national institutional factors. the funding is ad hoc and CSR initiatives are random. business and .1 From a slow start to status quo CSR was not met with any great zest in Finland to begin with. a common view has been that CSR is nothing new and provides little added value in a system where coordination between societal stakeholders is a mainstay for the economy as a whole. The framing is selective and the range of policy styles employed and CSR initiatives undertaken shows that the ambition level of the Finnish government is significantly lower than in the UK government. And indeed. are already safeguarded.Chapter 6 95 6 CONCLUSION 6. The supposition outlined in the introduction was that a government in a CME is likely to appraise that CSR is unnecessary. The signals were rather negatively received: CSR was to start with understood as something that would be useful in a less wellfunctioning country.

Business associations strongly objects government involvement in CSR. Yet. a policy document on CSR that would be backed by the whole government. The MTI and EK are the two most important actors. the EK has a vast impact on the CSR agenda in Finland. no one of them have pushed CSR or been very urgent to embrace CSR. this will happen in 2008. These further strengthen the instrumental framing. for instance as arguments in negotiations with business. These findings indicate that the network and degree of other societal actors involved in the policy-making for CSR is of the utmost relevance for the policy outcome (in practice this means being members of MONIKA). If is to be discussed again. Both the fact that the framing is so clear and that the MTI is . However. This can in turn be linked back to the features of the varieties of capitalism. for awareness raising or as a complement when legislation cannot be detailed enough. True to its usual habit. the government’s awareness of and focus on CSR are indisputably growing and clearly see methods of application for CSR. the Finnish government involves all stakeholders with the aspiration of working with CSR in consensus. That the government chooses to not go against the will of business associations even if the government itself thinks that it should have a formal policy on CSR shows how the so for Finland typical consensus aspiration has resulted in status quo for the public policy for CSR. has been planned for long. The reason for this status quo is strong objections from business associations about adopting a policy paper on CSR. it has been impossible for the government to bring business on the one hand and trade unions and NGOs on the other hand in line with each other. However.96 Conclusion civil society. and in effect. they will by no means risk more regulation and therefore rejects the thought of the government more involved in CSR. In general. at the earliest. but was once again put on ice this autumn. given the strongly divergent views on what CSR should be.

During the starting phase of the CSR discussion in Finland the focus was clearly on Finnish company operations abroad. the framing of the CSR policy that gradually has emerged (CSR as a means for competitiveness) is very clear.Chapter 6 97 the key ministry is part of a conscious strategy. As a result. and that non-responsible behaviour by Finnish companies would be a disadvantage. on the other hand. unlike a few years ago. Moreover. Finland sees an opportunity for its companies to take advantage of the increasing awareness of ethical and environmentally-friendly operations. the common view was that CSR was not urgent at home. However. This can be linked to the Finnish policy mantra of the decade. which so clearly sets the premises for the CSR policy too. there is an underlying risk for misinterpretation when talking about CSR as something “unnecessary” for CME governments. There is nothing in-built . the framing itself can also be seen as a consequence of the political-economic system. In the UK. the national framing of CSR is significantly stronger. However. with the MOL among those leading the way. but really made the government think about how it could be useful and what arguments to use in order to get it accepted. One might also argue that this scepticism―or what’s it in it for us way of thinking―did prevent Finland from adopting CSR entirely. the state has realised that Finnish consumers are becoming more demanding and so too is the international community. The national aspect has been pointed out during the last couple of years. as well as products stimulating those same values. CSR is primarily framed in an international context. competitiveness. In Finland. but with strong objections from business associations. This is in line with the main objective in Finnish policy: ever since the economic crisis in the 1990s has economic policy occupied Finnish politics and competitiveness been the catchword. where the role of the private sector is more emphasised than in Finland.

First of all. it started “talking the talk” as a result of social learning. This kind of symbolic diffusion is at the centre of sociological institutionalism. urging governments to action (EU and OECD). social or environmental concerns to a less extent than CMEs. Another important cause was the internationalisation of the economy. Being rulebased says nothing about the standards of the rules.98 Conclusion that LME systems will consider ethical. national constraints So to what extent are CSR policies learned or imitated from others. 6. . and to what extent are they functions of institutional factors in the national political-economic system? In order to answer that. Perhaps is its emphasis on the demonstrating role linked to features of the liberal market economy: it is difficult for the government to find acceptance for imposing binding regulations and instead. Seen in this perspective. Also the government learned what was going on on the international arena as well as in many other governments and felt that it too had to do something about it. Finnish companies expanding abroad brought the discussion home. This study has shown that this distinction is useful and that the causes for the emergence of the CSR agenda differ in Finland and the UK. the trigger in Finland was the international agenda and the international organisations.2 International influences. the UK’s emphasis and high ambitions with its demonstrating role is interesting. it tries to inspire by leading by the example. I would like to recall the distinction between causes of action and constraints on action that was made in Chapter 2 in order to decompose the causal relationships. The UK has an ambition to be in the fore: partly because of SRI ambitions with the pension funds as well as the leader aspiration when it comes to public procurement.

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In the UK, on the other hand, the main causes for government to set out a CSR strategy were national. Studies on the emergence of the British CSR agenda talk about a governance crisis and a need to re-embed social issues after the Thatcher years of deregulation (see Chapter 3). Thus, Finland and the UK had, at least initially, different motives for promoting CSR. In other words, the starting points for causal mechanisms were different: national factors triggered the discussion in the UK, while exogenous factors and international influence were crucial for the emergence of a public policy for CSR in Finland. This can be related to the supply and demand for learning. Finnemore & Sikkink (1998) remind that if it was not for the norm, it would not be necessary to mention CSR at all. Thus, if it was not for CSR having become a norm, governments did not have to talk about CSR, adopt a policy paper on CSR, create websites or launch any kind of initiatives. This corresponds to the discussion around the policy paper on CSR that could not be agreed upon. Disappointed government officials see it also as an image question―when so many other governments have showed their commitment formally―so should also Finland do. The first decision to embrace CSR in Finland was based on rationality. Other competitor governments do, and therefore also Finland has to. The initial scepticism that existed in Finland is exchanged gradually with an attempt to actually make use of CSR. Thus, it can be argued that the CSR norm has moved on from the first to the second phase. This is where the socialisation effect hits the policy-making, when the rationality of “talking the talk” is transformed into “walking the walk”. Finally, it is worth noting that the UK has an active policy, taking its own initiatives, whereas Finland exercises a reactive policy, mainly responding to international pressure and development. Finland’s government has no CSR initiatives of their own, but rather follows international standards. MONIKA, for

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Conclusion

instance, is a result of OECD requirements. This can also be interpreted in the light of the life cycle of norms. The CSR norm has reached the second stage, moving towards the third, in the UK, where the state itself is one of the norm advocates. In Finland, on the other hand, the government has not been a driver (because of the national features that have been discussed). Instead, the Finnish government is the object of the socialisation process. That was the trigger for CSR, but the outcome of the policy cannot be explained without the historical institutionalism. Once CSR meets the national context, the national institutions do constrain the policy. The summary of the findings of this thesis in the section above gives an account of how Finnish national institutions have constrained the public policy for CSR. The conclusion is that the expectations that were derived from the varieties of capitalism features could be confirmed in this analysis. The empirical data show that all the three aspects that are highlighted―features of the coordinated market economy, traditional formal institutions as well as informal institutions―have been important for shaping the CSR policy, and they are all needed in order to provide a comprehensive explanation. Hall & Soskice’s (2001) original work emphasises the rational behaviour of actors, and leaves the cultural aspect aside. Here, however, it is of no less important than the others. What about alternative explanations? The government is to a large extent seen as a uniform actor in this thesis, just as the theoretical approaches presupposes. However, that is not always the case, which opens up for the possibility that also organisational theory could have explained a great deal of the policy outcome. Furthermore, the theoretical approaches applied do not leave much room for individuals. Yet, the role enthusiasts and personal interest play, according to these data, cannot be ignored. Individuals, due to their personal interest in CSR, have tried to place it on the agenda in their ministries:

Chapter 6

101

We began to discuss CSR much due to one of our officials being very interested in the issue. It started with an article about CSR he didn’t get published in the Helsingin Sanomat, which started a discussion about why not. I really woke up during a visit to Sweden last year, where they really have a proactive grip [Globalt Ansvar]. /…/ Afterwards, I got in touch with the [x] department here. We have met and exchanged information, even if we do not have an official discussion about whether we should do more. Perhaps it was also my fault [that CSR wasn’t discussed more in this ministry], because I wasn’t very enthusiastic to begin with.

Also the establishment of FiBS was a result of one person’s interest, who in turn was inspired by the discussion in the EU. FiBS was originally established under the auspices of the National Research and Development Centre for Welfare and Health (Stakes). However, this was not because the public sector had decided to act, but because the initiator happened to be employed there and because FiBS as a network had to be established within an existing organisation. This is an important aspect that the analytical models applied here neglect and are incapable of accounting for. However, one can also put it like this: in accordance with sociological institutionalism, international ideas give these individuals their ideas and reasons to act.

6.3 The way ahead In the introduction, I hinted that a rationale for this study was to shed light on the status of CSR. What do these findings say about governments’ confidence in CSR and the future of CSR? The accelerating CSR related activities may show that CSR not only was a passing phase of the 1990s, but actually something to count with also in the future. The conclusion here is that governments also become increasingly aware of the CSR agenda. The escalating activity level of the Finnish

what CSR means in practice and in terms of implementation is yet to be seen? Furthermore. as the empirical data shows the view that CSR is merely a new label on old principles and working methods is quite prevalent. though. These organisations are therefore also likely to play a crucial role for the development of CSR as a concept. Thus. . the policy process for CSR in Finland was a response to pressure and influence from international organisations (the OECD and EU). Nevertheless. CSR will be of any significance only if it is seen and actively used as a new approach. this proves that CSR counts. a new right-wing government was elected in Finland in March 2007 and the informants do not think it will influence the plans to adopt a policy paper. but also in parts of Europe where governments still are not as familiar with CSR. the Finnish government feels that it needs to “talk the talk”. What might have an impact on CSR policy. which shows how important international initiatives and organisations might be for a single country.102 Conclusion government show that the symbol politics of CSR is about to fall into place also in Finland. is that the new government has decided to merge the MOL and MTI. this organizational aspect might have some influence: either the different views will be better coordinated and taken into consideration. not only in the studied countries. This indicates how important organisations like these are for the future implementation of CSR practices. If nothing else. or the MOL standpoints will be swamped with the economic policy that traditionally has a high priority. All in all. Given the importance of the two different focuses these two ministries have on CSR. This thesis can nothing but confirm this. If this view prevails. CSR will have little concrete impact. Constructivist projects in general often point to the importance of international organisations in the socialisation process.

not either in terms of party politics. I have heard criticism from several counters―in interviews as well as from others I have met in conferences. such as the Nordic countries. For Finland. . Thus. NGO representatives have felt that they were not taken seriously and organisations that do not have a seat in the committee have felt that it is a closed forum.4 Further research Some governments have had conscious CSR policies longer than others. that would for instance be to evaluate MONIKA’s role and function. would be worthwhile. Therefore. The backside of this choice of cases is that there are fewer variables to exclude as explanatory factors. comparative studies of more similar cases. Since this committee is central for the development of CSR in Finland. I would like to look further into the standpoints on the political scale: is CSR a trend that goes for everybody or are there differences between political parties? And finally: the two countries in this study differ in many ways. For instance.Chapter 6 103 6. its function is of great interest. Therefore. There are also government officials hoping for it to evolve from a What is only briefly addressed is here ideology. some are in the process of working policies out. This study shows that CSR not has caused any political discussion in Finland. making the contrasts very clear. there is a need to take the next step and evaluate existing policies and look into their effect and efficiency.

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2007. Enterprise and Regulatory Reform. Jokiluoma Hannu.2007.2007. the State Pension Fund.2007. MTI and Chairman of MONIKA. Head of Development. Interview 15. Senior Advisor. Previously worked for SAK and represented ETUC (the European Trade Union Confederation) in the EU multi-stakeholder forum for CSR.3. Telephone interview 7. Industries Department/Financing Division. Legal Affairs & EU. Council of Industry Policies. MSAH and member of MONIKA. Myllymäki Eeva-Liisa.2.2. Initiator to FiBS. MTI and Secretary-General of MONIKA. Contact person for the Ethical Forum. Manager. Monni Susanna. Juutinen Sirpa. Interview 15. International Department. Grahn Hans.2007. Telephone conversation. MSAH. ME and deputy member of MONIKA. previous Planning Officer. Telephone conversation 15. Deputy Director General. EK. Left Alliance. E-mail contact. Managing Director. . AKAVA. Interview 15.2007. Paaermaa Risto. Saarnilehto Merja.4. Industries Department. Interview 14. SAK. Interview 14.Appendix 119 APPENDIX 1 Informants Bergman Turo. PriceWaterhouseCoopers. Political Advisor.2. Interview 15. Telephone conversation 11.2. 27.2007. MFA. Myhrman Rolf.2. Department for Global Affairs. Griffith Mark.2007. FiBS.2007.2007. Advisory Director. Löyttyniemi Timo.10. Domestic CSR Issues. Interview 15. previously involved in the Ethical Forum. Interview 16.2007. Interview 13. Interview 15. Ambassador for Global Governance. Department for Occupational Safety and Health.2007. Senior Adviser.2.10. Immonen Jorma.2007. 25. Ristelä Pekka. Deputy Director.2.2007. Environmental Protection Department. Räsänen Rami-Samuli. Business Infrastructure.2. Ervasti Outi.2. the UK government. Department for Business. Senior Policy Advisor.2007. Chief Counsellor.2. MTI.6.

Vice President. Department for Working Environment Policy.2007. Producer and journalist. Salo-Asikainen Sirpa.2007. CSR & Community Involvement.2. Interview. 12. Interview 13. MF and member of MONIKA. Sinivuori Kimmo. Interview 15.2007. UN and Other Multilateral Cooperation.2.2007.2007. 12. 14.2. Nokia.2007. Counsellor. Director. Counsellor. Secretary General. 16. Sundelin Martin. Director. ICC and member of MONIKA. Interview. Uimonen Maija-Leena. Department for Working Environment Policy. FinnWatch.2.2007.6. 13. Vartiainen Kirsi. Special Planner.3.2007. MOL. ME. MOL and deputy member of MONIKA.2007.2. Ownership Steering Unit. International Affairs Unit. Interview. Previous member of MONIKA. E-mail and telephone conversation.6. Senior Advisor. 21. Interview. Department for External Economic Relations. Commercial Counsellor.2.2. Wide Johan. 27. Timonen Pekka. Telephone conversation 12.120 Salmenperä Matti. ME and member of MONIKA. Telephone interview. the Prime Minister’s Office. the Finnish Government.2007. Simola Eeva. Telephone interview. MFA. Vuori Timo. .

– Prospects. – When CSR became a topic in this organisation. if at all. in the ministry's work. – Important actors. . – How CSR relates to the interviewees work. – To what extent CSR has been a political discussion. – What factors brought it up? CSR drivers in Finland and in this organisation. if any. – Government initiatives and the role of government.Appendix 121 APPENDIX 2 Interview topics – Description of the CSR agenda in Finland/this organisation. – Added value of CSR.