Overview of CSR in Norway
Norway is a global leader in the area of corporate social responsibility (CSR) and is often cited as a best practice example of a country, whose public sector and increasingly, private sector enterprises, have made strides in integrating CSR into companies’ business strategy and day-to-day operations. At the core of CSR practiced in Norway is the understanding that companies have certain responsibilities towards people, society, and the environment. CSR is an integrated part of doing business; with a few exceptions, it is usually not something that is undertaken in addition to core business activities or as a philanthropic contribution. CSR principles of any given company permeate throughout every aspect of a company’s work, and at all levels—from the Board room at headquarters to offices abroad and to all suppliers. Companies need to address CSR in a forward looking manner and ensure that CSR is a part of corporate governance.
CSR in Norway has evolved over the years and this process was gradual. Initially, companies built up the town around a particular industry, especially the case of hydropower in Norway. These became company towns, where the company provided much of the services that are now provided by the public sector. Companies with operations in Norway are no longer expected to play these functions. Instead, companies are now expected to be responsible for the impact of its activities on the people, society and environment. For companies with operations in developing countries, the situation is a bit different. Companies with a presence in developing countries where poverty is widespread—and addressing MDGs is a work in progress—are expected to demonstrate responsibility toward the local people and communities, but are not required by Government to undertake long-term development activities. In some instances, however, Norwegian companies do work with communities to identify local needs and implement projects that address them. Working together with NGOs and international development partners, Norwegian companies set up schools, health clinics, create livelihood opportunities, and impart skills training.
The White Paper—Corporate Social Responsibility in a Global Economy2—lays out Norway’s approach to CSR. Issued and discussed at the Norwegian Parliament in 2010, the paper presents basic guiding principles for CSR and is the starting point for the country’s ambitious CSR policy. The paper does not define CSR, but provides a basic understanding of CSR. More importantly, it communicates the Government’s expectations for public and private sector enterprises and sets out expected roles and responsibilities of the authorities, the private sector and other actors in implementing the national vision for CSR. In Norway CSR is voluntary and goes beyond laws and regulations of any particular county. It seeks to integrate social, ethical and environmental issues in the daily business activities of Norwegian companies. The White Paper is an output of a long consultation process with key stakeholders and is firmly anchored in principles and guidelines set out in a series of international guiding principles, conventions and initiatives all geared toward making businesses more responsible. In fact, one of Norway’s key achievements was reaching a consensus between all key stakeholders including media and civil society on the CSR guiding principles before formally adopting them.
Norway’s overarching guiding principles for CSR cover three broad areas where the Government intends to play a role on CSR: 1) clarifying and communicating its expectations of all companies on CSR obligations; 2) participating actively in international processes aimed at strengthening the global framework for responsible business; and, 3) leading by example—aiming to be at the forefront on CSR in companies that are fully/partially-owned by Government, in its investments and procurement. Working with public sector companies, the Government intends to set standards for CSR execution/implementation that the private sector could emulate.3 Norway does not have an institutional framework to oversee and regulate CSR in the private sector companies. The Government however, expects that there will be positive spillover effects from public sector companies that are expected to take the lead nationally on the CSR agenda.
The CSR guidelines for public sector companies focus on four broads areas: respecting human rights and upholding core labor standards (adhered by the companies in Norway and outside); environmental risk mitigation and protection; corporate governance including anti-corruption and transparency matters. In each of these areas, the Government’s White Paper encourages companies to adhere to international guidelines and principles such as the UN Charter on Human Rights, UN Global Compact, OECD Guidelines for Multinational Enterprises, UNGCN, ILO conventions and for reporting the Global Reporting Initiative (GTI). The focus of the Government is to spread these principles and ensure that they are implemented. Violations or non-adherence to the principles in any four of these areas by any company operating abroad is viewed very seriously by the Government.
The Role of the Government in Operationalizing the CSR Agenda
The role of the Government is to engage, guide and influence CSR in partially/fully state-owned enterprises. The Government participates in dialogue and exchange of knowledge to improve CSR practices by Norwegian and continually considers new efforts to strengthen processes and develop new ones. The CSR department meets with PSEs on a regular basis. The Ministry of Foreign Affairs acts as the focal point and deals with companies’ CSR queries and requests for information. An advisory committee (KOMpact) was put together by the Ministry of Foreign Affairs; it has broad representation that includes CSOs, workers organizations, and trade associations. KOMpact is new and is meant to be a forum for dialogue on CSR issues. It is mandated to improve decision making processes, facilitate exchange of information between Norwegian stakeholders, and increase motivation for implementing CSR. The MoFA does not have a system of awards/penalties for good/bad performing companies. Instead it stresses that good companies are rewarded either by investors or consumers, who take under consideration a companies’ record on CSR when making a purchase or investing. The Ministry has a close dialogue on CSR related issues with industry confederations as well as civil society. The society at large is engaged in the monitoring and supervision of PSEs’ CSR activities. NGOs are both drivers and monitors of CSR, Ministry of Foreign Affairs and the Ministry of Trade and Industry and Innovation. Norway also participates in many multi-stakeholder initiatives for social responsibility.
The Government provides a robust menu of advisory and guidance services—information, guidance and dilemma training—to Norwegian companies. It maintains a web-based overview of information and expertise regarding CSR. To assist companies operating abroad, the Government has drawn up country profiles tailored to the private sector’s needs in areas relating to CSR and generally creates opportunities (KOMpact is a good example) for discussing specific problems and challenges that companies encounter internationally. It works closely with various stakeholders including social partners and civil society so that information and experience are shared broadly.
The Government of Norway’s responsibility on CSR goes well beyond its borders. It plays an active role in creating and strengthening international CSR guidelines, with a view to establishing more binding frameworks and mechanisms. For example, Norway has been involved in revising the OECD Guidelines for Multinational Enterprises in the areas of human rights and climate change and environment. In terms of funding, it is envisioned that Norway will allocate increased resources to initiatives and institutions bodies that promote CSR, including the UN Global Compact, the Global Reporting Initiative (GRI), and the International Labor Organization (ILO). Norway’s support of the UN Special Representative of the Secretary-General on human rights aims to develop a framework that sets out minimum requirements for CSR in respect human rights and business.
In addition, the Government has issued an Ethical Plan for government purchases and trade initiatives and a Code of Ethical Practices for global investments by the Norwegian Pension Fund (NorFund)—Norway’s sovereign wealth fund.