How CSR Europe can drive Corporate Sustainability through Social Innovation

Author: Dr. Thomas Osburg, Director Europe Corporate Affairs, Intel Corp. and Board Director of CSR Europe

Looking at current issues we are facing in Europe, we might be a little misled by day to day news. Undoubtedly, the ongoing financial instability in the Eurozone remains a serious issue for most European countries. However, the real long-term burning problems are in two areas which are ultimately more interlinked than what one might think and which CSR Europe aims to tackle in its new work programme 2013-2015:

First, the unemployment rate in Europe has hit record levels. In particular the unemployment rate of people under the age of 25 is alarming and unacceptable. In countries like Greece or Spain more than 50 % of the young people fail to find a job. At the same time, however, we witness an increasing drop-out rate in schools and a declining interest among youth in STEM subjects (Science, Technology, Engineering, Math). This is particularly worrying because Europe is missing more than 100,000 engineers and IT specialists; jobs, which could be filled if people had the appropriate qualification. A second area of major concern is the challenge of sustainable living in cities. This is driven by a growing population in various parts of the world and at the same time a trend of leaving the countryside to live in urban areas. This poses a significant challenge for housing, social welfare, energy consumption and other related issues. It is no surprise that businesses are being asked more and more to make a contribution to solving these problems.

The new Work program for CSR Europe that will be officially kicked off in April this year will address these sustainability problems in a much more focused way than before. CSR Europe’s Board of Directors, which is composed of representatives coming from world major companies, was very clear that we need to support the EU and national governments in helping them to find and implement solutions to long term challenges. One of the most promising approaches to do so can be seen in the concept of Social Innovation. It is broadly understood as a new form of cross-sectorial collaboration between governments, NGOs and private companies who strive to create shared value for all stakeholders. The concept builds on the belief that the potential to tackle the sustainability issues lies in the power of collaboration between these actors. In this sense, Social Innovation is not a next generation of CSR; it takes a very different approach from the very beginning. Social Innovation focuses on finding a joint, innovative solution to a societal problem and its subsequent implementation. A lot of companies have already embarked on this endeavour.

Yet, taking a path of Social Innovation is not a mission with a guaranteed result; a number of companies aiming at delivering good results fails to do so. Mainly, they do not generate a targeted impact or they lack long term viability. This can be partially related to the fact that Social Innovations often get started with an enthusiastic but narrow focus on the problem itself. Such an Invention-centred approach, without long term perspective planning fails to deliver a scalable Innovation.

To overcome this shortfall and to advance Social Innovation concepts, it seems more promising to first investigate companies’ Innovation concepts. The traditional Innovation Process predominantly focuses on economic sustainability for the firm, which means it should help the company to stay in business. For many years, this was sufficient enough and doing good was an add-on to gain reputation or secure the license to operate. Today, a true Social Innovation is supplemented with a societal component or a solution driven approach. Basically every successful enterprise has established a well thought-through Innovation process. This is a key component to remain competitive in the future.

This is changing now. Following requests to companies for Triple Bottom Line reporting, that requires communication of economic, ecological and social sustainability, a pure economic focus of the Innovation process is not sufficient anymore. In order to achieve the necessary ecological and societal sustainability, the Innovation process needs to change to allow for solutions contributing to the Triple Bottom Line and thus bearing potential for shared value creation, both for companies and society.

European Business Campaign on Skills for Jobs and its reference initiative Enterprise 2020 strategy aim at including Social Innovation into the Innovation process to help companies increase their own sustainability or – in other words – their capacity to endure. It is the dedication to Social Innovation, and Shared value creation that made Enterprise 2020 become the leading European movement for companies committed to developing innovative business practices and working together with their stakeholders to provide solutions to existing and emerging societal needs.

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