Lutz Preuss, Michael Gold, Chris Rees School of Management Labour Unions and CSR: Initial Results from a Cross-Europea

1. Lutz Preuss, Michael Gold, Chris ReesSchool of ManagementLabourUnions and CSR: Initial Results from a Cross-European Research Project

2. Introduction rapid growth in interest in CSR across the globe • formal tools: UN Global Compact, OECD Guidelines, ISO 26000, GRI sustainability reporting guidelines • global financial crisis highlighted issue of legitimacy of corporate power renewed attention to the relationship between business and key stakeholders, such as NGOs or local communities but: one societal actor frequently absent in the CSR debate, namely labour unions

3. Reasons for Considering Unions in CSR practical level • union role to defend the interests of the employee stakeholder • international labor cost competition has led to worsening conditions if not employment losses theoretical level • mismatch in scholarly attention between outsider and insider groups • self-selected nature of NGOs versus unions as democratically accountable organizations = what do unions make of the rise of CSR and to what extent do they engage with CSR initiatives?

4. Literature on Unions and CSR despite frequent attention in CSR literature on employees as stakeholders, trade unions themselves rarely considered initial research: two polar opposites • unions are largely scepticalof CSR as it transfers yet more power to managers to make unilateral decisions (Preuss et al., 2006; Salzmann and Prinzhorn, 2006) • unions hope that CSR tools may allow them to recover some of the ground they lost during years of declining influence (Blowfield, 2007), e.g. Ethical Trading Initiative = this study aims to go beyond this dichotomy and to cover a much wider geographic scope than prior research

5. Theoretical Lenses 1. ‘National business systems’ or ‘varieties of capitalism’ literature national variation in the way key institutions – e.g. state, legal system, industrial relations – combine to embed social and economic structures and norms within particular ‘national logics’ (Whitley, 1999; Hall and Soskice, 2001) 2. Institutional theory seeks cognitive and cultural rather than economic or efficiency-driven explanations of social phenomena CSR less about going beyond the law but specifying how business-society relations are constructed in different ways in different national settings (Brammer et al., 2012)

6. Methodology relative scarcity of prior research, hence exploratory research using case study approach 12 countries across Europe: Belgium, Finland, France, Germany, Hungary, Lithuania, Poland, Russia, Slovenia, Spain, Sweden, United Kingdom within each country we studied: • national trade union confederations and • sectorallevel unions covering engineering, utilities and, where appropriate, textiles sectors display different trajectories in global capitalism in terms of domestic versus global markets, quality product versus low-wage competition

7. Methodology data derived from semi-structured interviews as well as from complementary sources, like union documents interviews were undertaken by country teams composed of scholars working on the intersection of industrial relations and CSR in each country data collected: total of 71 interviews between November 2011 and March 2013 common interview schedule findings to be published in edited book published by Routledge

8. United Kingdom: NBS classification “the principal European liberal market economy” (Hankéet al. 2007) characterized by short-term finance, deregulated labour markets, far-reaching powers for CEOs, limited role of the state labour movement decentralised and poorly coordinated tradition of craft unionism but recent mergers led to general unions (e.g. Unite, 1.5m members, Unison, 1.4m members) long history of CSR, from early 19th century philanthropists through business-driven CSR coalitions in 1980s to multi-stakeholder agreements today, e.g. Ethical Trading Initiative

9. United Kingdom: Union Positions predominantly sceptical understanding: “… we live in a capitalist society and the reasons that any enterprise exists is to make money. … If they think that by appearing to be good corporate citizens, it helps the bottom line, then they’ll do it. If they don’t think so, then they won’t do it.” [GMB] particularly critical of voluntary nature of CSR but seen as useful concept to impress on employers that CSR covers working conditions and not just philanthropy concerns in particular the international arena, where compliance with e.g. ILO Conventions is a crucial topic

10. United Kingdom: Union Engagement use of CSR arguments to defend domestic employment e.g. use of environmental arguments in case of threatened factory closure and relocation of production of a food item to Poland although the UK remains the main market greatest visibility in the international arena: bring pressure on companies for failing to comply with own CSR policies e.g. US clothing corporation claimed to be compliant with labour standards but union GMB found out that one of its Central American subsidiaries was in receivership and had not paid wages for three months

11. Finland: NBS classification industrialised rather late but developed into an exemplary coordinated market economy close links between industry, government and labour, state-led coordination of the economy, long-term investment in heavy industries and knowledge economy cooperative industrial relationships, tradition of highly centralised wage bargaining but recently become more decentralised paternalistic roots of CSR but replaced by welfare state from 1960s; somewhat strengthened again in the wake of the internationalisation of the economy since the mid-1990s

12. Finland: Union Positions despite some scepticism, generally positive attitudes to CSR “… it increases opportunities, [although] our foundation is so strong, that we’ve got these strong unions and we’ve got strong legislation, we’ve got strong official procedures so we don’t really have to be very afraid that it will begin to slide.” support for the business case for CSR overall seen as supporting traditional aims of the labor movement, e.g. developing dialogue between management and labor

13. Finland: Union Engagement domestically, CSR seen as tool to increase union legitimacy “… when whole factories are closed down or activities are shifted to other countries and as a consequence you get a lot of redundancies, well in those circumstances especially these questions of responsibility arise and the idea that they should be considered more.” internationally, unions use CSR commitments as a way of putting pressure on companies and on subcontractors unions are increasingly networking with foreign unions, NGOs and MNEs to safeguard employee rights

14. Slovenia: NBS Classification rare example of a coordinated market economy among post-Communist transition countries (Feldmann, 2006) relative economic and political success based on coordination between business, government and labour; comprehensive bargaining coverage; industrial relations modelled along German lines several union federations divided along political and industrial lines and strong competition among unions CSR relatively new concept, popularised by the European Union but strong emphasis on worker representation in Yugoslav economic model

15. Slovenia: Union Positions overall sceptical perspective, reinforced in particular by the recent economic crisis ‘”This is all they opt for, competition, this liberal mantra, competition, competitiveness. …When I explained our understanding of CSR, he [the employers’ representative] said, ‘no way we can include all this’, he said, ‘this will hinder our competiveness’.” overall, CSR is not seen as particularly effective a ‘passive acceptance’ of the voluntary character of CSR by emphasizing that it is not on the agenda in times of crisis

16. Slovenia: Union Engagement unions in Slovenia have no strategies to actively and purposefully engage in CSR, although some ad hoc projects exist electrical engineering union: company blacklist, where firms do not respond to union complaints about activities that are unlawful or harmful to employees example of a conflict between union and a local environmental organization, due to the unsupported claims and demands made by the local environmentalists

17. Conclusions a ‘certain paradox in union attitudes to CSR’ (Segal et al., 2003) remains: • although CSR concerns fall into union remit at least partly • the initiative to develop CSR comes more or less entirely from management Hungary: best CSR practice in their countries was promoted by foreign multinationals, e.g. those from Germany, even though in top-down and paternalistic way however, some success for unions in marrying CSR to their own agenda, e.g. linking CSR to international development = question of agency within NBS/VoC

18. Conclusions significant cross-country differences • Finnish unions display a positive attitude to CSR • those in Belgium and Slovenia do not engage with CSR • middle position in Germany: unions display a degree of scepticism but also adopt a largely constructive approach also major within-country differences, e.g. France • proactive position by ConfédérationFrançaiseDémocratique du Travail (CFDT) • reluctance to engage with CSR by Force Ouvrière (FO) picture is far from static, as many unions detailed how their understanding of CSR has changed during recent years.

19. Conclusions explaining differences in union understanding of CSR through NBS arguments • unions in liberal market economies more sceptical of CSR, e.g. UK but also Hungary and Poland • unions with the most proactive attitudes to CSR come from coordinated market economies, e.g. Finland • clearest support for business case for CSR only in Finland yet no determinism overlaid with other factors, not least the nature of the union membership, e.g. proactive attitude in UK union Prospect which organises managerial and professional staff