Monday, December 20, 2010

CSR in Finland

Guest blog by Arno Kourula

Finland is a highly developed and educated northern European republic and European Union member country with approximately 5.2 million inhabitants. Since the second World War, Finland has transformed from a farm and forest economy to a diversified modern industrial economy. In this Nordic welfare state, public institutions have traditionally played a significant role in providing a societal safety net and levelling inequalities.

Since the recession of the early 1990s, the country has increasingly opened its financial markets, the energy and telecommunications sectors have internationalized and been privatized, and a large information and communication technology sector has developed lead by Nokia. According to international rankings, the country is one of the least corrupt and of the most competitive nations in the world.

Corporate social responsibility (CSR) has traditionally been largely implicit in nature, meaning that the state is assumed to take care of social issues and there has not been as strong a philanthropic tradition as in many countries. Nonetheless, a more explicit form of CSR has emerged, although gradually and unevenly. CSR has expanded from quality and environmental management trends towards a more comprehensive understanding of sustainability. Finnish companies have been relatively progressive in CSR and they perceive it as a potential competitive advantage.

Current priority issues in the area include employment practices, ethical consumption, the environment and climate change, competitiveness and cultural adaptation (i.e. operations of Finnish companies abroad). Compared with other European countries, Finland scores high on CSR aspects, such as sustainability reporting, explicit value statements, codes of conduct, adoption of management standards, membership in CSR organisations and networks, and participation in socially responsible investment. In the 2007 State of Responsible Competitiveness evaluation by AccountAbility, Finland is in 3rd place globally.

A key driver for Finnish CSR is legislation and government representatives tend to hold the view that the primary role of the state is to provide a legal framework within which business operates. The government emphasises the voluntary aspect of CSR in its public policy and has not been very keen on promoting Finland as a CSR frontrunner. Key pieces of legislation related to employment, accounting, social security and environmental protection form the baseline for corporate social responsibility. The Finnish government also promotes key international initiatives such as the OECD guidelines, UN Global Compact, and ILO principles.

Key CSR organizations in Finland include the the Committee on Social and Corporate Responsibility (a multistakeholder roundtable organized by the Ministry for Employment and the Economy), the Confederation of Finnish Industries, Finnish Business and Society (an enterprise network) and the Central Chamber of Commerce (ICC Finland).

While most universities in Finland offer courses related to CSR, institutions with larger programs on CSR both in teaching and research include Aalto University, Hanken School of Economics, Turku School of Economics, University of Jyväskylä, and the University of Tampere. All in all, Finland is an interesting case of relatively high adoption of CSR with best practices of CSR initiatives implemented by companies such as Nokia and Kesko.


Based on extracts from the chapter on Finland by Arno Kourula, Project Manager at Aalto University School of Economics, in The World Guide to CSR (Greenleaf, 2010).