The Swiss authorities adopt a light touch attitude while setting the pace of the corporate responsibility agenda
The Swiss government’s approach to corporate social responsibility bears a remarkable resemblance to what might be expected of a major international company. Sustainability reporting is emphasised, but there are doubts about how deep the thinking goes.
The Swiss government has some of the characteristics of a major corporation. Switzerland is governed by a seven-person board – the federal council – which makes the decisions, while the president, Micheline Calmy-Rey, acts as non-executive chair. The Swiss board departs from most company boards, however, in that the majority of its members are women.
The government imposes no direct corporate social responsibility obligations on companies. There is no national corporate responsibility strategy, and reporting obligations, especially for private companies, are limited. Corporations listed on the Swiss stock exchange must publish governance reports, but sustainability reporting remains voluntary. Swiss companies have the “freedom to decide their level of engagement,” says Thomas Pletscher, head of regulatory policy at the country’s main business federation, Economiesuisse.
But this does not mean that the government expects nothing of its corporations. Rather, it takes the view that if legislation is needed to ensure the stability and sustainability of Swiss society, then it will legislate. “Companies are not expected to compensate for any regulatory or institutional weaknesses on the part of the state,” according to the Swiss state secretariat for economic affairs.
Switzerland has a sustainable development plan that is, in effect, a national strategy for corporate responsibility. Unlike some corporate sustainability reports, however, which might consider environmental and social objectives as add-ons, the national plan specifically regards environmental protection, economic performance and “social solidarity” as having equal importance.
The strategy covers 2008-11 and includes many measures that will require a greater degree of sustainable behaviour from companies. Some objectives could easily have been lifted from a corporate responsibility plan, for example increasing the proportion of renewables in energy consumption, minimising miles travelled by goods, reducing the disparity between the salaries paid to men and women, increasing scientific research, and promoting multilingualism.
Progress reports are available via an online sustainable development dashboard. This shows that Switzerland plc is broadly making progress on reducing its energy intensity, and on reducing the resource intensity of Swiss products (resources consumed per unit of GDP fell by 15% between 1990 and 2009). Performance has been less good, however, when it comes to reducing waste, or cutting youth unemployment.
To cut its carbon dioxide emissions, Switzerland introduced a CO2levy in 2008. This is charged on all imported fossil fuels, meaning the tax is shared across society, from individuals to businesses. In a novel twist, the proceeds from companies are redistributed in a responsibility-encouraging fashion. Firms receive payments based on the number of employees they have, meaning that the biggest beneficiaries, according to the Swiss federal office for the environment, are companies “that, on the one hand, make effective use of fossil fuels and use renewable energy, and on the other hand, employ many staff”.
Companies can opt out of the tax if they sign up for the Swiss emissions trading system. In doing so, they take on legally binding emission reduction targets, and receive free carbon allowances up to their cap. If participating companies over-perform, the surplus can be sold. It remains to be seen if the carbon levy and the cap-and-trade scheme will have an impact. Swiss emissions in 2008 – the same year as the tax was introduced – stood at more or less the same level as 1990, according to the national sustainability dashboard.
Emphasis on standards
The government also behaves like a corporation in subscribing to international guidelines and standards, such as the OECD Guidelines for Multinational Enterprises, the International Labour Organisation Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the United Nations Global Compact. The Swiss economic affairs state secretariat says: “It is the responsibility of corporate management to respect and apply international standards.”
But critics say the government’s approach is superficial, and is mainly focused on reporting, rather than doing, good deeds. The Swiss Alliance of Development Organisations (known as Alliance Sud) said in April 2011 that the government’s implementation of the OECD guidelines was “rather passive and minimalist”.
This followed its failure to resolve a case involving the Swiss underwear manufacturer Triumph International, and workers in Thailand and the Philippines, who claimed to have been unfairly dismissed. Alliance Sud says the Swiss authorities, instead of giving up on the case in January, should have done more, such as organising the translation of documents and facilitating meetings.