10 Economic and administrative consequences

This white paper provides an account of the Government’s efforts to strengthen international frameworks that raise minimum standards for corporate social responsibility (CSR). The Government intends to play a proactive role in efforts in the UN and the OECD to develop guidelines and processes that promote CSR.

The white paper provides an overview of the authorities’ expectations of the private sector in terms of social responsibility. However, the authorities and the public sector also have responsibility for maintaining high ethical standards in their own activities. The authorities play an important role as owner, investor and purchaser. Companies with state ownership are required and expected to observe high standards of social responsibility, as are the authorities in managing the assets of the Government Pension Fund and in their procurement policy.

The white paper also discusses how the authorities will provide improved guidance and advisory services concerning CSR. This will be followed up by the Ministry of Foreign Affairs in cooperation with other ministries and the social partners, and in contact with NGOs. These and other measures outlined in the white paper will be covered by the budgets of the ministries concerned.

The Government expects all companies to actively exercise social responsibility. Although the financial consequences of this for the companies are uncertain, various stakeholders are increasingly expressing similar expectations. Companies that actively exercise social responsibility can therefore strengthen their competitiveness and enhance their reputation, whereas those who fail to do so may find that this has negative consequences for their access to capital, value creation and recruitment. On the other hand, corporate responsibility may entail new costs for companies, particularly if they are not already engaged in systematic CSR efforts.

An extension of the duty to provide information set out in the Accounting Act to include information on social responsibility, which the Government intends to propose, would not in itself necessarily involve any significant costs for the companies concerned. Internal measures and procedures introduced by companies to follow this up could, however, entail additional costs.