Paul Hohnen Sustainability Strategies

This article was published in Ethical Corporation on February 19, 2009.

Isn't it good, Norwegian Wood?

Norway, the land of Brundtland and sustainable development, has just released a white paper which sets a new standard for government guidance on corporate social responsibility, write Teresa Fogelberg and Paul Hohnen.

A month after Denmark adopted a law on corporate social responsibility reporting by its 1100 largest companies, the Stoltenberg government of Norway has joined the Viking values vanguard.

The Norwegian government's new 100-page white paper on responsible business may be the most comprehensive and bold of its kind in the world yet.

Entitled "Corporate Social Responsibility in a Global Economy", the paper sets corporate responsibility firmly in the context of global sustainability challenges and the competitiveness of Norwegian business in the global economy.

Coordinated by the Norwegian Foreign Ministry, the white paper starts out by describing both roles and responsibilities of the state and public realm as well as the role of the corporate sector.

Corporate responsibility starts at home, it says, and it gives considerable attention to the role of the state as an owner of companies, as an investor, as a pensions manager, and as a public procurer in providing a good example to private companies and investors.

The importance of ethical frameworks and transparency are key elements throughout the document.

Norway has not followed the Swedish model of mandating non-financial reporting for state-owned companies in line with the Global Reporting Initiative guidelines. But this is recommended (many companies do it anyway), as is the practice of external assurance.

The document is detailed in its framing of the responsibilities and dilemmas of companies. These included the challenges involved in operating in fragile states or states in zones of conflict. Special attention is also given to issues presented by fragile ecosystems, working with indigenous peoples and broader human rights questions.

Importantly, the paper also addresses grievance mechanisms, including a proposed strengthening of the OECD Guidelines National Contact Point system, based on UN Special Human Rights Representative John Ruggie's recommendations.

Thinking big

The scope of the white paper is impressive. It covers a wide agenda, including international conventions in the fields of climate change, environment and biodiversity, human rights, trade, and corruption.

Companies, it advises, need to be responsible employers, and gender balance continues to be an important guiding principle. They also need to position themselves within the global development agenda and in the context of the UN Millennium Development Goals. In this context, it also provides guidance on how companies can make responsible use of their supply chain.

In recognition of the global environment in which Norwegian companies operate, the white paper refrains from proposing national corporate responsibility guidelines. Rather, it recommends use of three of the most internationally recognised frameworks: the OECD Guidelines for Multinational Enterprises, the UN Global Compact, and GRI.

In this regard, it is consistent with the position taken by the Norwegian Pension Fund, which has long linked investment decisions to companies' corporate responsibility policies, including consistency with the OECD and UN instruments.

Looking ahead

Interestingly, the white paper also takes the opportunity to send a signal as to Norway's hopes for the future direction of corporate responsibility.

With regard to the OECD multinational enterprise guidelines, revised last in 2000, it supports a further revision to strengthen their human rights and environment (including climate change) aspects, as well as bolstering the National Contact Point complaints mechanism. This should be music to the ears of those who see the guidelines as one of the best — but under utilised — instruments in responsible business.

The paper commits Norway to continued support to the UN Global Compact, and to expand efforts to promote its use by the corporate sector. As the compact comes up to its first decade, expanded engagement by Norwegian companies, their clients and suppliers will be welcome by many.

Turning to sustainability reporting, which it notes as a key aspect of corporate responsibility, the paper announces Norway's commitment to provide support to the GRI. This will take the form of support for the development of reporting tools for small and medium-sized companies, in promoting GRI uptake by the corporate sector and state owned sector, and financial support.

While the white paper does not — unlike the new Danish law — require non-financial reporting, it states that the government is considering an amendment to the Norwegian Accounting Act to enhance corporate responsibility performance. The exact form of the amendment is not defined, however the paper does point to the Danish "report or explain" legislation as a strong model.

An English language translation of the white paper is expected to be released in early March 2009.

Teresa Fogelberg is Deputy Chief Executive of the Global Reporting Initiative and participant in Worldconnector, a social activist network. Paul Hohnen consults, writes and speaks on sustainable development issues. He is also a member of Ethical Corporation's editorial advisory committee. www.hohnen.net.