Desur Regional Dissemination Meeting Province of Bologna

September 25th, 2013

Italy and Emilia-Romagna’s CSR framework

Italy socio-economic frame

National and internationaloccurences

�Economic, environmental, social and financial crisis

�Globalization processes

�Population’s growing old

�Emigrants and immigrants flows

Italy socio -economic frame

Tourism

Machinery

Iron and Steel

Chemicals

Foodprocessing

Textiles

Motor Vehicles

Clothing

Footwear

Ceramics

GDP 2012: industrial sector 26.7% agriculture 2% service industry 71.3%

Industrial sector is mostly concerned with:

Italy socio -economic frame

� Smaller number of global corporations than other economies of comparable size

� Productive processes are commonly fragmented and clustered in several industrial districts

�The country was the world's 8th largest exporter in 2011

�Italian economic fabric consists mainly of SMEs (99,7% of active

industrial enterprises has less than 250 employers)

�SMEs employ more than 81% of actively working people ,

particularly in the service industry (approximately 49%).

�SMEs are quite often family-run

�Among SMEs, 81,7% are micro enterprises

Italy CSR frameworkAcademic insight

The Italian Academy treated the subject as early as 1968in an essay "Structures integrated into the Italiandistribution system," in which the italian economistGiancarlo Pallavicini , stated that:

“Business activity, while aiming to profit, should take explicitly into account a number of internal and externalinstances, including socio-economic”

Italy CSR frameworkForerunning Entrepreneurs and Managers

Adriano Olivetti (1901–1960) Italian engineer, politician and

industrialist whose entrepreneurialactivity thrived on the idea that

profit should be reinvested for the benefits of the whole society

Enrico Mattei (1906 – 1962) was concerned with a

highly socially responsiblepublic management

Italy CSR framework evolution

CSR ranges from philantropy

to Corporate citizenship

Italy CSR frameworkLaws and regulamentations

Art. 41 of Italian Constitution :

“ Private economic initiative is free. There shall not be conflictwith social utility or in a way that could damage safety, liberty, and human dignity. Law determines appropriate programms and controls so that public and private economy may be directed and coordinated towards social ends.”

Italy CSR frameworkLaws and regulamentations

� Legislative Decree n.460 (12-4-1997) “Reorganisation of the tax regulationsfor non- commercial and non-profit organizations of social utility”

� Law n.342 /11-21/2000) “Fiscal measures”� Joint return Italy-UK (4-29-2003) on CSR� Memorandum of understanding between Unioncamere and Ministry of

Labour and Social Welfare (11-27-2003)� Memorandum of understanding between ANCL (national association labour

consultant) and Ministry of Labour and Social Welfare (11-27-2003)� Memorandum of understanding between Assolombarda and Ministry of

Labour and Social Welfare (6-9-2004)� Memorandum of understanding between Confapi and Ministry of Labour

and Social Welfare (6-9-2004)� Memorandum of understanding between FederAmbiente and Ministry of

Labour and Social Welfare (3-23-2005)� Regional legislation and rules (aknowledge of EU requests on CSR)

EU CSR policy� Green Paper (July 2001)’Promoting a European framework for

Corporate Social Responsibility’

CSR is defined as “a concept whereby companies integrate social and environmental concerns in their business operations an d in their interaction with their stakeholders on a volunta ry basis ”

� Communication from the Commission concerning Corporate Social Responsibility, (July 2002)

‘Corporate Social Responsibility: ‘A business contribution toSustainable Development ’

� Communication from the Commission concerning Corporate Social Responsibility, (March 2006)

‘Implementing the partnership for growth and jobs: makin g europea pole of excellence on corporate social responsibility ’

� In October 2011 the European Commission published a new policy on CSR (A renewed EU strategy 2011-14 for CSR)

CSR is ‘ The responsibility of enterprises for their impacts on society ’

International CSR standard most implemented in Italy

�SA 8000 Social Accountability International �Sustainability Report Guidelines (GRI)�AA1000 AccountAbility 1000�ISO 26000�ISO 14001�EMAS �Social Audit�Social label�ISO 9000�OHSAS 18001

Italy CSR framework Public initiatives

CSR – SC (Corporate Social Responsibility-Social Commitm ent)project (Ministry of Welfare 2002)

Based on voluntary CSR approach and the promotion of CSR across national socio-economic system

Third European Conference on CSR (Ministry of Welfare - Venice, 14 November 2003), Italian multi-stakeholder Forum for Corporate Social Responsibility

Initiative aimed to encourage the dissemination of CSR be tweenbusinesses and Italian organizations

Italy CSR frameworkPrivate -Public initiatives

� Q-RES project – Quality of the ethic-social responsibility

Supported and promoted by Centre for Ethics, Law and Economics -LIUC University of Castellanza (1999)

� CSR award

Province of Modena and Chamber of commerce in partnership withUniversità of Modena and Reggio Emilia, Banca Etica, FocusLab

� ORSADATA CSR Observatory

Sodalitas (in collaboration with ISVI and Impronta Etica)

� Sodalitas Social Award

� “Dal dire al fare” CSR exhibitionMilano Metropoli Development agency, BIC la Fucina, Koinetica

� Social Value AwardMani Tese, Action Aid, Arci, AI Italia, Fondazione Banca Etica, Ucodep, Movimento Consumatori

Italy CSR frameworkPrivate -Public initiatives

� Q-RES project – Quality of the ethic-social responsibility

Supported and promoted by Centre for Ethics, Law and Economics -LIUC University of Castellanza (1999)

� CSR award

Province of Modena and Chamber of commerce in partnership withUniversità of Modena and Reggio Emilia, Banca Etica, FocusLab

� ORSADATA CSR Observatory

Sodalitas (in collaboration with ISVI and Impronta Etica)

� Sodalitas Social Award

� “Dal dire al fare” CSR exhibitionMilano Metropoli Development agency, BIC la Fucina, Koinetica

� Social Value AwardMani Tese, Action Aid, Arci, AI Italia, Fondazione Banca Etica, Ucodep, Movimento Consumatori

Italy CSR operators

� Research and training centers (ISVI Istituto per i valori d’impresa, Centro Studi Enel , Officina Etica , Osservatorio FinEtica )

� Academic research center: ALTIS , Alta Scuola Impresa e Società,CesCocom (Study Center on Consumption and Communication) EconomEtica (academic center for ethical economy and CSR

� CSR awards (Sodalitas Social Award - Company’s Social QualityAwards Provincia di Parma, Sustainable innovation AwardsConfindustria Giovani Reggio Emilia)

� Consultant team (FocusLab , Bilanciarsi , Sinopsis Lab )

� Non profit organizations (Impronta Etica – Fondazione Sodalitas –Club Modena CSR - GBS Study Group for Social report)

� Public bodies (Chambers of commerce – UnionCamere – CISE -Ministry of Development – Ministry of Welfare)

� Enterprises ….

� Managers ……

International laws

National laws

International Standard

Regional laws

LegislationCSR playersFoundations

Unions

Public Administrations

Business associations

Enterprises

SMEs

Big corporations

Banks

Non profit organizations

International occurences

Rising environmental awareness

Globalization

Financial market trend

Human and workersrights

Consumers expectations

Companies scandals and breakdown

CSR playersEthical investors Research and training bodies

Rating companiesCertification authorities

National standard promoters

CSR awards organizers

Consultant team Auditing business

Italian CSR “engine ”

Source: First report on CSR in Italy – by Prof. Mario Molteni – Università cattolica del Sacro Cu ore - Milan

CSR bodies

Italy CSR culture

Increasing number of consumers aware of sustainability issues.

In particular 44% of consumers in 2013 , compared to 38% in 2012, are willing to pay more for product/services made by companies that reinforced CSR programmes

In UE such percentage is on average around 36%

Survey by Nielsen Global survey on CSR carried out in may 2013 on a sample of 29.000 interviewed online in 58 countries

SMEs and CSR in Italy: what’s going on?

� Companies socially involved: diminishing in number, raisedinvested funds

� Why companies invest in CSR: ethical purposes and corporate image

� Funded initiatives: rising attention to the employers� SMEs and CSR: for 67% of them CSR makes relationship with

employers stronger� Ethical code: over 50% of the companies have adopted it� Internal stakeholders : focus on workplace quality and safety� External stakeholders (local community) : sponsorships and

charity� Environmental committment: alternative energy sources

Source: SMEs CSR workshop 2010 – Faculty of Economics – University ‘Carlo Bo’ - Urbino

5° national report SWG for Socialis Observatory “Corporate Social engagement in Italy“ - 2012

� CSR effectiveness measurement: it’s still little common

� Internal communication: 27% of companies invest on it but don’t getemployers involved

� Most used medium for CSR activities: Internet

� Dissemination of CSR principles among employers:

Intranet + Social report

� SMEs weakeness factors:� Scarce economic resources� Instinctive management� lack of incentives

SMEs and CSR in Italy: what’s going on?

Source: SMEs CSR workshop 2010 – Faculty of Economics – University ‘Carlo Bo’ - Urbino

5° national report SWG for Socialis Observatory “Corporate Social engagement in Italy“ - 2012

Emilia -Romagna socio -demographic features

�Emilia-Romagna is one of the 20 italian regions and It’slocated north-eastern

� It has nearly 4.5 million inhabitants (7% of the national population), of which about 12% are foreigners� The population in Emilia-Romagna region has been

growing again, after the stagnation of the previous two decades, essentially due to foreign immigration

�rising average age of the population

�italian lowest mortality rate

� region is characterized by an effective

and efficient education system

�Emilia-Romagna is the most important junction trading of the country

� The port of Ravenna is the largest in the Adriatic Sea.

�Significant increase in the car use ( from 58.4%, regional average in 2001, to 67.2% in 2008, 7.4% of cycle-pedestrian modality, slight

decline of 0.4% in the use of public transport in 2012)

�Moderately fast growth in the use of web technologies ( still remains a part of territory affected by a partial digital divide.)

E-R infrastructural system

� Land consumption in the last thirty years have grown by 74%

� Urban sprawl and loss of urban systems efficiency

� Loss of competitiveness of urban systems due mainly to the flows of goods and people handling, firms, workers and residents location

� The processes of production and energy conversion account for a significant amount of polluting emissions.

� Energy efficiency improvement, however insufficient to meet thetargets set by the EU

� Growing development of recycling and waste recovery systems

� Industrial sector accounts for about 10% of water withdrawals

E-R settlement system and environmental quality

Emilia -Romagna socio -economic features

�According to the Regional InnovationScoreboard in 2009 Emilia-Romagna got an innovationperformance score medium -high.Emilia-Romagna

� Emilia-Romagna has one of the highest european GDP : 30.493 eur (ISTAT 2009) exceeding 27% of the EU average

� In 2013 unemployment rate raised up to 9.4% , compared to 7.1% of 2012

� Less than 30 aged unemployment rate 17.4% (2013)

� Enterprises operating in the region are approximately 400.000, mostly SMEs (99,1% - less than 20 employers 97%)

�Emilia-Romagna is a region where social capital is widespread, witnessed by a research carried out by sociologist R.Putnam, whodefined it as "The trust, rules which regulate coexistence, networks of civic associations, elements that improve the efficiency of social organization by promoting initiatives taken by mutual agreement“

�Such level of social capital is confirmed by prof. R.Cartocci who analyzed it over the four-years period 1999-2002 in the 103 italian provinces by means of 4 indicators

E-R social capital

Daily press circulation

Electoralparticipation level

Sport associationsdiffusion

Blood donors Social Capital Index

Maximumscore

Trieste 225Bolzano 210Parma 208Genova 202Piacenza 201

Bologna 127Reggio E. 126Modena 125Ferrara 124Ravenna 121

Aosta 172Cuneo 169Pisa 164Livorno 162Pistoia 162

Ravenna 208Ragusa 191Siena 169Mantova 166Parma 165

Parma 151Mantova 144Piacenza 142Trieste 142Bologna 140

� Productive system is mainly arranged in local production systems and (differently from national trend) networked industrial districts , based on the region-spread presence of small companies (mostly family-run) and cooperative system

� Production pattern is characterized by a high quality manufacturing attitude and strong industrial vocation : Parma (Barilla and Parmalat), Reggio Emilia, Modena and Bologna (Ducati, Ferrari, Italjet, Moto Morini, Maserati, Lamborghini)

� Industrial sectors widely ranged ( chemicals in Ravenna, mechanic in central Emilia, textiles, electronics, ceramic districts in Modena surroundings, logistics in Piacenza)

� Well developed, also, sea tourism and tourism in art cities , especially from abroad

E-R economic framework

�Regional law n.21/2005 about Workplace conditions�Norms for promotion and development of mutual cooperation in E-R

(L.R. 6/2006) �New Productive Activities Programme 2013-2015 meant to support

CSR�CSR resolution issued by Regional Committee on july 7 °°°° 2011

by which Region committes itself in leading a nation-wideinnovative CSR policy through an ever more public-

private partnership�Memorandum of Understanding between Region of E-R and Ministry

of Economic Develpment to promote economic growthand SMEs sustainable competitiveness

E-R public initiatives to support CSR

�Regional law n.21/2005 about Work conditions�Norms for promotion and development of mutual cooperation in E-R

(L.R. 6/2006) �New Productive Activities Programme 2013-2015 meant to support

CSR�CSR resolution issued by Regional Committee on july 7° 2011�Memorandum of Understanding between Region of Emilia-Romagna

and Ministry of Economic Develpment on the matter of CSR training according to OECD guidelines

�Memorandum of Understanding between Region of Emilia-Romagna and Ministry of Economic Develpment to promote economicgrowth and sustainable competitiveness of SMEs

E-R public initiatives to support CSR

E-R public initiatives to support CSROngoing and planned initiatives fostered by Region of Emilia-Romagna are:�Participation to CSR Transnational Interegional Project along withother regions� Planning of regional CSR workshop network by means of the involvement of local CSR initiatives�A thematic website concerned with CSR�Organization of regional Forum on CSR issues plus periodic meeting aimed at a comparison and assessement of CSR promotionalinitiatives

E-R CSR public -private initiatives

Public-private partnership to promote and support CSR

�CSR Award Province of Modena (by Province of Modena and Chamber of Commerce)

�CSR in the industrial districts - Surveys 2004, 2008 (by Focus Laband Province of Modena)

�Impronta Etica initiatives

�Ugo Project (by Cise – Chamber of commerce)

According what emerged from Desur survey�Knowledge and the approach to CSR by SMEs is generally weak, mostly intuitive and unefficiently organized�Dissemination can be considered still insufficient�CSR is often meant as an additional cost and not as an opportunity�Insufficient development of an entrepreneurial culture of CSR�SMEs hardly understand the competitive surplus that might result from

activation of a sustainability strategy. �Frequently, SMEs in this area are included in an industry production chain where competitive criteria is represented by the price�CSR activities are often ‘unaware’�Insufficient attention paid to external stakeholders�Top management and/or the owner/entrepreneur play a key role in the

implementation of CSR strategy

CSR culture regional framework

�Main CSR focus among those internationally recognized, are: �Work quality/Human resources�Local project and connections� Social accounting � Environmental innovation� Work safety

�However, to be mentioned also several experiences in new CSR area of interest, such as:

� supply chain involvement� stakeholder engagement techniques� work-life balance activities� co-planning in collaboration with non-profit’s� home-work sustainable mobility� social entrepreneurship support

CSR culture regionalframework

CSR culture regional framework� It’s still widely understood that CSR is a philantropic activity

Among management tools, companies are being focused on

� Social Accounting

� SA8000 Standard

� Ethical Code

� Values Chart

International CSR standard reference are

� OECD guidelines

� UN Millenium Goals

� UN Global Compact

� GRI international guidelines

Source: Region of Emilia-Romagna Triennal productive activities programme 2012-2014 Report on CSR

Most implemented initiatives are focused on:�Cultural awareness raising event (courses, seminars, conferences, etc.) Quantitative research (survey)�Reward (awards, best practices observatory)

Most considered CSR issues regarding such initiatives:�Work safety and quality�Conciliation daily time and job�Environment�Locally relationships

CSR culture regionalframework

Source: Region of Emilia-Romagna Triennal productive activities programme 2012-2014 Report on CSR

Thank you for your attention

Umberto Mezzacapo - CesCoComStudies Center on Consumption and Communication

Department of Sociology and Business LawUniversity of Bologna