Pictured left: Plaça Espanya, Barcelona

By Juan Villamayor, originally posted on Mr. Villamayor’s thoughtful CSR site.

“Spanish people are passionate, creative and they tend to improvise.”

These are clichés that people use to describe the Spanish way of living--but do they apply also to “CSR the Spanish way?”

In the last report issued by the Reputation Institute, Spain ranks high not because of our economic model, the quality of our products or the good reputation of our companies, but thanks to our lifestyle and our cultural heritage.

Could corporate social responsibility (CSR) change this perception? Could CSR help us change our model, creating competitive advantages?

Juan Villamayor, http://juanvillamayor.com/

Juan Villamayor, http://juanvillamayor.com/

First, let’s have a look at the Spanish economy and its perspectives. With an unemployment rate of 20% and a public deficit of 10%, our economy badly needs to transform a model too long based on tourism and the building industry. Any initiative to save money and resources will be welcome. Therefore, environmental sustainability (energy cost reduction) and employee motivation (higher productivity) as part of a wider CSR strategy will find receptiveness.

In the last 15 years the world has seen the rise of Spanish multinational corporations (MNC) spreading all over the world, especially in Latin America and Europe.  Although the contribution of tourism and construction is still remarkable, energy, fashion retailers, banking and telecommunications are the new rising stars of the Spanish economy. Everybody has heard of, NH Hotels, Inditex (ZARA), Telefónica or Banco Santander:

  • Grupo Inditex. This Spanish fashion group is featured in the Dow Jones Sustainability Index (DJSI). It comprehends international retailers like ZARA or Massimo Dutti. Inditex faces great challenges such as how to control their supply chain or reduce waste and energy costs.
  • NH Hotels was the first Spanish hotel chain to join the International Tourism Partnership (ITP), a global association integrated by leaders in the travel and tourism industry.
  • Telefónica is one of the most important telecommunication companies in the world. It has just released a new sustainability report at the Cancun summit, and it’s the leading telecommunication company in the DJSI.

If we have a look at the last report issued by Forética, a Spanish multi-stakeholder organization supporting and promoting CSR, here are some important conclusions, just to name a few:

  • 6 out of every 10 companies knows what CSR means and takes
  • Also according to this report, 84% of companies think that CSR will remain relevant or even become more important in the future.
  • 8 out of every 10 companies consider that CSR contributes to cost reduction
  • 7 out of every 10 think it can contribute to profit generation
  • 6 out of 10 companies see CSR as a way to attract investors and fundings


Another report issued by Fundación Alternativas shows interesting results:
  • 55% of those polled think that, despite the current crisis, companies will not give up their CSR efforts, and even 24% consider that companies will increase their CSR activities.
CSR Made in Spain presents a major dilemma: whereas some people think that CSR is an extra cost that makes the current, uncertain situation even worse, other think that CSR will strengthen their position and help them keep their financial position under control.

Torre Agbar, Barcelona

Torre Agbar, Barcelona

Now, let’s go back to the clichés. Is CSR Made in Spain really passionate, creative and improvised?

Passion

All right, this cliché about us Spaniards might be right and could be extrapolated to CSR Made in Spain: 22% of the European companies reporting according to Global Reporting Initiative (GRI) standards are Spanish, which is a high percentage given the weight of the Spanish economy.

According to the Dow Jones Sustainability Index 2009, 4,44% of all companies featured in the index are Spanish, with some of them leading their respective sectors, such as Telefónica.

Definitely, Spanish corporations, especially MNCs, are handling CSR with passion.

Creativity

On one hand, Spanish corporations are following international standards and not creating their own frameworks. As I mentioned before, most of the Spanish companies publishing sustainability reports follow GRI standards.

On the other hand, small and medium enterprises (SMEs) need to be creative about the subject, mainly to find ways to avoid costs and complex procedures. There are several examples of creative CSR, one of them is this project of collaborative CSR called ResponsHabilizate. Here, people and small business have published their own ideas of how SME’s could easily implement CSR and be more sustainable.

Furthermore, creativity is a must when explaining CSR to people and companies, especially to SME’s. Here is a nice way to represent the path towards corporate responsibility, neatly presented as a subway map. Explaining CSR to people and SMEs is one of the big challenges of CSR Made in Spain.

Improvisation

Companies are not improvising, public institutions seem like they are. Spanish CSR is starting to have a regional touch, a local flavor that sounds delicious but actually smells more like improvisation. Spain is administratively divided into 17 autonomous regions with legislative capacity. Many people fear that each of those regions will be tempted to regulate the subject in an uncoordinated way. In fact, two regions have already passed a law to support voluntary CSR.

Meanwhile, the National CSR Council (CERSE), created back in 2009, could finally prove as useful. On February 15 the new Law of Sustainable Economy was approved by the Spanish Parliament. This new law encourages companies with more than 1000 employees to issue an annual Corporate Social Responsibility and Sustainability report. Good news at last?
Diagonal Mar district, Barcelona

Diagonal Mar district, Barcelona

Challenges

There are several challenges that CSR Made in Spain is facing now, some of them are common to other countries while others are country-specific:

  • Since SME’s are so important for the Spanish economy, it’s crucial to involve and support smaller businesses. Bigger corporations are familiar with CSR and sustainability, while SME’s are too often giving up their CSR plans due to cost reduction and the complexity of the most common CSR frameworks. According to Forética, one out of every three SME’s had to put their CSR strategies on cold ice, at least until the crisis is over.
  • Spain should develop a national CSR strategy, like Germany has done, avoiding regional, uncoordinated approaches. A little support from the government (from national to local authorities) could help SMEs go a long way
  • Put CSR into value. This is a challenge that CSR faces everywhere. However, in the current Spanish crisis it becomes more and more important to translate the advantages of CSR into profit.
  • CSR Made In Spain seems too focused on reporting (GRI & Global Compact), forgetting about the message and the overall strategy.
  • If we want to make CSR attractive and get support from the public opinion, we have to explore the possibilities that CSR offers in terms of resource optimization and job creation.

Again, in a situation of 20% unemployment and 10% public deficit, and despite the fact that the national government should lead the process, the role that Spanish companies can play should go beyond business. By reinforcing their CSR strategy they can and should play a very important role in the Spanish recovery.

Juan Villamayor is a GRI-trained Economist and Executive MBA who lives in Barcelona, Spain, who has strong connections to Germany and the Scandinavian countries. He is a freelance Sustainability and Corporate Social Responsibility consultant who takes an international approach.  To inquire about working with him, please contact him by email.

About The Author

Juan Villamayor

Juan Villamayor is an economist and MBA based in Barcelona, Spain. He is an expert in sustainability and corporate Social Responsibility and has a strong international outlook. He currently works as key account manager for a food ingredients multinational and has over 16 years experience in sales, marketing and innovation project management, 10 which which have been within the food industry. He believes in looking at business from a different angle. Learn more about him at http://juanvillamayor.com/ and follow him on Twitter: @JuanVillamayor