As the current crisis developed, many observers feared that the battle for short-term survival would be fought at the expense of long-term priorities. The thinking was that environmental and social responsibilities would fall victim to the need to maintain cash flow and retain jobs. But Christian Scharff, president of IMS Luxembourg (Institut pour le Mouvement Sociétal, Luxembourg – www.imsluxembourg.lu), argues that adopting the behaviour of good corporate social responsibility is actually sound management despite, or perhaps because of, the crisis.

IMS celebrates its second anniversary in April. Why did the six founding members think it necessary to create a formal structure for corporate social responsibility in Luxembourg?

“Firstly there was no organisation in Luxembourg to support companies willing to engage in corporate social responsibility. And there has been a trend, for at least a decade, for CSR – which stems from pressure, and clear expectations, from customers and employees. Two years after the creation of IMS we are even more convinced that such an association is needed to help and support companies looking for best practice in this area. The problem is that not so many people immediately understand what CSR is. It covers a very wide scope of activities and concerns – from transport and health to environment and time accommodation. But we are not trying to reinvent the wheel. We are convinced there are best practices already being carried out within companies, so we need to share that. Our objective is to be a toolbox for corporate social responsibility.

What are the unique advantages and disadvantages of creating such a network in Luxembourg? How much was the structure of IMS inspired by that of the French organisation IMS-Entreprendre pour la Cité?

“We have no formal association with IMS-Entreprendre pour la Cité. We just asked if we could take over part of their name. We have closer links with CSR Europe, a sort of umbrella association which is a huge European toolbox to which all our members have access via the internet. This provides great added value.

We decided from the beginning to adapt our structure to the scale of Luxembourg and its market. We have two pillars, one for so-called big companies, and another for small- and medium-sized companies. Each has its own working group taking care of the needs of its affiliates. For instance, the big employers are going to tackle the problem of mobility in 2009. The problem is that there are plenty of initiatives, but they are often restricted to the city, or, if on a national scale, they stop at the border. And we have 150,000 people coming to Luxembourg from the Greater Region every day.

The small- and medium-sized companies are working on creating a CSR toolkit for businesses with fewer employees. CSR is known in big companies that can afford to have people thinking about it, but for smaller companies it is not really top of mind. So we have to be extremely pragmatic and deliver off-the-shelf tools that they can employ without really thinking that it is CSR. We are definitely not a service club where we just network for pleasure. I really want people to get value from their membership of IMS.

IMS has attracted more than 50 corporate members from a wide range of sectors in less than two years. Has that met your expectations? What are the criteria for membership?

“We have just celebrated our 60th member, so in two years we have multiplied membership ten-fold. We are quite satisfied with that evolution – I mean you can see the glass half empty or half full. I am very happy with 60 members, but it is clear when you look at the number of companies in Luxembourg that that is still quite small. Half of the top 30 big companies are members, but work needs to be done in attracting small- and medium-size companies – the sector which, after all, accounts for the most companies in Luxembourg. Our aim is to have 100 members by year-end, and I think we will achieve this before then. Next year we will target a presence in the Greater Region. But we are doing things step by step.

The only criterion is that members have to be willing to behave as a good, socially responsible company. We have noticed that companies are really taking their time and thinking deeply before joining. That is because members are listed on our website, and that is a declaration of commitment. So they want to see what we are doing, if there is real content and input. We are also being very cautious and make sure we don’t do any visible lobbying or take political positions that could embarrass member companies. Which doesn’t mean we refrain from asking questions of the government and the authorities, but it is never politically coloured? We also don’t want IMS to be a commercial platform and we will not judge members or give prizes – we are a neutral organisation.

CSR cannot work without people. How important is it that a company communicates its CSR philosophy and strategy throughout the organisation? Does it not put additional pressure on staff?

“CSR is about acting and not talking. Companies are trying to find ways to act to deal with quality, health of employees, the environment, passive buildings, sustainable purchasing, equal opportunities... there are so many topics. I am not really in favour of big communication and discussions; I am more in favour of acting. I can give you one example – we have talked a lot about double-side printing, which may seem like a very simple thing. But you would be surprised by the number of companies that are not using this, even though technically it’s a no-brainer. And it is not only positive ecologically, but also economically. Many employees take part in some aspect of CSR just by applying a rule – just like I have two separate rubbish bins in my office.

Then there is the second aspect which involves actively pushing charities or what we call “mécénat citoyen”. Some companies are starting to do this and asking some employees to participate – either in their free time or on the company’s time. The question of whether we mark someone who participates as good, or give them a minus if they don’t participate, is extremely sensitive. Of course, it is completely the employee’s choice, but we have seen that those who do participate usually feel good in themselves. Firstly, because it is something good and satisfying. Secondly, it opens new networks. Thirdly, it is a new activity that provides variety to their work. It often depends on their education and involves leading by example. But it is still too rare in Luxembourg today.

IMS has drawn up, with one of our lawyer members, a paper seeking clarification on some of the legal and responsibility issues involved with volunteer work. There are grey areas in this field, just as there are in the field of tele-working – with some social and fiscal aspects that are still not clear.

You have mentioned in-house environmental awareness, employee well-being and equality – are business leaders becoming more aware of their responsibilities in these areas?

“I am always surprised that our monthly conference is attended by never less 60 or 70 people, which is a good number for Luxembourg. That means that there is an interest, that people are hungry for knowledge in this area. Remember, we are entrepreneurs and some people tend to think that behaving in a corporate socially responsible way costs more, but in many ways it can cost less. Double printing and energy saving are obvious, but many surveys also show that a company that employs gender equality, for example, is much more efficient. We have to break this taboo that behaving in a CSR way is going to be costly. That is absolutely wrong. It can do good for society and for the company and can save money. So it is sound management to do it.

Why has there been such a strong focus on CSR over the last ten years? Is the global awareness of the need for sustainability the driving force behind this trend?

“There is a certain return to core values, and some anxiety about the environment. Some of it has been exaggerated but people are looking to follow good leadership. Now with the crisis, criticism of companies has never been so high and people are expecting more and more. Corporate social responsibility we thought would be something critical for the future. Maybe the future is arriving faster than foreseen.

How has government policy in Luxembourg helped encourage CSR?

“The government does listen to what’s happening in the country and I am confident they are quite happy with our initiative. However, it is also clear that we could have quicker answers to some of the questions we raise. But I don’t want to be critical, because everyone can always do better. I think we are very lucky in Luxembourg to be so close to politicians, and that they are available for discussions.

Cynics say that some companies use CSR to appease critics or as a more subtle arm of corporate communication. Others say that it is not the place of corporations to be involved in social projects – that they should focus on profit and leave social projects to the government and charities. How do you answer those charges?

“I don’t want to put any names on the table, but there are some famous examples of this. But they are caught out quite quickly and their bad behaviour is exposed and it damages their image. We have also seen that what was accepted yesterday is no longer accepted today, but the question really is what will not be accepted tomorrow – and at what speed is that shift happening? That could have important consequences for the economic model of some companies. What does that mean in terms of service and transportation? Are current models sustainable? What do we have to do to stay in the race? That applies both to the employer and the employee.

The point is also to retain your employees. Within our members, there is an employer who offers so much in the way of tele-working and flexibility that nobody can match the same conditions even though the employer is not paying them the highest salary.

What did you make of the parliamentary crisis commission’s warning that the crisis could be an excuse for some enterprises to neglect their social responsibility?

“We have observed different types of behaviour. Those who do neglect their responsibility are widely known and I am sure they are not appreciated, either by customers, employees and future employees, or even by the authorities. But you also have companies that are going in the opposite direction, and are emphasising their social commitment demonstrating to their employees that they can work through the crisis together. Because one of these days the crisis will be over, and on that day people will remember how companies acted during the crisis.

Tonika Hirdman of the Fondation de Luxembourg has said that although there might be less money around because of the crisis, it has led to people changing their priorities. Do you agree – is this an opportunity to return to old values of humanity?

“Yes, and in many respects it is good news in terms of sustainability and what kind of planet we are going to offer future generations; what kind of work and living environment we are going to provide for our kids. I am an optimist – you have to be if you are leading such an organisation. We will find a way, because we always have, to accommodate contradictions – that is the magical genius of man.