As you might have heard the European Union launched the European Competitiveness Report last month. The great news is that this is the first time that the report includes a chapter on corporate social responsibility. This is worth talking about.

Since 1999 the European Commission has published an annual competitiveness report which provides an overview of the economic performance and competitiveness of the European Union region. It elaborates on drivers of competitiveness such as foreign direct investments and trade openness.

For the first time ever, a chapter on CSR has been included this year, which once more underlines the importance of CSR for business and the economy in general. Highlighting the Lisbon Agenda, the EU has emphasised the important role that CSR plays for social and economic development.

The report makes clear that CSR especially influences three competitiveness factors: human resources, risk and reputation management and innovation. This sounds completely plausible to me.

To be competitive, a corporation must have a strong team of employees. If a company has a good reputation for being a good corporate citizen, it will attract the right talent. An employee will want to be proud of being part of a company and will want to identify himself with that company, its values and also its CSR approach.

I notice more and more that students (and potential future employees) look hard at the CSR approach of companies and investigate how companies deal with different societal challenges, such as the current economic slow down or climate change. I am assuming it must be obvious how risk and reputation management is influenced by CSR. We live in an information society where nearly everything a company does becomes transparent. Corporations are under permanent public scrutiny and we have seen in the past how a company’s reputation can suffer if it does not adequately deal with CSR-related issues. The key is to be as transparent as possible and to proactively approach any issues that might arise.

A clear example is an open and transparent supply chain management approach. Last Spring, HP disclosed the names of our first tier suppliers and this will hopefully trigger other corporations to follow suit.

Finally, innovation is an important competitiveness driver that can be equally and positively influenced by CSR. CSR opens the door to establishing dialogue between different stakeholders and it encourages collaboration.

Confronted with non-optimal working conditions along the supply chain, HP joined forces with international institutions and non-governmental organisations to look for new innovative approaches to maintaining a socially and environmentally sound supply chain. Just a couple of weeks ago the CSR Europe Laboratory on Responsible Supply Chain Management launched an online portal which provides an overview of existing supply chain practices and consists of useful tools that small and medium sized enterprises can use.

The CSR chapter of the EU competitiveness report ends by saying that, if a company ignores CSR, then it misses opportunities for competitiveness gains. That is a strong statement and the message is clear: CSR is a ‘must-have’ for companies in operating today’s business world who want to be the most competitive and the most successful!

Jeannette Weisschuh, Director of Global Citizenship, HP EMEA