This region has seen good investors and bad ones, and it has learned that society creates the expectations for their behaviour. — By Robert L.Nemeskeri Photo: MTI MIXED COMPANY: the Hungarian town of Gyor has collected 160 tonnes of selected waste since May. Corporate responsibility is not the sole province of the millions of companies in Europe and the rest of the world. Corporate responsibility does not exist in a vacuum, but in the complex socio-economic and environmental framework of our life. High-level decision makers, recognising the need to create operational standards for business and society, thus fine-tuning the markets, developed 280 different pieces of environmental legislation, 60 framework directives numerous policies, international protocols, agreements and codes of conduct. And still no coherent framework exists for environ- mental management in Europe or anywhere else. The underlying problem is that the priority of developed societies is economic growth for its own sake. This type of economic growth is coupled with the generation of various waste streams and pollution of the air, water and soil, lowering the quality of their lives. This is mainly due to the inefficient utilisation resources and the skewed value system of the most powerful, highly developed societies, which get the biggest the slices of the earth's cake anyway. Several obvious suspects come to mind, first of all businesses, in their race to generate profit by all means. They create products and services to satisfy the existing demand. This creates markets that supposedly take care of all social and economic needs and processes in the long run. In reality the ideal market situation exists very rarely -- perhaps only in the form of the traditional rural weekend grocery market. There the supply of most produce in demand is sufficient, indeed, at least for a few hours. Other than that, economic activities are performed in more or less artificial conditions which are set by various levels of government, international regulations, multinational companies, local strongmen, trade barons and mafiosi. Second among the suspects would come the frantically consuming citizens -- their majesties the customers. They strive to satisfy their sometimes justified but increasingly perverted demands for food and shelter, for individual and family safety, for health, work, transport, culture, entertainment and so on and so forth. Most citizens in the developed countries have long reached the levels of comfort in all these areas. But we need more. Thirdly, governments waste a lot, by being mainly occupied with the periodic fights to stay in power. To get our votes they need to keep us happy. Which means to provide us with the inevitable circum et panem. To run costly election campaigns, they need the support of big business. And to set policies and make laws that allow us to consume more and more, where possible also preserving our natural environment, or whatever we are able to see of it. Not cynical I do not question democracy, and do not mean to sound cynical. I just want to come back to the point of corporate social and environmental responsibility. Since the mid 1990s hundreds of articles and books have appeared on this topic, mainly in the North American and British management journals and periodicals. Most of these resources and several pages of relevant Internet links can be found in the book, Voluntary Approaches to Corporate Responsibility by the UN Non-Governmental Liaison Service (NGLS), published in May 2002, in Geneva. This publication addresses many of the existing models and tools developed in the field of corporate responsibility. It is necessary to create a market where companies feel that becoming more environmentally and socially responsible is necessary for improving the bottom line. The European Commission in its Green Paper "Promoting a European Framework for Corporate Social Responsibility" (COM [2001] 366) and "Communication from the Commission concerning Corporate Social Responsibility: A Business Contribution to Sustainable Development" (COM [2002] 347), has also made efforts to raise awareness about the topic, to explain what has been done in some corporations and countries, and what could be done. The most recent information can be obtained through the proceedings of the events of the Athens Conference on Socially Responsible Enterprise Restructuring (April 3 and 4, 2003) and the Pan-European Conference of Environmental Ministers (May 20-24, 2003 in Kiev). Central and Eastern Europe is an interesting region in the context of corporate responsibility because of the rapid changes that took place in this region. Despite great difficulties many success stories can be enumerated and many large-scale experiments and useful models can benefit other developing regions. Business has had a major role in changing the socio-economic framework of CEE. In the transformation from planned to market economies and from totalitarianism to democracy the private sector has been a strong partner in social development. Business has skills and resources that most states cannot match. Business is the engine of most economies. It strives for efficiency, for quality management, to generate profit and wealth. It is only with this wealth that governments can develop new welfare states. During this time, environmental protection and environmental management have often been considered expensive challenges imposed on CEE by the European Commission. They are luxuries we cannot afford, as formulated by Russian President Vladimir Putin at the 2002 Johannesburg Summit. The region has started to map polluted sites for remediation in the coming decades. But not much attention has been devoted to the development of a sophisticated market that promotes the widespread use of clean technologies which would boost our competitiveness. Many foreign companies came simply to cash in on cheap labour and the skilled workforce, lenient laws and loose enforcement, and corruptible public officials. The good investors started to drive environmental management through their supply chain while the bad guys became infamous for their exploitation, pollution, and occasional industrial accidents. The Baia Mare cyanide accident in the Tisza River Basin in 2000 was a case in point. The good guys brought their tradition of community engagement, investment into the education sector and support for various charities and NGOs. Meanwhile the public sector has been slowly learning that its new role is more of the enabler than of the deliverer. Weak enforcement This situation created new difficulties in improving environmental management. Governments have approximated European legislation but are not keen or able to enforce it. And they are even weaker in achieving compliance with the new laws and regulations. More environmentally responsible corporate management in CEE requires serious capacity building in the public sector, and serious awareness raising and capacity building in civil society. This work must focus on the values and habits of consumers. It is necessary to create a market where companies feel that becoming more environmentally and socially responsible is necessary for improving the bottom line over the long term. Is the world becoming a better place to in the long term and for all humankind? Are the existing corporate responsibility approaches and models powerful enough to cope with the major challenges of diminishing resources, while most human beings still lack basic services and opportunities? And one final warning. Opting continuously for small steps and postponing the undertaking of a regular change is in absolute terms inefficient to duly address our environmental challenges. Thus a real change will very likely be unplanned, accidental and out of our control. — Robert L. Nemeskeri is the head of REC's Business and Environment Programme.

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