As the country prepares to host the next UN climate conference, there is plenty of scope for Polish companies to become more socially responsible and sustainable
Poland is an anomaly in the European Union: unlike most of the bloc’s countries, its economy is actually growing.
In fact, Poland is the only EU economy to have grown steadily during the economic crisis. In the peak crisis year of 2009, while Britain and Germany saw 5% contractions, Poland soldiered on, recording a 1.6% expansion.
The World Bank, in a paper published in October 2013, went so far as to say that Poland “has just had probably the best 20 years in more than 1,000 years of its history.” It has achieved “the highest level of income relative to western Europe since the year 1500 … offsetting more than 500 years of economic decline, a historically unprecedented achievement.” A golden age for Poland is seemingly under way.
But not everything is rosy. Question marks hover over the sustainability of Poland’s economic model.
Poland’s growth has been underpinned by exports, especially to Germany. Among the most significant Polish exports are cars, ships, machinery and metals. For the energy that their production consumes, Poland is highly dependent on coal – its vast Bełchatów power plant is the largest and most polluting coal power station in Europe.
Poland’s government says it recognises that it must move to a more sustainable energy model, but has done little about it. Any change would risk the wrath of the 125,000 people employed in the country in coal mining – more than half of the EU total.
When discussions have taken place about a more ambitious emissions reduction target for the European Union – going beyond the currently scheduled 20% cut by 2020 – Poland has consistently blocked them, to protect its companies against possible price rises (see box).
Poland also lags in terms of innovation. About a third of Polish companies are considered to be “innovative enterprises”, meaning they specialise in new and improved products or services. In neighbouring Germany by contrast, nearly 80% of companies are considered innovative.
Innovation lacking
The lack of innovation extends to business model innovation. Grzegorz Piskalski, director of CentrumCSR.PL, a Polish thinktank set up to promote corporate social responsibility, says: “Polish managers are usually trying to catch up with global mainstream trends.” Injections of new ideas usually come from outside. “It is hard to expect that sustainability would be an exception,” Piskalski says.
Andrzej Nartowski, chairman of the Polish Institute of Directors, says bluntly that there is “lip service about corporate responsibility among listed companies in Poland but little action”. There is also some cultural resistance, resulting from the shadow cast by Poland’s communist past.
“The Polish market is young, emerging, shareholder-orientated, and our experiences from the past make people suspicious about everything ‘social’. We’ve had enough of ‘social’ politics, ‘social’ approaches to life, ‘social’ obligations and so on,” Nartowski says.
There are no corporate responsibility requirements in Polish law, such as mandatory disclosure of non-financial information. The government also does not have a detailed corporate responsibility strategy.
The guidance that does come from the top tends to emphasise moving forward on corporate responsibility through dialogue between businesses and other groups, and by the adoption of ideas and standards from other countries. For anything more substantial to happen, Piskalski says, “the impulse must come from Brussels”.
Civil society shows limited interest in government-backed corporate responsibility dialogues. “Environmentalists or consumers don’t see corporate responsibility as an efficient tool to address real problems,” Piskalski says. “Polish civil society, even though very vibrant, never decided to engage in dialogue with the business community. The reason for that is that corporate responsibility is seen purely as a business concept, and business leaders and decision-makers ignore the fundamental concept behind corporate responsibility – multi-stakeholder dialogue.”
Agata Gruszecka-Tiesluk, knowledge manager at the non-profit Responsible Business Forum, which promotes corporate responsibility in Poland, says: “CSR appeared in Poland along with multinational enterprises that transferred their know-how, good practices, standards and culture to Polish subsidiaries.
“In Poland, the corporate responsibility language still remains the language of large companies.”
Grounds for hope
It would be unfair, however, to characterise Poland as a corporate responsibility wasteland. There are 76 Polish participants in the United Nations Global Compact, and there is increasing take-up of frameworks such as the Global Reporting Initiative guidelines, and the social responsibility standard ISO 26000, which have been translated into Polish.
A number of initiatives are also under way to encourage a more progressive approach. These often involve awareness-raising measures such as award schemes, and are focused on social responsibility more than environmental sustainability. Poland has an unemployment rate of about 10%, and the east of the country in particular remains poor.
Gruszecka-Tiesluk says: “Poland’s big corporate responsibility issues are directly linked to the social and economic context. In view of the difficult economic situation, the most pressing issues are the problems of high unemployment and the uncertain job market. There are more and more programmes focused on improving the competence of employees and adapting working conditions to their needs.”
The Polish Chamber of Commerce runs programmes on anti-corruption and on “Business Fair Play”. Companies can provide evidence to the Fair Play programme that they are responsible employers that settle their bills on time and are involved in charitable activities. Companies that score above a certain threshold can obtain certification.
Mieczysław Bąk, the Chamber of Commerce’s head of economy policy, says about 2,800 companies have been certified under the programme, which has been running since 1998. The focus is on small and medium-sized companies. While Poland’s large companies broadly adhere to international social responsibility standards, “a change of attitude in the SME sector is a major challenge,” Bąk says.
He adds that there is “no shortage of companies that support activities related to integrating people [into the workforce], helping disadvantaged groups, and organising local festivals and cultural events”. Poland’s businesspeople “recognise the need to be a good citizen”, but do little structured promotion of their social responsibility activities, he adds.
Best in class
Poland’s listed companies, meanwhile, can aim for inclusion in the Warsaw Stock Exchange Respect Index, which includes the 20 firms considered to meet the highest corporate responsibility standards.
Most recently, medical supplies wholesaler Pelion Healthcare joined the index, filling a space left by Kredyt Bank, which merged with Santander-owned Bank Zachodni WBK to create Poland’s third largest bank. Companies entering the index are assessed on “the level and degree of complexity” of their corporate responsibility activities.
A general ranking of Poland’s most responsible companies is drawn up each year by the Responsible Business Forum. The ranking is dominated by foreign corporations operating in Poland. GlaxoSmithKline heads the 2013 list, with the Polish arms of companies such as Danone, Tesco, Orange and Toyota not far behind. Poland’s biggest publicly traded company, oil firm Orlen, ranks fifth.
In second place is Kompania Piwowarska, Poland’s largest brewer, which is owned by multinational SABMiller. Kompania Piwowarska’s approach to sustainability has been inherited from its London-based owner, says sustainable development manager Małgorzata Walędzińska-Półtorak.
Kompania Piwowarska and SABMiller share the same 10 sustainability priorities, including promotion of responsible drinking, reduction of environmental impacts, respect for human rights and transparency. A local sourcing commitment means that its beer brands, including Tyskie and Zubr, are made using Polish ingredients.
Walędzińska-Półtorak says the company has fully taken on board the need to be environmentally and socially sustainable. “Through innovation and investment in the long term, the company achieves financial benefits,” she says, citing more environmentally friendly packaging and waste recovery and recycling. “All of these elements are a source of competitive advantage.”
Kompania Piwowarska measures its progress on sustainability against SABMiller breweries worldwide, including Australia’s Foster’s and Italy’s Peroni. In this, there is perhaps a positive message for Poland’s companies as they try to do better, because Kompania Piwowarska ranks top for sustainability in the SABMiller Group.
A fair COP?
Considering the Polish government’s resistance to more ambitious climate policies, it might seem odd that Poland is so keen to host UN Framework Convention on Climate Change Conferences of the Parties (COPs). The 2008 COP was held in Poznan, and the 2013 COP, from November 11-22, will be staged in Warsaw.
There is a suspicion however, that Poland wants to manage the COP for its own purposes. According to the Corporate Europe Observatory (CEO), which campaigns against corporate lobbying, the Warsaw meeting will be the “most corporate-captured COP ever”, with the interests of energy-intensive companies prioritised over environmental objectives.
Official event partners, CEO points out, include steel giant ArcelorMittal and Poland’s largest utility PGE Capital Group. CEO is also outraged that Poland’s ministry of economy will host an international coal and climate summit in Warsaw alongside the COP. This is “a coal lobby event that will tell the UN to embrace coal as the solution to climate change”, the group fumes.
Sandrine Dixson-Declève, director of the Prince of Wales Corporate Leaders Group, which promotes business leadership on climate change, says the COP organisers should be more prepared to embrace “the full spectrum of business” in Warsaw.
“For the moment the openness has been more towards the energy-intensive sectors, but we stand ready to have a low-carbon discussion with the Polish government,” she says. The Corporate Leaders Group, which includes GE, Kingfisher and Philips, has published a statement calling on Poland to change its energy system.
Poland is one of a number of governments that “believes you can’t decouple growth from greenhouse gases”, Dixson-Declève adds. There is also “a great deal of climate scepticism” in the country.
Expectations from the COP are limited. It is hoped that it can resolve some differences between countries and help make progress towards a global climate deal that negotiators aim to conclude in 2015.
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