Corporate Responsibility 2015

Conference co-hosted by the Federal Ministry for Development and Economic Cooperation (BMZ), the Federal Agency for Economic Cooperation (GIZ), AmCham Germany and Verantwortung Zukunft
Berlin, June 11, 2015
Ambassador John B. Emerson 

Social responsibility is a topic of great interest to me.  But it is the life work of my brother, Jed, who has been one of the global thought leaders on the subject.  And he is here with me tonight.  Now, while you would much rather hear from him, since he just got off an all-night flight from California, you’ll have to put up with me.

The role of business in job creation and wealth creation is well documented.  Business facilitates not only the flow of products and services, but also the free flow of ideas and people.  It spurs innovation and the resulting economic growth; and by working to strengthen the global application of l rule of law, business has an important role to play in advancing our shared values.

Fortunately, all this mirrors quite closely the foreign policy goals of both the United States and Germany.  Economics has always played a role in diplomacy, but as Secretary of State John Kerry says, in today’s complicated world, “economic policy is foreign policy, and foreign policy is economic policy.”

The reasons for this are clear.  Many of the challenges we face are economic in nature but at the same time, they have major security implications.  Economic, health, environmental, demographic, and human rights issues are inextricably linked.  They play a crucial role in almost all of the foreign policy challenges we face – climate change, terrorism, poverty, pandemic disease, refugees, the accelerating pace of technological innovation, and the global struggle of people of diverse backgrounds and faiths as they adapt to – or reject – the opportunities and realities of the 21st century.

As Thomas Friedman recently put it in his New York Times column, we are facing a struggle between “the world of order” and “the world of disorder.”  There has never been a more important time for the coalition of free-market democracies, the countries that Friedman refers to as the “core of the world of order,” to come together, and establish a win-win solution for global integration.  The European Union is perhaps the largest, best known, and most successful example of regional integration.  And two agreements we are currently negotiating – the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership – will bring depth and breadth to a global conversation regarding the advancement of the kind of rules-based public commons in which nations thrive.

By lowering barriers to trade and investment, agreements such as T-TIP and TPP will spark a boost to commerce in member countries – and beyond.  And by strengthening this approach, we will also be sending a message about the values an open trading system represents: freedom, open markets, rule of law, intellectual property rights protection, transparency in our commercial dealings, high standards for consumer health and safety, and respect for the environment and working men and women.

This is the foundation for sustainable, shared prosperity; and it is clear that the private sector is a necessary partner in these efforts.  Business exemplifies the benefits of democracy, free enterprise, and market-based economies.

But the goal of this conference is to address a larger purpose that must be served.  The simple fact is, the best businesses not only innovate and create jobs, but they are also at the forefront of promoting education, environmental stewardship, sustainable economic development and humanitarian assistance.

This is why business is an indispensable partner in diplomacy today.  Clearly, business needs governments to support its activities; but government also needs business if it truly wants to succeed in achieving its broader objectives.  There is both a business case and a policy case for corporate social responsibility.

In a nutshell, corporate social responsibility can be described as “doing well by doing good.”  It sums up one of America’s defining core values; a value that has also been central to the long-term success of the American economy.  For many, however, the idea of corporate social responsibility refers to the good works of companies – creating sustainable processes; converting to renewables; investing in their communities by supporting and even establishing schools, universities, libraries, performing arts centers, and hospitals, or providing humanitarian assistance during times of crisis.  These are all positive activities that demonstrate good corporate citizenship, particularly in the light of shrinking public budgets and societal challenges; but corporate social responsibility refers to more than philanthropy.

In an era when more than one third of the 100 largest economic actors are private companies, not countries, the idea that business and government can operate in parallel worlds simply does not work.  The United Nations Guiding Principles on Business and Human Rights provide a framework for corporations, states, civil society, and others as they work to strengthen approaches to these compelling societal challenges: problems that span political, economic, social and cultural boundaries.

We also need to keep in mind the symbiotic link between the prosperity that we work to advance and the security that it brings.  This was the lesson learned in the years following World War II, when out of the ashes of the most destructive and horrific war in world history, the United States and Europe collectively forged a transatlantic community, anchored in shared institutions.  This partnership brought an unprecedented era of peace, prosperity, and stability to this continent; and also inspired a broader vision of human rights that has inspired people around the world.  It is a vision of a world where people are free to speak their minds, to criticize their own government; to assemble and to vote, and to choose their own destinies; a vision where every human being has the right –and the opportunity – to reach his or her highest potential.

These rights, however, do not exist in a vacuum.  Nor are they inevitable – as the situation in eastern Ukraine or in Iraq or in Syria and northern Africa, or the terrorist acts in Paris, Brussels, Copenhagen, Ottawa, Toulouse, and Boston so tragically remind us.  What is certain is that they entail a corresponding set of obligations, and the responsibility to stand up and work for the common good.

Germans and Americans know that, when a country bustles with economic opportunity, its citizens are more likely to become productive members of their society.  They are equally likely to advocate for better education and, by extension, peace and prosperity. That makes them more likely to become economic, trading, and security partners – which also bodes well for global stability.

Germans and Americans also fully understand the potential consequences when these economic factors are not in place.  A failed state that denies opportunity is more likely to give rise to corruption and crime cartels, extremism and social unrest, and very often, hostile activity.  That’s why, when it comes to the geopolitical stage, economics has become the indispensable foreign policy tool of our time; and also from a broader perspective, why corporate social responsibility, as a tool to find sustainable solutions that can enhance our security and prosperity for the long term, is imperative, not only for society at large, but for stakeholders as well.

Our countries are closely linked by an extraordinary spirit of cooperation.  I am convinced that the strength of our ties – and in particular, our economic ties – will help us address the serious challenges of the 21st century.  In the end, however, the choices we make in confronting these challenges will be the proof of whether we are able to live up to our ideals.  That comes down to all of us and the broader role that Germany and the United States, as essential partners, can and must play in the world.

Vielen Dank.