Corporate Social Responsibility in Germany

Abstract

This chapter characterises Corporate Social Responsibility (CSR) from a German perspective. It examines whether and how the German political and socio-economic stakeholder response to sustainable development differs from the practices undertaken in other countries. By reviewing its historical development, key influencing factors, and current trends, this qualitative review, based exclusively on secondary data, forms an information basis from which Germany’s past CSR choices are critically investigated. The authors reason that the ‘recipe’ which led to the post-war German success story has paid too much attention to the Washington Consensus and does not reflect how capitalism should ideally work. Recent German scandals have born witness to the clash of shareholders maximising their income, which was done by stealth, while pretending to serve stakeholders and the environment. Germany has traditionally fast followed other countries and now is the time to pioneer again and show that a capitalism conscious of the needs of society is the best way forward. The authors call on Germany to follow the courage of her former social market economy convictions which are better adapted to post-capitalism. Asia’s commendable growth rates reveal the merit of this approach. A key premise in this realisation is a mind-set transition in which decision-makers cease making choices from the perspective of the past. The authors conclude that at a corporate response level, Germany could better utilise her unique stakeholder-orientated Mittelstand culture by empowering creative people thereby driving innovative sustainable solutions and ultimately economic growth.