University of Vaasa - Vaasan yliopisto

have, from participating in international activities as they can gain more exposure
and be updated on the development of CSR practices in other companies.
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The Danish government’s 2008 Action Plan for CSR (The Danish Commerce and
Companies Agency 2008) raises the question on the challenges ahead for Danfoss.
The new initiatives include making CSR reporting mandatory and that climate
responsibility should also be included, however, Danfoss has been making CSR
reports since 2002 and within its environmental reporting, climate change concerns
are considered. In terms of products, the action plan urges businesses for green
innovation and for more socially responsible products, but Danfoss has been
focussing on eco‐friendly products since the 1990s and with the example of Andares
in Mexico, it has incorporated social responsibility into its production. The action
plan will also initiate a survey of consumer roles in CSR, whilst in the Danfoss case,
the most important stakeholder in CSR was found to be its employees.
Danfoss is considered advanced in its CSR practices and thus have met most of the
requirements in the Action Plan. However, these new initiatives could still
potentially impact its competitive advantage in CSR, as it could bring other
companies that were lagging behind to catch up very quickly with Danfoss,
especially if Danfoss takes on a business‐as‐usual stance. If Danfoss would like to
maintain its CSR strategy of being proactive and agenda‐setting, it is recommended
that Danfoss focuses on increasing its partnership activities to further engage and
understand the needs of its stakeholders. We also recommend that Danfoss takes
interest in new developments within global warming such as carbon footprint and
water footprint, which would not only benefit its production activities, but it would
also improve its image as a green company. Lastly, another area where Danfoss
could consider is the base‐of‐the‐pyramid (BOP) strategy which focuses on the poor.
It might be the next wave of CSR development, given that production costs are
comparatively lower in developing countries and the vast market potential of the
“aspiring poor” (Prahalad and Hammond, 2002). In social actions, the growing
market provides the opportunity for Danfoss to forge more meaningful partnerships
that could possibly aid in poverty alleviation and at the same time improve its
reputation as a socially responsible company that cares for the poor.
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