Corporate social responsibility
The report found that
- CSR must be seen more as an interactive process than a product.
- CSR involves a diversity of stakeholders, approaches, motives and commitments.
- CSR evolves in a variety of contexts.
- Although there is already some formalisation, more auditable standards need to be developed to measure expectations and performance.
- There is a need to anchor CSR to the heart of the business process so that it can serve in bad as well as good economic times.
Recommended actions to reinforce CSR
- Promoting a 'CSR-friendly' social dialogue;
- Rethinking the rules, processes and practices;
- Enabling the actors to play their role;
- Promoting internal as well as external aspects of CSR, e.g. work safety;
- Intensifying the dialogue to include all stakeholders;
- Fostering CSR among small and medium-sized enterprises;
- Promoting CSR as a tool to anticipate change.
In line with the objectives of the Lisbon Summit, March 2000, the European Council made a special appeal to companies' sense of social responsibility regarding best practices in lifelong learning, work organisation, equal opportunities, social inclusion and sustainable development.
What is corporate social responsibility?
The Green Paper published by the Commission in July 2001 stated that CSR is commonly defined as 'a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis'.
The Foundation decided to conduct research on CSR in order to:
- clarify the concept;
- give a clear understanding of the subject by identifying the actors, approaches and conditions necessary for its growth;
- identify its added-value in terms of economic and social progress;
- put forward recommendations for future actions.
Focus on four themes
Restructuring, subcontracting, local community, environment
The report by the Foundation is based on a synthesis of two studies that were conducted into corporate social responsibility within the areas of living and working conditions.
- The first study aimed to investigate and describe corporate policies designed to instigate social responsibility in the field of working conditions and employment. Two specific issues highlighted in the study were restructuring and subcontracting.
- The second study aimed to develop two of the post-Lisbon priorities: corporate involvement in local community and economic regeneration; and the promotion of environmentally acceptable practices.
Interactive process and dialogue
Although it is generally presented in the form of a tangible product, CSR is essentially an interactive process, with a diversity of approaches, motives and stakeholders, e.g. management, worker representatives, workers, public authorities, local communities, suppliers and consumers. Identifying the legitimate stakeholders and measuring their expectations is crucial to the process. As a dialogue, CSR requires a commitment, trust and accountability from the stakeholders. Promoting the necessary skills and an appropriate institutional framework will contribute to reinforcing the quality and permanence of that dialogue.
Measuring levels of performance
A variety of approaches to CSR are apparent from the sectoral studies, due to its evolving nature. However, auditable standards as well as broad guidelines, codes of conduct, charters, investment screening mechanisms and benchmarks are being developed. Standards by which organisations can be measured make it possible to compare and contrast levels of performance. The report outlines a range of CSR-related standards, and proposes actions for the future.
The need for a sustainable model
Despite an increasing awareness of CSR and a rise in the level of activity, the study shows that CSR in Europe stands at a crossroads. An uncertain economic climate can undermine the willingness of companies to adopt or reinforce CSR initiatives. The challenge is to develop a sustainable CSR model at the heart of the business operations rather than at the periphery, so that can serve equally in good and bad times.
CSR evolves in a variety of contexts
The research shows that the definition of CSR depends on varying regulatory, cultural and economic contexts. We can assume that these contexts will continue to evolve and shape CSR. Four elements that could have a particular influence on this process are:
- globalisation, which changes the way companies do business and could result in expansion beyond a European framework;
- governance, which refers to the decision-making process in companies as well as in society;
- sustainable development, which invites companies to change the way they produce goods and services;
- EU enlargement, which will mean the inclusion of new countries whose values and contexts could contribute to shaping CSR.