Corporate social responsibility
The European Commission defines corporate social responsibility (CSR) as ‘the responsibility of enterprises for their impacts on society’ (Communication of 25 October 2011, A renewed EU strategy 2011-14 for Corporate Social Responsibility). This Communication also states that to fully meet their corporate social responsibility obligations, enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders. This 2011 Communication, which builds on the Commission’s 2001 Green Paper on CSR and its 2006 Communication on CSR, fulfils a commitment to promote CSR, made in the Europe 2020 Strategy.
On its website, the European Commission states further that CSR ‘refers to companies voluntarily going beyond what the law requires to achieve social and environmental objectives during the course of their daily business activities. It covers a range of areas: Europe 2020 (especially new skills and jobs, youth, local development); business and human rights; CSR Reporting; and socially responsible public procurement’.
Overall, the term CSR is used to describe various kinds and degrees of obligation undertaken by enterprises. The Commission’s 2011 Communication states, for example, that CSR should include human rights, labour and employment practices (such as training, diversity, gender equality and employee health and well-being), environmental issues, and combating bribery and corruption.
There has been some debate in recent years concerning the degree of obligation that CSR imposes on employers. The 2006 Communication launched the European Alliance for Corporate Social Responsibility, which is designed to encourage enterprises to voluntarily commit to the principles of CSR. The alliance has set itself three targets: raising awareness and knowledge of CSR, mainstreaming and developing coalitions and cooperation as well as creating a supportive environment for CSR.
However, reacting to the Commission’s 2006 Communication, the European Parliament issued a report on CSR in March 2007, which questions the validity of only supporting a voluntary approach towards CSR, arguing that companies should be encouraged to produce an annual CSR report.
The Commission’s 2011 Communication does not introduce mandatory reporting, but does make a commitment to monitor the commitments made by European enterprises with more than 1,000 employees to take account of internationally recognised CSR principles and guidelines.
The accession of many new Member States, especially in Central and Eastern Europe, has involved the development of new policy initiatives. One such initiative is an EU-funded project, Accelerating CSR in New Europe, which is based on the premise that the social aspects of change have not always been prominent in Central and Eastern Europe as countries move towards a free market economy. Central to the project is the notion that ‘cross-sectoral cooperation and social dialogue between various stakeholders’ can help to demonstrate the importance of CSR.
A report from the European Foundation for the Improvement of Living and Working Conditions (Eurofound), European and international framework agreements: Practical experiences and strategic approaches (2009) provides evidence to indicate that the increasing emergence of European Framework and International Framework Agreements (EF/IFAs) are helping to promote CSR. The report claims that such agreements are viewed by management as an integral part of good CSR practices:
According to the report, in addition to promoting positive publicity as well as representing a platform for entering into social dialogue with employees, CSR and EF/IFAs serve companies in another important way, that of ‘risk management’. This third factor involves an awareness that the internationalisation of business brings with it certain dangers, particularly a potential lack of transparency. While multinationals are keen to advocate a degree of decentralisation, the need to ensure that local management decisions do not undermine the company’s CSR objectives nevertheless prevails.
The most recent overview of national public CSR policies in the EU is contained in a Commission report issued in April 2011.
The EU-level social partners have also undertaken initiatives in this area, with a number of EU-level sectoral agreements on CSR having been concluded in recent years in sectors such as the electricity sector, the postal sector, the commerce sector, the banking sector, the hospitality sector and the sugar industry.
In terms of the future, the Commission’s 2011 Communication contains a range of actions that the Commission intends to carry out between 2011 and 2014 in order to promote CSR. This is based on the Commission’s view that, despite progress made in recent years, a number of challenges remain. For example, many EU companies have not yet fully integrated social and environmental concerns into their operations and core strategy, there are accusations that a small minority of European enterprises harm human rights and fail to respect core labour standards, and only 15 out of the 27 EU Member States have national policy frameworks to promote CSR.