Commission issues new Communication on Corporate Social Responsibility

In October 2011, the European Commission issued a new Communication on Corporate Social Responsibility, redefining the concept. It urges companies to address employment and social issues such as training, youth employment, dialogue with employee representatives, employee health and well-being, gender awareness and diversity management within the context of the Europe 2020 strategy, and to see such initiatives as a key part of the solution to Europe’s economic crisis.

Background

The Communication, A renewed EU strategy 2011-14 for Corporate Social Responsibility (136Kb PDF),was published on 25 October 2011. It states that a strategic approach to Corporate Social Responsibility (CSR) is increasingly important for the competitiveness of businesses and can bring benefits in terms of risk management, cost savings, access to capital, customer relationships, human resource management and the capacity for innovation. CSR can also benefit society as a whole by contributing to the achievement of the European Union’s Treaty objectives of sustainable development and a competitive social market economy, and underpinning the Europe 2020 strategy’s objectives.

This Communication, which builds on the Commission’s 2001 Green Paper (165Kb PDF) on CSR and its 2006 Communication on CSR (158Kb PDF), fulfils a commitment made in the Europe 2020 Strategy to promote CSR.

Progress since 2006

The Commission states that progress on CSR has been made over the past five years. Examples include:

  • the number of EU enterprises that have signed up to the 10 CSR principles of the United Nations Global Compact has risen from 600 in 2006 to over 1,900 in 2011;
  • the number of organisations with sites registered under the Environmental Management and Audit Scheme (EMAS) has risen from 3,300 in 2006 to over 4,600 in 2011;
  • the number of EU companies signing transnational company agreements with global or European workers’ organisations, covering issues such as labour standards, rose from 79 in 2006 to over 140 in 2011;
  • the number of European enterprises publishing sustainability reports according to the guidelines of the Global Reporting Initiative rose from 270 in 2006 to over 850 in 2011.

However, the Commission maintains that 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 also accusations that a small minority of European enterprises do not observe human rights principles and fail to respect core labour standards, and that only 15 out of the 27 Member States have national policy frameworks to promote CSR.

Actions during 2011–2014

The Commission therefore proposes a number of initiatives to speed up progress towards more widespread acceptance of CSR. It proposes a new definition of CSR as: ‘the responsibility of enterprises for their impacts on society’. It also states that enterprises should integrate social, environmental, ethical, human rights and consumer concerns into their business operations, and draw up a core strategy in close collaboration with their stakeholders in order to fully meet their corporate social responsibilities

It adds that CSR should include observance of human rights, ethical labour and employment practices (such as training, diversity, gender equality and employee health and well-being), consideration of environmental issues, and the combating of bribery and corruption.

Companies should lead the development of CSR, but they should be supported by public authorities, trade unions and civil society organisations.

For its part, the Commission will undertake to:

  • create multistakeholder CSR platforms in a number of relevant industrial sectors in 2013, so that enterprises, their workers and other stakeholders can make public commitments on the CSR issues relevant to each sector and jointly monitor progress;
  • launch, from 2012 onwards, a European award scheme for CSR partnerships between enterprises and other stakeholders;
  • address the issue of misleading marketing related to the environmental impact of products – so-called ‘green-washing’;
  • launch a process in 2012 with enterprises and other stakeholders to develop a code of good practice for self- and co-regulation;
  • as part of the 2011 review of the Public Procurement Directives, facilitate the better integration of social and environmental considerations into public procurement;
  • consider placing a requirement on all investment funds and financial institutions to inform all their clients about any ethical or responsible investment criteria they apply or any standards and codes to which they adhere;
  • in 2012, create with Member States a peer review mechanism for national CSR policies;
  • monitor the commitments made by European enterprises with more than 1,000 employees to take account of internationally recognised CSR principles and guidelines; and
  • publish by the end of 2012 a report on EU priorities in the implementation of the UN Guiding Principles, and thereafter to issue periodic progress reports.

Conclusions and the way forward

The Commission intends to work with Member States, enterprises and other stakeholders to periodically monitor progress and to jointly prepare a review meeting, which will be held in 2014. Prior to this the Commission will publish a report on the implementation of the agenda for action set out in this communication.

In particular, the Commission calls on European business and financial sector leaders to issue, before mid-2012, an open and accountable commitment to promote the uptake of responsible business conduct by a much larger number of EU enterprises, setting clear targets for 2015 and 2020, and in close cooperation with public authorities and their other stakeholders.

Andrea Broughton, Institute for Employment Studies

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