CSR & EU [Archived] 

CSR has recently moved up the list of EU priorities. The European Council in Lisbon in 2000 marked an important step when it appealed to companies' sense of social responsibility to achieve "the most competitive and dynamic knowledge-based economy in the world". The European Summit in Stockholm in 2001 also emphasised the role of the private sector in achieving long-term economic growth in combination with social cohesion. As a result of this interest, the Commission issued a Green Paper on 18 July 2001 on a European framework for Corporate Social Responsibility (CSR). The aim of the Green Paper was to launch a wide debate among the stakeholders. The consultation phase ended 31 December 2001. On 2 July 2002, the Commission published a follow-up to the Green Paper in the form of a Communication entitled "Corporate Social Responsibility: A business contribution to Sustainable Development". As a follow-up the the Communication, the Commission launched the EU Multi Stakeholder Forum on CSR in October 2002.

The Green Paper broadly discussed what role CSR plays and can play in the EU's business environment. It pointed out the difficulties in comparing and evaluating the effectiveness and the efficiency of the voluntary CSR actions that are taking place. The Green Paper suggested that a European approach, or a European framework, could help increase the coherency and the credibility of the companies' work on CSR.

The Communication of 2 July 2002, pleased industry but disappointed many NGOs by not including any calls for mandatory regulation in the field of CSR. The key issues discussed in the Communication are:

• Multi-stakeholder Forum on CSR: The Commission will set up a multi-stakeholder Forum with the aim of prom oting transparency and convergence of CSR practices and instruments. It will consist of app. 40 members, representing employers, employees, consumers and civil society. The Forum should set up theme based round tables to discuss issues such as competitiveness, sustainable development, codes of conduct, reporting and assurance, etc. The Forum should develop commonly agreed guidelines and criteria for these issues by mid-2004.
• Integrating CSR: The EU should work on mainstreaming CSR issues into all policy areas. An interservice group within the Commission should be set up to ensure consistency. By 2004, the Commission assess its own social and environmental performance and publish a social and environmental report.
• External relations: The EU should promote CSR principles and practice at international level, particularly in developing countries. International codes of conducts and principles, such as the ILO declaration on fundamental principles and rights at work, and OECD guidelines for multinational enterprises, will be supported and promoted.
• The Commission will explore the opportunities of using EMAS as a management standard also for social performance of companies and organisations.

The consultation process for the Green Paper attracted lots of interest from all stakeholders. The debate focused mainly on the issue of mandatory versus voluntary rules.

Industry emphasised the voluntary basis of CSR, to allow each company to find the methods suitable for its culture and needs. On the other hand, many NGOs and think-tanks were explicitly against the present voluntary approach to CSR. They claimed social reporting, auditing and labelling are not efficient and credible without any standardised methods or independent monitoring.

On 30 May 2002, the Parliament adopted its opinion on the CSR Green Paper. The main recommendations in the report were (rapporteur: Richard Howitt, UK-PES):

• the creation of an EU multi-stakeholder CSR platform made up of the different EU Actors involved;
• companies to supply information on the social and environmental impact of their operations;
• the mainstreaming of CSR in all areas of EU competence, in particular regional and social funding;
• the Commission to investigate the possibility of creating a European Ombudsman for European enterprises operating in developing countries with respect to CSR.

The consultation process on the Communication has just started. Many stakeholders have been involved in the discussions on setting up the multi-stakeholder Forum, and have welcomed the initiative. However, it is clear that many NGOs remain critical to the fact that the Commission did not explicitly open the door for mandatory regulations, especially in the field of social reporting.

Friends of the Earth Europe (FoEE) called the Communication a missed opportunity to stop business scandals. It states that: "The Commission's paper ignores calls from Friends of the Earth and others for binding rules to regulate multi-national companies world-wide. FOE has called for the paper to address binding corporate accountability including key measures such as, at the very least, mandatory social and environmental reporting."