CSR initiative provokes NGO protests

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A new proposal for an alliance on Corporate Social Responsibility (CSR) about to be launched by the Commission has been received with anger by NGOs and trade unions, who fear they will be excluded from the body. The proposed alliance will bring together mainly the Commission and enterprise.

The Commission says, “[A] common European understanding of what CSR means has emerged on the basis of the Commission’s definition of CSR 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.” It goes on to say that, “[the] Commission continues to attach importance to dialogue with all stakeholders, but also wishes to give recognition to enterprises as the primary actors in CSR. The main element of this new approach is therefore an innovative partnership with enterprises, which will take the form of a European Alliance for CSR.”

According to the draft communication, the CSR alliance would be a “political umbrella for new and existing CSR initiatives by large companies [and] small and medium-sized enterprises”. The draft does not foresee controls or minimum standards for CSR claims. 

Friends of the Earth Europe  (FoEE) said, "Commissioner Verheugen hijacked the CSR process to his jobs and employment agenda. The paper we received is not about improving the environmental and social impact of European companies, but only on how companies can become more competitive and profitable."  FoEE claims that "[the] Commission’s proposal does not include NGOs recommendations like:

  • ensuring accountability of companies to their stakeholders;
  • social and environmental reporting requirements;
  • using public policy measures such as public procurement and public subsidies to stimulate responsible behaviour;
  • Implementing international standards and principles;
  • involving stakeholders from the early stages of CSR strategy development;
  • ensuring independent monitoring/verification."

To this, the Commission reacted by saying: "NGOs have not been excluded, are not excluded and will not be excluded. The have been part of the broad consultation process and they will be part of the review.

The Commission will support the organisation of a review meeting with all stakeholders to take stock of progress made in relation to the recommendations of the CSR Forum before the end of 2006. To enhance the transparency, visibility and credibility of CSR practices, the Commission encourages enterprises who support the Alliance to make CSR information available to all stakeholders, including to consumers, investors and the wider public. Large companies in particular should seek to present CSR strategies, initiatives and their results or best practices in a way that is easily accessible to the public. In addition, the Commission will continue to support stakeholders in developing their capacity to assess and evaluate CSR practices."

 

The European Trade Union Congress (ETUC) reiterated the following demands: 

  • a commitment by firms to submit an annual company report on the social and environmental impact of their activities;
  • the promotion of standards covering all aspects of corporate governance (certification of end products, transparency and quality throughout the  production chain including product traceability, subcontracting, supply and relocations);
  • criteria governing access to the use of Community funds, thus assisting in  making a positive selection;
  • the drafting of codes of conduct and/or labels or similar measures, within the framework of procedures and checks laid down by the Commission, in conjunction with the trade unions and NGOs;
  • the establishment of instruments and/or certification agencies that correspond to verified criteria, so as to determine their legitimacy and representativeness.

UK Energy Minister Malcolm Wicks was recently quoted  as saying: "We want to provide the right policy framework to support [CSR] while letting business decide how to apply it [...] The position of Government is that CSR is something over and above the legal requirements and we feel it's best as a voluntary activity. [...] Where society judges that something is so crucial there should be at least a minimum standard, then we should legislate for it. [...] But I would see CSR as the social policies of companies and essentially something that is added to that."

The alliance is a central element of the Commission's upcoming communication (see the latest draft here) on CSR, to be launched by Commissioner Verheugen on 22 March 2006. The document was largely drafted to take account of criticisms voiced after the publication of the Commission's  2002 communication on the issue, which NGOs said gave too much room to corporate interests. 

In the multi-stakeholder forum that ensued, NGOs and companies were quarrelling with each other mainly on the question of whether CSR commitments on working standards and environmental protection should be voluntary or subject to regulation. The forum's final report gave preference to the "voluntary integration of environmental and social considerations into business operations over and above legal requirements and contractual obligations".

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