Since its inception in the 1990s, businesses have come a long way on Corporate Social Responsibility, says Stefan Crets, executive director of CSR Europe, a network of multinationals involved in CSR policies.
Stefan Crets is executive director of CSR Europe, the leading European business network for corporate social responsibility with around 70 multinational corporations and 31 national partner organisations as members.
CSR Europe provided answers to these questions in writing.
The debate about CSR has tended in the past to evolve around the mandatory vs. voluntary debate. How has this debate evolved since?
CSR is often defined as a voluntary initiative, this is because, whether you are responsible or not, it’s the consequence of a choice you are taking. CSR Europe, the European business network for CSR, has been at the heart of the European movement on CSR since its inception in 1995. Over the years, European businesses have indeed come a long way.
In the early and mid-1990s, CSR was still a new concept for many companies. Today, CSR is part of the corporate vocabulary, and companies are increasingly aware of the business impacts of environmental and social issues. Moreover, business leaders believe global threats are a challenge for the long-term success of their companies. Environmental concerns such as fighting climate change, reducing waste and using natural resources more sustainably have become core business issues. In addition to the financial crisis, on the socio-economic side, companies in Europe have had to deal with the challenges associated with an increasingly diverse and ageing population.
Forward-looking companies are today increasingly leveraging sustainability as a source of innovation and new business opportunities. Recent years have also seen a growing interest in how companies, policymakers and other stakeholders can work together to develop CSR as a way for business to contribute to sustainable development and societal wellbeing. Today, CSR is no longer seen as an add-on to the core business, but a way of doing business.
However, integrating CSR into global supply chains and ensuring that business contributes to sustainable development worldwide remains a major challenge for companies. For this reason, CSR Europe feels that it is time to put an end to the mandatory vs. voluntary debate and instead concentrate on placing social innovation and social and environmental considerations at the heart of the company strategy and operations.
Do you believe the Commission's CSR communication reflects the evolving nature of the debate?
The EU wants to reaffirm its global influence on CSR and enhance the EU’s global competitive positioning, especially given the adaptation of new global CSR instruments (e.g. ISO 26000, OECD, UN Framework on Business and Human Rights…etc).
Keeping all these issues in mind, the new communication has opted for a mix of smart policy while maximising shared value through the creation of innovative products, services and business models.
However, we believe that emphasis on the innovation and opportunity dimension of CSR could have been stronger and that the need for innovation and practical collaboration is more important than general public commitments.
For example, maximising opportunities through social innovation and practical collaboration lies at the very heart of our Enterprise 2020 initiative – a reference initiative for companies committed to developing innovative business practices and working together with their stakeholders to provide solutions to emerging societal needs. Through active engagement in Enterprise 2020, CSR Europe’s members have access to an open platform for innovation and exchange; this allows them to address societal challenges in a practical way and develop thought leadership and practical tools that can be replicated in other areas and sectors.
In the lead-up to 2020, the business response to the CSR agenda will determine the sustainable competitiveness of the European economy. The active engagement of companies in Enterprise 2020 and other international initiatives show that there is a genuine business commitment to contribute to sustainable development. CSR Europe hopes that this new communication will help to encourage even more companies to consider the importance of implementing innovative CSR strategies at the very core of their strategy and business operations.
What are your thoughts on the Commission’s measures to improve company disclosure of social and environmental information?
In order to be a trusted and successful company, transparency is necessary to build stakeholder confidence. However, enhanced transparency will only be worthwhile if it also drives performance on key material issues. Reporting should therefore be a process to articulate and reflect these improvements.
At the national level, many European governments have taken steps to support the development and uptake of CSR in their countries. For example, the Danish government has launched an ambitious action plan on CSR and the Dutch government has introduced strict goals for sustainable public procurement.
Some European countries, such as Denmark, France and Sweden, have introduced rules on CSR reporting for publicly listed companies or for state-owned companies to push companies to improve their sustainability performance and promote greater transparency towards stakeholders.
The Communication invites all European organisations, including civil society organisations and public authorities, to take steps to improve disclosure of their own social and environmental performance. What could have been helpful, however, would have been a commitment by the European Commission to publish its own CSR report as a good example.
At European level, the Communication states that the European Commission intends to adopt a legislative proposal on CSR reporting under the Danish EU presidency in 2012. CSR Europe, along with our members, is actively involved in these preparatory discussions.
Should disclosure of non-financial information become mandatory in some areas?
The progress and increased interest in CSR is inspiring. The experience is showing us that reporting (on a voluntary or mandatory basis) is healthy for companies as much as for any other organisation (public authorities, NGOs, academics) as it informs their internal and external stakeholders about their choices with regard to their ESG and responsibility.
However, CSR Reporting is a first step in the direction of more integrated reporting to better connect financial and non-financial performance. Social media will be a key driver for companies to unfold the potential of their CSR and sustainability strategies and practice.
The issue of mandatory reporting should take into account that a 'one-size-fits-all' approach will not yield CSR improvement benefits.
How can the Commission reward socially responsible behaviour by companies?
In the globalised world, issues such as demographic change, global poverty, environmental degradation or developing a skilled worforce for the knowledge-based economy become increasingly intertwined and extend across national borders and industrial sectors. Tackling them effectively requires joint action from companies, governments, stakeholders and the civil society.
Faced with today’s complex environmental and socio-economic challenges, progressive companies are gearing up for a CSR approach focused on cooperation and innovation.
For this reason, under the umbrella of Enterprise 2020, companies and stakeholders across Europe have set up a number of collaborative projects to tackle some of these issues: for example, Supply Chain Business and Human Rights, Health and Wellbeing, Active Ageing, Valuing Non-Financial Performance, Financial Education and New Business Models at the Base of the Pyramid.
The Commission should be a broker to enable enhanced collaboration and support innovation in order to increase European competitiveness and growth.