The debate on voluntary versus mandatory reporting is dead and the EU proposal on Corporate Social Responsibility, to be unveiled today by the European Commission after years of deadlock, goes in the right direction, said MEP Richard Howitt in charge of the dossier for the European Parliament in an interview with EURACTIV.
The voluntary vs mandatory approach is a dead debate “and let's please finally bury it today! People who think that there is just one approach or the other are wrong, what we are looking at today is the EU adopting a "smart mix" of regulatory and voluntary approaches,” Howitt said.
The MEP quotes the example of Denmark, where 1100 of the largest companies are required to report on their environment and human rights impact or else they have to explain why they have not.
“This is precisely an example of the "smart mix," which in the first year alone yielded over 97% compliance,” added Howitt.
However, there are still gaps on governance in the EU, which are clearly spelled out in the UN Framework on Business and Human Rights. “I hope in promoting national implementation plans by member states, the EU itself will not neglect the follow-up itself,” stressed the MEP.
According to Howitt, the Commission proposal to be unveiled today by Commissioners Michel Barnier, László Andor, respectively in charge of the Internal market, employment and social affairs and vice-president Antonio Tajani, responsible for industry and entrepreneurship, will show some clear advances in the policy debate.
The new blueprint should outline a strong focus on implementation of global CSR standards by European enterprises and making the way for new proposals for reporting of social, environmental and human rights impacts by business.
“Overall, I hope we will see unveiled today a whole new and more direct approach to CSR where the Commission is saying clearly to companies that there is an expectation for many more of them to have a clear plan at the core of the business to really integrate CSR into their business strategies,” Howitt added.
Not only glossy corporate reports
It is increasingly the mainstream business view that CSR is a key part of the competitiveness of a company not just a glossy corporate report, insisted Howitt.
Reportedly, the process is being driven by customers and investors who want to know the full list of challenges, opportunities and threats faced by companies.
The UN Human Rights Council, the OECD, the UN Principles for Responsible Investment and even the Prince of Wales through his Accounting for Sustainability Project seem convinced that there is a sound need for clearer standards and guidance for companies and states, especially in the wake of the financial and economic crisis.
Beyond EU borders to boost sustainability
“Today the EU is reinforcing its own name to that list,” said Howitt, stressing the EU can take leadership on CSR beyond its own border, at G20 level, so that the goal of sustainability can be fully integrated with company financial reporting worldwide by 2020.
Sustainability and CSR is at the very heart of the Europe 2020 Strategy. “In the Parliament I will be working to ensure that we tie all the tools together to ensure that Europe is working in coordination with business to promote the sustainablility agenda,” Howitt anticipated.
“On climate change governments are saying to business that we can't do it without you. We reject simply letting the argument be dominated by past wrongs, and instead focus on how we can work together in the future to meet new challenges. It is a refreshing change that I hope we can foster for the CSR debate as a whole,” he ended.
Richard Howitt was speaking to EURACTIV's Managing Editor Daniela Vincenti