A Parliament report on the Commission’s Communication on Corporate Social Responsibility (CSR), adopted on 9 March 2007, is critical of the Commission’s approach of letting companies decide how to incorporate social and environmental concerns into business practices.
The report was authored by Labour MEP Richard Howitt following the March 2006 publication of the Commission’s CSR Communication. The Communication led to a break-up of the EU Multi-Stakeholder Forum on CSR, when all NGOs stepped out of the Forum in protest at the setting-up by the Commission of a different body, the European Alliance on CSR, of which NGOs are no longer a part.
The Forum split was the culminating point of a long-standing conflict, in which companies claimed the right to define the CSR standards that they should apply, whereas NGOs said that only a common set of standards to be worked out between all stakeholders, and possibly enforced through regulation, would bring satisfactory results. NGOs have since grouped up in the European Coalition for Corporate Justice.
The Parliament mildly criticised the Commission, welcoming the Communication as such, but noting “the concerns expressed by some key stakeholders about a lack of transparency and balance in the consultation undertaken before publication”. It voted for a set of amendments jointly tabled by the two biggest groups – the EPP-ED (Conservative) and PSE (Socialist) and partly reflecting criticism from SME organisation UEAPME. The amendments watered down the initial, more critical proposal by Howitt, which had been adopted in the Employment Committee on 20 December 2006.
The amendments include replacing a phrasing whereby the Parliament “calls for the CSR debate at the European level to be ‘depolarised’ by neither supporting exclusively voluntary nor mandatory approaches” by a different wording, according to which the Parliament “Recognises the Commission definition that CSR is the voluntary integration of environmental and social considerations into business operations, over and above legal requirements and contractual obligations”.
Following the vote, Paul de Clerck of environmental NGO Friends of the Earth Europe commented: “We are quite happy with the report, because there are a number of points where it goes further than the Commission Communication. That includes the right of redress, in European courts, of foreign communities harmed by EU corporate practices, mandatory reporting obligations to companies to reveal the full impact of their activities on the environment and communities, and an obligation for companies to disclose lobbying activities they are funding.”
De Clerck agreed, however, to criticism uttered by fellow NGO Social Europe, according to which the EU is, after the break-up of the Multi-Stakeholder Forum, “no longer the main arena for CSR”. Both NGOs say that they prefer to work with single companies who are ready to go further than the Commission’s requirements to dealing with adverse lobbying from businesses and a reluctant bureaucracy in Brussels.