Corporate sustainability covers four main topics:
- business'sustainable development strategy: how to incorporate the principle of sustainability into everyday business activities?
- markets: business opportunities arising from sustainable development
- banking and investment: spotlight on how sustainable development is being approached by the financial services industry
- working with NGOs: how businesses are forging working partnerships with lobby groups.
Corporate sustainability goes beyond the concept of eco-efficiency, it also requires socio-effiency (relation between a firm's value added and its social impact).
The Global Reporting Initiative (GRI) developed Sustainability Reporting Guidelines in June 2000. The GRI was convened by the Coalition for Environmentally Responsible Economies (CERES) in partnership with the United Nations Environment Programme (UNEP). Numerous firms present yearly a Corporate Sustainability Report according to these guidelines and incorporate these reports in their communication strategies. A new version of the Guidelines was published in 2002.
What's the EU policy on corporate sustainability? The Commission decided to combine compliance with law and a Voluntary Approach by the groups/stakeholders involved after the comments made on its Green Paper "Promoting a European framework for Corporate Social Responsibility". The main issue is now to promote corporate sustainability in SMEs and to avoid artificial greening of the business performance.
To promote convergence and transparency of CSR practices and tools, the Commission wants to determine guidelines for:
- codes of conduct
- management standards (Total Quality Mangement Systems, Eco-Management and Audit Scheme..)
- measurement, reporting and assurance
- socially responsible investment (development by rating organisation of criteria and indicators)
To do so, the Commission has launched a EU Multi-stakeholder forum on CSR. This forum plays a key-role. It is expected to determine objective evaluation methods and validation tools such as ‘social labels’.
In the view of businesses, attempts to regulate CSR at EU level would be counterproductive, they stress the voluntary nature of CSR.
The European Round Table of Industrialists is not in favour of a standardised reporting of social performance. "It is not logical on the one hand to acknowledge the benefits of individually tailored approaches, and then to try to fit these to an externally imposed reporting standard".
Trade unions and civil society organisations emphasized that voluntary initiatives are not sufficient to protect workers and citizen rights. They advocated a regulatory framework establishing minimum standards. They also asked for effective mechanisms to e nsure a company's accountability for its environmental and social impact.
FEE (European federation of accountants) calls on the Commission to produce an explicit statement on companies being held accountable for CSR. The Commission's initiative should be limited to a framework of main principles or at maximum minimum standards. The focus should be on improving CSR practices, with any reporting principles being drafted in broad high level terms. Detailed reporting regulation should be developed at global level, such as that being developed by the GRI (global reporting initiative).
Click here for more positions on the Green Paper 'Promoting a European Framework for Corporate Social Responsibility.