EU and CSR

CSR Met-up

16 May 2013

Corporate responsibility and accountability in the EU

• Many European companies already adhere to

international CSR frameworks.

• A growing number of EU companies report on the

sustainability of their activities.

• Progress in the EU since 1990:• Definition

• Instruments and policies

• Practices

Early activities in European countries

• 1994 Danish government launched a CSR campaign

• 1998 UK government backed the voluntary ETI (ethical trading initiative for the improvement of labour conditions in supply chains)

• 1999 Sweden started to require large companies to include environmental information in their annual reports

• 1999 Germany gave financial backing to the launch of the UN global compact.

• 2000 UK appointed a minister for CSR.

• 2001 France adopted a law on New Economic Regulations (NRE) making CSR disclosure mandatory for listed companies.

Conclusion: Over the following decade, new challenges, such as social inclusion, the environment, diversity and competitiveness, spawned a range of new activities.

Transparency: a key question for European countries

Several EU Member States have a well developed policy on CSR

• Convergent transparency practices noted in the inventory of national policies:• exemplary CSR management in public organisations (post, energy,

etc)

• regulation of CSR disclosure to clients and investors

• organisation of exchanges between various CSR stakeholders

• global orientation of CSR disclosure in other policies (industry, banking, development, etc.)

• Various instruments and tools at national level (DK, UK, FR, NL, SV)• guidelines, ratings, reporting, procurements with specific provisions

• mandatory reporting

Voluntary approach to CSR in EU and international

standards (2001-2002)

• The European Commission adopted a voluntary approach on CSR (2001)

• The European Commission established a European CSR policy providing exchanges, projects and financial support (2002) to the stakeholders forum.

• In addition to this voluntary approach, the European Commission handles labour and environmental issues through directives (Reach, IPPC, etc)

• A directive introduced the possibility of extra financial information in annual balance (2003)

• The SRI market begins developing (2007)

Development of the definition of CSR

• First step in the definition (2001)CSR “is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary

basis”.

Second step in the definition (2006)CSR has a role in achieving Sustainable Development and ensuring more and better jobs. The Europe 2020 Strategy added consumer trust to the roles

of CSR.

Third step in the definition (2011)a new communication from European Commission.

New communication on CSR

A new step in the definition.• CSR refers to “the responsibility of enterprises for their impacts on society” and respect for

applicable legislation and for collective agreements between social partners;

• CSR in the EU recognises principles and guidelines internationally and integrates United Nations guiding principles on business and human rights;

• CSR is a long-term approach and includes the supply chains and impacts both direct and indirect.

• CSR has a multidimensional nature.

• The EU notes:

“According to these principles and guidelines, CSR at least covers human rights, labour and employment practices (such as training, diversity, gender equality and employee health and well-being), environmental issues such as bio-diversity, climate change, resource efficiency, life cycle assessment and pollution prevention) and combating bribery and corruption”.

• The disclosure of non-financial information is also recognised as an important issue

Recent progress in CSR within the EU

• Social dialogue: 140 transnational company agreements (from 79 in 2006)

• Monitoring: 700 members in the business social compliance initiative (from 69 in 2007)

• Reporting: 850 European enterprises following the global reporting initiative (from 270 in 2006)

• International standard: 1900 European enterprises involved in UN global compact (from 600 in 2006) and good participation in ISO26000

• Environment: 4600 enterprises adopting EMAS.

Evaluation of the impact of CSR but the EU could do better.

What kind of new actions?

• Role of public authorities:• each Member State must update a national plan and accept peer review

• Role of Social partners: database for international agreements

• Role of EU institutions:• creating an award and financial support for promotion and education on CSR.

• struggling against unfair commercial practices.

• (greenwashing) promoting CSR in public procurement and trade agreement

• submit a legislative proposal on the transparency for social and environmental information (2012)

• Initiate sectoral multistakeholder platforms.

• Conclusion: more visibility, more accountability and more trust.

Back to definitions

• EU Definition of CSR: "A concept whereby companies

integrate social and environmental concerns in their

business operations and in their interaction with their

stakeholders on a voluntary basis."

• After a 2011 review of this definition the EU puts forward a

new definition of CSR as: “the responsibility of enterprises

for their impacts on society”. Respect for applicable

legislation, and for collective agreements between social

partners, is a prerequisite for meeting that responsibility…

An action agenda for the period 2011-2014

The Commission's policy puts forward an 8 points agenda for action covering the period 2011-2014:

1. Enhancing the visibility of CSR and disseminating good practices: European award; Sector-based platforms for enterprises and stakeholders.

2. Improving and tracking levels of trust in business: public debate on the role and potential of enterprises, and surveys on citizen trust in business.

3. Improving self- and co-regulation processes: development of a short protocol to guide the development of future self- and co-regulation initiatives.

4. Enhancing market reward for CSR: leveraging EU policies in the fields of consumption, investment and public procurement in order to promote market reward for responsible business conduct.

5. Improving company disclosure of social and environmental information: Commission’s intention to bring forward a new legislative proposal on this issue.

6. Further integrating CSR into education, training and research: the Commission will provide further support for education and training in the field of CSR, and explore opportunities for funding more research.

7. Emphasizing the importance of national and sub-national CSR policies: Member States invited to present or update their own plans for the promotion of CSR by mid 2012.

8. Better aligning European and global approaches to CSR: UNGC, OECD Guidelines for MNE, ISO26000, ILO Tripartite Declaration, UN guiding principles on business and human rights.

Promoting corporate social responsibility in European industrial sectors

• Textiles: investigate the CSR-competitiveness link with 270 enterprises from Italy, France and Spain. A number of public policy initiatives tested to further promote CSR amongst small and medium sized textile companies.

• Construction: "Building Responsible Competitiveness" project shows how corporate social responsibility (CSR) can drive competitiveness in the construction industry. Output = set of guidelines for CSR in the construction sector .

• Chemicals: The prisme2 initiative set out to foster CSR by involving small and medium sized enterprises from chemical sector in Responsible Care . Output = a toolbox for SMEs offering a broad range of existing instruments that can help SMEs to manage issues related to Responsible Care and Corporate Social Responsibility.

Promotion of CSR and development of national CSR networks

• Croatia: Raising the level of understanding of the importance of CSR in Croatia: development of an alliance of the existing CSR activities performed by various organizations.

• Estonia: Develop a National CSR Policy for Estonia and build the capacity of businesses and governmental institutions on CSR and recognize outstanding companies in the field through a nationwide Corporate Responsibility Index.

• FYROM (Former Yugoslav Republic of Macedonia) : • Support to the mainstreaming of CSR related practices and policies through implementation of the measures

and activities foreseen in the National Agenda on CSR.

• Promote and reinforce the national multi-stakeholder dialogue on CSR, exchange of ideas and experiences on CSR practices develop capacity of National CSR body and encourage uptake of CSR practices in all sectors.

• Slovakia: Contribute to increasing competitiveness and sustainability of small and medium-sized enterprises (SMEs) in Slovakia through implementation of CSR practices.

Non financial reporting:  CSR MUST REMAIN BUSINESS-DRIVEN“

• 16 April 2013: the European Commission adopted a

proposal for a directive enhancing the transparency of

certain large companies on social and environmental

matters. Objectives:

• increase EU companies’ transparency and

performance on environmental and social matters, and

• contribute effectively to long-term economic growth and

employment.

• Companies concerned will need to disclose information on

policies, risks and results as regards environmental matters,

social and employee-related aspects, respect for human

rights, anti-corruption and bribery issues, and diversity on the

boards of directors.

• On 6 February 2013, the European Parliament adopted two

resolutions:

• “Corporate Social Responsibility: accountable,

transparent and responsible business behaviour and

sustainable growth” and

• “Corporate Social Responsibility: promoting society’s

interests and a route to sustainable and inclusive

recovery”

• Business Europe PRESS RELEASE ,16 April 2013

•  BUSINESS EUROPE is disappointed by the European Commission’s

decision today to propose a legislative initiative on disclosure of non-

financial information. The proposed regulatory approach to Corporate

Social Responsibility is running the risk of demotivating all companies

that have embarked on genuine CSR activities on their own.

• Instead of applying a ticking-the-box approach, the business-driven

purpose of CSR must be safeguarded” – said BUSINESS EUROPE

President Jürgen R. Thumann.

• This proposal will create red tape and further disadvantage for a large

number of European businesses in international markets, running

counter to the urgent necessity of re-establishing the conditions for

confidence and competitiveness in Europe.

• BUSINESS EUROPE does not share the Commission’s assessment

that there has been a market and regulatory failure in the area of

CSR reporting, which would justify obliging companies to disclose

non-financial information.

• NOTE: BUSINESS EUROPE represents small, medium and large

companies. Active in European affairs since 1958, BUSINESS

EUROPE’s members are 41 leading industrial and employers’

federations from 35 European countries, working together to achieve

growth and competitiveness in Europe.