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green paper sets off EU debate

September 2001

The European Commission has shown its strongest support yet for corporate social responsibility (CSR) principles by publishing a green paper as a ‘launch-pad for debate’ on the subject.

The EC wants the green paper, Promoting a European framework for corporate social responsibility, to prompt discussion on how the European Union can promote CSR, both within the 15 member states and internationally. It has invited comments from interested parties by 31 December.

The paper stresses that the EC favours voluntary adoption of CSR by companies rather than its enforcement through law. But it says that EU member governments should ‘focus on putting the proper regulatory or legislative framework in place in order to define a level playing field on the basis of which socially responsible practices can be developed’.

The paper says that companies should treat CSR ‘as an investment, not a cost, much like quality management’, and adds that further research, possibly funded by the EU, is needed into the impact of CSR on business performance.

On codes of conduct, the discussion document notes that these ‘are not an alternative to national, EU and international laws and binding rules’, but ‘complement’ regulation by promoting higher standards.

A commitment to CSR ‘means instilling it fully in business culture, from planning, implementation and staff policy to day-to-day decision making’. This ‘holistic’ approach should be backed up by social accounting, reporting and auditing, but a ‘global consensus’ on reporting formats and verification standards is still to emerge.

On socially responsible investment, the document comments that as a result of the proliferation of niche screening agencies, ‘companies seem overloaded with excessive and divergent information requirements. Thus a further expansion of SRI may encounter a growing aversion and non-cooperation from companies’. The solution, it says, is for ‘more convergence between indicators developed by companies and the criteria used by analysts to assess a company’s social and environmental performance’.

The paper also says companies should consider issues such as:

‘responsible downsizing’, with companies taking much greater responsibility for finding redundant workers new jobs

greater use of ‘ethical labelling’

a greater focus on ‘life long learning’ for employees

more profit-sharing for staff

flexible attitudes to child labour that maintain relationships with errant suppliers, but tackle child poverty and assist with educational needs

staff training on CSR issues, which the paper suggests may receive EU financial support.

The EC says the green paper backs up its recent European strategy on sustainable development, which states that ‘long-term economic growth, social cohesion and environmental protection must go hand-in-hand’, and will help the EU fulfil its strategic goal of making the European economy ‘the most dynamic knowledge-based economy in the world’.

The EC has stressed it does not want to make any ‘concrete proposals for action’ until the consultation period has finished.

The paper will be the focus of a conference on 27-28 November in Brussels entitled ‘Corporate social responsibility on the European social policy agenda’, to be hosted by the Belgian government during its six-month presidency of the EU.




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