Ethical Performance
inside intelligence for responsible business


a response to the challenges set out in the EC green paper on CSR

September 2001

A fundamental question underpins the European Commission’s consultative paper on corporate social responsibility: how can the EU best encourage companies to adopt uniform CSR policies and practices without resort to burdensome regulation? The challenge for Brussels is to bring order to the plethora of standards, codes and measuring tools covering everything from stakeholder dialogue to child labour. A shakeout of these would be welcome.

The most pressing need is to work with other bodies, governmental and non-governmental, to promote basic socially responsible reporting criteria. The document makes two key suggestions in this regard: first, that social and environmental reports should be verified by a third party. Second, that such reports should take account of the views of interested parties outside the company. ‘Binding rules,’ it notes elsewhere, ‘ensure minimum standards for all’.

Both these proposals would improve the quality of information, and its credibility. They would boost socially responsible investment too: investors mistrust opaque evaluation methods. Basic standards for codes of conduct are also proposed, for example on human rights and child labour. Many companies and investors measure their social performance according to their compliance with codes, so this would further strengthen corporate responsibility.

The EC needs to steer a course between forcing companies to reveal too much, and allowing them to reveal too little. As the UK company law review’s pilot study showed, if companies are forced to reveal too much, they may be seriously damaged. But being economical with the truth can be even more dangerous. The EC needs to ensure social reports do not degenerate into ‘public relations schemes without substance’, in the words of the green paper. It can make a major contribution in bringing order to what at present is a fairly chaotic scene. All interested parties, and especially the companies that produce the reports, have a vested interest in getting involved so that these aims are achieved.


3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter