Ethical Performance
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the EC green paper: some early feedback

January 2002

The green paper has prompted a large number of submissions from companies and other interested parties. EP reviews a selection of them

The consultation period for the European Commission’s green paper on corporate social responsibility closed at the end of December, and officials are considering the responses. It is already possible to see where the battlelines are being drawn.

Battlelines is not putting it too strongly. The EC’s invitation to debate its role in developing CSR has been taken up by powerful interests with widely diverging views.

Ethical Performance reviewed the 40 responses posted on the Commission’s web site by 15 December and a further 11 received directly from our readers. Ten were from companies.

The responses to most EC green papers follow a pattern: business opposes regulation; non-governmental organizations support it, academics discuss theory and unions stress the need for worker involvement. This paper is no different, with businesses tending, as Eurocommerce, the lobby group for retailers and distributors, puts it, to ‘advocate voluntary initiatives rather than legislation’, and pressure groups arguing regulation is essential.

The responses become interesting when they throw up fresh ideas, deviate from expected positions or defend them in unexpected ways.

One of several fresh ideas from the New Economics Foundation is a proposal to include community development investment in the CSR framework. This, it argues, would help to overcome the ‘contradiction between EU grant strategies and its overall aims to promote sustainability amongst community development organizations’.

Other responses make the point that if the EC is serious about promoting CSR, it should start with its own operations, from recycling its waste through to influencing intergovernmental bodies such as the World Trade Organization.

PricewaterhouseCoopers lists 12 ways in which the EC could make a ‘unique contribution’, including ‘mapping all current EU legislation and directives against CSR principles’.

Two business submissions do not dismiss regulation outright. BT supports regulation that ‘works with the market to promote the voluntary nature of CSR and reward best practice’. The UK telecoms company cites the UK’s ethical disclosure regulation, which requires pension funds to disclose their social, environmental or ethical investment policies. This ‘small alteration to UK pension law’, BT argues, is a ‘prime example’ of how legislation may lead to improved social and environmental performance by ‘asking questions’ of business and not detailing outcomes.

‘What does not work is broad-brush regulation, which directs companies to taking uniform approaches and does not allow innovation’, says Abbey National.

Specific regulations that promote greater disclosure may point the way forward and are also favoured by Solidar, an alliance of European NGOs for workers’ rights.

Such common ground is relatively rare. The Amnesty International UK Business Group proposes ‘legislation requiring mandatory social and environmental reporting’, while Siemens warns that standardization in this area would ‘strangle creativity’. Similar splits appear on whether the EC should require reports to be verified by a third party. Abbey National suggests that ‘CSR processes should be embedded in the company’s risk management processes and therefore automatically verified through the normal annual accounting and reporting process.’

One proposition on which many parties appear to agree is that the EC would probably be most effective in a supporting role to other international bodies. Two names crop up again and again: the International Standards Organization, which will publish a draft paper on the ‘feasibility and desirability’ of ISO CSR standards this spring, and the Global Reporting Initiative, which BT, among others, believes to be ‘the most suitable place and mechanism to achieve greater consensus in reporting.’

Siemens believes that ‘If the Commission would simply await the results of the GRI review, the global European companies would deliver as much comparability as is really needed’. But the ISO is strongest on technical standards while the GRI will not acquire an expanded permanent structure until later this year.

Green paper responses on SRI will be reviewed next month

 




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