Ethical Performance
inside intelligence for responsible business


EC white paper unveils European CSR alliance

April 2006

Plans to create a Europe-wide federation of companies on corporate responsibility have been outlined in the European Commission’s long-awaited second CSR white paper, published at the end of last month.

The ‘European Alliance for CSR’ will bring together companies of all sizes to share ideas and spread best practice.

The alliance will have no legal framework, no formal requirements for the companies involved, and, crucially, no new EC money to support it. The Commission hopes it will act as an ‘umbrella’ for companies in ‘joint operational projects’ on supply chain management, diversity, labour standards and stakeholder dialogue. At least one company, the German chemicals multinational BASF, has already said that it will become involved. The Commission envisages partnerships between companies, non-governmental organizations and trade unions. Such joint working arrangements are already practised by organizations in several European countries, among them the UK’s Ethical Trading Initiative.

Other new commitments are to:
create a pilot project for indicators of ‘decent work’ conditions
support further research on corporate responsibility
encourage business schools to include CSR topics in their courses
raise social and environmental issues in international trade negotiations
encourage respect for workplace standards through trade incentives.

To the dismay of some NGOs, the white paper comes down, firmly and finally, in favour of a voluntary approach to CSR. Friends of the Earth Europe noted the absence of measures on mandatory social and environmental reporting and on requiring companies to observe International Labour Organization and other CSR-related standards.

The white paper is also silent on socially responsible investment. Stephen Hine, head of international relations at Ethical Investment Research Services, the SRI data provider, said: ‘ The lack of reference to the interests of investors is surprising, given that they are now seeking more detailed information on environmental, social and governance risks and greater clarity on reporting in these areas.’

The document, officially known as a ‘communication’, has been published more than a year later than envisaged and has been the subject of intense behind-the-scenes politicking in recent months as the EC’s vice president, Guenter Verheugen, has taken a hands-on role in drafting the document. In a related move, Dominique Be, director general of employment and social affairs at the EC, has been relieved of his responsibility for CSR. No details of who will take on the brief were available as we went to press.

The Commission says it intends to review progress at the end of this year.

see briefing, page nine and editorial, page twelve


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