CorporateSocialResponsibility:

theEUDebate
OlivierDeSchutter
CSRintheEU10:ExpectationsvsRealities
Prague,15September2006

CSR:theEuropeanDebate
ThreemeaningsofCSR:
1.
CSRasanunderstandingoftheroleofcompaniesin
society:companiesoweadutynotonlytotheir
shareholders,butalsototheirworkers,toconsumers,
andtothecommunitiesinwhichtheyoperate.
2.
CSRasamethodofregulatingtheactivitiesof
companies:frombindinglegalobligationsto
incentivesrewardingvoluntarycommitments.
3.
CSRasanalternativetoregulation:market
mechanismsinsteadofpublicinterventions.

CSRinEurope:FromSubstancetoProcess
Lisbon European Council of 23-24 March 2000
A new strategic goal for 2010: to become the most
competitive and dynamic knowledge-based economy
in the world capable of sustainable economic growth
with more and better jobs and greater social cohesion.
A special appeal to companies corporate sense of
social responsibility regarding best practices on
lifelong learning, work organisation, equal
opportunities, social inclusion, and sustainable
development,
Gteborg European Council of June 2001: Sustainable
Development Strategy for Europe

CSRinEurope:FromSubstancetoProcess

Green Paper, Promoting a European Framework for Corporate Social

Responsibility (July 2001): defines CSR as aconceptwhereby
companiesintegratesocialandenvironmentalconcernsintheirbusiness
operationsandintheirinteractionwiththeirstakeholdersonavoluntary
basis,goingthereforebeyondtheirlegalobligations.
CommunicationCorporateSocialResponsibility:ABusiness
ContributiontoSustainableDevelopment(July2002):Theproliferation
ofdifferentCSRinstruments(suchasmanagementstandards,labelling
andcertificationschemes,reporting,etc.)thataredifficulttocompare,is
confusingforbusiness,consumers,investors,otherstakeholdersandthe
publicandthis,inturn,couldbeasourceofmarketdistortion.
Therefore,thereisaroleforCommunityactiontofacilitateconvergence
intheinstrumentsusedinthelightoftheneedtoensureaproper
functioningoftheinternalmarketandthepreservationofalevelplaying
field.

CSRinEurope:FromSubstancetoProcess

CommunicationCorporateSocialResponsibility:ABusiness
ContributiontoSustainableDevelopment(July2002):

Acknowledgestheneedformoreconvergenceandtransparencyin
codesofconduct,managementschemes,reportingobligations,eco
andsociallabels,andsociallyresponsibleinvestment.

EstablishmentoftheCSEEMSForuminordertopromote
transparencyandconvergenceofCSRpracticesandinstruments,
through:

ExchangeofexperienceandgoodpracticebetweenactorsatEU
level;

BringingtogetherexistinginitiativeswithintheEUandseeking
toestablishacommonEUapproachandguidingprinciples,
includingasabasisfordialogueininternationalforaandwith
thirdcountries;

Identifyingandexploringareaswhereadditionalactionisneeded
atEuropeanlevel.

TheCSREMSForum

EuropeanParliament,Report ontheCommissionGreen
PaperonPromotingaEuropeanFrameworkforCorporate
Social Responsibility (rapp. R. Howitt):
inadditioncompaniesandotherscouldbeinvitedto
registertheircodesofconductswiththePlatform,which
wouldinturncheckthatallCodescomprisedofbasic
labour,socialandenvironmentalstandards,already
agreedataninternationallevel.Companiesmightthen
registertheirreportsonsocialandenvironmentalimpacts,
onanannualbasisfollowingappropriateEuropean
legislationtomakethismandatory.

TheCSREMSForum

Threeexperimentalroundtables(AprilJune2002)
Formallaunch:16October2002
Mandateistoimprove knowledge about the relationship between
CSR and sustainable development (including its impact on
competitiveness, social cohesion and environmental protection) by
facilitating the exchange of experience and good practices and bringing
together existing CSR instruments and initiatives, with a special
emphasis on SME specific aspects; and explore the appropriateness
of establishing common guiding principles for CSR practices and
instruments()
- No reference to the objective of identifyingandexploringareaswhere
additionalactionisneededatEuropeanlevel.
Finalreportof29thJune2004.

TheSecondCommunicationonCSR

BecauseCSRisfundamentallyaboutvoluntarybusinessbehaviour,an
approachinvolvingadditionalobligationsandadministrative
requirementsforbusinessrisksbeingcounterproductiveandwouldbe
contrarytotheprinciplesofbetterregulation.Acknowledgingthat
enterprisesaretheprimaryactorsinCSR,theCommissionhasdecided
thatitcanbestachieveitsobjectivesbyworkingmorecloselywith
Europeanbusiness()
EnsuringanenablingenvironmentforCSR:WiththenewEuropean
StrategyforGrowthandJobsandthroughitsinitiativeonbetter
regulation,theEuropeanCommissionandEUMemberStateshave
committedthemselvestosetupandstrengthenabusinessfriendly
environmentinwhichentrepreneursandenterprisescanflourishand
grow.
EuropeanAllianceonCSR

TheSecondCommunicationonCSR
Anappraisal:

RuptureoftheformalequalityamongCSRstakeholders

CSRdrivenpurelybymarketmechanisms,withoutaregulatory
framework

CSRaspotentiallythreateningforthecompetitivenessofEuropean
business

Canthiswork?ThebusinesscaseforCSR.
Theargument:

Positiveimpact of CSR policies on the internal workings of

the company: improves the working environment; ability to
attract the best candidates and retain the best employees;
limiting pollution and waste disposal saves resources (ecoefficiency); contacts with local stakeholders improve the
licence to operate of the company.

PositiveimpactofCSRonthemarketpositionofthe
company:ethicalconsumerism;sociallyresponsible
investment;shareholderactivism;awardanceofpublic
contractsonthebasisofsocialandenvironmental
considerations.

Canthiswork?ThebusinesscaseforCSR.
Theambiguities:

Creates a dependency of CSR on its economic returns.

Theargumentdependsontheanswersoftheenvironment(consumers,
investors,publicauthorities)toCSRpractices,andisthushighly
contextdependent.

FromCSR is profitable for business to CSR may take care of itself:

perception of CSR as driven by market mechanisms without a need for
public interventions.
However, there is a need for an adequate regulatory framework to ensure
that best practices will be rewarded and worst behavior penalized, for
instance by market incentives (cf. eco-efficiency) or by regulatory
initiatives (cf. the measures required to promote and allow for ethical
consumerism and for socially responsible investment: certification of
codes of conduct and of labels, information on non-financial
performances of companies).

Conclusion
TwoshiftsinCSR:

From substance to process.

FromthesearchforanadequateframeworkforCSRtothedenunciation
ofsuchaframeworkasbridlingthecreativityoftheeconomicactors,
andasbadforbusiness.
Twoexplanations:

TheproceduralisationofCSR and the takeover by business.

ThesubordinationofCSRtothereorientationoftheLisbonstrategy.