EC takes optional social responsibility approach
EUROPE – The European Commission has published a communication on corporate social responsibility (CSR) outlining a series of optional recommendations.
The EU is to launch a forum in which all relevant parties will be invited to debate the EU’s main proposals for CSR. It will review the forum’s progress in the summer of 2004 and expects to see the debate concluded in 2010.
Publication follows last year’s green paper which invited businesses, investors, trade unions and social organisations to have their say.
Institutional investors such as pension funds underlined the need to improve the transparency and disclosure of companies’ practices. They also want to see improvements and changes in the methodologies used by ratings companies to ensure their investments remain socially responsible.
The EU has asked pension funds to disclose the extent to which they consider CSR and SRI in their investment decisions.
Most companies have rejected the idea of a “one-size-fits-all” CSR principle and stressed that adherence to any EU codes of practice or guidelines should remain voluntary.
The Commission document says businesses believe that attempts to regulate CSR at EU level could be counterproductive, since it would restrict innovation, and lead to conflicting priorities for companies operating in different geographic regions.
Trades unions and social organisations claim that a failure to regulate CSR undermined workers’ and citizens’ rights. They would like to see a regulatory framework that, at minimum, establishes minimum standards and ensures a level playing field.
The unions also rejected the idea that CSR principles should be drawn up by companies alone. They believe that all parties, including the workers themselves and shareholders, should get involved to ensure the credibility of CSR policies.
The EU says it would like to see increased convergence and transparency in the following areas to ensure CSR’s credibility:
•codes of conduct
•accounting, auditing and reporting
•socially responsible investment