Europe’s new CSR strategy

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Insight Corporate Excellence

The European Commission has published a new Report on Promotion of Corporate Social Responsibility, designed to create a high level of trust on the part of consumers and improve the contribution of companies to the welfare of the society.

The document concludes with a call upon all actors (companies, the European Commission and the European Parliament, stakeholders, etc.) for a joint and coordinated action to work along these lines with the short-term time horizon set to 2014, and long-term goals until 2020.

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Europe’s new CSR strategy

  1. 1. InsightsStrategy DocumentsI10 / 2011Public AffairsEurope’s new CSR strategy The European Commission has published a new communication for the promotion of Corporate Social Responsibility, with the aim being to generate a high degree of trust among consumers and improve the contribution enterprises make to society’s wellbeing. On 25 October this year, the European Commission Diagnosis: insufficient development adopted a new Communication on Corporate In chapter 2, the communication records a diagnosis Social Responsibility (CSR)1. This communication of insufficient for the development of CSR in the EU constitutes a “renewed and reinforced strategy” since 2006. Among other indicators, it notes that out on CSR for enterprises in the European Union of the 850 enterprises publishing GRI reports barely a and introduces Community policy through to the hundredhaveincludedsocialresponsibilityintheir core autumn of 2014, the date when the Commission business, going beyond legal requirements in social, responsible for this communication will be environmental, ethical and human rights concerns. renewed2. It is a document that has been drawn up as a result of the consensus between numerous New definition institutions and stakeholders. This consensus is Chapter 3 addresses “a modern understanding” of apparent in the initiatives that endeavour to meet CSR, incorporating: the aspirations of the various stakeholders. In practice, this Communication paves the way for A. International benchmarks: Internationally the development of a far-reaching regulation of recognised principles and guidelines, such as the CSR over the coming years. OECD Guidelines for Multinational Enterprises, the ten principles of the United Nations Global Regarding the content of the new strategy, we shall Compact, the ISO 26000 Guidance Standard highlight the following aspects: on Social Responsibility and the ILO Tri- partite Declaration of Principles Concerning Objective: recover trust Multinational Enterprises and Social Policy. In chapter 1, the communication poses the question “Why is the Commission presenting this new strategy B. Multistakeholder nature: Recognising that the main now?” It is framed within the current crisis scenario actors of CSR are enterprises, a description is made and its aim is to regain trust and rebuild the social of the multidimensional nature of corporate social contract between business and society. CSR is in responsibility and specification is made of the role the interests of enterprises and in the interests of of public authorities and of other stakeholders, such society as a whole, the Communication affirms. as trade unions or civil society organisations.Document drawn up by Corporate Excellence - Centre for Reputation Leadership citing, among other sources, the speeches by Pedro Ortún, head of theEuropean Commission’s Directorate General for Enterprise and Industry at the presentation of “Non-Financial Reporting in Europe and Spain” organised byGarrigues Medioambiente and Corporate Excellence, October 2011.1. The Communication is a 15-page document written by Spain’s Pedro Ortún, Head of the European Commission’s DG Enterprise & Industry. For the time being, only the English version is available, but over the coming weeks translations are expected to be made available in all EU languages.2. The new Commission will have to review CSR policies at the beginning of 2015 or 2016 to establish the improvement goals through to 2020.
  2. 2. Europe’s new C. Regulatory mix: the EU introduces the need C. Code of Best Practices. In 2012 Brussels willCSR strategy to regulate certain aspects of CSR, upholding promote the drafting of a Code of Best Practices a smart mix of voluntary policy measures. The that will involve not only companies but also all role of the public authorities is very important other stakeholders. in this matter. For example, today there is already a regulatory framework for non-financial D. Enhancing market reward. Brussels invites public reporting that is confusing and somewhat vague, authorities to consider criteria of sustainability and as described by the report “Regulatory Guidelines corporate responsibility in public procurement, 2010: Report on Sustainability in the European public investment and public lending, without Union” drafted by the Foro de Reputación introducing more bureaucracy or additional Corporativa - Corporate Reputation Forum (fRC) administrative requirements. It also calls upon and Garrigues, and which has been considered by investment funds and financial institutions to Brussels when preparing this Communication. inform all their clients, enterprises and public authorities about any ethical criteria they apply or An Agenda for Action 2011-2014 standards and codes to which they adhere. The agenda contains the actions for raising the awareness in CSR matters that the Commission proposes to “Address the issue of undertake. The most noteworthy of these are: misleading marketing A. Enhancing the visibility of CSR in enterprises related to the and disseminating their good practices among consumers and investors. Accordingly, in 2013 the environmental impacts Commission is to introduce multistakeholder platforms of products (so-called of a sectoral or regional nature, or which are part of the supply chain, whose mission will be to monitor and “green-washing”) in the give visibility to the most relevant initiatives. This context of the report on the strategy will also provide for the creation of European awards for partnership schemes between companies application of the Unfair and other stakeholders related to CSR. Commercial Practices B. Improving and tracking levels of trust in Directive” business. Being capable of generating this trust is vital for guaranteeing the very survival of enterprises E. Transparency on social and environmental over the medium and long terms. Accordingly, the concerns. The Commission is going to propose EU will address the issue of misleading marketing improving transparency and fostering sustainable related to the environmental impacts of products economic operations. On the other hand, the (so-called “green-washing”) in the context of the Commission is going to call for a review of report on the application of the Unfair Commercial the Directives on transparency and financial Practices Directive, foreseen for 2012. disclosure, whereby this will apply to both listed and unlisted companies. Specifically, Brussels is It will also initiate a debate with stakeholders on currently working on the design of a common non- the integration of stakeholder expectations in financial disclosure model that will be introduced business management and carry out periodic surveys into article 46 of the 4th Directive modernising of citizen trust in business (CSR Eurobarometer). accounting rules. The reform will take into consideration not only large corporations but also SMEs and, according to the EC, it will not involve New definition of CSR any additional costs of any significance. (EC communication on CSR) F. Boosting education in CSR matters. The aim is to International benchmarks integrate the principles and values of responsibility References to internationally recognised principles into education, from primary through to secondary and guidelines, such as the OECD Guidelines, the ten Principles of the Global Compact, ISO schooling, at business schools and in all the training 26000 and the ILO Tripartite Declaration. curricula in life-long learning in companies. The Commission will provide further financial Multistakeholder nature support for education and training projects on Recognising the main actors of CSR and specifying the role to be played by public authorities and other stakeholders, CSR under the EU Lifelong Learning and Youth such as trade unions and civil society organisations. in Action Programmes, and launch an action in 2012 to raise the awareness of education Regulatory mix professionals and enterprises on the importance The EU introduces the need to regulate certain aspects of CSR, upholding a smart mix of voluntary policy measures. of cooperation on CSR. Among the research projects of greatest interest Source: Author’s own, 2011 for Brussels is the socio-economic research for Insights 2
  3. 3. Europe’s newCSR strategy measuring the economic value contributed by CSR as intangible, quantifiable and capable of increasing “In 2012 the EU will a company’s net value. create a peer review G. Emphasising the importance of national and mechanism that will allow sub-national CSR policies. The European sharing best practices and Commission calls upon Member States to continue developing specific CSR policies. In 2012 it will helping Member States create a peer review mechanism that will allow through a mentoring sharing best practices and helping those Member States that are lagging behind to update their arrangement.” policies through a mentoring arrangement. Brussels J. Relations between Europe and other regions singles out Spain as one of the countries at the in the world in CSR matters. The Commission forefront in this field and which, therefore, may play seeks better alignment between European and a leadership role in this peer review mechanism. international approaches, with the aim always being to re-instate the European Union’s leadership in An agenda for action 2011-2014 this field among all international public and private organisations and institutions regarding the values, (EC communication on CSR) principles and definitions expounded here. 1. Enhancing the visibility of CSR in enterprises and disseminating their good practices Conclusion among consumers and investors. The document ends by making a call to all the players 2. Improving and tracking levels of trust in business. 3. Code of Best Practices. (enterprises, European Commission and Parliament, 4. Enhancing market reward. Member States, stakeholders, etc.) to work together 5. Transparency on social and environmental concerns. and in a coordinated manner to develop these lines 6. Boosting education in CSR matters. 7. Emphasising the importance of national of action, initially with 2014 in mind, but with their and sub-national CSR policies. sights set on 2020. 8. Boosting CSR in large corporations with more than 1,000 employees. 9. Human rights. 10. Relations between Europe and other regions in the world in CSR matters. Source: Author’s own, 2011 H. Boosting CSR in large corporations with more than 1,000 employees. The Commission is to set up a CSR Monitor for enterprises with more than 1,000 employees, taking into account internationally recognised CSR principles and guidelines, and particularly the ISO Standard. In addition, the Commission invites all large European enterprises to make a commitment by 2014 to take account of at least one of the following sets of principles and guidelines when developing their approach to CSR: the UN Global Compact, the OECD Guidelines for Multinational Enterprises, the ISO 26000 Guidance Standard on Social Responsibility or the ILO Tri-partite Declaration of Principles Concerning Multinational Enterprises and Social Policy. I. Human rights. In 2012, the Commission will create a working party with enterprises and other stakeholders to develop human rights guidance based on the UN Guiding Principles. At the end of 2012 it will publish a report on EU priorities in the implementation of the UN Guiding Principles. Brussels expects enterprises to incorporate these definitions into their CSR strategy, and Member States to develop them. Insights 3
  4. 4. ©2011, Corporate Excellence - Centre for Reputation LeadershipBusiness foundation created by large companies to professionalize the management of intangible assets and contribute to the developmentof strong brands, with good reputation and able to compete in the global market. Its mission is to be the driver which leads and consolidatesthe professional management of reputation as a strategic resource that guides and creates value for companies throughout the world.Legal NoticeThis document is property of the Corporate Excellence - Centre for Reputation Leadership and has as its objective to share businessknowledge about Brand, Reputation, Communication and Public Affairs Management.This document is directed exclusively towards its addressee and contains confidential information, subject to professional secrecy, whosedisclosure, copy or non-authorized use is against the Law. If you receive this document by mistake, let us know immediately and erase itwithout keeping a copy.Corporate Excellence - Centre for Reputation Leadership is the owner of all the intellectual property rights of the images, texts, designsand any other content or elements of this product and has the necessary permission for its use, and therefore, its copy, distribution, publicrelease or transformation is prohibited, without express authorization from the owner.

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