The EU must encourage responsible business

Written by Richard Howitt on 6 February 2015 in Opinion
Opinion

Now is the time for the EU to take the lead on CSR issues, writes Richard Howitt.

More than 400 businesses, NGOs, trade union, governmental and other representatives have converged in Brussels for the multi-stakeholder forum on corporate social responsibility (CSR) - a forum which I first proposed being established in my role and was happy to see was in rude health. 

CSR has its many critics, from those who accuse companies of using it to 'greenwash' their reputation, to businesses suspicious that it is a trojan horse for new burdens to be imposed in Brussels. Many have suggested that CSR was an 'add on' for business that would be quickly forgotten in these times of economic crisis.

How wrong they were. The size of the event matches the direct contribution business responsibility is playing not just for us in Europe, but in other international fora.

Indeed a major theme of the forum was for Europe and European companies to implement global CSR initiatives, in particular the UN guiding principles on business and human rights, the OECD guidelines on multinational enterprise and the concept of 'integrated reporting.'

But the support for the EU to take the lead in doing so was overwhelming, reflecting the public consultation which preceded it and which found four in five back European commission action on CSR.

"This is about changing business culture away from the fatal short-termism of recent years, and supporting business to be genuinely sustainable in the long-term - for itself, for its people and for the planet"

The danger of retreating to the polarisation of the past was evident with one NGO threatening a walk out if CSR actions were only voluntaristic, and one business association saying new legislation would 'kill off CSR'.

However, organisers DG Growth - internal market, industry, entrepreneurship and SMEs - sensibly stuck to the current commission position in favour of a 'smart mix' between voluntary and mandatory approaches, and individual companies present including Unilever, Telefonica, Coca Cola and Ikea spoke favourably about the overall approach.

The directive on non-financial reporting by business, for which I had been proud champion, was shown in the public consultation to be 'the most significant achievement' of the previous CSR strategy, with widespread support from companies themselves.

At the forum, both German and French government representatives spoke in favour of EU rules on how companies can show 'due diligence' in responsibly managing their global supply chains, and this may feature in the new CSR communication and five year commission action plan which will now be drawn up following the results of recent discussions.

As part of my own contribution, I emphasized how CSR has a vital contribution to make towards the Juncker commission's priority, for long-term investment. 

The forum's workshop on financial institutions called on them to set up systems for benchmarking corporate environmental and social performance.

The need for Europe to create a 'sustainable capital markets union' as championed by Aviva global investors, was also among the conclusions supported.

In essence, this is about changing business culture away from the fatal short-termism of recent years, and supporting business to be genuinely sustainable in the long-term - for itself, for its people and for the planet.

What CSR has shown is that many in business support this aim, and many of their stakeholders want to work with companies to achieve it. Europe has demonstrated it is prepared to play its role in doing so too.

About the author

Richard Howitt (S&D, UK) is parliament's rapporteur on corporate social responsibility

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