Business and unions back CSR – but favour vague voluntary commitments

Date: 17/06/04

IT WAS hardly a recipe for success when the European Commission asked the European associations of employers, unions, civil organizations and business to come together and discuss a road-map for future policies on corporate social responsibility.

By the end of June, this so-called European Multi Stakeholder Forum on Corporate Social Responsibility (CSR) will have to come up with recommendations for the Commission to take CSR in Europe to the next level.

The exact recommendations are not written in stone yet and participants are reluctant to speak openly of their efforts.

But it is already clear that they will not give a final, common opinion on the future of CSR.

The only thing the report will get full marks for is vagueness, because the stakeholders still have too divergent views on where the subject should be going.

Most forum participants have demonstrated that they are by now convinced of the business case for CSR.

Lots of good examples show that it is beneficial to implement CSR practices in a company.

It can, for instance, provide a systematic way of managing risks and it can be a fruitful boost for a company's reputation.

Put simply, companies can use CSR as a management tool.

For example, in the supply chain, it means looking at all suppliers and seeing that they act in a 'CSR' way. It could mean checking if a far-flung firm in Asia, providing a component or product, is not using child labour or ruining the local environment.

Ignorance of these issues could easily come back to haunt managers when customers, investors or even their own workers find out.

However, the list of obstacles seems just as extensive.

These vary from worries about the degree and nature of stakeholder involvement to the vague boundaries of societal responsibilities of business.

Furthermore, the discrepancy between the undeniable focus of investors - who are financing all these CSR initiatives after all - on direct results and the emphasis laid on long term achievements by the CSR advocates, seem hard to bridge.

The centrepiece of the European Commission's strategy for promoting CSR and sustainable development, as set out in its CSR policy paper in the summer of 2002, the forum made a start in October 2002.

The platform was set up on the assumption that dialogue and partnership are key to promote CSR and develop a model on social responsibility founded on European values.

A true dialogue between all parties was not guaranteed from the beginning with participants such as employers' organization UNICE, the European Trade Union Confederation, the European Platform of Social NGOs and the 'Green G8'. The unions and civil organizations seemed to be sceptical from the outset about business' efforts to achieve a better society.

Since the start of the forum, however, all stakeholders in the debate admit that the attitudes towards each other have improved.

As a starting point to try and reach agreement on possible future steps, business and its stakeholders presented best practice cases.

In four 'round table' sessions, around 50 examples have been presented, focusing on convergence and transparency, development aspects of CSR, improving knowledge and fostering CSR among small- and medium-sized enterprises.

Coming to a common understanding between all representatives seemed especially tricky considering the convergence and transparency of CSR practices and tools.

The question turned out to be not so much whether companies should be transparent, but how.

Not surprisingly, non-governmental organizations and trade unions would like to see some obligations on at least larger companies to report on what they are doing to address their environmental and social impact, allowing flexibility on what to report and how.

Although certain companies supported some of the suggestions of NGOs and trade unions, business and employers' organizations generally argued that there should not be any additional disclosure or reporting requirements on companies. These would stifle innovation and reduce flexibility, they said.

Business also stated that internal auditing and verification procedures can be considered a reliable tool, whereas trade unions and NGOs would like to see independent third parties involved in this matter, seeing these as central to the credibility of disclosure.

The participants could not agree on a common recommendation on these subjects, other than this 'needs to be further developed'.

Full of good intentions, the participants plan to call for more investment in interdisciplinary CSR research.

The European Academy of Business in Society - a grouping of big business such as Microsoft, Unilever and leading business schools - already carries out research into CSR. There should be more of this work, the stakeholders will argue.

This would be one way to achieve the objectives to raise awareness and improve knowledge on CSR.

Furthermore, the capacities and competencies of the people engaged in this area should be developed more, both inside and outside business.

Besides this, it is recognized that the dialogue between the different stakeholders should continue.

How this framework should be filled in further and who will be responsible for what, is still ambiguous, however.

NGOs and unions see an important role for the Commission to coordinate this process, employers' organizations seem to feel more strongly for a voluntary approach.

Former commissioner for employment and social affairs Anna Diamantopoulou made it plain at a high level CSR-meeting in Venice last November, that the Commission is looking for a clear reference framework and rules of the game, entailing greater transparency and convergence and more coherent public policies of CSR.

A new policy paper on CSR, which the Commission is expected to publish before the end of its term, will show how useful the final recommendations of the European Multi Stakeholder Forum will actually be.

Vague? You bet.

• Imre de Roo is a Dutch journalist and specialist in corporate social responsibility.

http://ec.europa.eu/comm/employment_social/soc-dial/csr/csr_index.htm http://ec.europa.eu/comm/employment_social/soc-dial/csr/csr_index.htm

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