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Corporate social responsibility: a business contribution to sustainable development.
The implementation of this European strategy should be of benefit to enterprises, the actors concerned, and the sustainable development of the European Union (EU). The economic success of enterprises no longer depends solely on strategies to maximise profits in the short term but on taking into consideration social and environmental objectives, including in the interest of consumers.
Communication from the European Commission of 2 July 2002 concerning Corporate Social Responsibility: A business contribution to Sustainable Development [COM (2002) 347 final - Not published in the Official Journal].
The Commission presents a European strategy to promote corporate social responsibility (CSR). CSR involves companies integrating social and environmental objectives in their business operations and in their interaction with the actors concerned.
The Commission emphasises that the CSR programmes contribute to the sustainable development of the European Union (EU). In addition, they have a positive impact on the management and competitiveness of enterprises, considering in particular:
- the globalisation of trade, which means that enterprises have activities and responsibilities abroad, including in developing countries;
- consumer awareness regarding the image and reputation of enterprises;
- financial institutions and investors taking into account the CSR activities of enterprises in order to evaluate the success and risk factors inherent in a company;
- the possibility of using CSR activities to develop the skills of employees.
Principles of the European strategy
The strategy to promote CSR proposed by the Commission is based on a series of principles:
- the voluntary, transparent and credible nature of CSR activities;
- the identification of areas where European action will add value;
- a balance between the actions taken in the economic, social and environmental spheres and in relation to consumers' interests;
- attention to the specific needs of Small and Medium-sized Enterprises (SMEs);
- compatibility with existing international agreements and instruments (particularly those of the International Labour Organisation (ILO) and the Organisation for Economic Cooperation and Development (OECD)).
Key actions of the European strategy
Firstly, the Commission encourages developing knowledge on the impact of CSR on the economic performance of enterprises. It therefore proposes to launch studies into activities to raise awareness and disseminate information.
The exchange of good practice between businesses and between Member States must also be encouraged through the networking and coordination of actors.
The skills in enterprises must be supported, in particular by using European funding to train employees. In addition, the principles of CSR must be integrated into management training programmes in enterprises.
SME’s capacity for action must be strengthened by taking into account their specific characteristics and their limited resources. The Commission therefore encourages the exchange and dissemination of good practice, SME associations, cooperation between large companies and SMEs, and awareness-raising campaigns.
The transparency of CSR practices and tools must be guaranteed. The Commission therefore encourages the adoption of:
- codes of conduct (concerning workers' rights, human rights, protection of the environment, etc.);
- management standards (in order to integrate social and environmental aspects into the day-to-day activities of enterprises);
- instruments for measuring performance (such as internal evaluation reports);
- labels on products;
- standards for Socially Responsible Investment (SRI), in order to direct investors towards enterprises in the light of their CSR results.
The creation of a European forum could be of benefit to all the parties involved in CSR activities. It should be a place for exchanging experiences, cooperation and identifying areas where European action is required. In the first instance, the Commission invites the forum to look at:
- the link between CSR and the competitiveness of enterprises;
- the contribution of CSR to sustainable development, including in third countries;
- issues specific to SMEs;
- the effectiveness of existing codes of conduct;
- guidelines and common criteria for evaluating CSR activities;
- labelling programmes;
- the dissemination of information on Socially Responsible Investment policies.
Lastly, the Commission proposes to integrate the objectives of CSR into all European policies. In accordance with its strategy to promote sustainable development, the EU has undertaken to integrate economic, social and environmental considerations into its policies. In addition, the CSR principles are particularly relevant in the following European policies:
- employment and social affairs policy, particularly in the fields of education, training, equal opportunities and the integration of people with disabilities, the anticipation of industrial change and the restructuring of enterprises;
- environmental policy, through evaluating environmental results, ecotechnology, and the environmental effectiveness of products (i.e. the link between the quantity of products and their impact on the environment);
- consumer policy, in particular with regard to raising consumer awareness of social and environmental standards;
- public procurement policy, in order to include social and environmental criteria in public procurement procedures;
- external trade, external relations, and development policies, including with respect to multi-national enterprises;
- public administration policy, given that the European institutions are also committed to implementing the CSR principles.
This Communication follows on from the Green Paper on CSR published in 2001.