Launch of “European Alliance for Corporate Social Responsibility”

How can we inspire more European enterprises to go beyond their minimum legal obligations in favour of society and sustainable development? In other words, how can we best encourage a greater business commitment to Corporate Social Responsibility (or CSR)? To mobilise the resources and capacities of European enterprises and to make Europe a pole of excellence on CSR, the European Commission has today announced its backing of the launch of a “European Alliance for Corporate Social Responsibility”. The new Alliance has an open nature and European enterprises of all sizes are invited to voluntarily express their support. The Alliance is not a legal instrument to be signed by enterprises. It is a political umbrella for new or existing CSR initiatives by large companies, SMEs and their stakeholders. It should lead to new partnerships and new opportunities for all stakeholders in their efforts to promote CSR. Today’s initiative is the follow-up of a broad consultation with all stakeholders in the European Multi-stakeholder Forum on CSR, which presented its final report in 2004. The Commission proposes to re-convene meetings of this Forum in 2006 to review progress on CSR with all stakeholders.

Commission Vice-President Günter Verheugen, responsible for enterprise and industry policy said: “This Alliance will help reconcile Europe’s economic, social and environmental ambitions. The Commission has opted for a voluntary approach which is more effective and less bureaucratic. Since CSR is about voluntary business behaviour, we can only encourage it if we work with business. Europe needs a public climate in which entrepreneurs are appreciated not just for making good profits but also for making a fair contribution to addressing societal challenges.”

Social Affairs Commissioner Vladimir Spidla added: “The partnership launched today is an open alliance, which aims to give new impetus to CSR initiatives. I believe that CSR can help workers better adapt to change and gain the skills for the 21^st century economy. It can also contribute to make equal opportunities a reality in European companies and encourage the integration of disadvantaged groups.”

Improving the climate and conditions for business in Europe creates a corresponding need for more self-discipline on the part of the business community. In this context, CSR is increasingly important for the smooth functioning of the market economy.

With this “European Alliance for Corporate Social Responsibility” the Commission aims to encourage the further take-up of CSR amongst European enterprises, and to increase support and recognition for CSR as a contribution to sustainable development and the Growth and Jobs Strategy. To achieve this, the Commission believes that a new political approach is necessary. This involves giving recognition to enterprises as the primary actors in CSR. At the same time, the Commission continues to attach utmost importance to dialogue with all stakeholders, and recognises that without the active support and constructive criticism of non-business stakeholders, CSR will not flourish.

A broad consultation process

In presenting this Alliance, the Commission draws on several years of public debate, consultation and dialogue with enterprises and their stakeholders. A Green Paper (2001)^[1], a Communication (2002)^[2], and the setting up of an EU Multi-Stakeholder Forum on CSR marked important steps in this process. The Forum succeeded in achieving a measure of consensus among stakeholders, but also revealed significant differences of opinion between business and non-business stakeholders. A common European understanding of what CSR means has emerged as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

Small and medium-sized enterprises

Contrary to popular myth, CSR is far from being the exclusive preserve of large companies. Like much business practice, some of the most exciting new developments in this field come from small and medium-sized enterprises. The Commission recognises the need to give greater recognition to what many SMEs already do in the field of CSR. The Commission will facilitate the exchange of experience about how best to further encourage CSR amongst SMEs.

What can CSR achieve?

Recruitment of more people from disadvantaged groups
Investment in skills development, life-long learning and employability
Improvements in public health, in areas such as food marketing and labelling
Better innovation performance
A more rational use of natural resources and reduced levels of pollution, thanks to investments in eco-innovation and to the voluntary adoption of environmental management systems
A more positive image of business and entrepreneurs in society
Greater respect for human rights and core labour standards, especially in developing countries;
Poverty reduction and progress towards the Millennium Development Goals.

More information:

http://ec.europa.eu/enterprise/csr/policy.htm

ANNEX

MAKING EUROPE A POLE OF EXCELLENCE ON CORPORATE SOCIAL RESPONSIBILITY:

THE EUROPEAN ALLIANCE FOR CSR

CSR MATTERS TO ALL OF US
Corporate Social Responsibility (CSR) matters because it mirrors the core values of the society in which we wish to live. It matters to individual companies, big or small, who through innovative products and services, new skills and stakeholder engagement can improve their economic, environmental and social performance in the short and long term. It matters to those who work in and for companies, for whom it can help to create a more rewarding and inspiring working environment. It matters to those who buy from companies, to consumers who are paying more and more attention to the social and environmental credentials of the products and services they buy. It matters to the local communities where companies operate, who want to know that they are living amongst organisations that share their values and concerns. It matters to investors who feel that responsible business behaviour needs to be encouraged. It matters to people in other parts of the world who expect European based companies to behave in accordance with European and international values and principles. And it matters to our children and future generations who expect to live in a world which respects people and nature.

STRIVING FOR A SUSTAINABLE MARKET ECONOMY
A strong business commitment to CSR as well as an overall supportive role of public authorities towards CSR has become particularly important over the last 15 years as regard its contribution to the respect for human rights and the rule of law as well as the sustainable functioning of democracy and market economy, be it on a local, national, European or global scale. In order to be a successful economic model, the market economy needs to build on some essential prerequisites: on the one hand an effective and coherent legislative and regulatory framework; on the other hand, self limitation and self control as much as a proactive climate of innovation and entrepreneurship, fairness and trust: all these are necessary elements to combine high levels of economic success, environmental protection, social cohesion and welfare. To this end, leading enterprises in Europe are more than ever undergoing a process of searching, learning and innovating as regards their governance, management, stakeholder dialogue and product development, thereby making corporate and product responsibility a natural part of their everyday business practice and competitiveness. Small companies, as a key driver for growth and jobs in Europe, have as much to offer as large companies when it comes to corporate responsibility, even though they often adopt a more informal and intuitive approach to CSR. Against the background of globalisation and the associated structural changes, companies are making these shifts in the expectation that the other stakeholders also commit and shoulder their share of the risks and opportunities of responsibility and innovation. Dialogue with stakeholders helps companies to anticipate and deal with social and environmental issues which may affect future competitiveness.

A EUROPEAN ALLIANCE FOR CSR
In this context, the European Commission backs members of the business community that are laying the foundations of a European Alliance for CSR. This is an open Alliance for enterprises sharing the same ambition: to make Europe a Pole of Excellence on CSR in support of a competitive and sustainable enterprise and market economy. The essence of this initiative is partnership. This partnership is based on agreement that the priorities of the European Strategy for Growth and Jobs fully respond to the challenges of increasing global competition, demographic trends and a sustainable future.
The delivery of this strategy is crucial for securing Europe’s sustainable growth as much as the European way of life. The Alliance is built on the understanding that CSR can contribute to sustainable development, while enhancing Europe’s innovative potential and competitiveness, thereby also contributing to employability and job creation. The Alliance seeks to promote CSR as a business opportunity creating win-win situations for companies and society and recognises that CSR is a voluntary business approach which reflects the diversity of European business. While enterprises are the primary actors in CSR, public authorities at local, national and European level have a supportive role to play in promoting it. The Alliance initiative builds on previous discussions with business and stakeholders. In particular, it draws the lessons from the European Multi-Stakeholder Forum on CSR, a major initiative facilitated by the European Commission. The Forum provided a platform for European representatives of business, employers, trade unions and civil society organisations to engage in an innovative process of learning and dialogue and to agree recommendations for more and effective CSR practice. It will also capitalise on the European Campaign to promote CSR among SMEs and the multitude of other business and employer driven initiatives. Another key driver for this Alliance is the European Roadmap for Businesses on CSR - 2010, whereby leading companies and business networks have set out their vision and priorities for a competitive and sustainable enterprise from a European perspective.
The Alliance lays the foundations for the partners to promote CSR in the future. It evolves around the following three areas of activities:

Raising awareness and improving knowledge on CSR and reporting on its achievements
Helping to mainstream and develop open coalitions of cooperation
Ensuring an enabling environment for CSR

RAISING AWARENESS AND IMPROVING KNOWLEDGE ON CSR
The Alliance will explore and support creative ways to exchange and disseminate CSR best practice, initiatives and tools with a view to making them relevant to business practitioners, policy leaders, consumers, investors and the wider public at all appropriate levels across Europe and abroad. Special attention will be paid to promoting CSR amongst enterprises of all sizes in a way that is better in tune with today’s and tomorrow’s realities and challenges.

The Alliance reaffirms that, building on existing initiatives, there is a need to further promote multi-disciplinary research on CSR at European level, in particular on its impact on competitiveness and sustainable development. Closer integration with universities and scientific experts as well as continuous dialogue and cooperation with civil society are essential in this respect.
An important contribution to Europe’s future competitiveness and sustainability will depend on education taking a leading role in the CSR agenda. The Alliance will encourage the integration of CSR and sustainable development related topics in traditional courses, in the curricula of future managers and graduate students, in executive education and in other educational institutions.

HELPING TO MAINSTREAM CSR AND DEVELOP OPEN COALITIONS OF COOPERATION.
Considering the wide-ranging nature of CSR and the diversity of the European and international business landscape, the partners of the Alliance have identified several priority areas for action:

Fostering innovation and entrepreneurship in sustainable technologies, products and services which address societal needs
Helping SMEs to flourish and grow:
Assisting enterprises to integrate social and environmental considerations in their business operations, especially those in the supply chain
Improving and developing skills for employability
Better responding to diversity and the challenge of equal opportunities taking into account the demographic changes alongside the rapid aging of the European population
Improving working conditions, also in cooperation with the supply chain
Innovating in the environment field with a special focus on integrating eco efficiency and energy savings in the product and service creation process
Enhancing pro-active dialogue and engagement with all relevant stakeholders
Further addressing the transparency and communication challenge to make the non-financial performance of companies and organisations more understandable for all stakeholders and better integrated with their financial performance
Operating outside the borders of the European Union in a socially and environmentally responsible way as companies do inside the European Union

These priority areas will be addressed by “open coalitions of cooperation” bringing together interested companies ready to tackle these issues in the form of “laboratory meetings” in order to explore and to develop joint operational projects, in partnership with relevant experts and stakeholders and with the backing of the European Commission.

ENSURING AN ENABLING ENVIRONMENT FOR CSR
With the new European Strategy for Growth and Jobs and through its initiative on better regulation, the European Commission and EU Member States have committed themselves to set up and strengthen a business-friendly environment in which entrepreneurs and enterprises can flourish and grow.
In addition, the European Commission will step up its policy of promoting the voluntary and innovative efforts of companies on CSR, by encouraging good practices and their dissemination in a strengthened partnership with business and all relevant stakeholders as well as the national authorities. It will do this also by being consistent across the policy areas and integrating the promotion of CSR where appropriate. To succeed in their joint mission, the partners of the Alliance will capitalise on equivalent alliances developed at national level and will inspire and support similar initiatives in countries where there is interest in doing so. The Alliance supports the organisation of review meetings with all stakeholders, starting in 2006, to take stock of progress made in relation to the recommendations of the European Multi-stakeholder Forum on CSR and of other trends, developments and innovations in CSR.

CONCLUSION AND NEXT STEP
Commitment, mutual trust and dialogue are vital for the success of this Alliance. The Alliance will be what its partners will deliver on the agreed initiatives and priority areas. The partners agree that for coordination and communication purposes, the Alliance will rely on existing business driven structures actively involved in the CSR domain. The partners of the Alliance agree to take stock through high level meetings and to also communicate the Alliance results in the context of the European Strategy for Growth and Jobs.
Time has come to make Europe a Pole of Excellence on CSR. The Alliance is formed to make it happen.

^[1] COM(2001)366 final

^[2] COM(2002)347 final