The European Commission dips its toes into CSR policy waters with a softly-softly approach that lacks impact.
By Wayne Visser
Part of the Searching for Sustainable Business series
Continuing on the theme of CSR policy and regulation, introduced in my reflections on Nigeria and India, I want to shine a spotlight on Europe’s policies on CSR, which have been evolving for more than a decade now.
EC Issues Green Paper & White Paper on CSR
In 2001, the European Commission (EC) issued a Green Paper on CSR, which “provided all interested parties with a platform for further discussion with the goal of policy generation in the CSR area in Europe.”
After a year of consultation, the White Paper – entitled CSR: A business contribution to sustainable development – was released, and represented the official policy intention of the EC in the field of CSR. Both papers were based on a broad consensus and had been debated through a multi-stakeholder process that included companies, business associations, governments, NGOs and trade unions.
Progress on Waste And Climate Change
After the White Paper, all seemed to go quiet on the European CSR policy front. Meanwhile, however, there was significant progress on waste management and climate change policy.
In terms of waste, the 2002 WEEE Directives made a great leap forward on the restriction of hazardous substances in electrical and electronic equipment and the introduction of take-back schemes for waste electrical and electronic equipment (WEEE).
Significant progress was also made on climate change, with a 2003 Directive laying the foundation for the EU Greenhouse Gas Emission Trading Scheme, which commenced operation in January 2005 as the largest multi-country, multi-sector carbon trading scheme in the world.
The EC re-entered the fray in March 2006 by establishing the European Alliance on CSR, an open alliance of European enterprises, launched to further promote and encourage CSR.
The alliance is a political umbrella for CSR initiatives by large companies, small- and medium-sized enterprises (SMEs), and their stakeholders. In 2006, a research report was published by CSR Europe, titled the European Cartography on CSR Innovations, Gaps and Future Trends, based on an analysis of 545 CSR-related business solutions and 140 networking activities in 19 EU countries.
Stirrings of More Robust CSR
Things seemed to go quiet again and then, in May 2010, I was invited to make a presentation on CSR in Brussels to the EU High Level Group (HLG), comprising of 27 Member State representatives.
The topic of my presentation was “CSR and the global financial crisis” and it gave me a fantastic opportunity to talk with some of the people helping to shape the EU agenda. There were a number of trends that I found interesting.
The first was that, whereas formerly CSR was discussed purely as a voluntary activity by business (this was especially clear in the EU’s policy statement on CSR in 2006), there was now increasing discussion and even demand for what Susan Bird, CSR co-ordinator in the Directorate-General for Employment of the European Commission and part of the EU HLG on CSR, called “a more active role,” which may involve “conditions” being introduced in the future, although this was all still up for debate.
Smart, Sustainable and Inclusive
A second insight was how the competitiveness agenda has changed. The first ten-year economic strategy of the European Union – the Lisbon Agenda, which ended in 2010 – was all about competitiveness and paid very little attention to CSR issues.
However, the 2008 European Competitiveness Report dedicated an entire chapter to CSR and countries such as Denmark were claiming that responsible, green growth was central to its international reputation and hence its competitiveness. This changing emphasis is also reflected in the new Lisbon Strategy for 2020, which has as its central goal “smart, sustainable and inclusive growth.”
Renewed EU Strategy Underwhelming
After my visit to Brussels, I concluded that the sleeping giant of CSR policy in Europe was awakening and that we should “watch this space.”
As it turned out, we did not have to wait very long.
In October 2011, “A renewed EU strategy 2011–14 for Corporate Social Responsibility” was launched. The document itself is only 15 pages long (which is a good thing!) and I recommend that everyone read it. While I review the strategy in more detail in The Quest for Sustainable Business, here are six points about the 17 actions that Europe intends to implement:
1. Multi-Stakeholder CSR Platforms
There is a commitment to create multi-stakeholder CSR platforms for industries. Applying CSR at a sector level makes a lot of sense and a stakeholder engagement approach is always welcome. The concern is that this duplicates many similar initiatives that have already been undertaken by the likes of GRI, WBCSD and industry associations.
2. CSR Awards
The launch of a European CSR award scheme may give CSR some gravitas and greater PR mileage. But the world is already awash with CSR award schemes, and when I look at the sorts of companies that win these awards, I find they tend to be the usual suspects who are doing little more than strategic CSR, when what we really need is more transformative approaches.
The problem of greenwash is mentioned, although no specific commitment is made. Regulation on this would be a welcome addition and follows existing best practice in Australia, Canada, Norway and the United Kingdom.
There is also an action to develop a code of good practice for self- and co-regulation exercises, which could be interesting, although a lot of this work has already been done by AccountAbility and its suite of AA1000 standards.
4. ESG Integration
The weakest and most disappointing action is on “better integration of social and environmental considerations into public procurement,” which has the caveat “without introducing additional administrative burdens for contracting authorities or enterprises, and without undermining the principle of awarding contracts to the most economically advantageous tender.”
By including that last phrase, the message is clear: the lowest price will continue to win the day.
5. Deflecting And Devolving Responsibility
The only action with any teeth is requiring large companies to commit to the UN Global Compact, or the OECD Guidelines for Multinational Enterprises, or the ISO 26000 Guidance Standard on Social Responsibility by 2014.
But giving companies the choice between these very different principles and guidelines is laughable. It suggests an equivalence between the minimal efforts required to sign up to the Global Compact’s 10 principles and the 100 pages or so of detailed guidance across seven core areas in ISO 26000.
6. Still Needed: More Effective Regulation
There is an attempt to extend the EU policy on CSR down to a national level, requiring member states to develop their own plans. It will keep a few bureaucrats busy but I won’t be holding my breath.
I really don’t believe we need more policy or legislation on CSR. What we need is to eliminate the contradictory policies (such as fossil fuel subsidies) and focus on more effective regulation of issues, including labour rights, biodiversity loss and transparency.
Europe has shown policy leadership on many issues, from labour rights and animal rights to environmental management and climate change. However, I can’t help but wonder if this new wave of CSR policy development is doing more to confuse and distract than advance the agenda.
Time will tell.
Australia: From Laggard To Leader: Pioneering Experiments Down Under
India: A Giant Leap Backwards On CSR: India’s Great Missed Opportunity
Nigeria: Oil on Troubled Waters: Can Shell Make Good in Nigeria?
China: Yin And Yang: Striving For Sustainable Harmony In China
Mexico: Going Glocal With CSR: Multilateral Musings In Mexico
South Africa: How South Africa Led The World In Corporate Governance & Economic Empowerment
Japan: Meme-Splicing in the Land of the Rising Sun
Africa: Lessons from Africa’s Wild Frontiers
Searching for Sustainable Business: The Life Story of a Global Movement