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Five years ago this month, the European Commission announced that corporate social responsibility would become one of the priority areas within its Social Policy Agenda, playing an important part in minimizing the social and environmental consequences of economic integration.
How does the record stand? The Commission has issued a white paper outlining the broad direction of EU policy in this area, and set up a multi-stakeholder forum to inform it. It has made it easier for consumers to understand the wider impacts of what they are buying by encouraging the providers of products as varied as food and financial services to make available information on their social and environmental performance. It has played its part in implementing the Kimberley Process Certification Scheme for the international trade in rough diamonds, which helps to prevent diamond sales being used to finance bloody wars in Africa. It has helped company managers by creating a CSR management framework and raised awareness in the new member states. The Commission can claim some successes. It has, however, failed to respond adequately to its business critics’ central charge of meddling in what the Commission itself defines as a voluntary company activity. By favouring the voluntary approach in the 2002 white paper, officials placed themselves in the middle of a long-running war between business and civil society. They then sought consensus by creating a forum for both sides to work out a compromise. But the ink was barely dry on the final communication from this multi-stakeholder forum when NGOs which had provided credibility broke ranks, criticizing the absence of commitment to regulation.
The Commission now has the thankless task of presenting more detailed policy based on a consensus which does not exist. Hence the continued non-appearance of a second white paper (see page three).
In the meantime, a stream of regulations from Brussels is enforcing responsible business behaviour. The requirement to incorporate EU regulation into UK national law forced officials to bring forward the Operating and Financial Review. Having jumped on the CSR bandwagon, the Commission could be forgiven for wanting now simply to jump off. It should not do this, but instead concentrate on groundwork that urgently needs doing. Developing professional standards, analyzing the financial benefits of sustainability programmes, fostering partnerships and transparency – all need more research and support. Having fallen between two stools, the Commission should stop worrying about its critics and get on with the job, which for now is to stick to the basics.
How does the record stand? The Commission has issued a white paper outlining the broad direction of EU policy in this area, and set up a multi-stakeholder forum to inform it. It has made it easier for consumers to understand the wider impacts of what they are buying by encouraging the providers of products as varied as food and financial services to make available information on their social and environmental performance. It has played its part in implementing the Kimberley Process Certification Scheme for the international trade in rough diamonds, which helps to prevent diamond sales being used to finance bloody wars in Africa. It has helped company managers by creating a CSR management framework and raised awareness in the new member states. The Commission can claim some successes. It has, however, failed to respond adequately to its business critics’ central charge of meddling in what the Commission itself defines as a voluntary company activity. By favouring the voluntary approach in the 2002 white paper, officials placed themselves in the middle of a long-running war between business and civil society. They then sought consensus by creating a forum for both sides to work out a compromise. But the ink was barely dry on the final communication from this multi-stakeholder forum when NGOs which had provided credibility broke ranks, criticizing the absence of commitment to regulation.
The Commission now has the thankless task of presenting more detailed policy based on a consensus which does not exist. Hence the continued non-appearance of a second white paper (see page three).
In the meantime, a stream of regulations from Brussels is enforcing responsible business behaviour. The requirement to incorporate EU regulation into UK national law forced officials to bring forward the Operating and Financial Review. Having jumped on the CSR bandwagon, the Commission could be forgiven for wanting now simply to jump off. It should not do this, but instead concentrate on groundwork that urgently needs doing. Developing professional standards, analyzing the financial benefits of sustainability programmes, fostering partnerships and transparency – all need more research and support. Having fallen between two stools, the Commission should stop worrying about its critics and get on with the job, which for now is to stick to the basics.
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