Redefining Corporate Social Responsibility

In October 2011, the European Commission put forward a new strategy for Corporate Social Responsibility (CSR), which they define as "the responsibility of enterprises for their impact on society".

Participants at a hearing organised by EPP Group MEP Raffaele Baldassarre, Parliament's Rapporteur (responsible for drafting the Parliament's position) on CSR, will this week be discussing the paper.

What is Corporate Social Responsibility?

Corporate Social Responsibility refers to the actions of companies that go beyond their legal obligations towards society and the environment. Specific regulatory measures can create a supportive environment to ensure that companies take voluntary actions to be socially responsible.

The European Commission, in its 2001 Green Paper, defined CSR as "the voluntary integration of social and environmental concerns in their [companies'] business operations and in their interaction with their stakeholders".

A renewed concept of CSR

With the new strategy, the Commission proposes a new definition of CSR as "the responsibility of enterprises for their impact on society". To fully meet their corporate social responsibility, companies must have in place a process for integrating social, environmental, ethical and human rights issues, as well as the demands of consumers, in their business operations and in their basic strategy.

Enhancing the impact of CSR policy

To this end, the Commission has identified several factors that will help to further enhance the impact of its policy on CSR, including:

• the need for a balanced approach, involving the various stakeholders taking into account the points of view of businesses, non-business stakeholders and Member States;
• the opportunity to clarify what is expected from companies, and make the Union-wide definition of CSR consistent with existing, new and updated international principles;
• the need to support a 'market award' for responsible business conduct, including in investment policy and public procurement;
• the need to contemplate self-regulation and co-regulation, that are important means by which companies seek to manage their social responsibility;
• addressing the issue of transparency in companies on social and environmental issues, both within the companies themselves and for all parties concerned;
• the urgent need to pay more attention to human rights, which have been given greater importance in the context of CSR;
• the need to recognize the complementary role that regulation plays in creating a more favourable environment for ensuring that companies are voluntarily socially responsible.

The Rapporteur's position on the new proposals

Mr Baldassarre believes that, "if properly exploited, CSR can emphasize the contribution and value of companies to working as a catalyst for greater social cohesion at European and global level. It is therefore necessary to ensure adequate financial support to the implementation of the strategy, to promote a greater awareness of its positive aspects by all the actors involved".

"The promotion of CSR, including through a European award, might give the impulse needed for the diffusion of best practice and strategies that are crucial, especially to small and medium-sized enterprises."

"That said, I firmly believe that the basic principle for the development of CSR must be its voluntary nature. Only a voluntary approach will allow companies to put in place, based on their specific capacity, the economic paradigm shift necessary to implement the idea of sustainable development, the cornerstone of the Europe 2020 strategy for growth."

"A key requirement for achieving this objective is the creation, through targeted policies - adequately supported - of a business-friendly environment that makes adherence to CSR a natural choice. This can only happen with the minimum administrative burden and eliminating the additional costs resulting from disclosure requirements or other types of requirements for businesses trying to expand their social responsibility."

The hearing on CSR hosted by Raffaele Baldassarre takes place on Monday 1 October 2012, from 16:00-19:00, in room ASP3E2 of the European Parliament.