Corporate responsibility and accountability in the EU

1. Renewed EU strategy for corporate social responsibility 2011-2014 CSRby Ms Evelyne Pichenot, EESC member10 April 2012 – Hong Kong

2. Corporate responsibility and accountability in the EU • Many European companies already adhere to international CSR frameworks. • A growing number of EU companies report on the sustainability of their activities. • Progress in the EU since 1990. - Definition - Instruments and policies - Practices.

3. Various early activities in Europe- 1994 Danish government launched a CSR campaign- 1998 UK government backed the voluntary ETI (ethical trading initiative – for the improvement of labour conditions in supply chains). - 1999 Sweden started to require large companies to include environmental information in their annual reports- 1999 Germany gave financial backing to the launch of the UN global compact.- 2000 UK appointed a minister for CSR.- 2001 France adopted a law on New Economic Regulations (NRE) making CSR disclosure mandatory for listed companies. Conclusion: Over the next decade, new challenges, such as social inclusion, the environment, diversity and competitiveness, spawned a range of new activities.

4. Transparency: a key question for European countries • Several EU Member States have a well developed policy on CSR • Convergent transparency practices noted in the inventory of national policies: - exemplary CSR management in public organisations post, energy, etc) - regulation of CSR disclosure to clients and investors - organisation of exchanges between various CSR stakeholders - global orientation of CSR disclosure in other policies (industry, banking, development, etc.) • Various instruments and tools at national level (DK, UK, FR, NL, SV) - guidelines, ratings, reporting, procurements with specific provisions - mandatory reporting

5. Voluntary approach to CSR in EU and international standards (2001-2002) • The European Commission adopted a voluntary approach on CSR (2001) • The European Commission established a European CSR policy providing exchanges, projects and financial support (2002) to the stakeholders forum. • In addition to this voluntary approach, the European Commission handles labour and environmental issues through directives (Reach, IPPC, etc) • A directive introduced the possibility of extra financial information in annual balance (2003) • The SRI market begins developing (2007)

6. Development of the definition of CSR First step in the definition (2001) CSR “is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.Second step in the definition (2006) CSR has a role in achieving Sustainable Development and ensuring more and better jobs. The Europe 2020 Strategy added consumer trust to the roles of CSR.Third step in the definition (2011) a new communication from European Commission.

7. New communication on CSR A new step in the definition.CSR refers to “the responsibility of enterprises for their impacts on society” and respect for applicable legislation and for collective agreements between social partners CSR in the EU recognises principles and guidelines internationally and integrates United Nations guiding principles on business and human rights. CSR is a long-term approach and includes the supply chains and impacts both direct and indirect.CSR has a multidimensional nature. The EU notes: “According to these principles and guidelines, CSR at least covers human rights, labour and employment practices (such as training, diversity, gender equality and employee health and well-being), environmental issues such as bio-diversity, climate change, resource efficiency, life cycle assessment and pollution prevention) and combating bribery and corruption”.The disclosure of non-financial information is also recognised as an important issue.

8. 7) Recent progress in CSR within the EU • Social dialogue: 140 transnational company agreements (from 79 in 2006)Monitoring: 700 members in the business social compliance initiative (from 69 in 2007)Reporting: 850 European enterprises following the global reporting initiative (from 270 in 2006)International standard: 1900 European enterprises involved in UN global compact (from 600 in 2006) and good participation in ISO26000Environment: 4600 enterprises adopting EMAS.Evaluation of the impact of CSR but the EU could do better.

9. What kind of new actions? - Role of public authorities: each Member State must update a national plan and accept peer review- Role of Social partners: Database for international agreements- Role of EU institutions: - creating an award and financial support for promotion and education on CSR. - struggling against unfair commercial practices. - (greenwashing) promoting CSR in public procurement and trade agreement - submit a legislative proposal on the transparency for social and environmental information (2012) - create sectoral multistakeholder platforms.Conclusion: more visibility, more accountability and more trust.