EU commission: More CSR obligations for companies

Quiz question: Where is “shared value” hidden in this graph from HBR 1/2011?

Yesterday, we had a workshop with Seco and Swiss stakeholders, where we presented results of our feasibility study on a “Sustainable Trading Initiative Switzerland”. We argued in favour of a national plattform that enables that Swiss companies and public buyers learn more about sustainable trade, because in future, Swiss companies need to invest more into sustainability issues, if they want to remain competitive. At that time, I didn’t know that two days earlier, the EU commission additionally gave important political reasons for investing into CSR.

On Tuesday, the EU Commission published a 15 pages long “COMMUNICATION FROM THE COMMISSION : A renewed EU strategy 2011-14 for Corporate Social Responsibility“. Definitely, a MUST-read for all interested in the future of CSR. I will briefly sum up some important issues: The European Commission’s new strategy on corporate social responsibility (CSR), is

“part of a package of measures on responsible business (see IP/11/1238), aims to help enterprises achieve their full potential in terms of creating wealth, jobs and innovative solutions to the many challenges facing Europe’s society. It sets out how enterprises can benefit from CSR as well as contributing to society as a whole by taking greater steps to meet their social responsibility.”

The Commission now newly defines CSR as:

“the responsibility of enterprises for their impacts on society” – instead of its much criticized definition:

“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.

In the Commission’s view, companies should “have a process in place to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close cooperation with their stakeholders”. It emphasizes

  • the importance of intgrating CSR into the core business strategy,
  • creating and maximizing shared value,
  • explicit recognition of Human Rights and ethical considerations.

The German “Council for sustainable development” evaluates the new strategy as progressive. It emphasizes that the Commission plans to oblige companies more to CSR-guidelines, prohibit greenwashing and that it announced to soon propose laws that make social and ecological reporting obligatory. Obviously, corporate lobby organizations are vehemently protesting against the new plans and defending CSR’s voluntary character (look at BDA and also look at the article in the Handelsblatt). And also obviously, the CORA network on Corporate Accountability is supporting the proposal.

I have not read the agenda in detail yet, as I am off to a weekend in Montreux at Lac Lemand … but I will report more details when I am back.

In the meantime, you might read Michael Porter’s January “big idea” article in Harvard Business Review on “Creating shared value” – or watch his video on “rethinking capitalism“. I guess the EU proposal reflects on this. This picture sums up his “big idea”.

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