Examine Debates Around Corporate Social Responsibility in Eu

1. Examine debates around CSR in EU

The EU is very influential over many of the actions and laws in the way companies in member states are run and monitored. As the idea of corporate social responsibility has grown significantly over the past few decades the EU issued a green paper on the subject in 2001. The EU want to "become most competitive and dynamic economy in the world, capable of sustainable economic growth... and greater social cohesion". Issuing this green paper is an initial proposal of these ideas but without any commitment to action. There is much logic for action at EU level due to their power and influence as active environmental players.

The Green Paper 2001 was the EU's first attempt to stimulate international debate surrounding the issues of corporate social responsibility, mainly the issue of whether it should be imposed on companies by law or should it remain voluntary. The intentions were to promote a potential framework for CSR for governments, NGO's and businesses. Respondents were asked to consider the future role of the EU in CSR and give their opinions.

There are many reasons these issues have been raised that have prompted EU to get involved; today citizens have a much higher concern from citizens about globalization and the effects business activities are having on the environment. Social criteria are increasingly influential in investment decisions and the media bring a lot more transparency of business activity.

The main contribution will be to 'add value to existing activities by providing a standard framework , promoting quality and coherence, developing broad principles and approaches , promoting best practice and innovation and effective evaluation and independent verification' (green paper 2001). Dialogue is another main point, mentioning the improvement of dialogue between business and all stakeholders and a clear identification of the different role for actors involved in business.

In response to the report EU received over 250 replies (mainly UK) this enabled a snapshot of the agreements and problems found with the paper. Clean Clothes Campaign (2002) said "important to define CSR very clearly and provide set of criteria and indicators" as this is the only way we can really hold bad companies accountable. However BiTC 2002 adhered the "fundamentals of CSR must not be constrained otherwise innovation of good business practice will be undermined" meaning that if there is a law business will only comply to the minimum standards set by that law rather than having constant competition of being the most ethical. Friends of the earth (Foe) recognised another problem with not having regulated CSR as it's "used as a convenient excuse to undermine necessary legislation and regulation that support sustainable development". This is the idea that businesses want it to stay voluntary just to stop it being regulated.

The posing question is to what extent businesses should be regulated? Some argue that good practice come from within and will only work if believed there as KPMG argue, "Responsible behaviour is not something that can be legislated for as it is a mindset and a product of cultural values", thus regulation would diminish that effect. Also if regulated, the idea of using CSR for the 'business case' scenario of staying ahead of competition and using it to make money would be ruined. De Schutter (2008) argues that the business case for CSR 'rests on certain presuppositions about markets and the business environment, which cannot be simply assumed, but should be affirmatively created by a regulatory framework for CSR BUT The authors assert that stakeholder theory 'does not require a change in the law to remain viable' (Phillips et al. 2003). - maybe use in EU However, there are still companies with no CSR policies that still profitable without the business case marketing devise so we cannot always rely on a voluntary notion.

The Abbey national make a good point in that they "Reject a 'one size fits all' model for reporting but welcome the 'development of common criteria" this is a constructive view as they don't completely reject either side of the argument. This fits in with the point that 'companies serious and committed to CSR should welcome legalities to protect them from companies who use it to 'window dress' (NEF 2002). This company is obviously comfortable with CSR in that it would welcome common criteria, however only to a certain extent as the subject needs a lot of scope in order to adapt to different business communities.

The EU Multi Stakeholder Forum followed in 2002. It reflects view that 'the involvement of all affected stakeholders is key to ensure acceptance and credibility of CSR and better compliance with principles'. Its main advances on the Green Paper were explored opportunities of establishing common guidelines for CSR practices that are in line with legislation and international agreements e.g. ILO and OECD. Groups, referred to as 'Round Tables', discussed and reported on different issues such as improving knowledge, transparency of CSR practices and development.

Internal factors affecting the forum included awareness of variation in size, age and activity of companies, further adding to the rejection of a 'one size fits all' concept. Main internal drivers behind CSR that were reported were the values and commitment of key decision makers (i.e. owners/managers) and the argument