The Guardian (UK): Forum filling: “corporate agenda social responsibility”: "Only binding legal measures will establish a general incentive for responsible corporate behaviour which matches their general incentive to be profitable." (ShellNews.net) 8 Nov 04

'Multistakeholder' proposals for tougher EU reporting regulations have been kicked into touch, reports David Gow from Brussels

Monday November 8, 2004

In early October the European Commission named and shamed scores of EU firms, including GlaxoSmithKline, BP and EDF, the French power group, as the biggest industrial polluters, according to the new European Pollutant Emission Register, and urged them to improve their environmental performance - or face prosecution from 2007 under a 1996 directive.

The reaction from some of the British companies named in the Guardian's report was swift and loud - testimony to how far up the corporate agenda social responsibility, embracing measures to minimise firms' impact on the environment as well as treatment of labour, has moved in the last few years. They had a few fair points to make, notably about reductions in emissions since 2001, the source of the EU's data, but the overriding impression they left was one of acute sensitivity to CSR.

Many leading European transnationals, including oil majors such as Shell and arms contractors such as BAE Systems, have, with some success and a great deal of mutual hostility and suspicion, engaged in formal and informal discussions with stakeholders, including investors, unions and NGOs, about CSR. But there is no common practice within corporate Europe, let alone uniform EU guidelines on both policy and best practice.

In late June, three years after the commission published its green paper on CSR, calling it a tool for helping the EU achieve its "Lisbon" goal of becoming "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion," a high-powered "European multistakeholder forum" produced a 131-page report - and provoked an immediate row.

The report, full of vague, generalised recommendations for the most part, ran into flak from NGOs such as Amnesty, Oxfam and Social Platform before it was even published. While they welcomed some - including better and more transparent links between purchasers and suppliers, business monitoring of and reporting on CSR performance according to defined criteria, use of CSR in public procurement contracts - as "substantive," they wanted stronger action and tougher measures.

They called for "a proper framework that complements the voluntary commitment of a steadily growing number of companies with proactive and consistent public policies to create the right enabling environment and ultimately to ensure accountability by all companies." Against business demands for a purely voluntarist approach, the NGOs urged the EU and other public authorities to "shift gears from merely moderating dialogue to developing policies, setting standards and, where necessary, enforcing them." They went further: "Only binding legal measures will establish a general incentive for responsible corporate behaviour which matches their general incentive to be profitable."

This was, obviously, a red rag to a bull for the business representatives on the forum, including the former industry commissioner and banker, Viscount Etienne Davignon, who heads up CSR Europe. On July 23 their riposte expressed "astonishment" that the NGOs - who had signed the report - were at once guilty of undermining it when corporate Europe had shown "evolution of thinking" and accepted "important challenges" in the interests of getting an agreed statement.

"The experience of the last weeks of the EU debate ... has clearly demonstrated that we lack stable interlocutors when it comes to the general CSR policy debate at EU level. This could have a detrimental effect on the development of CSR practices at company level if the wrong conclusions were drawn on the role of the EU in promoting CSR."

It was left to the unions, which have been wary about CSR as a poor man's substitute for collective bargaining and co-determination, notably in Germany, to pour balm on troubled waters. But the European TUC, while acknowledging progress on its agenda of greater union participation, demanded an approach going beyond pure voluntarism.

The ETUC wants all EU companies to produce annual reports on their activities relating to their social and environmental impact, strict standards of governance, codes of conduct drawn up by the commission and policy instruments for measuring and assessing CSR activities.

Given this fundamental argument between binding and voluntary approaches towards the issue it's hardly surprising that the commission, as arbiter, has effectively put CSR on ice for the time being. The new "college" of commissioners is still in dispute, and although the president, José Manuel Barroso, has made attainment of the Lisbon goals the priority for his five-year tenure, CSR rates fairly low down his pecking order. If it is a burning matter for Vladimir Spidla, the proposed employment and social affairs commissioner, or Günter Verheugen, the enterprise chief-in-waiting, for that matter, you wouldn't notice from their confirmation hearings at the European Parliament. Pas un mot à ce sujet.

Alasdair Murray, director of the business and social policy unit at the Centre for European Reform and author of a 2003 CER pamphlet on CSR, says: "It's pretty well been put into touch. If someone in the new commission gets excited about it there'll probably be a new paper and working group but it's not a phrase that's passed Barroso's lips as far as I can tell."

Its all a far cry from the forum's grand words: "CSR is about the core business activities of a company and, while companies are there to make profits, an approach which integrates environmental and social considerations and is based on dialogue with stakeholders is likely to contribute to the long-term sustainability of business in society." And: "In the longer term, business success and ... shareholder value will ...be better delivered by those companies which are contributing to sustainable development."

· David Gow is the Guardian's European business editor.

http://society.guardian.co.uk/givinglist/story/0,,1343545,00.html