25 October 2011 EU has published a new strategy for CSR. A short (only 15 pages!) EU document and worth reading for any type of enterprise. Why?
2011 saw criticism of CSR, proposition of new terms & understanding of what CSR is and may say – also increased awareness among large and small companies, including improved results for the Sustainability Index in Latvia for example.
This EU strategy “renews” the EU approach to CSR in various ways and provides guiding principles that all EU based companies and governments alike would have to take into consideration when planning strategies and action for 2012 & onward. So, what has or has not changed?
The major changes: in line with the overall development of the CSR subjects – the definition has also changed. CSR is defined as “the responsibility of enterprises for their impacts on society”. Short and presumably very wide definition and it includes some renewed aspects.
In our seminars for SMEs in Latvia (under the framework of Employers Confederation project) we have continuously emphasized that disregarding any fancy CSR policies – the one of the elements in maintaining company CSR stand is “law”. Particularly relevant subject, when considering the tendencies to circumvent or blankly ignore legal provisions, meant for example to protect employees, or within the context of current Shadow economy discussion & tax evasion in LV. Thus the EU position is clarified in this regard & CSR includes “the respect for applicable legislation, and for collective agreements between social partners” as a prerequisite for meeting that responsibility.
In line with the developments of the CSR subject and company implementation levels the EU approach takes the shared value creation in the center of its definition (once the prerequisites are fulfilled): “Maximizing the creation of shared value for their owners/shareholders and for their other stakeholders and society at large”. Of course, making profit is of importance to the enterprises, however the CSR 2.0 (see earlier post on Wayne Vissers book) calls for innovation of products, services and business models that support the maximization of value for the society as a whole. Or, as the EU strategy puts it “that contribute to societal well-being and lead to higher quality and more productive jobs.” However, the workload can not be put only on companies – if the context of operations is unfavorable to the active promotion of these CSR approaches, the company competitiveness can be impeded. Therefore,
the other important aspect of the strategy is emphasis on the role of the public sector in supporting the voluntary company measures and where necessary, improving the regulation.
Furthermore, the steps envisaged in the strategy for 2011-2014 show what trends enterprises will have to follow. EU will try to:
- enhance visibility of CSR & promote good practices
- work with improving trust in business, through f.ex. activities against misleading marketing, particularly green-washing;
- support enterprises in the process of voluntary self-regulation
- and encourage public sector support through market actions like – procurement, promotion customer support for sustainable products & services; improve investment climate to include CSR and support reporting initiatives (disclosure).
The activities that call particular attention to state action are related to national & regional CSR policy development, and inclusion of CSR in education, training & research.
Finally, all of the actions should try to follow the international principles, particularly OECD, UN, ILO principles that include reference to principles of human rights, labour practices, environmental protection and also anti-corruption.
A renewed strategy, it does bring the latest developments in CSR field into one common reference point for EU with an ambition behind – to secure best standing of EU based companies. It also leaves room for enterprises to choose the best possible action in given circumstances. I believe Latvia is not the only country where the public sector has to catch up with current progress of companies that have marked the “best in class”. and secure procurement and investment policies that favor sustainability vs short term, unsustainable and often “cheapest” solutions.
See the full EU strategy at http://ec.europa.eu/enterprise/policies/sustainable-business/files/csr/new-csr/act_en.pdf
Further references on situation in Latvia: http://www.ilgtspejasindekss.lv/