No surprises as European Alliance for CSR launches

16 May 2006

The European Commission unveiled its new corporate social responsibility (CSR) strategy on March 22 in Brussels, at a rather muted press conference where journalists were almost outnumbered by the CEOs of major companies lined up behind European Commissioners Günter Verheugen and Vladimír Špidla, writes Stephen Gardner. The lukewarm response was a consequence of the leaking of the Commission's new communication, entitled Implementing the partnership for growth and jobs, make Europe a pole of excellence on corporate social responsibility.  Even before the March 22 launch it was clear that the new initiative, in fact, contains little that is new. Speaking at the press conference, Verheugen, Commission vice-president and Commissioner for Enterprise and Industry, made it clear that CSR in Europe will remain business-led and entirely voluntary.  “A controversial discussion has been finished,” he said.  “At its heart: does CSR require a legal framework or should it be purely voluntary?  We're not going to create any new bureaucracy but we will rather pursue a partnership approach.” His colleague, Employment Commissioner Vladimír Špidla, commented that the initiative resulted from an alliance between the European Commission and EU companies, adding, “Today's initiative is voluntary and open-ended.  I hope it will lead to specific projects leading to benefits for workers and companies equally.” At the centre of the communication is a European Alliance for CSR.  This will be a “political umbrella for new and existing CSR initiatives,” according to a Commission statement. Businesses welcomed the approach.  Bernd Pischetsrieder, chairman of Volkswagen, told reporters at the launch event, “The voluntary approach is key for us because it opens a lot of creativity.”  Etienne Davignon, chairman of CSR Europe, said the Alliance would find “practical answers” to CSR questions with a view to integrating CSR principles into “the whole of management.” The first step for the European Alliance for CSR will be “open coalitions of cooperation” and “laboratory meetings” to develop joint projects, according to the communication.  Catherine Bunyan, spokeswoman for Commissioner Verheugen, told Ethical Corporation that further discussions will take place under the auspices of employers' organisations UNICE (Union des Industries de la Communauté européenne).  “They will set the schedule,” said Bunyan.  “[The European Commission is] not organising this, we're backing it.” The new communication will also revive the European Multi-Stakeholder Forum on CSR, which worked through 2003 and 2004, and whose final report, published June 2004, formed the basis of the current communication.  The Forum will support the discussions and initiatives organised by the Alliance through a series of review meetings. In other respects, the new communication is a continuation of existing initiatives.  It calls for awareness-raising and good practice exchange, cooperation at EU member state level, research, education, on-going discussion with initiatives at international level, and the involvement of SMEs. Contributing to the Lisbon Strategy The new communication is therefore not so much a milestone in the development of an EU-specific model for CSR; rather it is a positioning of CSR as a tool for contributing to the EU's revised Lisbon strategy for growth and jobs. EU leaders meeting in Lisbon in 2000 agreed Europe should become the world's “most competitive and dynamic knowledge-driven economy by 2010.”  However, when the new college of European Commissioners took office in late 2004 it had become clear that the strategy was not on track.  2005 therefore saw a relaunch under new Commission president José Manuel Barroso, with the focus squarely on growth and jobs.  CSR has a role to play, but only if it can contribute to these ends. Commissioner Verheugen underlined this clearly at the March 22 launch of the new communication.  “We're convinced this can make a positive contribution to the growth and employment strategy, if we can establish a direct link between business success and this concept [of CSR],” he said. Responding to a claim that some businesses felt the voluntary approach was too weak, Verheugen added, “There must be a misunderstanding.  There will be no monitoring, no benchmarking, no naming and shaming.  No reporting requirements.  It is completely voluntary.  We will never have a regulatory framework for CSR because it is a philosophy, a concept.” NGO backlash NGOs reacted strongly against this approach.  “What they call CSR is not what we call CSR,” said Virginie Giarmana of the Coalition of European NGOs on CSR and Corporate Accountability.  “[The new communication] is not adding anything; it's undermining CSR.  Previous Commission papers had the idea that CSR could be something sustainable and protect rights.  This is not there anymore.” The European Trade Union Confederation (ETUC) was also critical. ETUC's Juliane Bir said that a voluntary approach is acceptable, “but it needs to be controlled, with reporting and European criteria.” Bir added that a European approach to CSR is necessary, saying that other initiatives such as the UN Global Compact and OECD guidelines are “not enough.  We are in Europe and if we want to develop the EU social model we have to have guidelines.” Criticism of the EU approach also came from the Global Reporting Initiative (GRI).  “We don't feel like there's a lot of leadership coming out of the European Commission,” said GRI's Alyson Slater.  “We feel it's a missed opportunity.  Any company that hasn't yet started to look at CSR has been let off the hook.  We're disappointed at the lack of language around accountability and transparency of reporting.” Complementing not overlapping Other initiatives broadly welcomed the European Alliance for CSR and saw it as a complement to, rather than a replication of, their own work.  However no other initiative has immediate plans to work with the Alliance. Georg Kell, Executive Head of the UN Global Compact, said, “We welcome all initiatives that contribute to the creation of a positive relationship between business and society. At the same time, we do not have a specific view on EU-internal debates.  At this point, we do not know what kind of activities the new European Alliance is undertaking, but we look forward to learning more about it.” Kathryn Gordon, Senior Economist at the OECD, said that the EU had a policy-making mandate, unlike the OECD, and therefore the respective initiatives were complementary.  OECD guidelines were an instrument for international cooperation, she said. “It is normal that other institutions – including the EU – do the same as they seek to carry out their respective missions.  The new initiative gives a distinctive and valuable European voice to the international dialogue on CSR and is extremely supportive of the objectives of the OECD Guidelines.” Kevin McKinley, Deputy Secretary-General of the International Standards Organisation (ISO) echoed these comments.  “The EU initiative is a positive one which appears to be complementary to ISO’s development of the ISO 26000 standard for social responsibility,” he said.  “Rather than signifying a gap, the EU initiative is a very appropriate regional support of the social responsibility concept and associated approaches that work best for industry.” There is little concrete detail in the new communication on next steps for the European Alliance for CSR, beyond the statement that the Alliance will support “the organisation of review meetings with all stakeholders”, with the first meetings to take place in 2006.  The meetings will be organised through “existing business driven structures.”  The Multi-Stakeholder Forum will also reconvene in 2006. A version of this article was published in Ethical Corporation magazine.

 

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