What is CSR
The term CSR stands for Corporate Social Responsibility, a trend that has emerged in the western business practice seeking to integrate businesses into the society as responsible and ethical citizen. This trend has been most popular in the United States and the United Kingdom; however continental European countries with the European Union at the front are increasingly witnessing a change in the private sector with more and more businesses committing themselves to creating a private sector that takes into account the environmental and social aspects of their activities and organization as well.
It is not an easy task to accurately and objectively define CSR as there are as many definitions as stakeholders in the field among which academics, business practitioners, government officials, politicians and activists coming from non-governmental sector each have a different definition prepared. Thus we use the one that the European Union has provided:
“Corporate Social Responsibility is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. (Communication from the Commission to the European Parliament, The Council and the European Economic and Social Committee (2006) – Implementing the Partnership for Growth and Jobs – Making Europe a Pole of Excellence on CSR which cites the Commission Green Paper 2001 “Promoting a European Framework for Corporate Social Responsibility”)
Amongst other things, this definition emphasizes that:
- CSR covers social and environmental issues, in spite of the English term corporate social responsibility;
- CSR is not or should not be separate from business strategy an operations: it is about integrating social and environmental concerns into business strategy and operations;
- CSR is a voluntary concept;
- And important aspect of CSR is how enterprises interact with their internal and external stakeholders (employees, customers, neighbors, non-governmental organizations, public authorities, etc.). (Baseline study on CSR practices in the New EU Member States and Candidate Countries, 2007, p.15)
For the business CSR can be a source of opportunity, innovation, and competitive advantage (Michael & Kramer: 2006, p.1) while at the same time providing with the opportunity to actively contribute to the sustainable development. Thus, in addition to the obvious, direct, benefits of CSR enjoyed by the ultimate beneficiaries of responsible corporate practices, CSR brings benefits to the companies that practice it. Organizations considering environmental, social and broader economic questions in connection with their core operations unleash innovations and deliver better financial returns. Strategically and systematically integrated into their business, CSR helps companies to better address reputation risks, attract investors, improve relations with stakeholders and become more competitive in mature markets. (Kori Udovicki, Baseline study on CSR practices in the New EU Member States and Candidate Countries, 2007)
There is no ‘one size fits all’ in CSR as it is a flux term in itself. However, various activities can be a good example of how the companies implement the CSR principles into their business practice, activities and forms of conduct, so called ‘good practice examples’. These may comprises two elements: acting as a good corporate citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities. (Michael & Kramer: 2006, p.9)
What is the role of EU in the context of CSR integration in European business?
The EU approach to CSR, (quoted above) is integrated in the broader context of various international initiatives related to trade and development co-operation, such as the ILO core labour standards, OECD guidelines for multinational enterprise, RIO Declaration on Environment and Development, Johannesburg declaration and its Action Plan for Implementation, the UN Global Compact Principles and others. It has its roots in the Commission’s White Paper from 1993 on growth and employment and in 2002, a Multi-Stakeholder Forum consisting of companies, business organizations and networks trade unions and civil society representatives was established to elaborate a European strategy for CSR and to encourage awareness rising about its implications. (Baseline study on CSR practices in the New EU Member States and Candidate Countries, 2007, p.15)
The NGOs that have contributed to the forum’s activities have called on the EU to take the lead in the development of an effective European CSR framework. Such a framework should be based on internationally agreed standards and principles such as the OECD Guidelines and ILO Conventions and involve all stakeholders from the early stages of development and include credible provisions for the monitoring and verification of the standards, cods of conduct and other ethical claims.
Resources
CSR Europe: www.csreurope.org
Baseline Study on CSR Practices in the New EU Members States and Candidate Countries. UNDP. 2007
“Corporate Social Responsibility at EU level. Proposals and recommendations to the European Commission and the European Parliament”. The European Coalition for Corporate Justice (ECCJ). November 2006.
Porter E. Michael and Mark R. Kramer. “Strategy and Society. The Link between Competitive Advantage and Corporate Social Responsibility”. Harvard Business Review. December 2006.