The European Parliament,

–  having regard to the Council Resolution of 3 December 2001 on the follow-up to the Green Paper on corporate social responsibility(1),

–  having regard to the Council Resolution of 6 February 2003 on corporate social responsibility(2),

–  having regard to the Commission communication entitled ‘Modernising Company Law and Enhancing Corporate Governance in the European Union – A Plan to Move Forward’ (COM(2003)0284) (the Corporate Governance Action Plan),

–  having regard to the Commission communication entitled ‘’Responsible Businesses‘ package’ (COM(2011)0685),

–  having regard to the Commission communication entitled ‘Social Business Initiative – Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation’ (COM(2011)0682),

–  having regard to the Commission communication entitled ‘Europe 2020 – A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

–  having regard to its resolution of 30 May 2002 on the Commission Green Paper on promoting a European framework for corporate social responsibility(3),

–  having regard to its resolution of 13 May 2003 on ‘the Communication from the Commission concerning Corporate Social Responsibility: A business contribution to Sustainable Development’(4),

–  having regard to its resolution of 13 March 2007 on ‘corporate social responsibility: a new partnership’(5),

–  having regard to the opinion of the European Economic and Social Committee of 24 May 2012 on the Commission communication entitled ‘A renewed EU strategy 2011-14 for Corporate Social Responsibility’(6),

–  having regard to the Commission communication entitled ‘A renewed EU strategy 2011-14 for Corporate Social Responsibility’ (COM(2011)0681),

–  having regard to Rule 48 of its Rules of Procedure,

–  having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on Employment and Social Affairs, the Committee on Foreign Affairs, the Committee on Development, the Committee on International Trade and the Committee on Culture and Education (A7-0017/2013),

A modern understanding of CSR: preliminary remarks

1.  Stresses that business cannot take over public authorities’ responsibility for promoting, implementing and monitoring social and environmental standards;

2.  Emphasises that the current global economic crisis arose from fundamental errors with respect to transparency, accountability, responsibility and from short-termism, and that the EU has a duty to ensure that these lessons are learnt by all; welcomes the Commission’s intention to conduct Eurobarometer surveys on trust in business; calls for the results of these surveys to be fully debated and acted on by all stakeholders; strongly advocates corporate social responsibility (CSR), and takes the view that CSR – if implemented correctly and practised by all companies, not only larger firms – can make a great contribution towards restoring lost confidence, which is necessary for a sustainable economic recovery, and can mitigate the social consequences of the economic crisis; notes that when business assumes a responsibility for society, the environment and employees, a win-win situation is created that serves to broaden the basis of trust necessary for economic success; takes the view that making CSR part of a sustainable business strategy is in the interest of businesses and of society as a whole; points out that many businesses – especially small and medium-sized enterprises (SMEs) – are setting an outstanding example in this field;

3.  Takes the view that business can contribute to the development of a social market economy and to meeting the objectives of the Europe 2020 strategy, providing jobs and paving the way for economic recovery;

4.  Believes that the debate on CSR should be placed in a broader setting which, while ensuring that CSR remains primarily a voluntary policy, also leaves room for dialogue on regulatory measures, wherever appropriate;

5.  Endorses the new definition of CSR put forward by the Commission, which does away with the dichotomy between voluntary and compulsory approaches;

6.  Considers corporate governance to be a key element of corporate social responsibility, especially as regards relations with public authorities and workers and their representative organisations and as regards policy on bonuses, compensation and salaries; believes that in particular in cases where a business is in difficulty, excessive bonuses, compensation and salaries paid to managers are incompatible with socially responsible behaviour;

7.  Believes that a business’s tax policy should be considered part and parcel of CSR and that socially responsible behaviour consequently leaves no room for strategies aimed at evading tax or exploiting tax havens;

8.  Believes that when assessing the social responsibility of a company, it is necessary to take into account the behaviour of companies operating within its supply chain and, where applicable, of its subcontractors;

Strengthening the links between CSR, the general public, competitiveness and innovation

9.  Calls on the Commission and national authorities to promote innovative business models designed to forge closer links between businesses and the social environment in which they operate;

10.  Calls on the Commission to consider the current discussions taking place with regard to the review of the Accounting and Transparency Directives so that the new proposed CSR strategy would complement the revised Directive;

11.  Stresses the importance of support for innovative solutions enabling businesses to address social and environmental challenges such as the introduction of smart transport systems and eco-efficient products which are accessible and designed for everyone;

12.  Encourages the Commission in its efforts to raise CSR's profile and disseminate best practice, and is strongly in favour of introducing a European award scheme for CSR firms and partnerships; in this regard, calls on the Commission to consider, among other actions, whether an European social label could be introduced to this end;

13.  Welcomes the idea of establishing multi-stakeholder CSR platforms, and agrees with the sector-specific approach chosen;

14.  Acknowledges the importance and the potential of CSR Europe’s Enterprise 2020 initiative, which can play a substantial role in strengthening the link between CSR and competitiveness by fostering the dissemination of best practice; calls on the Commission and the Member States to foster greater synergies as regards the aim of pursuing policies and initiatives to promote social innovation and job creation; urges the Commission to support the efforts of the CSR Europe network, seeking first and foremost to strengthen cooperation between business and Member States so as to lay the foundations for national action plans and the dissemination of best practice;

15.  Endorses the Commission’s proposal to carry out periodic surveys of public trust in business and public attitudes towards CSR strategies implemented by businesses; recommends linking the content of these surveys with the revision of the sustainable consumption and production action plan, with a view to identifying barriers to more responsible consumption;

Making CSR policies more transparent and more effective

16.  Urges the Commission to draw up specific measures to combat misleading and false information regarding commitments to corporate social responsibility and relating to the environmental and social impact of products and services, over and above those provided for in the Unfair Commercial Practices Directive, having particular regard to the issues of filing and considering complaints on the basis of an open and clear procedure and initiating investigations; considers not only that ‘greenwashing’ is a form of deception that misleads consumers, public authorities, and investors, but that it also reduces trust in CSR as an effective means of promoting sustainable and inclusive growth;

17.  Agrees that greater account should be taken of social and environmental considerations in public procurement; calls, in this connection, for the lowest price no longer to be used as an award criterion and for greater accountability throughout the subcontracting chain;

18.  Calls on the Commission to take further initiatives to unlock and strengthen the potential of CSR in tackling climate change (by linking it to resource and energy efficiency), e.g. in the processes companies use to purchase raw materials;

19.  Stresses that EU assistance to third-country governments in implementing social and environmental regulations and effective inspection regimes is a necessary complement to advancing the CSR of European business worldwide;

20.  Stresses that Socially Responsible Investment (SRI) is part of the implementation process of CSR in investment decisions; notes that although there is currently no universal definition of SRI, it usually combines investors’ financial objectives with their concerns regarding social, environmental and ethical (SEE) and corporate governance issues;

21.  Acknowledges the importance of businesses divulging information on sustainability such as social and environmental factors, with a view to identifying sustainability risks and increasing investor and consumer trust; points to the substantial progress being made in this respect, and calls on the Commission to support the objective of the International Integrated Reporting Council (IIRC) of making IR the global norm within the next decade;

22.  Stresses that stringent respect for human rights, due diligence and transparency must be maintained in order to ensure CSR along the whole supply chain, measure the sustainability footprint of European business, and combat tax avoidance and illicit money flows;

23.  Stresses that corporate responsibility must not be reduced to a marketing tool, and that the only way to develop CSR to the full is to embed it in a company’s overall business strategy and to implement it and translate it into reality in its day-to-day operations and financial strategy; would welcome a link between good corporate responsibility and good corporate governance; believes the Commission should encourage companies to decide on a CSR strategy at board level; calls on the Commission and the Member States to introduce corporate stewardship codes that reflect the importance of responsibility for all in the company and establish a strong link between its environmental, social and human rights performance and its financial results;

24.  Stresses that it should be easy for investors and consumers to identify firms which have made a commitment to CSR, as this would encourage them in their efforts;

25.  Stresses that Socially Responsible Investment (SRI), as part of the implementation process of CRS in investment decisions, combines investors’ financial and economic objectives with social, environmental, ethical, cultural and educational considerations;

26.  Is closely monitoring the current discussions on the legislative proposal on the transparency of the social and environmental information, provided by companies; advocates the adoption of a legislative proposal allowing for high flexibility of action, in order to take account of CSR's multi-dimensional nature and the diversity of the CSR policies implemented by businesses, matched by a sufficient level of comparability to meet the needs of investors and other stakeholders as well as the need to provide consumers with easy access to information on businesses’ impact on society, including governance aspects and life cycle cost methodology; considers that information on sustainability should also cover, where appropriate, the subcontracting and supply chains and should be based on globally accepted methodologies such as those of the Global Reporting Initiative or the Integrated Reporting Council; calls, in addition, for an exemption or a simplified framework to be applied to SMEs;

27.  Calls for increased, more inclusive and more transparent monitoring of CSR principles in EU trade policy, with clear benchmarks set for measuring improvements so as to encourage confidence in the system;

28.  Encourages the EU as well as the Member States to provide concrete information on and education and training in CSR, so that enterprises can take full advantage of CSR and implement it in their organisational culture;

29.  Encourages media companies to include transparent journalism standards in their CSR policies, including guarantees of source protection and the rights of whistleblowers.

30.  Calls on the Commission to give further consideration to both binding and non-binding measures to facilitate the recognition and promotion of efforts by businesses in connection with transparency and the disclosure of non-financial information;

31.  Is firmly opposed to the introduction of specific parameters, such as EU-wide performance indicators, which could give rise to unnecessary red tape and inefficient operational structures; instead, calls on the Commission to provide companies with and promote the use of internationally accepted methodologies, such as those of the Global Reporting Initiative and the Integrated Reporting Council;

32.  Considers it essential, however, that the Commission should, as quickly as possible, develop the projected common life cycle-based methodology for measuring environmental performance; believes this methodology would be useful both from the point of view of transparency of business information and for the purposes of the assessment which public authorities bring to bear on companies’ environmental performance;

33.  Welcomes the Commission’s intention to launch a ‘Community of Practice’ on CSR and social action on the part of business; believes this must be complementary to a code of good practice for co-regulation and self-regulation, allowing all stakeholders to engage in a common learning process in order to improve and strengthen the efficiency and accountability of multi-stakeholder actions;

34.  Calls for the full and active consultation and involvement of representative organisations, including trade unions, in the development, operation and monitoring of companies’ CSR processes and structures, working with employers in a genuine partnership approach;

35.  Calls on the Commission to ensure that an obligation of systematic reporting on essential information on sustainability does not overburden companies, since any new CSR strategy needs to be welcomed by them; calls on the Commission to allow for a transition period before non-financial reporting on a regular basis comes into force for companies, since this would provide them with the opportunity in the first place properly to implement CSR internally, establishing an accurate and detailed CSR policy as part of their internal management systems;

36.  Supports the Commission’s proposal to require all investment funds and financial institutions to inform every customer (citizens, businesses, public authorities, etc) about any ethical or responsible investment criteria which they apply or any standards and codes to which they adhere;

37.  Endorses the Commission’s directive on minimum standards for victims; calls for the CSR policies of companies in the relevant sectors (such as travel, insurance, accommodation and telecommunications) to include positive and practical strategies and structures to support victims of crime and their families during a crisis, and to set up specific policies for any employee who becomes a victim of crime, whether in the workplace or outside;

38.  Acknowledges the substantial value and potential of self-regulation and co-regulation instruments such as sector-specific codes of practice; welcomes, therefore, the Commission’s desire to improve the instruments currently in place by developing a code of good practice for this area; is opposed, however, to the introduction of a single approach that fails to take account of the specificities of each sector and the specific requirements of businesses;

CSR and SMEs: putting theory into practice

39.  Draws attention to the special features of SMEs, which mainly operate at local and regional level inside specific sectors; considers it essential, therefore, for Union CSR policies, including national CSR action plans, to take proper account of the specific requirements of SMEs, to be in keeping with the ‘think small first’ principle, and to recognise the informal, intuitive SME approach to CSR;

40.  Points to the importance of involving small and medium-sized enterprises in CSR and recognising their achievements in this area;

41.  Acknowledges that many SMEs in Europe already undertake CSR policies, such as local employment, community engagement, applying good governance policies with their supply chain, etc; points out, however, that most of these SMEs do not know that they are actually implementing sustainability, CSR and good corporate governance practices; calls on the Commission, therefore, to first examine SMEs’ current practices before considering specific CSR strategies for SMEs;

42.  Voices its opposition to all measures that could result in additional administrative or financial constraints for SMEs, and its support for measures enabling SMEs to take joint action;

43.  Calls on the Member States and regional authorities to make smart use of cohesion funding with a view to supporting CSR promotional activities carried out by SME intermediary organisations, taking their cue from, for example, the main German programme cofinanced by the European Social Fund;

44.  Calls on the Commission, in collaboration with Member States, SME intermediary organisations and other stakeholders, to devise strategies and measures to help SMEs pool best CSR practice, for instance by means of a database for collection of information on CSR policies implemented by SMEs, with details of projects carried out in the various Member States;

45.  Recommends that CSR guides and handbooks should be drawn up for SMEs; stresses, in this connection, the urgent need for more academic research into ways of boosting acceptance of CSR among SMEs, as also into the economic, social and environmental impact of CSR policies at local and regional level;

46.  Takes the view that, in order to have a real impact on poverty reduction, the CSR agenda should also focus on SMEs, since their cumulative social and environmental impact is significant;

47.  Calls on the Commission and the Member States to devise development and support strategies aimed at disseminating CSR among SMEs; recommends, in particular, that specific measures should be drawn up for small and micro-enterprises;

Compliance issues and relations with third countries

48.  Stresses that, following the entry into force of the Lisbon Treaty, Parliament is to be fully informed on how the findings of Sustainability Impact Assessments (SIA) of agreements are incorporated into negotiations prior to their conclusion, and to be told which chapters of those agreements have been changed in order to avoid any negative impacts identified in the SIA;

49.  Stresses that future bilateral investment treaties signed by the EU must guarantee that a fair balance is struck between the need to protect investors and the need to allow for state intervention, especially with regard to social, health and environmental standards;

50.  Calls for the idea of sponsorship to be promoted among employers;

51.  Recalls that both court litigation and alternatives to it are already available for settling commercial disputes and/or seeking compensation for negative externalities of irresponsible or illegal business activity; calls, in this regard, on the Commission to do more to enhance awareness of both paths amongst the business community and the public at large; recalls that the International Chamber of Commerce (ICC) offers dispute resolution services for individuals, businesses, states, state entities and international organisations seeking alternatives to court litigation that can contribute to improving effective access to justice for victims in the event of breaches of responsible business practices causing economic, social and environmental damage in the EU and/or abroad;

52.  Stresses that awareness-raising at corporate level concerning the importance of CSR and the consequences of non-compliance, as a task for the Commission, must be accompanied by adequate awareness and capacity building at the level of host country governments in order to ensure effective implementation of CSR rights and access to justice;

53.  Considers that the Commission and the Member States should encourage EU companies to take initiatives aimed at promoting CSR and to exchange good practices with their partners in other countries;

Conclusions

54.  Emphasises the need for any regulatory measures to be drawn up within a robust legal framework and in line with international standards, in order to avoid disparate national interpretations and any risk of competitive advantages or disadvantages emerging at regional, national or macroregional level;

55.  Encourages the Commission to continue its efforts to promote CSR in relations with other countries and regions around the world; calls, in this connection, for greater efforts to make reciprocity a central tenet of trade relations;

56.  Reaffirms the belief that the development of CSR should be driven primarily through the multi-stakeholder approach assigning a leading role to businesses, which must be able to develop an approach tailored to their own specific situation; stresses the need for targeted measures and approaches for the development of CSR among SMEs;

57.  Notes that the current Commission strategy for CSR covers the period 2011-2014; calls on the Commission to ensure that an ambitious strategy is adopted in good time for the period after 2014;

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58.  Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

(1) OJ C 86, 10.4.2002, p. 3. (2) OJ C 39, 18.2.2003, p. 3. (3) OJ C 187 E, 7.8.2003, p. 180. (4) OJ C 67 E, 17.3.2004, p. 73. (5) OJ C 301 E, 13.12.2007, p. 45. (6) OJ C 229, 31.7.2012, p. 77.