Corporate social responsibility (CSR)

If corporate responsibility for health and environmental sustainability is to spread through European MNEs, it must be made attractive to businesses by recognizing best practice and championing leading companies so that shareholders and customers can distinguish between well-performing companies and others. It is also important to engage the private sector, shareholder and consumer groups in formulating standards of good practice and methods of audit so that they are owned by the stakeholders. Processes such as these have begun to take shape at the European level and within member states. In 2001, the European Commission's green paper on this topic defined corporate social responsibility (CSR) as "a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis". The paper went on to stress the principle of voluntarism in corporate social responsibility, but argued that it was important for long-term shareholder value and sustainability.

 

Some elements of corporate responsibility are underpinned by legislation and regulations, for example, those concerning obligations to pay taxes, account for financial performance, and protect the health and safety of employees and consumers. Other aspects of corporate responsibility, referred to as corporate social responsibility, may be seen as voluntary actions that exceed minimum standards of behaviour and may be monitored against standards of good practice. These depend on the value that company boards, employees, shareholders, customers and other stakeholders ascribe to good practice, and the extent to which they are aware of these actions and the business's impact.

The Tripartite Declaration on Multinational Enterprises and Social Policy reiterated the responsibility of multinational enterprises (MNEs) for health and other social and economic impacts on employees, communities and future generations, as well as customers and shareholders. The Bangkok Charter for Health Promotion in a Globalized World clarified these responsibilities in relation to global health.

If corporate responsibility for health and environmental sustainability is to spread through European MNEs, it must be made attractive to businesses by recognizing best practice and championing leading companies so that shareholders and customers can distinguish between well-performing companies and others. It is also important to engage the private sector, shareholder and consumer groups in formulating standards of good practice and methods of audit so that they are owned by the stakeholders. Processes such as these have begun to take shape at the European level and within member states.

Already, in 2004, the EU set up a multi-stakeholder forum on CSR, the European Alliance for Corporate Social Responsibility, whose findings informed the development of a 2006 Commission communication on CSR. And as more and more research provides evidence for a business case for CSR, businesses are standardizing their approach on their own initiative. In growing numbers, European businesses are becoming voluntary partners of this alliance; however, there remains a European debate on CSR, which focuses on the degree to which government, at a European and national level, should lead or legislate on this issue.

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