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Under the banner of Corporate Social Responsibility (CSR) the Lisbon summit of 2000 called on companies to show more involvement with lifelong learning, sustainable development etc., to further its aims of modernisation. In the UK the idea was eagerly embraced by the Labour government. Now, with doubts on both sides of industry about its benefits, the EU wants to press ahead. We examine the case for CSR and the views of its critics.
'THE ETUC BELIEVES THAT Corporate Social Responsibility should complement, but in no way replace, legislation on social and environmental rights or standards set by collective bargaining'. 'There are no examples of major corporations that have changed their business models or their business strategies to improve their social and environmental impacts'. Two quotes that illustrate the doubts that are setting in about the progress of CSR. The first is from John Monks, head of the European Trade Union Confederation and the second, on British business, from Peter Frankental of Amnesty International. CSR has been thought of as a 'good thing' for at least five years. In March 2000 the British government created the world's first minister for corporate social responsibility and two years later the EU Commission set up its CSR Multi-Stakeholder Forum.
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One of the many 'round table' sessions held as part of the Multi-Stakeholder forum |
The Forum's final report, published in summer 2004 gave an extended definition of CSR which included some generally agreed principles. Firstly, it is voluntary, this view is certainly supported by the UK government which argues that it is in companies' business interest to act responsibly. Secondly it must be over and above the normal legal requirements that firms are charged with. 'No company failing to comply with agreements or legislation can be defined as socially responsible', in the words of John Monks. Thirdly CSR must be part of the core business activities of a company, not an add-on like donation to charity. Finally a CSR corporation must engage in dialogue with its employees as they are one of the most important stakeholders in the project.
More than 50 example companies were present at the forum's meetings over a period of 20 months, with both employees and management taking part. What then are the factors causing pessimism about CSR's likely impact ? While there is a business case for companies to act responsibly, it is often not very strong. For instance the argument that young graduates will be more attracted to work for CSR employers may be true but less responsible ones still seem to find enough. Critics argue that legislation is often needed to make corporations do things which governments are currently expecting them to achieve voluntarily.
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