# EUR-Lex - 52011DC0685 - EN

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# 52011DC0685

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN DATA PROTECTION SUPERVISOR "Responsible Businesses" package /* COM/2011/0685 final */**

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The Treaty of Lisbon provides that the
European Union and its internal market are based on a "highly competitive
social market economy". In order to preserve and expand on this model in a
difficult economic and financial environment, the EU has adopted the Europe
2020 Strategy with a view to creating the conditions for more intelligent,
sustainable and inclusive growth. A number of ambitious political initiatives
aim to anchor these objectives in real action:

–
In April 2011, in order to relaunch the internal
market, the "Single Market Act"[1] (SMA)
aimed to highlight the importance of the human element and of confidence as
motors of the European economy and integration by reinforcing social
considerations in the implementation of policies on business support. This
involves increasing corporate responsibility vis-à-vis the social environment,
and highlights the special role to be played by socially responsible
businesses.

–
Alongside this, the "Innovation Union"
flagship initiative promotes the concept of social innovation, which for
associations and social entrepreneurs means using their creativity for the
benefit of vulnerable social groups and meeting urgent social needs which have
not been satisfied by the market or by the public authorities.

–
At the end of 2010, the "European Platform
against Poverty and Social Exclusion" proposed an overall strategy to
coordinate national and European policies in order to make Europe more
inclusive, and "harness the potential of the social economy" in the
fight against poverty and social exclusion.

–
In its Communication entitled "An
integrated industrial policy for the globalisation era",
the Commission notes that a "new approach is needed to the balance between
short-term profit maximisation and sustainable value creation in the longer
run"[2].

Growth
and competitiveness are at stake, and are possible only through the renewed
confidence of EU citizens. We must draw on Europe's propensity for innovation
and creativity, while remaining true to our values: responsibility and transparency,
but also justice, social inclusion and solidarity. This new inclusive and
sustainable growth, which focuses on employment for everyone, therefore
involves in particular the reinvigoration of the real economy driven by
businesses which create value and are governed in a transparent and responsible
manner.

In relation to the above, the
"Responsible Businesses" package proposes a range of measures and
initiatives to consolidate and expand our economic and social model, which is
the cornerstone of the communal lives of 500 million Europeans. Through this
initiative, the Commission wishes to encourage and help the business world to
contribute to our common effort to reinstate responsibility, confidence and
social inclusion at the heart of a more sustainable economic model on our
continent, because the prerequisite for sustainable economic performance is
social cohesion. In this context, the Commission fully supports business
measures and innovative initiatives which increase the employment rate and
improve social inclusion while strengthening the global competitiveness of the
European economy.

In doing so, the Commission has been
listening to the opinions expressed by stakeholders during consultations and
public debates held in the European Union since 2010, and notes the keen
interest which such issues attract.

The "Responsible businesses" package comprises:

– this
introductory Communication;

–
the proposal to revise the Accounting Directives[3];

–
the proposal to revise the Transparency
Directive[4];

–
the Communication on Corporate Social
Responsibility (CSR)[5];

–
the Communication "Social Business
Initiative"[6].

This package sets out two objectives:

·
to create an economic environment which is more
conducive to creation and innovation, and which boosts confidence in the business
world by simplifying the administrative burdens and obstacles which weigh in
particular on small and medium-sized enterprises (SMEs), thereby allowing them
to develop and achieve their growth potential. In particular, this involves
fine-tuning the rules on the transparency of accounts and business activities.
This could reduce the administrative costs by 2.3 billion euros;

·
to articulate the Commission's vision and
projects for responsible, social entrepreneurship in society. In particular,
this involves rethinking the role of businesses in society and the environment
of entrepreneurs who come up with projects which are innovative and
economically viable and have a strong social impact.

1. Creating a more sustainable economic environment, in
particular for SMEs

The purpose of the two legislative
initiatives in this package is to strengthen confidence in the functioning of
European businesses.

The Accounting Directives deal with
the annual and consolidated accounts of corporate enterprises in Europe. They reduce the administrative burden weighing on SMEs by creating a simplified
system for small companies. They provide greater clarity and comparability
between the annual accounts for companies with a strong cross-border dimension
and which affect a significant number of third parties. Lastly, they protect
users by preserving the information they need.

Through the modernisation of the Transparency
Directive, the Commission wishes to foster access to the regulated markets
for small and medium-sized listed companies. For instance, abolition of the
requirement to publish quarterly information should not only reduce the listing
costs for small and medium-sized businesses but also encourage long- and
medium-term investment and thereby promote socially responsible investment.

These initiatives concerning the accounting
standards and transparency are also intended to improve transparency in
resource-rich countries, including within the European Union, by creating a
sense of responsibility among extraction and forestry businesses. The
extraction and forestry companies listed on the European markets and the major
non-listed companies will publish a report on payments to governments,
detailing them by country and, where payments are for one specific project, by
project, with a materiality threshold. These reports will give the citizens of
resource-rich countries significantly more information on exactly what European
companies pay to host governments in exchange for the right to extract natural
resources from their countries.

It should be noted that these proposals
will be supplemented in 2012 by a legislative proposal aiming to encourage the
disclosure of non-financial information.

2. Rethinking the role of responsible,
social entrepreneurship in society

The two Communications are complementary
and result from a joint Commission initiative and a major preparatory
consultation and discussion process.

The Communication on Corporate Social
Responsibility (CSR) presents a strategy to allow all businesses to
contribute more towards achieving the objective of the Europe 2020 Strategy by
tapping their potential to create shareholder and societal value. It proposes
an updated definition of CSR which is in line with internationally recognised
principles and guidelines. The text looks at how to raise awareness of and
better reward the responsible practices of businesses in public policies
(investments, public procurement, transparency of non-financial information)
and of private stakeholders (consumers and investors). It ensures follow-up to
the application of the internationally recognised principles and guidelines,
and identifies possible ways to implement the UN's Guiding Principles on
Businesses and Human Rights.  It calls on the Member States to develop real CSR
strategies, launches a debate on social issues (demographic change, health,
welfare at work, local development), and reiterates the importance of CSR in
the world of education.

The Social Business Initiative deals
more specifically with a type of business whose main mission in its
profit-making economic activity is to serve the general interest in social,
societal and environmental terms. Such businesses, which account for a
significant and growing proportion of the European economy and also help to
strengthen the social economy as such, already exist in all the Member States.
They are often pioneers of social innovation and change, and use various
organisational models – e.g. joint stock companies, cooperatives, mutual
benefit companies, associations or foundations – and all reinvest their profits
(or at least a large proportion of them) in the achievement of their social
goals. Despite their involvement in citizens' and Community initiatives through
which they generate new interfaces and links between stakeholders, they nevertheless
lack visibility and recognition from the general public, politicians and
investors. This Communication therefore pursues the objective of developing a
favourable environment for social businesses to encourage the development of
initiatives within the internal market which are innovative and economically
viable and have a strong social impact. The Communication examines whether
sufficient account is taken of the operational methods, specific features and
objectives of this type of business in all European policy fields. The text
also provides for measures to facilitate access to (private and public) funding
for social businesses in order to improve their visibility and recognition, and
to create a more favourable regulatory environment, from both the corporate law
viewpoint and from the perspective of public procurement or State aid.

[1]               "SMA
– Twelve levers to boost growth and strengthen confidence", COM(2011) 206
final of 13 April 2011

[2]               COM(2010)614
final/2 of 17 November 2010

[3]               COM(2001)
684 final

[4]               COM(2001) 683 final

[5]               COM(2011)
681 final

[6]               COM(2011)
682 final