Opinion of the Committee of the Regions on the "Green Paper on Promoting a European Framework for Corporate Social Responsibility"
Date: 2002-03-14
Institutions: European Committee of the Regions
Subjects: EC recommendation, EU publication, social role, type of business

12.8.2002

EN

Official Journal of the European Communities

C 192/1

II

(Preparatory Acts)

COMMITTEE OF THE REGIONS

Opinion of the Committee of the Regions on the ‘Green Paper on Promoting a European
Framework for Corporate Social Responsibility’

(2002/C 192/01)

THE COMMITTEE OF THE REGIONS,

having regard to the Green Paper presented by the Commission on promoting a European framework for
Corporate Social Responsibility (COM(2001) 366 final);

having regard to the decision taken by the Commission on 25 July 2001, under the first paragraph of
Article 265 of the Treaty establishing the European Community, to consult the Committee of the Regions
on the matter;

having regard to its Bureau’s decision of 13 June, 2000 to instruct Commission 5 for Social Policy, Public
Health, Consumer Protection, Research and Tourism to prepare the Committee’s work on this subject;

having regard to the conclusions of the Lisbon and Nice European Councils which emphasised the role
of corporate social responsibility in addressing employment, adapting working conditions in the new
economy and how it can contribute to the goal of building a dynamic, competitive and cohesive
knowledge-based economy;

having regard to the draft opinion (CdR 345/2001 rev.) adopted by Commission 5 on 19 November
2001 [rapporteurs: Ms Hanniffy (IRL/EPP, Member of Offaly County Council and Member of Midlands
Regional Authority) and Ms Buron (1) (F/PES, Member of Châteaubriant Borough Council)];

whereas the concept of corporate social responsibility has been driven, to date, by large companies there
remains great potential for all enterprises, including SMEs, and also the public sector, including local and
regional authorities, to develop more socially responsible practices;

whereas being socially responsible means more than just fulfilling legal obligations,

adopted unanimously the following opinion at its 43rd plenary session of 13 and 14 March 2002
(meeting of 14 March).

(1) Member of the CoR until 25 January 2002.

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1. The Committee of the Regions’ general comments

White Paper would have more specific regard to the role of
public authorities, including local and regional authorities, in
the adoption and implementation of CSR principles.

1.1.
The Committee of the Regions welcomes the Green
Paper as an important step towards a socially responsible
inclusive and competitive Europe and in launching a debate
on how the European Union can promote corporate social
responsibility (CSR), how to encourage its acceptance and how
to make the most of existing experience.

1.2.
The Committee acknowledge that this Green Paper
brings together the results of much thought and discussion on
encouraging companies to contribute to a better society and
that it also comes at a time when governance structures are
being challenged to cope with the global economy giving rise
to the need for fresh thinking on the relationship between
business and society.

The Committee accepts that the principle of social
1.3.
partnership between business, governments, NGOs, individ-
uals and civil society underlies the principle of corporate
social responsibility and acknowledges that local and regional
authorities can play a significant role in contributing to the
development of CSR practices.

1.4.
The Committee emphasises that a clear distinction
must be drawn between business acting out of responsibility
as opposed to philanthropy/charity/sponsorship and that the
former philosophy underpins this initiative.

1.5.
The Committee stresses that this proposal is based
exclusively on the voluntary nature of CSR, while expressing
its agreement with the Commission’s statement that CSR
should ‘not be seen as a substitute to regulation or legislation
concerning social rights or environmental standards, including
the development of new appropriate legislation’.

2. The Committee of the Regions’ recommendations

2.1. The role of the European Union and the need for a framework

2.1.1.
The Committee acknowledges that while CSR is
based on voluntary participation by business there is a role for
the European Union in providing a framework for raising
awareness, promoting CSR principles, assisting business and
public authorities to incorporate CSR practices and high-
lighting best practice.

2.1.2.
The Union could also promote better research on the
impacts of the CSR practices on business performance and
also the impact of CSR on particular target groups and social
sectors.

The Committee

2.1.3.
the Com-
mission carry out a study in order to take on board types of
conduct and practices consistent with CSR within the European
budget.

recommends

that

2.1.4.
The Committee recommends that the indicators to
be defined by the Community’s Business Impact Task Force, if
deemed suitable, should be adapted and implemented without
delay.

2.2. The promotion of corporate social responsibility

The CoR considers that if CSR is treated as an
2.2.1.
investment rather than a cost, then business needs to be
convinced and made aware of the business sense of developing
a CSR approach. To enable this the Committee believes that a
survey of consumer attitudes needs to be undertaken at an EU
level to determine the level of consumer support for CSR
products and services and assess the commercial benefit for
business in investing in CSR.

The Committee would consider that there is potential
1.6.
for better integration of CSR principles into other existing EU
policies and programmes and that some of these programmes
could be used for better research, promotion and bench-
marking of CSR policies.

2.2.2.
The CoR further recommends a survey of businesses
using CSR be carried out at the earliest opportunity to assess
the impact of corporate social responsibility on business
performance.

The Committee recognises that the issues set out in the
1.7.
Green Paper apply to both public and private sector bodies
and would recommend that the proposed memorandum on

2.2.3.
The CoR considers that the Commission should
develop and provide a ‘tool box’ for business and public
authorities who are convinced of the need and benefit of CSR
and who want to implement CSR principles using the best
available practice.

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2.2.4.
The CoR believes that it must be determined whether
the introduction of a CSR label for goods and services is really
necessary and useful. Although the existence of such a label
would help develop consumer awareness, the Committee is
nevertheless equally aware of the potential for abuse of such
labels. It therefore considers, in the event that it is decided to
create the label, either publicly or privately, that there would
be potential for monitoring of the standards of these labels,
developing minimum objective criteria and policing their
application in order to maintain credibility of the CSR process
and protect the consumer.

2.2.5.
The voice of those at the margins of society needs to
be heard in the ongoing development of CSR. A small budget
should be allocated to build capacity in such groupings to
facilitate the development of a partnership approach.

The CoR recommends that CSR and the linkages between
business and marginalised should be developed by slightly
re-orienting the focus on existing funding streams where
necessary.

2.3.5.
The Committee emphasises that development in any
one of the environmental, social, culture and economic areas
does not happen in isolation. All are interlinked and progress
in any one generates positive change in some or all of the
others.

2.3.6.
The Committee recommends that specific mention
be made of cultural development in the Green Paper. The
relationship between business and cultural development is
already established and has potential to create social change
and increased economic activity.

2.3.7.
The CoR recognises the linkage between CSR and
Social Capital and requests that this should be referred to.
‘Social capital refers to features of social organisation such as
networks, norms, and social trust that facilitate co-ordination
and co-operation for mutual benefit’
(Putnam, 1995).
Key concepts are:

2.3. Making the best of existing experiences

— participation in democratic structures;

— participation in social networks;

The Committee believes that best use must be made
2.3.1.
of existing experiences and sees the identification of good
practices as a fundamental tool in achieving voluntary ‘buy-in’
by the business sector.

2.3.2.
The Committee also recommends that case studies
from countries outside the European Union be included in this
process as this has the potential to open up new vistas on how
to carry out business in parallel with the development of
society, thus leading to a more competitive Europe.

2.3.3.
The Committee considers that CSR needs to be
integrated into formal and informal education structures and
a concerted effort should be made to include it on the
syllabi of third level courses, in particular on business and
administration courses.

The Committee would emphasise the responsibility
2.3.4.
of business to proactively engage with employees in relation
to their on-going training and development. The rewards for
business from increased employee ownership, the increase in
workforce skills and quicker adaptation to changing con-
ditions, resulting from the adaptation of a life-long learning
strategy, need to be demonstrated.

— reduction of inequalities in society;

— building of trust and mutual cooperation.

The development of social capital
leads to enhanced net-
working, increased trust and participation and ultimately a
more socially cohesive society.

2.3.8.
The Committee emphasises the role to be played by
ICT in CSR, particularly its efficiency in speeding up infor-
mation flows on good practice and in enabling business to
communicate with employees and communities in an open
and transparent manner.

The Committee recommends that the positive effects
2.3.9.
of a proactive approach to health and safety by business
should be emphasised. Absenteeism due to illness and injury
is a drain on companies’ resources and a threat to competi-
tiveness. Preventative strategies aimed at eliminating the causes
of ill-health are an integral component of CSR.

2.3.10. Much work is now carried out by sub-contract.
Businesses should encourage sub-contractors to adapt a proac-
tive/preventative approach as outlined above.

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2.3.11.
HRM policies of business need to reflect on CSR
and the training/development needs arising. Businesses should
be encouraged to integrate CSR into employee training
programmes.

— co-ordination of training/life-long learning;

— leading ICT development.

The Committee highlights the key role to be played
2.3.12.
by SMEs. While accepting that large business may be the first
to expand CSR activities the Committee feels that SMEs are
uniquely placed to interact with their local communities to
develop an enterprise culture. The linkage of the workforce
to their immediate environment is an important factor in
facilitating proactive dialogue between SMEs and civil society.
SMEs will need structured support from existing funding
streams as they are less likely to adopt CSR practices in the
short term.

2.3.13.
The Committee suggests that the use of mentoring
as an example of CSR needs to be emphasised. A proactive
interaction with developing enterprises leads to the creation of
a more innovative and enterpreneurial society which in turn
leads to increased profitability for existing business.

2.4. The role of local and regional government in promoting CSR

The CoR emphasises that local and regional govern-
2.4.1.
ment already does and can play a significant role in many of
the initiatives to promote CSR with particular emphasis on:

— development of local social partnership linking business,

the third sector and the marginalised;

— PPP development with an emphasis on impact on local

community;

2.4.2.
The Committee stresses the role of local and regional
authorities in socio-economic planning. They have a special
responsibility in the setting-up of permanent structures for the
exchange of information, dialogue and project preparation,
bringing together businesses (represented by the social part-
ners) and other community players, especially in the fields of
vocational training, employment, the fight against exclusion,
and environment protection. Representatives of the business
world should be called on to participate in planning initiatives
that involve their region, such as the drawing-up of local
Agenda 21.

The Structural Funds, and the ESF in particular, could be used
to support
these participatory structures and help them
to develop innovative experiences. The Urban and Equal
Community initiatives could also take account of local schemes
promoting CSR.

Special attention should be paid to the impact of company
restructuring on the local or regional community. Local and
regional authorities should help to set up ‘strategic monitoring
groups’ to evaluate the impact of likely changes in business
activity and create the conditions needed to accompany them
in a manner that is acceptable to all stakeholders.

More attention should also be given to the security questions
related to business activity and situation.

— local awards/benchmarking;

— support for SMEs;

The role of local and regional government in econ-
2.4.3.
omic and social planning should be highlighted with particular
emphasis on creating dialogue between business and the
community, thus minimising future conflict over proposed
business development.

— developing local cultural initiatives linked to business;

— definition of which local marginalised groups need to be

targeted by business;

— raising awareness of the linkage between community

development and economic development;

2.4.4.
Local and regional government continues to outsour-
ce many of its activities to external contractors, in addition to
owning and running companies and — as has been pointed
out more than once — represents one of the largest sources of
employment at local level. Moreover, local authorities carry
out decentralised cooperation initiatives aimed at developing
local communities in third countries. The Committee would
welcome EU support for pilot-projects for the development of

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indicators to assist the implementation of ethical budgets by
local and regional authorities. The CoR accepts that local and
regional authorities can give a lead in relation to promoting
good CSR practices by ensuring that their purchasing and

procurement strategies are CSR compliant. Also to encourage
this process the Committee would encourage local and regional
authorities to establish awards schemes for good examples of
CSR within their areas, to promote good practice.

Brussels, 14 March 2002.

The President

of the Committee of the Regions

Albert BORE

Opinion of the Committee of the Regions on the ‘Draft Joint Report on Social Inclusion’

(2002/C 192/02)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission Draft Joint Report on Social Inclusion
(COM(2001) 565 final);

having regard to the decision taken by the European Commission on 12 October 2001 to consult it
under the first paragraph of Article 265 of the Treaty establishing the European Community;

having regard to its Bureau decision of 12 June 2001 to instruct Commission 5 for Social Policy, Public
Health, Consumer Protection, Research and Tourism to prepare the Committee’s work on this subject;

having regard to Commission Staff Working Document e-Inclusion — The Information Society’s potential
for social inclusion in Europe (SEC(2001) 1428);

having regard to the Commission’s Proposal for a Decision of the European Parliament and of the Council
establishing a programme of Community action to encourage cooperation between Member States to
combat social exclusion (COM(2000) 368 final);

having regard to the Communication from the Commission Building an Inclusive Europe (COM(2000) 79
final);

having regard to its Opinion on the Communication from the Commission Building an Inclusive Europe
(CdR 84/2000 fin) (1);

having regard to its Opinion on the Proposal for a Decision of the European Parliament and of the
Council establishing a programme of Community action to encourage cooperation between Member
States to combat social exclusion (CdR 302/2000 fin) (2);

having regard to the Draft Opinion (CdR 393/2001 rev.) adopted by Commission 5 on 19 November
2001 [rapporteur: Baroness Hanham (UK/EPP)];

whereas the Communication is addressed to the Extraordinary European Council in Laeken,

adopted unanimously the following opinion at its 43rd plenary session of 13 and 14 March 2002
(meeting of 13 March).

(1) OJ C 317, 6.11.2000, p. 47.
(2) OJ C 144, 16.5.2001, p. 52.