Opinion of the European Economic and Social Committee on Information and measurement instruments for corporate social responsibility (CSR) in a globalised economy
Date: 2005-06-08
Institutions: European Economic and Social Committee
Subjects: corporate governance, corporate social responsibility, globalisation, international standard, multinational enterprise, social indicator, social labelling

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Opinion of the European Economic and Social Committee on Information and measurement
instruments for corporate social responsibility (CSR) in a globalised economy

(2005/C 286/04)

On 15 September 2004, the European Economic and Social Committee, acting in accordance with Rule
29(2) of its Rules of Procedure, decided to draw up an opinion on: Information and measurement instru-
ments for corporate social responsibility (CSR) in a globalised economy (Own-initiative opinion).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 24 May 2005. The rapporteur was Ms Pichenot.

At its 418th plenary session, held on 8 and 9 June (meeting of 8 June 2005), the European Economic and
Social Committee adopted the following opinion by 135 votes to 2 with 18 abstentions:

1. Introduction

1.1
In July 2002, The European Commission adopted new
guidelines for the promotion of corporate social responsibility
(CSR), and, in so doing, brought enterprises into its sustainable
development strategy. CSR represents a form of implementa-
tion at micro-economic level of the macro-economic concept
of sustainable development. In concrete terms the Commission
defines corporate social responsibility as ‘a concept whereby
companies integrate social and environmental concerns in their
business operations and in their interaction with their stake-
holders on a voluntary basis’. Once it has completed a variety
of work in this field,
the Commission will present a new
communication entitled ‘Strategy for the promotion and develop-
ment of CSR in the European Union’.

1.2
Directive 2003/51/EC of the European Parliament and
the Council, dated 18 June 2003 (1) amends the 4th Directive of
1978 on annual accounts and the 7th Directive of 1983 on
consolidated accounts by introducing the following paragraph:
‘To the extent necessary for an understanding of the company's
development, performance or position,
shall
include both financial and, where appropriate, non-financial
key performance indicators relevant to the particular business,
including information relating to environmental and employee
matters.’

the analysis

Good governance of enterprises, which complies with
1.3
the principles set out by the OECD on this matter, and socially
responsible investment are assuming greater importance in the
world of business. Socially responsible investment means mana-
ging a portfolio of stocks and shares not just with an eye to
their financial yield but also taking account of social and envir-
onmental criteria.

The European Economic and Social Committee attaches
1.4
considerable importance to CSR which it wishes to see become
one of the driving forces in a global sustainable development
strategy.
its opinion on this
subject (2), the EESC stated that ‘corporate social responsibility

In the final observation of

(1) cf. EESC opinion of 22 and 23 January 2003 on the Proposal for a
Directive amending the Directives on the annual and consolidated
accounts of certain types of companies and insurance undertakings
(rapporteur: Mr Ravoet) (OJ C85 of 8.4.2003) and the Commission
Recommendation of 30 May 2001 on the recognition, measurement
and disclosure of environmental issues in the annual accounts and
annual reports of companies (Recommendation 2001/453/EC).
(2) EESC opinion on corporate social responsibility (Rapporteur: Ms

Hornung-Draus) – OJ No. C 125 of 27.5.2002.

is a key theme for the EESC, which will keep a close watch and
actively monitor its further development’. In its opinion, the
EESC also took the view that a socially responsible approach
had to be based on a real and proactive implementation of
existing standards (legislation and collective agreements) and to
be backed up by voluntary commitments going beyond those
standards. The EESC also envisaged the establishment of a CSR
geared to the specific context of the EU.

1.5
Debates are now being held in all EU Member States on
the subject of CSR, even though laws and practices differ very
considerably from state to state. The drive to increase aware-
ness of CSR in the new Member States must be continued. This
situation justifies the drawing-up of the present own-initiative
opinion to coincide with the publication of a new Communica-
tion following on from the Green Paper and the work of the
European Multi-Stakeholder
Social
Responsibility (CSR EMS Forum).

Forum on Corporate

together,

representing the other

Between October 2002 and June 2004, the CSR EMS
1.6
for an initial civil and social (3)
Forum brought
dialogue, representatives of about 20 organisations representing
employers, networks of enterprises, employees and civil society
bodies
stakeholders. The working
method, based, among other aims, on seeking to achieve
consensus in order to promote transparency and convergence
between the instruments employed, was designed to reach a
common diagnosis of drivers and obstacles in respect of CSR
if possible, put forward joint recommendations on the
and,
way forward. In addition to carrying out an appraisal of the
factors which impede the promotion of CSR, on the one hand,
and those which promote it, on the other, the CSR EMS Forum
clearly pinpointed the incentives which should be introduced in
order to stimulate awareness amongst stakeholders and to train
them. The Forum further recommended that the assessment of
CSR be based on the major international texts already endorsed
by all the Member States.

(3) It should be pointed out that the word ‘social’ does not have the
same connotation in French as it does in English. This has led
French speakers to make a distinction between ‘social’ and ‘sociétal’.
The term ‘social’, which in French implies ‘industrial relations’, is
used to designate responsibility vis-à-vis
stakeholders
(‘responsabilité sociale’). The term ‘sociétale’, which in French
‘the
implies ‘the community within which an enterprise operates’,
labour market area’ and ‘the catchment area’, is used to designate
responsibility vis-à-vis external stakeholders (‘responsabilité socié-
tale’).

internal

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1.7
Article I(3) of the Draft Constitutional Treaty stipulates
that: ‘the Union shall work for the sustainable development of
Europe based on … a social market economy, highly competi-
tive and aiming at full employment and social progress, …’.
CSR is one of the instruments designed to maintain balance
between the three pillars of the Lisbon Strategy: the economy
and growth; employment and the European social model; and
the environment. CSR thus provides a means of strengthening
social cohesion and making further progress towards the crea-
tion of a knowledge-based society. This will bolster
the
economic efficiency of the EU and make EU enterprises more
competitive (4).

1.8
The increase in international trade has been brought
about by enterprises of all sizes, even though a considerable
percentage of this increase can be attributed to multinationals.
Flows of goods, services and capital between states can take
place within one and the same group of enterprises. We are
indeed witnessing a globalisation of the economy, not just an
internationalisation of trade. The growing role played by enter-
prises in this respect means that they have to assume an ever
increasing amount of social responsibility extending beyond
state frontiers.

Against this background,

1.9
it is no longer sufficient to
think solely in terms of the internal market of the EU. In the
case of a large number of enterprises, the appropriate reference
level has become the global market, in which various practices
are being developed which have a bearing, either implicitly or
explicitly, on various concepts of CSR. Even though they claim
to be universal, each of these concepts represents the expres-
sion of a certain view of ethics, society, labour market aspects,
broader social aspects and the environment.

2. From experimentation to maturity: moving towards

greater transparency

2.1 International conventions, standards and principles (5)

There is a recognition, at worldwide level, that human
2.1.1
rights, the dignity of workers and the future of the planet
represent the ethical basis of economic activity. International
and European standards have been set
these
values.

in respect of

a benchmark at

The international conventions, standards and princi-
2.1.2
level
ples which provide
comprise: the ILO Declaration on international enterprises; the
ILO Declaration on fundamental rights;
the guidelines for
multinationals set out by the OECD; and the UN's Universal
Declaration of Human Rights.

international

(4) The important and complex issue of the link between competitive-

ness and CSR will not be analysed in this opinion.

(5) For a more exhaustive list, see the conclusions of the EMS Forum.

2.1.3
To this list of basic texts should be added the UN
guidelines on consumer protection and the safety and quality
standards for food products set out in the Codex Alimentarius.
With regard to environmental provisions and good governance,
reference should also be made to the conventions listed in
connection with the new GSP+ measures (6).

2.1.4
The international community has committed itself to
achieving the Millennium Goals by 2015. Under the Action
Plan adopted at Johannesburg, the CSR is listed as one of the
tools for achieving a more equitable and more inclusive globali-
sation. All the different forms of enterprises and all the bodies
which finance them are thus called upon, as a matter of
urgency, to make their contribution towards the sustainable
development of the planet.

2.1.5
In its report entitled ‘A fair globalisation: Creating oppor-
tunities for all’ (7), the drafting group of the World Commission
on the Social Dimension of Globalisation stressed that, if volun-
tary initiatives were to be credible, they had to be backed up by
a concern for transparency and a readiness to be accountable,
which presupposed the existence of effective systems for evalu-
ating results, on the one hand, and the provision of public
information and inspection mechanisms, on the other hand.

The EESC encourages all EU Member States to ratify
2.1.6
all the ILO Conventions which concern them and to incorpo-
rate them into national law.

(6) Conventions related to environment and governance principles:
Montreal Protocol on Substances that deplete the Ozone Layer
Basel Convention on the Control of Transboundary Movements of
Hazardous Wastes and Their Disposal
Stockholm Convention on persistent Organic Pollutants
Convention on International Trade in Endangered Species
Convention on Biological Diversity
Cartagena Protocol on Biosafety
Kyoto Protocol
Change
UN Single Convention on Narcotic Drugs (1961)
UN Convention on Psychotropic Substances (1971)
UN Convention against Illicit Traffic in Narcotic Drugs and Psycho-
tropic Substances (1988)
Mexico UN Convention against Corruption
cf. EESC opinion no. 132/2005 of 9.2.2005 on the Scheme of
generalised tariff preferences (Rapporteur: Mr Pezzini)

to the UN Framework Convention on Climate

(7) Report of

the World Commission on the Social Dimension of

Globalisation issued in February 2004;
EESC opinion No. 252/2005 of 9.3.2005 on The social dimension of
globalisation – the EU's policy contribution on extending the benefits to
all; rapporteurs: Mr Tom Etty and Mrs Renate Hornung-Draus
(COM(2004) 383 final).

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2.2 The body of European standards (8)

and endeavouring to build a spirit of partnership with relevant
stakeholders’.

2.2.1
The Council of Europe has backed up these interna-
tional reference points by adopting the European Convention
for the Protection of Human Rights and Fundamental Freedoms
and the European Social Charter. The EU Member States have
provided themselves with their own body of laws, known as
the ‘acquis communautaire’ or ‘the existing body of EU law’.
The European Court of Human Rights in Strasbourg and the
European Court of Justice in Luxembourg are guarantors of
this body of European law. The EU's Charter of Fundamental
Rights, proclaimed at Nice in 2000, marked a new departure
by abolishing the division of rights into civil and political
rights, on the one hand, and economic and social rights, on the
other hand. The EMS Forum confirmed the underlying princi-
ples in respect of the gearing of the whole of this body of law
towards the objectives of CSR.

2.2.2
Enterprises are an integral part of human society, not
just a component of the economic system. Their primary func-
tion is to produce goods and deliver services, thereby creating
jobs providing incomes and paying taxes. Enterprises are, thus,
an integral part of human society. The economic performance
of undertakings has, for a very long period, been measured by
means of management
tools and accountancy instruments.
These tools and instruments, which can be rendered more
effective, are subject to regular adjustment.

The European social market economy model does not
2.2.3
regard enterprises simply as capitalised companies or bodies for
processing contracts but also — and more especially — as
collective entities which should provide a forum for social
dialogue. Capitalised companies exist only by virtue of their
shareholders, whereas enterprises,
irrespective of the rules to
which they are subject, are an integral part of human society
and not just a component of the economic system.

2.2.4
Enterprise models which take account of stakeholders
are of real interest, when viewed alongside enterprise models
geared solely to the level of return secured by shareholders.
Enterprises will manage their responsibility more effectively if
they are alert to the expectations of their various stakeholders.

2.2.5
In its Green Paper on Promoting a European framework
for corporate social responsibility, the European Commission states
that
‘corporate social responsibility is essentially a concept
whereby companies decide voluntarily to contribute to a better
society and a cleaner environment’. In its opinion on the Green
Paper and its opinion on the Social dimension of globalisation —
the EU's policy contribution on extending the benefits to all, the
‘socially responsible behaviour means
EESC points out that:
companies applying existing social rules in a committed way

(8) For a more exhaustive list, see the conclusions of the EMS Forum.

The Union needs to enhance the perception of what it
2.2.6
means to be a European enterprise.
It could encourage the
dialogue and exchange of views between different players and
types of experiences, in terms of measurement instruments for
CSR, so that CSR practices continue to stimulate innovation
and spread among different categories of enterprises.

2.3 CSR instruments: standards and implementing criteria (9)

2.3.1
The body of standards is implemented by means of
specific instruments drawn up by public and private agencies
(instruments which, for the most part, originate from common
law countries); these instruments take the form of reference
criteria and methods of applying these criteria. These instru-
ments provide a variety of interpretations of the body of stan-
dards, linked to the socio-cultural background of the authors of
the instruments. These implementing instruments have been
drawn up by a number of bodies: associations of enterprises,
public standards agencies, audit offices, assessment bodies,
universities, citizens' associations and public authorities. There
are many such instruments. Most of them are private initiatives
and they are often in competition with each other and some-
times incompatible.

A number of reference criteria have been publicised:
2.3.2
these include international criteria, such as ISO 9000,
ISO
14000, SA 8000, AA 1000 and GRI European criteria, such as
EMAS, SME Key, Eurosif and the ‘societal balance-sheet’ (10) and
national criteria, taking the form of rules, decrees and recom-
mendations.

The operators — specialised analysts working for fund
2.3.3
impact assessment
managers and social and environmental
agencies — consult the international body of standards. These
operators draw up more precise criteria in respect of the princi-
ples (values) set out in the body of standards. The matching of
the criteria to the standards is then measured by means of
significant, useful, intelligible and comparable indicators.

2.3.4
These operators are responsible for making the assess-
ment of non-financial risks credible to investors and consu-
mers; this operation is tending to make CSR into a factor with
regard to enhancing market competitiveness. The credibility of
these operators needs to be ensured by means of self-regu-
lation. The establishment of a standard, namely CSRR-QS 1.0
demonstrates that the profession is ready to take up this chal-
lenge.

(9) See ‘ABC of CSR Instruments’, drawn up by the European Commis-

sion's Directorate for Employment and Social Affairs.

(10) The ‘societal balance-sheet’, drawn up by coops, mutuals and the
non-profit sector, is a global diagnostic tool based on the ‘cross-
appraisal’ principle, involving internal and external stakeholders of
enterprises.

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2.3.5
The Global Pact launched by the UN Secretary-General
constitutes one of the voluntary instruments which has been
endorsed by over 2 000 enterprises worldwide.

These characteristics, and the links between them, need to be
assessed by means of an approach which is based on universal
values and relevant principles, whilst at
the same time,
respecting diversity.

2.3.6
The Global Reporting Initiative (GRI) guidelines are
frequently used by a fair number of multinationals. The Interna-
tional Organisation for Standardisation (IS0) started work in
2005 on the specific task of drawing up guidelines on social
responsibility (11) (ISO 26000).

Common ground on CSR has been found between the
2.3.7
social partners in the framework of the work of the social
dialogue sectoral committees (12). The following joint initiatives
have been decided: a code of practice in respect of CSR in the
hotel sector; a joint declaration on CSR in the field of
commerce, a code of conduct in respect of the sugar industry
and agreements in the textiles, leather and clothing industries
and, more recently, in the banking sector.

In addition to the above agreements, codes of conduct
2.3.8
and charters for enterprises have also been established. Some of
these documents were decided upon unilaterally by manage-
ments, some were drawn up after consultations with the
various
including negotiations with
representatives of the staff of the enterprises concerned. A
number of these codes of conduct and charters have, however,
been shown to fall short of the ILO standards.

stakeholders, perhaps

Other

2.3.9
instruments have not been publicised. The
precise methodology adopted by assessment agencies, i.e. the
indicators used for measuring the correlation between each
criterion and the standards concerned, represent the ‘machine
the agencies concerned,
the economic activity of
tools’ of
which are in competition with other agencies.

2.3.10
The instruments may be intended for use by the
enterprises themselves, on a voluntary basis, or for use by
socially responsible investors. They may also be aimed at final
consumers. Fair trade labels and environmental quality labels
provide information on the choices available to individual
consumers. Campaigns to boost awareness, such as the ethical
labelling scheme, have helped to bring about a general recogni-
tion of the situation. This has, in turn, set in train responsible
patterns of consumption. With regard to labelling systems,
however,
in drawing up
uniform, valid criteria that offer sufficient guarantees and
provide truly reliable information.

there are sometimes difficulties

3. Making the measurement of CSR more reliable and

more transparent

3.1 General observations

3.2 The coherence of the instruments

3.2.1
and the body of international reference points.

There has to be coherence between the instruments

The instruments also have to be in tune with the body
3.2.2
of European standards and the existing body of European law
(the ‘acquis communautaire’).

3.2.3
Enterprises always have a liability to comply with local
legislation. The added value represented by CSR does, however,
vary depending on the socio-economic context in which enter-
prises operate (formally industrialised countries, emerging
economies, poor countries).

3.2.4
In the less advanced countries, major enterprises may
be called upon to make good the shortcomings of public
authorities by taking responsibility for the health, accommoda-
tion and education of
their
families. In this context, CSR instruments can be useful to get a
clear picture of the efficiency and interest for all stakeholders of
the actions implemented by companies at their initiative.

their employees and even of

3.3 The suitability of the instruments

One and the same criterion can be measured using a
3.3.1
variety of indicators. To quote an example, ‘non-discrimination
on grounds of gender’ may be measured by determining the
proportion of women who are members of boards of directors
or who work at management level, the relation between the
salaries paid to women and those paid to men or the number
of hours of training provided for men and women respectively,
etc. Turning to the criterion of ‘job creation’, the indicator for
measuring this criterion in the event of
the relocation of
production, gives an incomplete picture of the situation if it
reflects solely the point of view of one area; an overall indicator
has to take account of job losses in the original country of
production and new jobs in the country to which production is
transferred.

3.1.1
Instruments for measuring CSR have to comply with
requirements in respect of coherence, relevance and reliability.

(11) ‘Guidance and social responsibility’
(12) See the EESC Information Report on The current state of co-regulation

and self-regulation in the Single Market (Rapporteur: Mr Vever).

3.3.2
Considerable attention needs to be paid to the field
real scope of the subject being measured. By way of example,
the average salary paid to the employees of an enterprise will
not represent a suitable social policy indicator if it imposes
conditions on subcontractors under which they are unable to
provide their own workforce with decent wage levels.

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3.3.3
Bearing in mind that CSR involves going beyond legal
requirements, the lack of uniformity of national laws may have
damaging effects. By way of example, an enterprise producing
a moderate level of pollution will receive a good assessment in
a country in which the legislation on emissions into the atmo-
sphere is non-existent, whilst an enterprise producing a similar
level of pollution in a country with strict rules on emissions
will receive a poor assessment. For this reason, it is essential to
regard the social and environmental standards set out in the
existing body of EU law as representing the minimum stan-
dards, whilst at the same time continuing efforts to improve
them.

3.4 The reliability of the instruments

3.4.1
comparison, in terms of both time and space:

The indicator must make it possible to carry out a

— it must make it possible to measure the year-on-year trend

with regard to a given phenomenon;

— it must make it possible to measure the same subject in
different places. With this aim in view, there is a need to
remove ambiguities. For example, investment in vocational
training may include only amounts paid to a training body
or it may include the wages paid to workers while they are
undergoing a course of training.

It is not necessary to seek to aggregate data in all
3.4.2
cases. For example, there is a good reason to add up green-
house gas emissions since they have a global impact; the same
cannot be said in the case of the amount of water consumed,
since in this case the impact is measured in terms of local
resources.

3.4.3
Indicators should be accompanied by ‘quality state-
ments’ which indicate, for example, which players draw up the
data in question and the methodology used.

— Instruments used to measure physical volumes (such as
measuring devices for gas emissions) need to be located in
the right places and to be properly calibrated. In the case of
indicators of a more qualitative nature, such as indicators
used to measure vocational training, there is a need to
specify the concept involved and to clarify the method of
appraisal to be adopted.

— There is a need to specify the party responsible for
collecting data since the status of the collectors and their
respective role are matters which have an impact. It would
be advisable for the parties responsible for collecting data at
local
level to have their data corroborated by the stake-
holders concerned or by bona fide third parties. By way of
example, technical data could be corroborated by a verifica-
tion body, social data could be verified by employee repre-
sentatives and environmental data could be corroborated by
specialised NGOs.

3.4.4
This process — which gives rise to costs for the enter-
prises concerned — leads to a form of recognition (the intro-
duction of labels, certificates, etc.). The process involves the
intervention of a competent and independent external third
party. The professional organisations concerned have an impor-

tant role to play,
process and the outcome of the process.

in respect of both the reason behind the

4. Extending the use and improving the quality of the

instruments

4.1 Developing the practice of providing information

4.1.1
It is becoming standard practice for large enterprises
to issue annual reports. This is in line with calls for transpar-
ency with regard to business strategy, including practice with
regard to CSR. The quality of the information does, however,
continue to be very uneven. Improvements will therefore have
to be made.

4.1.2
SMEs and non-quoted companies only rarely figure in
the studies that have been carried out on the quality of infor-
mation; these studies concentrate on large enterprises. Those
SMEs and non-quoted companies which have obtained an
EMAS or ISO 14001 certification are, however, obliged to
produce a regular environmental statement. The cost involved
in obtaining certification does, however, prevent many SMEs
from embarking upon this exercise, particularly in view of the
involves monitoring the situation at a given
fact
moment, thereby making it necessary to carry out regular reap-
praisals.

that

it

4.1.3
For reasons of lack of funding and human resources,
SMEs cannot be asked to provide, from the outset, the same
level of information as that requested of large enterprises. As a
step towards progress in this field, SMEs should, nonetheless,
be encouraged to inform their stakeholders of the responsible
practices — be they modest or considerable — which they
have adopted.

There are also networks comprising private, public
4.1.4
and parapublic bodies,
including university research bodies,
which provide information on CSR and promote this concept
at national or European level, such as CSR Europe and the
European Foundation for the Improvement of Living and
Working Conditions (the ‘Dublin Foundation’) or at world-level,
such as the World Business Council for Sustainable Develop-
(WBCSD) and the ILO database. These organisations
ment
should be helped to disseminate the results of their work, while
informing users in a transparent fashion about the diversity of
players and methods.

4.1.5
In a number of EU Member States, educational innova-
tions are being introduced in schools with a view to stimulating
consumer awareness. The body of
international standards
should form an integral part of the subject matter taught to
young Europeans.

4.2 Differentiating the instruments

4.2.1
There is a need to reconcile, on the one hand, the exis-
tence of a single body of principles and, on the other hand,
respect for diversity.

4.2.1.1
Single body of principles: if appropriate, it should be
possible to aggregate indicators in order to provide an overall
picture of the policy pursued by the enterprise concerned.

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4.2.1.2
Diversity: the indicators used must take account of
the socio-economic, legal and cultural situations, as well as the
type and size of the enterprise,
in the various geographical
areas and the various vocational sectors.

be advisable for more qualitative criteria, such as attitude
towards CSR, to be included in the tendering rules, in line with
the approach to be adopted by the EU in connection with
GSP+ in the field of trade preferences.

4.2.2
It would be advisable for the indicators to enable
comparisons (benchmarking) to be made on both a geographical
and a sectoral basis, namely comparisons between different
entities of one and the same enterprise or one and the same
group, comparisons between entities operating in the same
sector of activity and comparisons between entities operating
in one and the same territory.

4.2.3
A number of specific tools should be provided; the
indicators used in respect of industry, on the one hand, and
services, on the other hand, cannot be strictly identical.
Concrete indicators — on the basis of the same concepts —
should be adapted in respect of: services of general interest and
producers of standard goods and services; market and non-
market sector activities; and multinational groups and SMEs;
these indicators should be geared to the respective sectors of
activity.

4.2.4
In the major industrial and service sectors, it is neces-
sary, in the interests of sectoral cohesion, for the sectoral refer-
ence criteria in respect of CSR and the corresponding instru-
ments to be drawn up on the basis of negotiations between
sectoral federations — at European or other appropriate levels
— representing employers, on the one hand, and workers, on
the other hand. The growth in the number of framework agree-
ments between international trade union federations and multi-
nationals is opening up a number of prospects in this regard. It
would be a good idea for these criteria and indicators to be
drawn up jointly by the partners engaged in the respective
social sectoral dialogues, whilst being ready to accept any assis-
tance which may be provided by other stakeholders.

4.3 Extending the area of utilisation of the instruments

4.3.1
The CSR instruments are serving the needs of an ever
increasing number of players. Non-financial risks are now
growing in importance; these include risks to reputation, risks
affecting cohesion (the creation of bad labour relations in enter-
prises) and the risk of financial malpractice (corruption, insider
dealing, fraud, unfair competition and counterfeiting). Investors,
in particular a number of managers of
save-as-you-earn
schemes, ethical
funds and socially responsible
investors, are taking account of these non-financial risks which
are becoming marketing criteria.

investment

4.3.2
Export credits provided by banks and credit insurance
provided by specialised companies should take account, in their
ratings, to a greater extent than they do at present, of the
sustainable development policy of the state concerned and of
the CSR strategy adopted by enterprises operating in the state
in question.

4.3.3
In cases where CSR practices bring about a quantifi-
able reduction in the risks to which enterprises are exposed, it
would be appropriate for banks and insurance companies to
take account of this in their tariffs.

4.3.4
in most cases,
based on the simple rule of accepting the lowest bid. It would

The awarding of public contracts is,

The EU is actually already including in its bilateral
4.3.5
agreements (for example,
in the EU-Chile Association Agree-
ment) references to the guidelines set out by the OECD and
intends to promote respect for fundamental standards in its
trading relations with emerging economies, such as those of
Brazil, India and China. The EU should systematically include
on the agenda for the trans-atlantic dialogue the subject of
reaching agreement on CSR and should also pursue this
approach in the EU-Canada dialogue.

4.3.6
The way to bring about the more frequent use of the
CSR instruments is by strengthening the mechanisms intro-
duced by the OECD, in particular the quality of the national
contact points of all the OECD member states. The EU should
encourage other states which are not members of the OECD to
comply with the guidelines set out by this organisation. Public
authorities in all the OECD member states have a particularly
important role to play in ensuring that there is an effective
monitoring system.

4.4 Establishing a new generation of instruments

The Global Reporting Initiative (GRI) guidelines are
4.4.1
private reference criteria; these criteria, whilst being recognised,
are susceptible of
improvement. When these guidelines are
revised in 2005/2006, European players should participate
emphatically in the work of the GRI with a view to making its
methods and criteria more appropriate to the European
context.

4.4.2
In June 2004, the International Organisation for Stan-
dardisation (ISO) decided to set about drawing up guidance on
social responsibility. Unlike the standards set out in ISO 9000,
dealing with quality management systems and ISO 14000,
dealing with management of the environment, the guidelines
set out in ISO 26000 would not constitute a generic standard
for management systems and would not result in the issue of
certificates. An emerging economy, namely Brazil, and a
formerly industrialised country, Sweden, are to jointly chair the
working party and provide the secretariat. Work starts in
March 2005 and is scheduled to last three years. The guidelines
are set to be published at the beginning of 2008. The EESC is
paying particular attention to this initiative.

4.4.3
The EESC recommends the establishment of an infor-
mation portal on CSR practices adopted by large enterprises;
the portal would be based on information provided by the
enterprises themselves. The data would take the form of
declarations made by the enterprises themselves; as things
stand at present, the data would not be corroborated by the
stakeholders concerned. It would be advisable for a comparison
to be made, by an institutional observer, of the declarations of
enterprises, on the one hand, and the appraisals made by stake-
holders, on the other hand. The task of carrying out such a
qualitative analysis could be entrusted to a body like the Dublin
Foundation. The EESC proposes that this issue be discussed in
connection with the work programme of the European Moni-
toring Centre on Change (EMCC).

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5. Moving from a management initiative to voluntary

participation in CSR involving the stakeholders

5.1 Transparency of the action

5.1.1
The commitments entered into voluntarily by enter-
prises must be publicised and it must always be possible to
verify the effectiveness of
these commitments. By way of
example, an enterprise which declares its intention to open up
access to employment to handicapped persons should publish
figures showing the proportion of handicapped persons which
it has taken on and the adjustments it has made in connection
with the relevant jobs. Concrete information that is as compre-
hensive as possible makes it easier to gauge the extent to which
an enterprise is fulfilling its commitments. As responsibility is
measured by actions and not by words, enterprises have to
demonstrate transparency.

5.2 Making a distinction between ‘communicating’ and ‘reporting’

5.2.1 R e p or t i ng

involves

‘Reporting’

5.2.1.1
issuing a public document
the way in which the enterprise
providing an account of
concerned perceives the economic environmental and social
impact of its activities. By issuing this report, the enterprise
concerned accepts that the stakeholders concerned have a legit-
imate right to raise questions with the enterprise.

5.2.1.2
In capitalised companies, boards of directors have,
from the outset, reported to general meetings of shareholders.
For a very long time, public authorities have also demanded
that information be made available, at least in connection with
tax returns and social security contributions. Incomplete infor-
mation has been provided to wage earners in many European
countries for decades. The new departure is therefore that, in
future, information will be more comprehensive and be made
available to all civil society bodies.

5.2.1.3
The issuing of an overall report therefore provides a
response to the explicit and implicit questions raised by stake-
holders. Such a report constitutes an instrument of dialogue
and it may include interactive consultation systems. On the
basis of a detailed analysis of the indicators, the annual report
shows the overall performance of the enterprise, i.e. its capacity
to reconcile requirements in respect of economic results, social
effectiveness and environmental impact. The annual report also
sets out objectives, deadlines and implementing measures. This
represents a general step forward.

choose to spotlight the commitments entered into by the enter-
prise and the results which it has obtained in terms of good
practice. As part of such a communication action, comparisons
may be made with other enterprises in order to highlight
strengths and to capitalise on the fact that the enterprise has
been awarded quality labels. Such communication actions must
not, however, take the place of reporting.

5.3 The quality of information

5.3.1
Irregularities in respect of the information provided
regularly occur, be they financial irregularities (false reporting)
or non-financial
irregularities (misleading advertising). These
practices are punished by law.

5.3.2
The provision of a high quality of information requires
organisation involving the management board, which would be
responsible, for example, for the following tasks: providing an
interface between the enterprise and stakeholders;
internal
steering of work on CSR by establishing a network of corre-
spondents; the collection and dissemination of best practice
within the group; reporting; and the definition of a procedure
for the internal collection of data, involving: consultations on
the collection of data with stakeholders, discussions with repre-
sentatives of employees tests to determine consistency, and vali-
dation by the competent team.

5.3.3
Different stakeholders are involved, depending upon
the sector of production, state and territory. The most exhaus-
tive possible lists of stakeholders should be drawn up. Enter-
prises will have that much more credibility vis-à-vis the media
and civil society if
they have involved the stakeholders in
drawing up their CSR strategy.

The stakeholders concerned and/or bona fide third
5.3.4
parties are involved, if the context lends itself to this, in the
processes of collecting and issuing reports. In cases where these
bodies do not exist, the codes of conduct adopted must, as a
minimum requirement, make provision for the establishment
of a monitoring committee. In the absence of trade union orga-
nisations, committees for health and safety at the workplace
and local associations for the protection of human rights
should be recognised as valid partners with a view to the orga-
nisation of monitoring. To quote a further example, in the case
of food safety, research institutes and consumer associations
would be involved. Distributors of goods and suppliers of
services should involve representatives of consumers and users
when drawing up their strategies for sustainable development.

5.2.2 Commu ni c a ti on

Communicating information for

the purpose of
5.2.2.1
enhancing the standing of enterprises and providing the public
with a positive picture of the enterprise represents another,
quite different, exercise to that of ‘reporting’. The former exer-
cise represents a current public relations practice.

5.2.2.2 With a view to achieving this public relations objec-
tive, the communication officers of the enterprise concerned

5.4 Dialogue with the stakeholders

Voluntary commitment has to go hand-in-hand with a
5.4.1
well-organised dialogue with the
stakeholders. Voluntary
commitment is only a means to an end; the goal continues to
be to create value and economic, social and environmental
performance. By entering into voluntary commitments, enter-
prises therefore express their readiness to take action and to
publicise their action.

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Official Journal of the European Union

C 286/19

5.4.2
This implies that enterprises enter into a voluntary
commitment to take account of the expectations and interests
of stakeholders and to improve the transparency of
their
actions in this field. The act of agreeing to enter into a dialogue
with the stakeholders implies that the enterprise retains control
over the commitments which it is to enter into. In the face of
the plethora of expectations and interests, enterprises can prior-
itise their objectives in the light of objective reference criteria
and their own strategies.

5.4.3
The various stakeholders are all entitled to express
their expectations but not all stakeholders have the same level
of legitimacy. It may thus be considered that internal stake-
legitimacy than
holders frequently have a higher
external stakeholders. Furthermore, not all legitimate demands
can be taken into consideration by enterprises, since they do
not have infinite resources. Deciding between the various
demands is a task which may be carried out through negotia-
tion and consultation but, in the final analysis, the decision has
to be taken by the enterprise concerned.

level of

5.4.4
Dialogue is particularly important for the stakeholders
forming part of the value chain. Customers have to help their
suppliers and subcontractors to make their activities more
socially responsible. Partners must not be subjected to paradox-
ical requirements, such as having to comply with a high level
of labour-law standards whilst being offered inadequate prices
for their products. Customers should rather assist subcontrac-
tors in order to help them make progress.

Brussels, 8 June 2005.

the establishment of

5.4.5
There is a need for a social dialogue on CSR in
connection with voluntary strategy-formulation by enterprises.
The involvement of representatives of employees should cover
the enterprises' specific
three stages:
strategy, taking account of the principles of sustainable devel-
opment;
the measures required to
comply with this strategy; and the independent monitoring of
the effectiveness of the measures taken at all levels of the enter-
prise.

the implementation of

At European level, the voluntary and/or negotiated
5.4.6
approach to addressing the implications of CSR in all those
multinationals which have set up European enterprise commit-
tees marks a decisive step. It also makes it possible to involve
the new Member States in this dynamic process. European
enterprise committees should play a role in bringing about the
incorporation of CSR into the policies pursued by enterprises.
They are also the ideal
It
should, however, be borne in mind that a coherent policy on
CSR also has to take account of the views of external stake-
holders, in particular (a) all members of the overall workforce
involved (temporary workers, employees of subcontractors
working on the site, craftsmen and other
self-employed
workers working for the enterprise) and (b) all participants in
the value chain (subcontractors, suppliers), whose views should
be heeded to the greatest possible extent.

forum for internal stakeholders.

The president

of the European Economic and Social Committee

Anne-Marie SIGMUND