COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS A renewed EU strategy 2011-14 for Corporate Social Responsibility
Date: 2011-10-25
Institutions: European Commission
Subjects: action programme, business management, corporate social responsibility, public-private partnership

EUROPEAN COMMISSION 

Brussels, 25.10.2011 
COM(2011) 681 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

A renewed EU strategy 2011-14 for Corporate Social Responsibility 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

Introduction .................................................................................................................. 3 

1.1. 

Addressing corporate social responsibility is in the interests of enterprises…............ 3 

1.2.  …and in the interests of society as a whole ................................................................. 3 

1.3.  Why is the Commission presenting this new strategy now?........................................ 4 

2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

Evaluation of the impact of European policy on CSR ................................................. 4 

A modern understanding of corporate social responsibility ........................................ 6 

A new definition........................................................................................................... 6 

Internationally recognised principles and guidelines................................................... 6 

The multidimensional nature of CSR........................................................................... 7 

The role of public authorities and other stakeholders .................................................. 7 

CSR and the Social Business Initiative........................................................................ 7 

CSR and social dialogue .............................................................................................. 8 

An agenda for action 2011-2014.................................................................................. 8 

Enhancing the visibility of CSR and disseminating good practices ............................ 8 

Improving and tracking levels of trust in business....................................................... 9 

Improving self- and co-regulation processes ............................................................... 9 

Enhancing market reward for CSR ............................................................................ 10 

4.4.1.  Consumption .............................................................................................................. 10 

4.4.2.  Public procurement .................................................................................................... 10 

4.4.3. 

Investment .................................................................................................................. 11 

4.5. 

4.6. 

4.7. 

4.8. 

Improving company disclosure of social and environmental information................. 11 

Further integrating CSR into education, training and research.................................. 12 

Emphasising the importance of national and sub-national CSR policies .................. 12 

Better aligning European and global approaches to CSR .......................................... 13 

4.8.1.  Focusing on internationally recognised CSR principles and guidelines.................... 13 

4.8.2. 

Implementing the UN Guiding Principles on Business and Human Rights .............. 14 

4.8.3.  Emphasising CSR in relations with other countries and regions in the world........... 14 

5. 

Conclusion.................................................................................................................. 15 

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1. 

INTRODUCTION 

The European Commission has previously 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”.1 

Corporate  social  responsibility  concerns  actions  by  companies  over  and  above  their  legal 
obligations  towards  society  and  the  environment.  Certain  regulatory  measures  create  an 
environment more conducive to enterprises voluntarily meeting their social responsibility. 

1.1. 

Addressing corporate social responsibility is in the interests of enterprises… 

A strategic approach to CSR is increasingly important to the competitiveness of enterprises. It 
can  bring  benefits  in  terms  of  risk  management,  cost  savings,  access  to  capital,  customer 
relationships, human resource management, and innovation capacity.2  

Because  CSR  requires  engagement  with  internal  and  external  stakeholders,  it  enables 
enterprises to better anticipate and take advantage of fast changing societal expectations and 
operating  conditions.  It  can  therefore  drive  the  development  of  new  markets  and  create 
opportunities for growth. 

By addressing their social responsibility enterprises can build long-term employee, consumer 
and citizen trust as a basis for sustainable business models. Higher levels of trust in turn help 
to create an environment in which enterprises can innovate and grow. 

1.2.  …and in the interests of society as a whole 

Through  CSR,  enterprises  can  significantly  contribute  to  the  European  Union’s  treaty 
objectives of sustainable development and a highly competitive social market economy. CSR 
underpins  the  objectives  of  the  Europe  2020  strategy  for  smart,  sustainable  and  inclusive 
growth,  including  the  75%  employment  target.3  Responsible  business  conduct  is  especially 
important when private sector operators provide public services. Helping to mitigate the social 
effects of the current economic crisis, including job losses, is part of the social responsibility 
of enterprises. CSR offers a set of values on which to build a more cohesive society and on 
which to base the transition to a sustainable economic system.  

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3 

COM(2001)366 
European  Competitiveness  Report  2008  (COM(2008)774),  and  accompanying  Staff  Working  Paper 
SEC(2008) 2853 
A  number  of  the  Europe  2020  flagship  initiatives  make  reference  to  CSR:  the  Integrated  Industrial 
Policy  for  the  Globalisation  Era  COM(2010)614,  the  European  Platform  against  Poverty  and  Social 
Exclusion COM(2010)758, the Agenda for New Skills and Jobs COM(2010)682, Youth on the Move 
COM(2010)477  and  the  Single  Market  Act  COM(2011)206.  In  addition,  the  Innovation  Union 
COM(2010)546)  aims  to  enhance  the  capacity  of  enterprises  to  address  societal  challenges  through 
innovation,  and  the  contribution  of  enterprises  is  central  to  achieving  the  objectives  of  the  flagship 
initiative “A Resource-Efficient Europe” COM(2011)21 and COM(2011)571.. 

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1.3.  Why is the Commission presenting this new strategy now? 

The  Council  and  the  European  Parliament  have  both  called  on  the  Commission  to  further 
develop its CSR policy.4 In the Europe 2020 Strategy, the Commission made a commitment 
to  renew  the  EU  strategy  to  promote  Corporate  Social  Responsibility.  In  its  2010 
communication on industrial policy the Commission said it would put forward a new policy 
proposal  on  CSR.5  In  the  Single  Market  Act  it  stated  that  it  would  adopt  a  new 
communication on CSR by the end of 2011.6 

The  economic  crisis  and  its  social  consequences  have  to  some  extent  damaged  consumer 
confidence  and  levels  of  trust  in  business.  They  have  focused  public  attention  on  the  social 
and  ethical  performance  of  enterprises.  By  renewing  efforts  to  promote  CSR  now,  the 
Commission aims to create conditions favourable to sustainable growth, responsible business 
behaviour and durable employment generation in the medium and long term. 

2. 

EVALUATION OF THE IMPACT OF EUROPEAN POLICY ON CSR 

The Commission has played a pioneering role in the development of public policy to promote 
CSR ever since its 2001 Green Paper7 and the establishment of the European Multistakeholder 
Forum  on  CSR.  In  2006  the  Commission  published  a  new  policy  whose  centrepiece  was 
strong  support  for  a  business-lead  initiative  called  the  European  Alliance  for  CSR.8  The 
policy  also  identified  8  priority  areas  for  EU  action:  awareness-raising  and  best  practice 
exchange; support to multistakeholder initiatives; cooperation with Member States; consumer 
information and  transparency;  research; education; small and  medium-sized enterprises; and 
the international dimension of CSR.  

This policy has contributed to progress in the field of CSR. Indicators of progress include: 

– 

– 

– 

4 

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6 
7 
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9 

The number of EU enterprises that have signed up to the ten CSR principles of the 
United Nations Global Compact has risen from 600 in 2006 to over 1900 in 2011. 

The  number  of  organisations  with  sites  registered  under  the  Environmental 
Management and Audit Scheme (EMAS) has risen from 3,300 in 2006 to over 4,600 
in 20119. 

The number of EU companies signing transnational company agreements with global 
or  European  workers’  organisations,  covering  issues  such  as  labour  standards,  rose 
from 79 in 2006 to over 140 in 2011.  

Environment  Council  5  December  2008,  Environment  Council  20  December  2010,  Foreign  Affairs 
Council 14 June 2010, European Parliament Resolution 13 March 2007 (P6_TA(2007)0062), European 
Parliament Resolution 8 June 2011 P7_TA(2011)0260 
Integrated Industrial Policy for the Globalisation Era COM(2010)614 
COM(2011)206 
COM(2001)366 
COM(2006)136 
Of these organisations, it is estimated that about 80% are enterprises.  

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– 

– 

The Business Social Compliance Initiative, a European, business-driven initiative for 
companies  to  improve  working  conditions  in  their  supply-chains,  has  increased  its 
membership from 69 in 2007 to over 700 in 2011. 

The  number  of  European  enterprises  publishing  sustainability  reports  according  to 
the guidelines of the Global Reporting Initiative rose from 270 in 2006 to over 850 in 
2011. 

Through  the  European  Alliance  on  CSR,  leading  enterprises  developed  a  series  of  practical 
tools  on  key  issues.10  About  180  enterprises  expressed  support  for  the  Alliance.  National 
employers’  associations  also  supported  the  Alliance  and  undertook  a  number  actions  to 
promote CSR. 

In spite of this progress,  important challenges remain.  Many  companies in the EU  have not 
yet fully integrated social and environmental concerns into their operations and core strategy. 
Accusations persist of the involvement of a small minority of European enterprises in human 
rights harm and failure to respect core labour standards. Only 15 out of 27 EU Member States 
have national policy frameworks to promote CSR.11 

The  Commission  has  identified  a  number  of  factors  that  will  help  to  further  increase  the 
impact of its CSR policy, including: 

– 

– 

– 

– 

– 

– 

– 

The need for a balanced multistakeholder approach that takes account of the views of 
enterprises, non-business stakeholders and Member States.  

The  need  to  better  clarify  what  is  expected  of  enterprises,  and  to  make  the  EU 
definition  of  CSR  consistent  with  new  and  updated  international  principles  and 
guidelines. 

The  need  to  promote  market  reward  for  responsible  business  conduct,  including 
through investment policy and public procurement. 

The need to consider self- and co-regulation schemes, which are an important means 
by which enterprises seek to meet their social responsibility. 

The need to address company transparency on social and environmental issues from 
the point of view of all stakeholders, including enterprises themselves. 

The  need  to  give  greater  attention  to  human  rights,  which  have  become  a 
significantly more prominent aspect of CSR. 

The need to acknowledge the role that complementary regulation plays in creating an 
environment  more  conducive  to  enterprises  voluntarily  meeting  their  social 
responsibility.. 

The remainder of this communication presents a modern understanding of CSR, including an 
updated definition, and a new agenda for action. In doing so it builds on the 2006 policy while 

10 

11 

For  example:  gender  equality,  responsible  supply-chain  management,  and  improving  dialogue  with 
investors on companies’ non-financial performance. See www.csreurope.org/pages/en/toolbox.html  
“Corporate Social Responsibility: National Public Policies in the EU”, European Commission, 2011 

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also  introducing  important  new  elements  which  can  help  further  extend  the  impact  of  the 
policy. It seeks to reaffirm the EU’s global influence in this field, enabling the EU to better 
promote its interests and values in relations with other regions and countries. It will also help 
to  guide  and  coordinate  EU  Member  State  policies  and  so  reduce  the  risk  of  divergent 
approaches  that  could  create  additional  costs  for  enterprises  operating  in  more  than  one 
Member State.  

3. 

A MODERN UNDERSTANDING OF CORPORATE SOCIAL RESPONSIBILITY 

3.1. 

A new definition 

The  Commission  puts forward a  new definition of CSR as “the responsibility of enterprises 
for their impacts on society”. Respect for applicable legislation, and for collective agreements 
between social partners, is a prerequisite for meeting that responsibility. To fully meet their 
corporate social responsibility, enterprises should have in place a process to integrate social, 
environmental,  ethical,  human  rights  and  consumer  concerns  into  their  business  operations 
and core strategy in close collaboration with their stakeholders, with the aim of: 

– 

– 

maximising the  creation of shared value for  their  owners/shareholders and  for their 
other stakeholders and society at large; 

identifying, preventing and mitigating their possible adverse impacts.  

The complexity of that process will depend on factors such as the size of the enterprise and 
the nature of its operations. For most small and medium-sized enterprises, especially micro-
enterprises, the CSR process is likely to remain informal and intuitive. 

To  maximise  the  creation  of  shared  value,  enterprises  are  encouraged  to  adopt  a  long-term, 
strategic  approach  to  CSR,  and  to  explore  the  opportunities  for  developing  innovative 
products, services and business models that contribute to societal wellbeing and lead to higher 
quality and more productive jobs.  

To  identify,  prevent  and  mitigate  their  possible  adverse  impacts,  large  enterprises,  and 
enterprises  at  particular  risk  of  having  such  impacts,  are  encouraged  to  carry  out  risk-based 
due diligence, including through their supply chains. 

Certain types of enterprise, such as cooperatives, mutuals, and family-owned businesses, have 
ownership and governance structures that can be especially conducive to responsible business 
conduct. 

3.2. 

Internationally recognised principles and guidelines 

For companies seeking a formal approach to CSR, especially large companies, authoritative 
guidance is provided by internationally recognised principles and guidelines, in particular the 
recently  updated  OECD  Guidelines  for  Multinational  Enterprises,  the  ten  principles  of  the 
United Nations Global Compact, the ISO 26000 Guidance Standard on Social Responsibility, 
the ILO Tri-partite Declaration of Principles Concerning Multinational Enterprises and Social 
Policy, and the United Nations Guiding Principles on Business and Human Rights. This core 
set of internationally recognised principles and guidelines represents an evolving and recently 

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strengthened  global  framework  for  CSR.  European  policy  to  promote  CSR  should  be  made 
fully consistent with this framework.  

3.3. 

The multidimensional nature of CSR 

According  to  these  principles  and  guidelines,  CSR  at  least  covers  human  rights,  labour  and 
employment  practices  (such  as  training,  diversity,  gender  equality  and  employee  health  and 
well-being), environmental issues (such as biodiversity, climate change, resource efficiency,  
life-cycle  assessment  and  pollution  prevention),  and  combating  bribery  and  corruption. 
Community involvement and development, the integration of disabled persons, and consumer 
interests,  including  privacy,  are  also  part  of  the  CSR  agenda.  The  promotion  of  social  and 
environmental  responsibility  through  the  supply-chain,  and  the  disclosure  of  non-financial 
information, are recognised as important cross-cutting issues. The Commission has adopted a 
communication  on  EU  policies  and  volunteering  in  which  it  acknowledges  employee 
volunteering as an expression of CSR.12  

In addition, the Commission promotes the three principles of good tax governance – namely 
transparency, exchange of information and fair tax competition – in relations between states.  
Enterprises  are  encouraged,  where  appropriate,  also  to  work  towards  the  implementation  of 
these principles. 

3.4. 

The role of public authorities and other stakeholders 

The development of CSR should be led by enterprises themselves. Public authorities should 
play  a  supporting  role  through  a  smart  mix  of  voluntary  policy  measures  and,  where 
necessary,  complementary  regulation,  for  example  to  promote  transparency,  create  market 
incentives for responsible business conduct, and ensure corporate accountability.  

Enterprises must be given the flexibility to innovate and to develop an approach to CSR that 
is  appropriate  to  their  circumstances.  Many  enterprises  nevertheless  value  the  existence  of 
principles  and  guidelines  that  are  supported  by  public  authorities,  to  benchmark  their  own 
policies and performance, and to promote a more level playing field. 

Trade  unions  and  civil  society  organisations  identify  problems,  bring  pressure  for 
improvement and can work constructively with enterprises to co-build solutions. Consumers 
and investors are in a position to enhance market reward for socially responsible companies 
through the consumption and investment decisions they take. The media can raise awareness 
of  both  the  positive  and  negative  impacts  of  enterprises.  Public  authorities  and  these  other 
stakeholders  should  demonstrate  social  responsibility,  including  in  their  relations  with 
enterprises. 

3.5. 

CSR and the Social Business Initiative 

Corporate social responsibility is applicable to all enterprises. This communication is adopted 
together with a complementary but distinct Social Business Initiative (SBI) which supports a 
specific  kind  of  enterprise,  namely  those  whose  primary  purpose  is  explicitly  social  and/or 
environmental, that reinvest profits for that purpose, and whose internal organisation reflects 

12 

“Communication on EU Policies and Volunteering: Recognising and Promoting Crossborder Voluntary 
Activities in the EU” COM(2011)568.  

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the societal objectives.13 The  SBI deals with  the ecosystem required for social business and 
social innovation to flourish and contribute to the European social market economy. 

3.6. 

CSR and social dialogue 

In  recent  years  several  sectoral  social  dialogue  committees  have  promoted  good  CSR 
practices  and  established  guidelines.14  The  Commission  facilitates  such  initiatives  and 
recognises that CSR contributes to and supplements social dialogue. Innovative and effective 
CSR  policies  have  also  been  developed  through  transnational  company  agreements  (TCAs) 
concluded  between  enterprises  and  European  or  global  workers'  organisations.15  The  EU 
actively supports TCAs and will launch a searchable database of such agreements. 

4. 

AN AGENDA FOR ACTION 2011-2014 

This  agenda  contains  commitments  from  the  Commission  itself,  as  well  as  suggestions  for 
enterprises,  Member  States,  and  other  stakeholder  groups.  In  implementing  this  agenda,  the 
Commission will  at all times take account  the particular characteristics  of SMEs, especially 
their limited resources, and avoid creating unnecessary administrative burdens.  

4.1. 

Enhancing the visibility of CSR and disseminating good practices 

By giving public recognition to what enterprises do in the field of CSR, the EU can help to 
disseminate  good  practice,  foster  peer  learning,  and  encourage  more  enterprises  to  develop 
their  own  strategic  approaches  to  CSR.  Building  on  the  lessons  of  initiatives  in  different 
Member  States,  the  Commission  will  support  capacity-building  for  SME  intermediary 
organisations  to  improve  the  quality  and  availability  of  CSR  advice  for  small  and  medium-
sized enterprises.  

The  Commission  has  launched  a  wide  range  of  programmes  to  work  with  enterprises  and 
other  stakeholders  on  critical  social  and  environmental  issues.16  Further  engagement  with 
enterprises  will  be  important  for  the  success  of  the  Europe  2020  strategy.  The  Commission 
will  therefore  promote  dialogue  with  enterprises  and  other  stakeholders  on  issues  such  as 
employability, demographic change and active ageing17, and workplace challenges (including 
diversity management, gender equality, education and training, and employee health and well-
being).  It  will  in  particular  focus  on  sectoral  approaches  and  on  the  dissemination  of 
responsible business conduct through the supply chain. 

13 
14 

15 

16 

17 

COM(2011)682 
"Industrial  relations  in  Europe  2010",  Chapter  6.3.4,  European  Commission,  DG  Employment  Social 
Affairs and Inclusion, 2011 
“The role of transnational company agreements in the context of increasing international integration” 
COM(2008) 419 final  
For  example:  the  Retail  Forum  for  Sustainability;  the  EU  Platform  for  Diet,  Physical  Activity  and 
Health;  the  Business  and  Biodiversity  Campaign;  the  process  on  corporate  responsibility  in  the 
pharmaceutical industry; the European Food and Sustainable Production Round Table; the University-
Business  Forum;  the  Advertising  Round  Table;  and  the  European  Pact  for  Mental  Health  and  Well-
being.  
2012 is the European Year of Active Ageing.  

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CSR Europe’s Enterprise 2020 initiative is an example of business leadership in the field of 
CSR that is particularly relevant to EU policy objectives. The Commission will help to review 
the initial results of this initiative by the end of 2012, and to define its next steps.  

The Commission intends to: 

1. 

2. 

Create  in  2013  multistakeholder  CSR  platforms  in  a  number  of  relevant  industrial 
sectors,  for  enterprises,  their  workers  and  other  stakeholders  to  make  public 
commitments on the CSR issues relevant to each sector and jointly monitor progress.  

Launch from 2012 onwards a European award scheme for CSR partnerships between 
enterprises and other stakeholders. 

4.2. 

Improving and tracking levels of trust in business 

Like all organisations, including governments and the EU itself, enterprises need to be trusted 
by citizens. The European business community should aspire to be amongst the most trusted 
groups  of  organisations  in  society.  There  is  frequently  a  gap  between  citizens’  expectations 
and what they perceive to be the reality of business behaviour. This gap is caused partly by 
instances  of  irresponsible  behaviour  by  some  enterprises,  as  well  as  by  cases  of  some 
enterprises exaggerating their environmental or social credentials. Sometimes it is caused by 
an  insufficient  understanding  on  the  part  of  some  enterprises  of  fast  evolving  societal 
expectations,  as  well  as  by  an  insufficient  awareness  on  the  part  of  citizens  of  the 
achievements of enterprises and the constraints under which they operate. 

The Commission intends to: 

3. 

4. 

Address  the  issue  of  misleading  marketing  related  to  the  environmental  impacts  of 
products (so-called "green-washing") in the context of the report on the application 
of the Unfair Commercial Practices Directive18 foreseen for 2012, and consider the 
need for possible specific measures on this issue. 

Initiate  an  open  debate  with  citizens,  enterprises  and  other  stakeholders  on  the  role 
and potential of business in the 21st century, with the aim of encouraging common 
understanding  and  expectations,  and  carry  out  periodic  surveys  of  citizen  trust  in 
business and attitudes towards CSR.  

4.3. 

Improving self- and co-regulation processes 

Enterprises  often  participate  in  self-  or  co-regulation  processes,  for  example  sector-wide 
codes of conduct on societal issues relevant to the sector in question. When such processes are 
designed in an appropriate way they can earn stakeholder support and be an effective means 
of ensuring responsible business conduct. Self and co-regulation are acknowledged by the EU 
as a part of the better regulation agenda.19  

18 
19 

Directive 2005/29/EC 
See  the  Interinstitutional  Agreement  on  better  Law-making  2003/C  321/01,  and  Commission 
Communication “Better Regulation for Growth and Jobs in the European Union” COM(2005)97.  

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Experience  suggests  that  self  and  co-regulation  processes  are  most  effective  when  they:  are 
based on an initial open analysis of the issues with all concerned stakeholders, in the presence 
of and if necessary convened by public authorities such as the European Commission; result, 
in  a  subsequent  phase,  in  clear  commitments  from  all  concerned  stakeholders,  with 
performance  indicators;  provide  for  objective  monitoring  mechanisms,  performance  review 
and  the  possibility  of  improving  commitments  as  needed;  and  include  an  effective 
accountability mechanism for dealing with complaints regarding non-compliance.  

The Commission intends to: 

5. 

Launch a process in 2012 with enterprises and other stakeholders to develop a code 
of  good  practice  for  self-  and  co-regulation  exercises,  which  should  improve  the 
effectiveness of the CSR process. 

4.4. 

Enhancing market reward for CSR 

The positive impacts of CSR on competitiveness are increasingly recognised, but enterprises 
still face dilemmas when the most socially responsible course of action may not be the most 
financially beneficial, at least in the short term. The EU should leverage policies in the field 
of consumption, public procurement and investment to strengthen market incentives for CSR. 

4.4.1.  Consumption 

Consumer attention to CSR-related issues has grown in recent years, but significant barriers 
remain, such as insufficient awareness, the need sometimes to pay a price premium, and lack 
of  easy  access  to  the  information  necessary  for  making  informed  choices.  Some  enterprises 
play a pioneering role in helping consumers to make more sustainable choices. The revision 
of  the  Sustainable  Consumption  and  Production  Action  Plan  may  provide  an  opportunity  to 
identify new measures to facilitate more responsible consumption. 

4.4.2.  Public procurement 

The Commission set an indicative target that by 2010 50% of all public procurement in the 
EU should comply with agreed environmental criteria. In 2011 the Commission published a 
guide on Socially Responsible Public Procurement (SRPP), explaining how to integrate social 
considerations  into  public  procurement  while  respecting  the  existing  EU  legal  framework.20 
SRPP can include positive action by public authorities to help under-represented businesses, 
such as SMEs, to gain access to the public procurement market.  

Member  States  and  public  authorities  at  all  levels  are  invited  to  make  full  use  of  all 
possibilities offered by the current legal framework for public procurement. The integration of 
environmental and social criteria into public procurement must be done in particular in a way 
that  does  not  discriminate  against  SMEs,  and  abides  by  Treaty  provisions  on  non-
discrimination, equality of treatment and transparency.  

The Commission intends to: 

20 

“Buying  Social:  a  guide  to  taking  account  of  social  considerations  in  public  procurement”,  European 
Commission, 2011 

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6. 

Facilitate  the  better  integration  of  social  and  environmental  considerations  into 
public procurement as part of the 2011 review of the Public Procurement Directives, 
without  introducing  additional  administrative  burdens  for  contracting  authorities  or 
enterprises, and without undermining the principle of awarding contracts to the most 
economically advantageous tender. 

4.4.3. 

Investment 

In  response  to  the  financial  crisis,  the  Commission  is  making  a  number  of  regulatory 
proposals to ensure a more responsible and transparent financial system. By taking adequate 
account  of  relevant  non-financial  information,  investors  can  contribute  to  a  more  efficient 
allocation  of  capital  and  better  achieve  longer-term  investment  goals.  The  Commission  is 
supporting capacity-building for investors on how to integrate non-financial information into 
investment  decisions.  In  this  context,  the  Commission  encourages  enterprises  to  disclose 
information related to the implementation of good tax governance standards. 

European asset managers and asset owners, especially pension funds, are invited to sign up to 
the  UN  Principles  for  Responsible  Investment.  Public  authorities  have  a  particular 
responsibility to promote CSR in enterprises which they own or in which they invest.  

The Commission intends to: 

7. 

Consider  a  requirement  on  all  investment  funds  and  financial  institutions  to  inform 
all  their  clients  (citizens,  enterprises,  public  authorities  etc.)  about  any  ethical  or 
responsible investment criteria they apply or any standards and codes to which they 
adhere. 

4.5. 

Improving company disclosure of social and environmental information 

Disclosure  of  social  and  environmental  information,  including  climate-related  information, 
can  facilitate  engagement  with  stakeholders  and  the  identification  of  material  sustainability 
risks. It is also an important element of accountability and can contribute to building public 
trust  in  enterprises.  To  meet  the  needs  of  enterprises  and  other  stakeholders,  information 
should be material, and cost-effective to collect.  

Some  Member  States  have  introduced  non-financial  disclosure  requirements  that  go  beyond 
existing  EU  legislation.21  There  is  a  possibility  that  different  national  requirements  could 
create additional costs for enterprises operating in more than one Member State. 

A growing number of companies disclose social and environmental information. SMEs often 
communicate such information informally and on a voluntary basis. One source estimates that 
about 2,500 European companies publish CSR or sustainability reports, which puts the EU in 
a position of global leadership22. However this is still only a small fraction of the 42,000 large 
companies operating in the EU.  

21 

22 

The  Fourth  Directive  on  annual  accounts  2003/51/EC  requires  enterprises  to  disclose  in  their  annual 
reports environmental and employee-related information to the extent necessary for an understanding of 
the company's development, performance or position. All Member States have chosen to exempt SMEs 
from this requirement.  
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There are a number of international frameworks for the disclosure of social and environmental 
information, including the Global Reporting Initiative. Integrated financial and non-financial 
reporting  represents  an  important  goal  for  the  medium  and  long  term,  and  the  Commission 
follows with interest the work of the International Integrated Reporting Committee.  

In  order  to  ensure  a  level  playing  field,  as  announced  in  the  Single  Market  Act  the 
Commission  will  present  a  legislative  proposal  on  the  transparency  of  the  social  and 
environmental  information  provided  by  companies  in  all  sectors.  An  impact  assessment  of 
possible  options  for  this  proposal,  which  will  also  include  a  competitiveness  proofing  and 
SME  test,  is  currently  ongoing.  The  Commission  is  also  developing  a  policy  to  encourage 
companies to measure and benchmark their environmental performance using a common life-
cycle based methodology that could also be used for disclosure purposes. 

All organisations, including civil society organisations and public authorities, are encouraged 
take steps to improve disclosure of their own social and environmental performance..  

4.6. 

Further integrating CSR into education, training and research 

The  further  development  of  CSR  requires  new  skills  as  well  as  changes  in  values  and 
important  role  by  encouraging  education 
behaviour.  Member  States  can  play  an 
establishments  to  integrate  CSR,  sustainable  development  and  responsible  citizenship  into 
relevant  education  curricula,  including  at  secondary  school  and  university  level.  European 
business  schools  are  encouraged  to  sign  the  UN  Principles  for  Responsible  Management 
Education. 

High  quality  academic  research  supports  the  development  of  business  practice  and  public 
policy in the field of CSR. Further research should build on the results of projects financed 
under the 6th and 7th EU Framework Programmes. The Commission will explore opportunities 
for  financing  further  research  and  innovation  on  CSR,  and  supporting  CSR  principles  and 
guidelines in research funded still under the 7th Framework Programme, as well as under its 
successor, Horizon 2020, and in building the European Research Area. 

The Commission intends to: 

8. 

Provide  further  financial  support  for  education  and  training  projects  on  CSR  under 
the EU Lifelong Learning and Youth in Action Programmes, and launch an action in 
2012  to  raise  the  awareness  of  education  professionals  and  enterprises  on  the 
importance of cooperation on CSR. 

4.7. 

Emphasising the importance of national and sub-national CSR policies 

Many  public  policy  measures  to  support  CSR  are  best  carried  out  at  national,  regional  and 
local level. Local and regional authorities are encouraged to make smart use of EU structural 
funds  to  support  the  development  of  CSR,  especially  amongst  SMEs,  and  to  partner  with 
companies to better address problems such as poverty and social inclusion.  

The Commission intends to:  

9. 

Create  with  Member  States  in  2012  a  peer  review  mechanism  for  national  CSR 
policies. 

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The Commission invites: 

A 

Member States to develop or update by mid 2012 their own plans or national lists of 
priority  actions  to  promote  CSR  in  support  of  the  Europe  2020  strategy,  with 
reference  to  internationally  recognised  CSR  principles  and  guidelines  and  in 
cooperation  with  enterprises  and  other  stakeholders,  taking  account  of  the  issues 
raised in this communication.  

4.8. 

Better aligning European and global approaches to CSR 

The EU should promote European interests in international CSR policy developments, while 
at  the  same  time  ensuring  the  integration  of  internationally  recognised  principles  and 
guidelines into its own CSR policies. 

4.8.1.  Focusing on internationally recognised CSR principles and guidelines 

In  order  to  advance  a  more  level  global  playing  field,  the  Commission  will  step  up  its 
cooperation with Member States, partner countries and relevant international fora to promote 
respect  for  internationally  recognised  principles  and  guidelines,  and  to  foster  consistency 
between  them.  This  approach  also  requires  EU  enterprises  to  renew  their  efforts  to  respect 
such principles and guidelines.  

The  OECD  Guidelines  are  recommendations  addressed  by  governments  to  multinational 
enterprises.  The  Commission  welcomes  the  adherence  of  non-OECD  countries  to  the 
Guidelines.  In  addition  to  governmental  endorsement,  the  Guidelines  have  a  distinctive 
implementation and grievance mechanism, the network of National Contact Points established 
by  all  adhering  countries,  that  can  assist  enterprises  and  their  stakeholders  in  resolving 
practical issues, including through mediation and conciliation. 

The Commission intends to: 

10. 

Monitor  the  commitments  made  by  European  enterprises  with  more  than  1.000 
employees  to  take  account  of  internationally  recognised  CSR  principles  and 
guidelines,  and  take  account  of  the  ISO  26000  Guidance  Standard  on  Social 
Responsibility in its own operations. 

The Commission invites: 

B 

C 

All large European enterprises to make a commitment by 2014 to take account of at 
least  one  of  the  following  sets  of  principles  and  guidelines  when  developing  their 
approach to CSR: the UN Global Compact, the OECD Guidelines for Multinational 
Enterprises, or the ISO 26000 Guidance Standard on Social Responsibility. 

All  European-based  multinational  enterprises  to  make  a  commitment  by  2014  to 
respect  the  ILO  Tri-partite  Declaration  of  Principles  Concerning  Multinational 
Enterprises and Social Policy. 

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4.8.2. 

Implementing the UN Guiding Principles on Business and Human Rights23  

Improving  the  coherence  of  EU  policies  relevant  to  business  and  human  rights  is  a  critical 
challenge.  Better  implementation  of  the  UN  Guiding  Principles  will  contribute  to  EU 
objectives  regarding  specific  human  rights  issues  and  core  labour  standards,  including  child 
labour, forced prison labour, human trafficking, gender equality, non-discrimination, freedom 
of  association  and  the  right  to  collective  bargaining.  A  process  involving  enterprises,  EU 
Delegations  in  partner  countries,  and  local  civil  society  actors,  in  particular  human  rights 
organisations and defenders, will raise understanding of the challenges companies face when 
operating in countries where the state fails to meet its duty to protect human rights.  

The Commission intends to: 

11. 

12. 

Work  with  enterprises  and  stakeholders  in  2012  to  develop  human  rights  guidance 
for a limited number of relevant industrial sectors, as well as guidance for small and 
medium-sized enterprises, based on the UN Guiding Principles. 

Publish by the end of 2012 a report on EU priorities in the implementation of the UN 
Guiding Principles, and thereafter to issue periodic progress reports.24 

The Commission also: 

D 

E 

Expects  all  European  enterprises  to  meet  the  corporate  responsibility  to  respect 
human rights, as defined in the UN Guiding Principles.  

Invites  EU  Member  States  to  develop  by  the  end  of  2012  national  plans  for  the 
implementation of the UN Guiding Principles. 

4.8.3.  Emphasising CSR in relations with other countries and regions in the world  

Internationally  recognised  CSR  guidelines  and  principles  represent  values  which  should  be 
embraced  by  the  countries  wishing  to  join  the  European  Union,  and  the  Commission  will 
therefore continue to address this in the accession process.  

The Commission promotes CSR through its external policies. It will continue, through a mix 
of  global  advocacy  and  complementary  legislation,  to  aim  at  disseminating  internationally 
recognised CSR guidelines and principles more widely and enabling EU businesses to ensure 
that  they  have  a  positive  impact  in  foreign  economies  and  societies.  The  Commission  will 
make  relevant  proposals  in  the  field  of  trade-and-development.  Furthermore  where 
appropriate, it will propose to address CSR in established dialogues with partner countries and 
regions.  

EU  development  policy  recognises  the  need  to  support  CSR.25  By  promoting  respect  for 
social and environmental standards, EU enterprises can foster better governance and inclusive 

23 

24 

25 

The  UN  Guiding  Principles  cover  three  pillars:  the  state  duty  to  respect  human  rights;  the  corporate 
responsibility to respect human rights; and the need for access to effective remedy.  
Reports  published  by  the  European  Commission  on  the  legal  framework  for  human  rights  and  the 
environment applicable to EU enterprises when they operate outside the EU (2010), and on responsible 
supply chain management (2011), will be considered in this context. 
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growth in developing countries. Business models that target the poor as consumers, producers, 
and  distributors  help  to  maximise  development  impact.  The  search  for  synergies  with  the 
private  sector  will  become  an  increasingly  important  consideration  in  EU  development 
cooperation and in EU responses to natural and man-made disasters. Enterprises can play an 
important role through employee volunteering in this respect. The future European Voluntary 
Humanitarian  Aid  Corps  may  provide  one  means  of  better  exploiting  synergies  with  the 
private sector. 

The Commission intends to: 

13. 

Identify ways to promote responsible business conduct in its future policy initiatives 
towards more inclusive and sustainable recovery and growth in third countries. 

5. 

CONCLUSION  

The  Commission  will  work  with  Member  States,  enterprises  and  other  stakeholders  to 
periodically monitor progress and to jointly prepare a review meeting to be held by mid 2014. 
In preparation for that meeting the Commission will publish a report on the implementation of 
the  agenda  for  action  set  out  in  this  communication.  This  will  require  more  coordinated 
working methods between the European Multistakeholder Forum on CSR and the High Level 
Group of CSR representatives of Member States. The Commission will present an operational 
proposal for this by the end of 2011. 

On  the  basis  of  this  communication,  the  European  Commission  would  welcome  discussion 
with and commitments from the Council, the European Parliament, the Economic and Social 
Committee, the Committee of the Regions, enterprises and other stakeholders. 

The  Commission  calls  on  European  business  leaders,  including  those  from  the  financial 
sector, to issue, before mid 2012, an open and accountable commitment to promote, in close 
cooperation  with  public  authorities  and  their  other  stakeholders,  the  uptake  of  responsible 
business conduct by a much larger number of EU enterprises, with clear targets for 2015 and 
2020.  

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