COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN DATA PROTECTION SUPERVISOR &quot;Responsible Businesses&quot; package
Date: 2011-10-25
Institutions: European Commission
Subjects: action programme, business management, business start-up, competitiveness, corporate social responsibility, innovation, market economy, small and medium-sized enterprises, sustainable development

EUROPEAN COMMISSION 

Brussels, 25.10.2011 
COM(2011) 685 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE 
ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS 
AND THE EUROPEAN DATA PROTECTION SUPERVISOR 

"Responsible Businesses" package 

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

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

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

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

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

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

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

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2  

"SMA – Twelve levers to boost growth and strengthen confidence", COM(2011) 206 final of 13 April 
2011 
COM(2010)614 final/2 of 17 November 2010 

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

The "Responsible businesses" package comprises: 

–  this introductory Communication; 
–  the proposal to revise the Accounting Directives3; 
–  the proposal to revise the Transparency Directive4; 
–  the Communication on Corporate Social Responsibility (CSR)5; 
–  the Communication "Social Business Initiative"6. 

This package sets out two objectives: 

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

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

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

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

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

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

These  initiatives  concerning  the  accounting  standards  and  transparency  are  also  intended  to 
improve  transparency  in  resource-rich  countries,  including  within  the  European  Union,  by 
creating  a  sense  of  responsibility  among  extraction  and  forestry  businesses.  The  extraction 
and  forestry  companies  listed  on  the  European  markets  and  the  major  non-listed  companies 

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5  
6  

COM(2001) 684 final 
COM(2001) 683 final 
COM(2011) 681 final 
COM(2011) 682 final 

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will  publish  a  report  on  payments  to  governments,  detailing  them  by  country  and,  where 
payments are for one specific project, by project, with a materiality threshold. These reports 
will  give  the  citizens  of  resource-rich  countries  significantly  more  information  on  exactly 
what European companies pay to host governments in exchange for the right to extract natural 
resources from their countries. 

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

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

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

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

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

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