Corporate Social Responsibility

The main political basis for the debate on corporate social responsibility (CSR) in Europe is the principle of sustainability. It is based on the 1987 Brundtland Report of the UN World Commission on Environment and Development. For the first time it defined the principle of “sustainable development” for the long-term viable development of the world’s population. Sustainable development is development that meets the needs of the present generation one the one hand. On the other hand it doesn’t compromise the ability of future generations to meet their own needs and choose their own lifestyles.

In the European Union (EU), sustainability was integrated into the political strategy at the beginning of the 21st century. The principle is an important contribution “to make the European economy the most competitive and dynamic knowledge-based economy in the world by 2010”. Since last year, it has been among the political top priorities.

The most important basis for the dissemination of the topic to the European public is the Green Paper “European Framework for Corporate Social Responsibility”. The paper was published by the EU Commission in 2001. At the sustainability summit in 2002, however, the UN expressly pointed out one thing: that companies also have to make a significant contribution to sustainable development. To meet this requirement, more and more companies are developing guidelines and strategies for implementing sustainability goals.

Sustainability is more than social responsibility

About ten years ago, the term Corporate Social Responsibility (CSR) entered the European sustainability debate and is often used synonymously (e.g. sustainability report and CSR report). However, there are differences. CSR is merely the voluntary assumption of social responsibility. Sustainable development on the other hand requires business to act responsibly in environmental, social and economic terms. According to the EU Commission, CSR can only contribute to the implementation of sustainability strategies.

Nevertheless, European companies are increasingly taking their cue from the U.S. approach to CSR. This is due to analysts calling for CSR reports at the global level and initiatives. One of which the Global Reporting Initiative (GRI) that is pushing for uniform reporting standards. As a result, social responsibility has been gaining in importance in European business for several years. Also it is increasingly seen as a strategic success factor.

Corporate commitment not infrequently generates skepticism

But the social commitments of companies are not only met with applause. The forced withdrawal of the state and its social security systems has created new scope for action for companies. They are called into public-private partnerships, set up foundations or get involved in private universities. Ambitious cultural projects can hardly be realized without corporate support. In the education and science sector in particular, the planned penetration of companies and brands into the social sphere, the donations to science, schools, communities and NGOs is viewed with increasing concern. The public fears that in there could be less altruistic motives behind the engagements than a well thought-out business case. It also suspects that the engagement is thus subject to the caveat of good behavior versus corporate interests.

Many companies (and managers) sometimes find this form of citizenship alienating. Their economic system is characterized by corporatist thinking aimed at consensus, which is constituted within a democratic constitutional state that protects the free market order. It is designed to allow broad segments of the population to participate in the creation of value in the economy as a whole through an expanded welfare state. Social responsibility has its institutional and collectively agreed space within it, with assigned corporate responsibilities, which have so far been set out in the social reports. Social commitments are less a matter of calculation; they tend to follow the traditions of corporate history.

The emergence and expansion of CSR commitments are accompanied by a variety of communication requirements. Companies need to know their relevant stakeholders, give their CSR projects high credibility, and at the same time be very prudent in communicating these engagements or even linking them to their sales efforts.

Dive deeper into the topic of CSR on our topic page on the blog.