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Corporate Social Responsibility in the European Union: Strategy

and Practice

Yukiko Fukasaku

Innovmond, France

Yokohama, 28 May 2009

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Outline

Policies and strategies on Corporate Social Responsibility (CSR) in the European Union since 1990s

CSR practices in some large European firms based in France Danone L’Oreal GDF-Suez EDF Sanofi-Aventis

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Origin of EU CSR policy

1995 European Business Declaration against Social Exclusion Policy instrument to promote the European

“social model”, i.e., “social” aspect stressed.

Since 2000: instrument to achieve Lisbon Strategy for growth and employment and the Sustainable Development Strategy

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Lisbon and SD Strategies

Lisbon Strategy for growth and jobs, 2000 Goal to become “ the most competitive and

dynamic knowledge-based economy…”SD Strategy, 2001

“Public policy…key role in encouraging a greater sense of corporate social responsibility…

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Green paper on CSR and the First Communication

Green paper (2001) CSR can contribute to Lisbon targets “…concept whereby companies integrate

social and environmental concerns to their business operations and their interaction with their stakeholders on a voluntary basis.”

First EC Communication on CSR Public policy has a role to promote CSR Launch EU Multistakeholder Forum on CSR

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Multistakeholder Forum on CSR

Aim: promoting transparency and convergence of CSR practices and instruments in Europe Involving businesses, business organisations, employee

organisations (social partners), consumer groups, civil society

Final report 2004 Support for “voluntary” approach to CSR

Assessment : convergence difficult to achieve “Voluntary” (businesses) vs. “Mandatory” (civil society) not

resolved CSR approach satisfactory to all stakeholders was not possible

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Revised Lisbon Strategy, Renewed SD Strategy, European Social Agenda (2005)

Stress on economic growth and job creation: priority on “economy” of the three pillars?

Role of innovation, education, R&D in enhancing growth, jobs and SD

CSR could modernise the European “social model”: adapting to globalisation, aging, technological

advances, lower employment rates, persisting inequality,

enhancing stakeholder dialogue and transparency in business practices.

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Second EC Communication on CSR (2006) and European Alliance on CSR

CSR as voluntary activity of businesses “can play a key role in contributing to SD while enhancing Europe’s innovative potential and competitiveness”

Backed launching of European Alliance for CSR To make Europe a pole of excellence on CSR Open coalition of European enterprises

European Alliance on CSR More than 200 businesses and business organisations three themes

Raising awareness and improving knowledge on CSR and its reporting Mainstreaming CSR Ensuring enabling environment for CSR

Instruments Cartography on CSR Innovations – Online Marketplace on CSR - CSR

laboratories

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Current status of EU CSR policy

MSF : Depolarise “Voluntary” vs. “Mandatory” argument European Parliament resolution (2007):Urges further EC action to

promote CSR EC: No plan to formulate regulatory framework for CSR

Support existing international agreements (eg, Global Compact) and participate in their eventual revisions

DG Employment, DG Enterprise Mainstream CSR in existing policy areas: equal opportunity, gender,

SMEs, climate change, innovation European corporate behaviour changed as result of promoting CSR businesses that are strong in innovation also strong in CSR

Non governmental organisations actively promoting CSR Regional business organisations eg, CSR Europe National organisations eg. ORSE in France

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EU level CSR policies - summary

A tool in regional policy, To enhance competitiveness, To move towards knowledge society and sustainability, To modernise the social model

Explicit inclusion as a tool of Lisbon Strategy demonstrates its importance

Recognition of the importance of innovation in CSR practices

Idea that public policies should play a role in promoting CSR

EC consultations, MSF, Alliance, NGOs facilitate networking and knowledge exchange among stakeholders

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CSR practices in France

National public policy context National SD Strategy n 2003 2001 economic regulations oblige listed companies to include

social and environmental information in annual reports 2007 Grenelle Environnement

The five enterprises in this study A few decades of experience in addressing environmental and

social issues publish annual Sustainable Development reports, have dedicated bodies (committees at board level, divisions) to

address SD issues in their corporate governance structures, Large foreign operations including in developing countries

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Danone

Food sector giant in dairy products, bottled water, infant and medical nutrition

CSR awareness and activities since 1972 “Long-term business success depends on improving human

and social welfare” Danone Way (2001) and Danone Way Ahead (2007) Social innovation

Prioritise local needs development Danone Grameen Foods (Bangladesh) and

danone.communities Share your Meal programme (Poland) Water protection schools (Thailand, Nepal, Argentina)

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L’Oréal

World’s largest cosmetics manufacturer Raw material assessment

Respect for EU regulations, safety assurance in raw material use eg. nanotechnology materials

Responsible procurement Biodiversity protection, respect for local rights, fair trade

Sustainable innovation Green chemistry Stop animal testing Alternative skin models – Episkin and SkinEthic

Diversity promotion Diversity – nationality, ethnic and social origins, disability, gender and

age recruitment

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Sanofi-Aventis

Pharmaceutical giant Ethics 21

Ethics in R&D: stopping biopiracy - laboratory animals - clinical trials Respect for biodiversity- local knowledge, Human rights, supplier

relations Counterfeit drugs

Patient 21 Improving access to pharmaceutical products by promoting innovation

and respecting IP rights, generic drugs development – focus on developing country diseases eg. Malaria, TB,

People 21 Equal opportunity – worker health and safety – career development –

local community dialogue Planet 21

Biodiversity – climate change – resource management

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EDF – Electricité de France

Largest power producer and distributor in France, investments in other countries in EU and elsewhere

Now privatised, but long history as public enterprise, as such public welfare is of utmost importance – the origin of its CSR philosophy

Climate change and resource management most important issues Optimising generation mix – promoting energy eco-efficiency –

minimizing impact on environment and health Main points of current CSR policies

Safety and security of infrastructure Human resource measures Access to energy services for the most vulnerable Local partnership Education and awareness about energy production and use Commitment to ethics – fight discrimination, employee profit sharing Stakeholder dialogue

Flamanville EPR - Laos dam

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GDF-Suez

Gas, liquid natural gas, electricity producer, distributor, water distribution and treatment, waste treatment

Stress on local development in foreign implantation Promotes innovation for SD through R&D and bottom-up

approaches Many opportunities for eco-innovation because operations cover

the entire energy-water-waste chain Promotes ethical behaviour, fights corruption, equal

opportunity, employee well-being, workplace safety, information sharing with developing country partners, addressing needs of vulnerable clients

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Summary – CSR in French multinationals

Stress on social and human resource issues eg, diversity, local development, responsible resourcing, human rights, employee welfare and capacity development,

Active in addressing issues specific to developing countries; also stakeholder dialogue,

Report environmental, social (societal) and governance aspects – triple bottom line approach,

Aware of the role of innovation in promoting CSR and creating win-win situations,

Comply and go beyond regulations and policies; ie., participate in initiatives at national, European, and global levels and use them for information exchange,

“CSR is common sense for business” .

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Conclusion and future prospects

High awareness of the importance of CSR both at public policy and business levels in Europe to enhance business performance by advancing the ESG agenda

From emphasis on “social” pillar to the triple bottom line concept;

Mainstreaming in major policy areas Recognition of the importance of innovation in CSR

practices Move towards regulation and standards? EU CSR policies, regional and national NGOs facilitate

knowledge sharing and debate among companies and promote stakeholder dialogue

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Thank you

Innovmond SARLyukiko.fukasaku@innovmond.fr