The actions of companies have significant impacts on the lives of citizens in the EU and around the world. Not just in terms of the products and services they offer or the jobs and opportunities they create, but also in terms of working conditions, human rights, health, the environment, innovation, education and training.
For this reason, EU citizens rightly expect that companies understand their positive and negative impacts on society and the environment. And, therefore, prevent, manage and mitigate any negative impact that they may cause, including within their global supply chain. Living up to this duty is commonly known as 'corporate social responsibility' (CSR) or 'responsible business conduct' (RBC).
Public authorities, including the EU, have an important role in supporting and encouraging companies to conduct their business responsibly. Over the last years, we've introduced a smart mix of voluntary and mandatory actions to promote CSR/RBC, and implement the UN guiding principles on business and human rights (UNGPs) and the UN 2030 agenda for sustainable development.
In 2011, the Commission adopted its renewed strategy for CSR, which combines horizontal approaches to promote CSR/RBC with more specific approaches for individual sectors and policy areas. Following up on its strategy, the Commission published a staff working document in March 2019. It gives an overview of the Commission's and the European External Action Service's (EEAS) progress implementing CSR/RBC and business and human rights.
The Commission has defined CSR as the responsibility of enterprises for their impact on society and, therefore, it should be company led. Companies can become socially responsible by:
Public authorities play a supporting role through voluntary policy measures and, where necessary, complementary regulation.
The Commission promotes CSR in the EU and encourages enterprises to adhere to international guidelines and principles. More specifically, the EU’s policy is built on its 2011 renewed strategy for CSR, which aims to align European and global approaches to CSR. This strategy stresses the importance of enhancing the visibility of CSR and disseminating good practices, through the integration of CSR into education, training, and research. The strategy also improves self and co-regulation processes and companies' disclosure of social and environmental information.
This is an alternative term introduced by the OECD in close cooperation with business, trade unions and non-governmental organisations. The OECD has defined RBC as "making a positive contribution to economic, environmental and social progress with a view to achieving sustainable development and avoiding and addressing adverse impacts related to an enterprise's direct and indirect operations, products or services".
Human rights are an increasingly important aspect of CSR/RBC, especially when it comes to businesses' global supply chains. The UN guiding principles on business and human rights define what companies and governments should so businesses don't have a negative impact on human rights. These guiding principles were endorsed by the UN Human Rights Council in 2011, stating that business enterprises are specialised organs of society, which requires them to comply with all applicable laws and to respect human rights. The EU endorsed the UN guiding principles in its 2015 action plan on human rights and democracy and has committed to supporting their implementation. Therefore, we've published a number of guiding materials and promoted the development of national action plans (NAPs).
Small and medium-sized enterprises (SMEs) are the most common type of businesses in the EU. They may not know or use the term 'CSR' or 'RBC', but through their close relations with employees, the local community, and their business partners, they often have a naturally responsible approach to business. For most SMEs, the process by which they meet their social responsibility goals is likely to remain informal and intuitive. Nevertheless, we promote CSR/RBC among SMEs by developing CSR handbooks and manuals.