Acronym CSR means Corporate social responsibility. What does it mean? It is corporation’s initiatives to assess and take responsibility for the company’s impacts on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.
Since 2014, corporate social responsibility (CSR) has moved from being voluntary to mandatory for EU member states. The approval was finally made by the European Parliament and the European Council when EU member states agreed to back reforms that will mean large listed companies are required to report on their environmental and social impacts.
Thus, 6,000 large companies will be required to report on their policies on diversity, social issues and on corruption, as well as the risks they pose to human rights and to the environment, including through their supply chains. However, it is questionable whether the reforms agreed will in fact be enough to drive meaningful change. “…some member states, particularly Germany, Poland and the UK, mean the requirements will not apply to the majority of large companies – according to estimates just one in seven large companies will be required to report. Companies will also be free to choose which indicators and standards they use for reporting – making comparisons between companies meaningless. Reports will be audited, but not verified – and no sanctions are in place for companies that fail to comply” (the guardian, 2014).
Meaningless report will indeed be more red tape- however, meaningful report will be valuable for everyone. But no doubt some companies will remain blind to the advantages of the reporting regime. Continuing to brush aside the adverse impacts of their business and ignore the potential costs in their business plans. It is unlikely that the reforms will transform business behavior overnight. Serious abuses will still remain unaccounted for. But the onus is now on business leaders to make these reforms work for business.
Yet, demands for greater transparency and accountability are growing – from investors and from civil society. By complying with the reforms, companies would have an enhanced understanding of the risks they face, and will act to reduce these risks which not only be of benefit to their reputation, but also benefit their long-term survival business and in all probability, their bottom line. These companies have a key role to play in driving the market towards greater transparency.
Chaplier, J. (2014, February 28). EU to force large companies to report on environmental and social impacts. Retrieved March 10, 2017, from https://www.theguardian.com/sustainable-business/eu-reform-listed-companies-report-environmental-social-impact
Kieu Anh Le, Lu Wang, Zdenek Elias, Niko Tuononen