I've been researching the possibility of proposing a new European CSR corporation to the European Community (EC). To date, all the legislation on Corporate Social Responsibility (CSR) is non-binding; however, the EU commission has published more than a dozen communications on the importance of CSR practices for European businesses.
One reason for this lack of binding legislation could be simply due to the fact that the EC does not have competence to address CSR issues. Nevertheless, the EC does have competence to create new companies. The EC enacted the SE (European LLC in 2001) and the SEC (European cooperative society in 2004). Therefore, I see no reason why the EC would be prohibited from creating a new 'socially responsible' European company. In fact, the majority of its Member States already have some form of CSR corporation so it would seem consistent with 'European personality.'
In my opinion, this new European CSR company would need to have the possibility to pursue both a legitimate business AND social purpose to the same extent. Although this would not exemplify the 'For-Benefit' archetype of the Fourth Sector, it would allow For-Benefit companies to emerge in a new legal arena where few barriers exist for social entrepreneurs who would like to do good and do well...
Any thoughts, comments, suggestions?
Have an amazing weekend!
-Alissa
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I fully agree with the idea that the EC could – should – work on developing a new CSR corporation, especially at this very moment of economic and social crisis. Up to now, the EC has been quite “shy” on this issue (my personal opinion), even if we can salute the efforts made since 2000 to introduce the CSR concept in it’s legislation, and into the State’s members national legislations.
Many obstacles are still to overcome, alas.
1 – There is a great need to develop “Socially responsible investing”, even if trends confirm major growth of this sector. Ethic and sustainable development rating companies such as “Vigeo” have helped a lot, but their resort mainly concerns international companies. This is why the EC has tried to encourage national legislation to help small businesses access CSR practices and ethic rating. Never the less, I keep on thinking that as long as national legislations are not binding (or more binding) on this issue, the EC efforts will be insufficient. The market of “SRI” has to be pushed, so that more companies appeal to rating companies, so that Ethic investors develop. Investors have the key to everything, and as long as “SRI” remains marginal, “CSR” will be marginal as well in Europe.
2 – This leads me to a second obstacle, which is not the least. There is a problem of “economic and social culture” in some major State members (such as France, for example). I recommend you take knowledge of Isabelle MAIGNAN and David RALSTON’s study on the differences of approach of CSR between State members, and between Europe and the US. It clearly shows that a country like France, for example, tends to consider that it’s historical approach of “social dialogue” is sufficient, and therefore, that CSR is overmuch – if not contradictory – with “social dialogue”. This explains why France, since 2001, hasn’t progressed very much on it’s CSR legislation. Hopefully, things are just starting to change, since some trade-unions have recently decided to promote CSR practices (the “CFDT” trade-union, mainly).
The MAIGNAN and RALSTON study also shows (as well as the reports of the “ORSE” – Observatoire sur la Responsabilité sociale de l’Entreprise) that French companies don’t really communicate on environmental issues, or on their relationships with external stakeholders, and concentrate their information on their “social dialogue” practices… which is just a small part of CSR. Better less than nothing, I agree… but its does show a major cultural obstacle that will take time to overcome, and it partly explains why some State members are reluctant to develop European legislation on CSR issues.
3 – I also think that some State members and some European authorities fear that developing CSR companies status can harm traditional companies that are important to the European economy… like insurance companies, for example. If you take the example of the French welfare market, where insurance companies are in competition with the “mutuelles” (who are CSR companies), you can see that the “mutuelles” are still major competitors, despite the interchange process that has benefit insurance companies since the enforcement of the “Insurance market” legislation in the mid 90’s. Helping out CSR companies can modify substantially market structures, and I’m not sure that this will please a lot of influent lobbies.
Nevertheless, times are changing, and I really think that European consumers are willing to address themselves to CSR companies. Sustainable development and economic ethics are becoming major priorities to them (hopefully), and maybe this will end up motivating State members governments.
And since future belongs to those who innovate and think ahead, well I really do think your idea of working on a new European CSR company is a GREAT idea. I really look forward to reading more about that on your blog… :)
Benoit PETIT
benoit_petit_droit@hotmail.com
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