Business and Sustainable Development

During the Johannesburg Summit, global business
has renewed its commitment to the concept of sustainable
development. For most companies these days, corporate
sustainability has become an indispensable part of doing
business. But what is corporate sustainability?

Corporate sustainability covers four main topics:

  • business'sustainable development strategy: how to
    incorporate the principle of sustainability into
    everyday business activities?
  • markets: business opportunities arising from
    sustainable development
  • banking and investment: spotlight on how
    sustainable development is being approached by the
    financial services industry
  • working with NGOs: how businesses are forging
    working partnerships with lobby groups.

Corporate sustainability goes beyond the concept of
eco-efficiency, it also requires socio-effiency (relation
between a firm's value added and its social impact).

The Global Reporting Initiative (GRI) developed
Sustainability Reporting Guidelines

in June 2000. The GRI was convened by the Coalition for
Environmentally Responsible Economies (CERES) in
partnership with the United Nations Environment Programme
(UNEP). Numerous firms present yearly a Corporate
Sustainability Report according to these guidelines and
incorporate these reports in their communication
strategies. A new version of the Guidelines was published
in 2002.

What's the EU policy on corporate sustainability? The
Commission decided to combine compliance with law and a
Voluntary Approach by the groups/stakeholders involved
after the comments made on its Green Paper "Promoting a
European framework for Corporate Social Responsibility".
The main issue is now to promote corporate sustainability
in SMEs and to avoid artificial greening of the business
performance.

To promote convergence and transparency of CSR
practices and tools, the Commission wants to determine
guidelines for:

  • codes of conduct
  • management standards (Total Quality Mangement
    Systems, Eco-Management and Audit Scheme..)
  • measurement, reporting and assurance
  • labels
  • socially responsible investment (development by
    rating organisation of criteria and indicators)

To do so, the Commission has launched a EU
Multi-stakeholder forum on CSR. This forum plays a
key-role. It is expected to determine objective
evaluation methods and validation tools such as social
labels.

In the view of businesses, attempts to regulate CSR at
EU level would be counterproductive, they stress the
voluntary nature of CSR.

The European Round Table of Industrialists

is not in favour of a standardised reporting of social
performance. "It is not logical on the one hand to
acknowledge the benefits of individually tailored
approaches, and then to try to fit these to an externally
imposed reporting standard".

Trade unions and civil society
organisations

emphasized that voluntary initiatives are not sufficient to
protect workers and citizen rights. They advocated a
regulatory framework establishing minimum standards. They
also asked for effective mechanisms to e nsure a company's
accountability for its environmental and social impact.

FEE (European federation of accountants)

calls on the Commission to produce an explicit statement on
companies being held accountable for CSR. The Commission's
initiative should be limited to a framework of main
principles or at maximum minimum standards. The focus
should be on improving CSR practices, with any reporting
principles being drafted in broad high level terms.
Detailed reporting regulation should be developed at global
level, such as that being developed by the GRI (global
reporting initiative).

Click here

for more positions on the Green Paper 'Promoting a European
Framework for Corporate Social Responsibility.

  • The Commission invited the CSR EU Multi-stakeholder
    Forum to develop commonly agreed guidelines and
    criteria for measurements, reporting and assurance by
    mid-2004.
  • The CSR EU Multi-stakeholder Forum is expected to
    present a report about its work before summer 2004.
    Depending on its result, the Commission will decide
    which initiatives are needed to further promote CSR.
     

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