If a corporation fails to act responsibly “there is very little chance such a company will survive,” Commissioner Vladimir Spidla said while defending the CSR initiative.
“I don’t believe that,” retorted Craig Bennett from the British branch of Friends of the Earth, who then claimed that oil giant Shell is an example of an irresponsible firm with huge profits.
CSR’s voluntary programme encourages Europe’s multinational corporations to make money without hurting people or the planet.
Participants agree to shun practices such as child labour, animal-habitat destruction and oil pollution. Currently 60 multinationals from Nestle to Sony coordinate their efforts and “try to learn from each other,” said Pierre Echard, director of the CSR Europe Network.
Bennett and other critics, however, point to evidence that corporations often break their CSR promises because the programme lacks teeth.
Due to a “growing scepticism about the volunteer approach,” Bennett said, many non-government organizations (NGOs) are recommending the EU enact new regulations.
One recommended rule would require companies to file annual reports on their social and environmental progress, just as they now report financial results.
Big corporations often spotlight their responsible behaviour in advertisements, but Bennett said failures regularly go unnoticed. The programme’s only real watchdogs are NGOs and the media, he said.
Moreover, Bennett claimed the programme “is not a success” because only 2.5 per cent of the world’s 61,000 multinationals have signed CSR agreements.
Spidla said he would not rule out new regulations in the future and admitted CSR “has its limits.”
But Spidla called it “a good starting point.” He praised companies for “going beyond what they had to do” at their own expense and said CSR “allows us to carry our social concepts beyond European territory,” wherever multinationals operate.
Because of consumer and public relations pressure, Spidla said corporations “can’t get away with violating” a CSR agreement.
Bennett, however, claimed companies do it all the time.
The CSR debate is expected to intensify in coming months as the European Parliament considers whether to modify the so-called “business alliance” approach to corporate responsibility, said parliament’s spokesman on the issue, Richard Howitt of Britain.
Howitt said he “thinks there is room” for regulation as well as volunteerism, citing the “complicity” of some multinationals in human-rights violations and even slave labour.
“These are companies that claim to be responsible,” he said.
Echard, representing big business, said much of the success of CSR goes unseen. Participants work together “in a closed environment” in order not to be accused of using the programme for public relations, he said.
Echard said the multinationals “are striving” to improve their corporate responsibility, but admitted “they are by no means angels.”