CSR in Europe
Overview of the CSR industry in Europe
The European Commission promotes CSR in the EU and encourages enterprises to adhere to international guidelines and principles. Relevant EU policy is built on an agenda for action aiming at:
• Enhancing the visibility of CSR and disseminating good practices;
• Improving and tracking levels of trust in business;
• Improving self and co-regulation processes;
• Enhancing market rewards for CSR;
• Improving company disclosure of social and environmental information;
• Further integrating CSR into education, training, and research;
• Emphasising the importance of national and sub-national CSR policies;
• Better aligning European and global approaches to CSR.
CSR is generally company-led, but public authorities can play a supporting role through a smart mix of voluntary policy measures and, where necessary, complementary regulation.
CSR in Europe – An Overview
The interaction between business and society in Europe is shaped by the diversity of economic, political and cultural landscapes across the continent. The idea that companies can contribute to societal well-being, beyond their legal obligations, has a long tradition in many parts of the region. In general, the development of CSR in Europe has been driven both by proactive strategies adopted by pioneering businesses, European institutions, and national governments, as well as by external pressures from other stakeholders such as civil society and the investor community, among others.
In Western Europe, the development of the welfare state system during the second half of the 20th century emphasized the role of the state as the primary provider of welfare, while companies were expected to fulfill their societal obligations mainly by complying with laws, paying taxes, and providing employment. Over the recent decades, however, economic and socio-political factors in many Western European countries have led to a partial redefinition of the boundaries between the public and the private sector as well as their respective roles in society. In this context, growing attention is paid to the voluntary actions that companies take as part of their CSR strategies to manage their economic, social and environmental impacts and to contribute to wider societal development.
In post-communist Central and Eastern Europe, environmental and social concerns have tended to receive less attention than the significant economic challenges associated with the transition to a market economy. However, CSR awareness and implementation in the region are advancing rapidly. In contrast to Western Europe, it is mainly companies themselves – often multinational corporations – that are the main agents of change, whereas external pressure from civil society, media, and public authorities has so far been fairly low.
In Europe, as well as in other parts of the world, the CSR movement has traditionally been led by large companies. Yet 99% of European companies are small and medium-sized enterprises (SMEs), and about two-thirds of jobs in the private sector are in SMEs. Many small companies are by nature attuned to the values of their founder or owner as well as to the needs of their local communities, but today increasing attention is being paid to the implementation of a more structured CSR approach in European SMEs.
As a relatively wealthy, stable region with a developed economic and societal structure, the current CSR issues and challenges in Europe naturally differ to some extent from those faced by the less developed regions in the world.
Many social and environmental responsibilities, which may fall under companies’ voluntary CSR engagement elsewhere, are in Europe legally defined. However, the increasing interest in business opportunities associated with innovative CSR approaches, together with the growing stakeholder expectations for corporate accountability and responsible business practices both within and outside Europe, continue to push the CSR agenda forward.
What are the broad trends?
Some of the most popular CSR trends in the area of corporate social responsibility include:
• Increased transparency;
• Investment in green technologies;
• Local community and employee engagement;
• Diversity and inclusion initiatives;
Three important trends related to ethics and corporate social responsibilities are:
• Strategic changes in corporate philanthropy;
• A new social contract between employers and employees;
• The growth of global ethics and corporate social responsibility.
How much is it growing?
Businesses have made commendable progress, but the challenges we’re facing in 2020 continue to reveal areas where CSR needs to be reinforced.