European Parliament committee rejects compulsory corporate social responsibility reporting

The European Parliament’s industry committee has rejected a proposal to require companies to report on their actions towards corporate and social responsibility (CSR), stating that such reporting should be on a voluntary basis.

The proposal was put before the Committee on Industry, External Trade, Research and Energy by Green MEP Caroline Lucas, and was – as she described to edie – a very modest proposal for a European directive requiring transparency against a set of criteria which, if approved, would not have come into effect for a number of years.

Nevertheless, the majority of the members of the committee decided that Lucas’ proposal was far too onerous on companies, which should be permitted the flexibility to trade and be profitable. However, such MEPs are mistaken in the belief that they are protecting the interests of business, says Lucas. “Many companies see the writing on the wall and see that corporate social responsibility is an issue – and are already starting to respond,” she said.

On the other hand, the MEPs’ reticence could be being brought about by lobbying by big business, which now has a substantial presence at the European Parliament, says Friends of the Earth Corporate Campaigner Craig Bennet. Bennet is critical of those who believe that calls for voluntary reporting has any effect on business. He points out that UK Prime Minister Tony Blair was ignored by 77% of companies when, in October 2000 in a keynote address to the CBI, he called on the top 350 companies to publish annual environmental reports by the end of 2001. “The evidence is clear now that this approach is failing,” Bennet told edie. Demands for compulsory CSR reporting are likely to dominate the forthcoming World Summit on Sustainable Development in Johannesburg in September, predicts Bennet.

The document that was eventually approved by the European Parliament’s Industry Committee was a ‘gutted’ version of that proposed by Lucas, she says, adding that she removed her name from it. The proposal forms the Industry Committee’s response to a green paper published last year by the European Commission on CSR reporting, and was the first response from a Parliamentary committee. It will now be put before the Committee on Employment and Social Affairs, the group responsible for the green paper.

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