Telefónica welcomes the new EU policy on Corporate Social Responsibility

Good news for CSR! On 25th October, the European Commission published “A renewed EU strategy 2011-14 for Corporate Social Responsibility”. The communication presents the concerns of CSR, an evaluation of the impact of European policy on CSR, a modern understanding of CSR – including an updated definition- and a new agenda for action 2011-2014.

But why has the EC decided to launch a strategy on CSR at this precise moment? In a context of economic crisis where consumer confidence and trust in business have been damaged, the EC believes that Europe needs to create conditions favourable to sustainable growth, responsible business behaviour and durable employment generation in the medium and long term. In spite of the success of previous EU policies on CSR, such as the EC’s 2001 Green Paper and the EC’s 2006 European Alliance for CSR, important challenges remain: on one side, “many companies in the EU have not yet fully integrated social and environmental concerns into their operations and core strategy.” On the other hand, “accusations persist of the involvement of a small minority of European enterprises in human rights harm and failure to respect core labour standards. Only 15 out of 27 EU Member States have national policy frameworks to promote CSR.”

How does the EC understand CSR now? The EC has simplified the definition of CSR to “the responsibility of enterprises for their impacts on society”. The communication notes that addressing corporate social responsibility is in the interests of enterprises and in the interests of society as a whole. In addition, the EC gives advice to enterprises on why and how to manage their CSR: “to fully meet their corporate social responsibility, enterprises should have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of:

• Maximising the creation of shared value for their owners/shareholders and for their other stakeholders and society at large.
• Identifying, preventing and mitigating their possible adverse impacts.”

The communication also addresses the framework provided by internationally recognised principles and guidelines – OECD Guidelines for Multinational Enterprises, the ten principles of the United Nations Global Compact, the ISO 26000 Guidance Standard on Social Responsibility, the ILO Tri-partite Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the United Nations Guiding Principles on Business and Human Rights-, stating that “European policy to promote CSR should be made fully consistent with this framework.”

What will be the role of public authorities and other stakeholders in the new CSR policy? The communication is clear on this respect: “The development of CSR should be led by enterprises themselves. Public authorities should play a supporting role through a smart mix of voluntary policy measures and, where necessary, complementary regulation […] Enterprises must be given the flexibility to innovate and to develop an approach to CSR that is appropriate to their circumstances.” Nevertheless, the EC acknowledges the opinion of Telefónica and many other enterprises, which “value the existence of principles and guidelines that are supported by public authorities, to benchmark their own policies and performance, and to promote a more level playing field.”

The new policy also puts forward an agenda for action from 2011 to 2014 that contains commitments from the Commission itself, as well as suggestions for enterprises, Member States, and other stakeholder groups on 8 areas:

1. Enhancing the visibility of CSR and disseminating good practices
2. Improving and tracking levels of trust in business
3. Improving self- and co-regulation processes
4. Enhancing market reward for CSR
5. Improving company disclosure of social and environmental information
6. Further integrating CSR into education, training and research
7. Emphasising the importance of national and sub-national CSR policies
8. Better aligning European and global approaches to CSR

The EC has committed through this communication to “work with Member States, enterprises and other stakeholders to periodically monitor progress and to jointly prepare a review meeting to be held by mid 2014.” Finally, “The Commission calls on European business leaders, including those from the financial sector, to issue, before mid 2012, an open and accountable commitment to promote, in close cooperation with public authorities and their other stakeholders, the uptake of responsible business conduct by a much larger number of EU enterprises, with clear targets for 2015 and 2020.”

Telefónica welcomes this new policy and looks forward to collaborate with the EC to give it an impetus. Our company has been working on CSR since 2001 and promoting the use of common standards in CSR –to avoid the fragmentation of the EU market- since 2007. Regarding the reporting of non-financial reporting, Telefónica would feel comfortable with a flexible model like the one implemented in Denmark. This model binds to inform on CSR policies or, in the event of not doing so, explicitly indicate it, letting the company choosing the way of doing it. Telefónica prefers an only model of non-financial reporting because it would avoid the fragmentation of the global market, particularly the EU market.

Alberto Andreu, Chief Reputation and Sustainability Officer of Telefónica, S.A.

Eduardo Serra, Public Affairs Manager of Telefónica, S.A.