2.7.1 Corporate social responsibility

The ultimate aim of CSR (environmental protection, proper working conditions and respect for human rights) is both idealistic and abstract in nature. Consequently, it is necessary to transpose CSR aims to more concrete objectives.

The first concrete CSR objective is to bring about a change of corporate conduct so that businesses will incorporate environmental and human issues into their decision-making processes. The desired change of conduct requires a change in attitude; not only the short-term financial results count but also the manner in which these are realised and their long-term feasibility are important factors to be considered. To stimulate changes in corporate behaviour a number of international organisations have drawn up corporate codes of conduct (OECD, ICC, Global Compact).1A corporate code of conduct contains standards and instructions that provide a framework for balancing the interests involved in the decision-making process. Adopting a code of conduct formulated by international organisations, governments, the branch or the company itself, may help a company to change its conduct.

A second concrete objective of CSR is to improve corporate transparency. Companies should disclose information on corporate practices and be answerable to the public, especially when it comes to corporate behaviour in foreign countries in which regulation is less detailed, or applied less strictly than in the Netherlands. Sustainability reporting may contribute to achieving this objective. The external verification of sustainability reporting by independent auditors is a sub-objective within the objective of increased corporate transparency. In the absence of independent verification of sustainability reporting, companies could be tempted to issue favourable sustainability reports that are actually little more than window dressing. Another sub-objective is the harmonisation of standards and verification procedures for sustainability reporting, which is a prerequisite for the comparability of sustainability reports. Furthermore, benchmarking is a useful tool in creating a level playing field, necessary for a healthy competition environment and good quality levels. Several initiatives in the field of sustainability reporting have been taken by (international) organisations and governments (GRI, EU, Dutch Green Party, Dutch Labour Party).2

The business community itself has formulated objectives with respect to CSR, the first being ecological and social risk management in order to prevent loss of reputation. The introduction of internal risk management systems contributes towards the realisation of this objective. Initiating dialogue on delicate issues with stakeholders and including this kind of information in sustainability reporting is also part of reputation management. A second objective of the business community is to avoid legislation on these topics. As indicated earlier, the business community, by actively participating in the public debate on CSR and by self-regulatory action hopes to achieve this second objective.