Socially responsible companies needed

Citation

(2003), "Socially responsible companies needed", Work Study, Vol. 52 No. 3. https://doi.org/10.1108/ws.2003.07952caf.005

Socially responsible companies needed

The European Commission is encouraging firms to assess their performance not on profit margins alone but also on the welfare of their workforce and care for the environment. The move is designed to support the business contribution to sustainable development.

The recent high profile collapse of some US companies hit media headlines worldwide, and public attention has been focused sharply on corporate governance. Companies' attitudes not only to their shareholders, but also to their workers and society at large have come to the fore.

This is an appropriate time, then, for the European Commission to adopt a new strategy on CSR: corporate social responsibility. Its recent communication draws on a Europe-wide debate on CSR, launched by a Commission green paper in 2001. Several responses – from governments, business, trade unions and others – showed the level of support for EU action in this field.

The Commission defines CSR as companies voluntarily integrating social and environmental concerns into their operations and dealings with their stakeholders. Whereas in the past, managements tended to focus solely on maximising short-term profits, the Commission argues that in the modern globalised economy the "triple bottom line", which includes social and environmental performance, is increasingly important to a company's image and therefore its long term success. In other words, good behaviour creates shareholder value.