CSR – How much voluntary commitment is enough?

The voluntary sustainability measures of companies – widely referred to as Corporate Social Responsibility (CSR) – are not sufficient to generate a significantly positive influence on society. To achieve this, political regulation and voluntary corporate measures must go hand in hand. This is one of Oeko-Institut’s key findings in IMPACT – a large European research project on CSR. Oeko-Institut is discussing the main results of the project today in Berlin.

“Many companies endeavour to make their economic activity sustainable, but often come up against their own limits. Frequently it is not clear to them which measures can generate a beneficial effect (e.g. for the environment) and how this effect can then be optimized. Only the right mixture of voluntary measures, regulations and standards can help bring about crucial adjustments for sustainability and, in doing so, generate better impacts – that is, positive effects on society,” says Christoph Brunn, researcher at Oeko-Institut.

Voluntary measures and regulation are complementary

The key question must always be what measures can be used to achieve the greatest benefit for society. Previous discussions about whether various aspects of sustainability can be left to the companies to carry out voluntarily or whether and how strongly it should be regulated thereby become superfluous. The question of why a company carries out these measures – regulation, voluntary commitment or a mixture of both – is only a secondary concern.

Regulation and voluntary activities are by no means mutually exclusive; rather, they should be regarded as complementary: “There are good examples of companies getting active beyond the legal minimum, for example with health and safety at work in the building sector. This has occurred even though such issues are tightly regulated in Germany,” says Brunn. In addition, governmental intervention can help create an awareness of the problems involved in specific sustainability issues.

Regulation: Rights of and obligations for companies

Finding the right level of regulation will be a challenge. “Complete” regulation can in most cases not be considered the only useful alternative. This becomes evident when considering a responsible approach to conflict minerals: “Far reaching mandatory obligations to avoid the use of conflict minerals might bring peace and stability to conflict affected regions, but also cause unintended side effects. A general avoidance of resources from a certain region is often the easiest way to fulfill such obligations. But this is problematic because legal mining is often the only employment opportunity for those living there,” says Andreas Manhart, researcher at Oeko-Institut.

Notwithstanding this, there are new possibilities to address many problematic situations in global supply chains. In particular it should be examined more often whether the due diligence approach is a suitable solution. This approach requires that companies take measures within their capabilities to prevent or remedy any irregularities in their supply chains. Depending on the scope of the legislation, a company is not fully responsible for all actions of its suppliers, but only for the proper fulfillment of its duty of due diligence. So far the use of a binding due diligence approach has been tested in the value chains of several resources, including those of some minerals, metals and timber.

IMPACT – European research project on CSR

IMPACT is the largest European research project on the topic of CSR that has been conducted to date. The goal of the project was to determine whether the voluntary CSR measures have positive effects on society. A key finding of the IMPACT project is that such corporate sustainability measures do have an impact, but one that is too small to bring about a fundamental change. Having voluntary CSR as the sole instrument for making economic activity sustainable is thereby called into question.

Further information:

Oeko-Institut's background paper on the IMPACT project

Information on Oeko-Institut's CSR symposium held in Berlin on 16.10.2013 (German language only)

Contact at Oeko-Institut:

Christoph Brunn
Researcher in Environmental Law & Governance Division
Oeko-Institut (Institute for Applied Ecology), Darmstadt office
Phone: +49 6151 8191-128
Email: c.brunn@oeko.de

Regine Barth
Project Leader and Head of Environmental Law & Governance Division
Oeko-Institut (Institute for Applied Ecology), Darmstadt office
Phone: +49 6151 8191-130
Email: r.barth@oeko.de

Oeko-Institut is a leading independent European research and consultancy institute working for a sustainable future. Founded in 1977, the institute develops principles and strategies for ways in which the vision of sustainable development can be realised globally, nationally and locally. It has offices in three cities in Germany: Freiburg, Darmstadt and Berlin.

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