What is corporate responsibility?
As with sustainable finance, there is no commonly accepted definition of corporate (social) responsibility. In 2011, the EU Commission proposed the following definition: “the responsibility of enterprises for their impacts on society”. This means that:
Respect for applicable legislation, and for collective agreements between social partners, is a prerequisite for meeting that responsibility. 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:
- maximizing 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
Corporate responsibility
In addition to the sustainable finance regulatory wave, corporate responsibility topics, such as environmental and human rights, due diligence, and diversity, have been at the top of the regulatory agenda.
For example, modern slavery laws have been put in place in Australia, Brazil, California, and the United Kingdom. In addition, environmental and human rights due diligence have been made mandatory in France with the Duty of Vigilance Law.
In the process of discussing and adopting similar laws on due diligence it is possible to identify countries like Germany and Switzerland, but also the EU which has announced its intention to issue regulation in this area.