Jump down to beginning of page content

Blog


Julia Beier

Julia Beier, Associate, Advisory Services

Publication Date

December 19, 2012

Share



CSR ‘Made in Germany’: Are Voluntary Standards Enough?

Julia Beier, Analyst, BSR

In 2011, the European Commission published its new corporate social responsibility strategy and updated its definition of CSR. Previously defined as “a concept whereby companies integrate social and environmental concerns … on a voluntary basis,” CSR is now defined as “the responsibility of enterprises for their impacts on society,” with respect to applicable legislation and demand for non-financial disclosure of EU companies.

Yet vigorous debate continues at the country and European Union levels as whether or not to regulate CSR efforts and whether non-financial reporting should be required by law. Whereas some countries such as France (with the Grenelle II Article 225) and Denmark have already adopted national laws on CSR reporting, Germany continues to resist this commitment.

I recently attended a discussion in Brussels on “CSR—Made in Germany,” organized by the German Federal Ministry of Labor and Social Affairs, which is in charge of the national CSR strategy. The objective was to present the consensus paper of the National CSR Forum and discuss the positions taken by German businesses, trade unions, and NGOs in response to the Commission’s renewed strategy. (The National CSR Forum is composed of experts from businesses, government, the civil society sector, and others who advise the German government on CSR strategy.)

During the debate, a number of national government officials and German business interests spoke out against CSR regulations and mandatory non-financial reporting, favoring guidance over regulation at the EU level. In contrast, Germany’s trade unions and NGOs favored the new definition of CSR because it aims to increase transparency, engagement, and compatibility among European companies.

Interestingly, while the German government resists mandatory standards, many large German companies are internationally recognized for their CSR efforts. As two examples, BMW was identified this year by the Dow Jones Sustainability Index as the greenest automaker for the seventh consecutive year, and PUMA published the first-ever environmental profit and loss account in 2011. In general, large German companies are quite advanced on environmental performance, as well as social dialogue and stakeholder engagement, notably with unions and works councils.

So what’s the real challenge here? In fact, the backbone of the German economy is not large multinational companies, but small and medium-sized companies (SMEs) that represent 99.7 percent of all businesses and provide up to 60 percent of all jobs in Germany. Non-financial reporting may be difficult for these companies, as they often lack the data and financial resources for third-party verification of their sustainability reports.

Moving forward, sustainability actions and solutions will be expected not only from multinational corporations but from all stakeholders in Germany, including SMEs. To achieve this, easily applicable tools and frameworks must be developed specifically for SMEs to enable them to demonstrate their leadership in the sustainability field. Finally, non-financial reporting should not be seen as a financial burden, but rather as an opportunity to advance a company’s sustainability journey.

 

For more on CSR reporting in Europe, see BSR's guide on the Grenelle II law, recently passed in France.

Publications

Blog

Opinions, ideas, and notes from the field from BSR staff members around the world.

BSR Insight

A weekly member-only email newsletter, providing members with expert insights, tools, and analysis on timely global sustainability topics.

BSR Review

A collection of articles, research reports, and opinion pieces written or developed by BSR Sustainable Investment in China Newsletter: Helping investors support sustainable businesses, and helping businesses attract and engage these investors.

Case Studies

Snapshots of our impact working with business to create a just and sustainable world.

Research Reports

Independent, business-critical research to help you stay ahead of the curve and advance corporate responsibility.

Sustainable Investment in China

A quarterly newsletter will help investors in China understand how sustainable investing can mitigate business risk and create opportunities for greater financial as well as social and environmental returns.

Sustainability Matters 

Snapshots of our impact working with business to create a just and sustainable world.

 BSR member-only content; valid login required.

Share Your Thoughts

Please note, all comments are subject to moderation.



About the Author(s)

Julia Beier

Julia Beier , Associate, Advisory Services

Julia focuses on human rights, stakeholder engagement, CSR strategy and reporting, and conflict minerals... Read more →