Case Study 2: Environmental, Social and Governance Reporting in Europe

Abstract

Corporate social responsibility (CSR) has become a well-established concept “whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis” (EU, 2002). CSR is now being adopted by more companies, investors and business schools. At the same time, the civil society, academia and media are also becoming very familiar with the CSR agenda. CSR necessitates legal compliance as well as “customary ethics” (Carroll, 1991). In this context, it may appear that a motivation for CSR may be borne out as a necessity to offset the threat of regulation. Evidently, many companies prefer to be one step ahead of government legislation or intervention to anticipate social pressures. Arguably, there is always scope for business and government to become more aligned with regards to the regulatory aspect of CSR. Governments can take an active leading role in triggering CSR behaviour among its stakeholders. The businesses themselves will realise that appropriate CSR regulation can possibly bring in economic value as well (Porter & Kramer, 2011).

Parts of this chapter have appeared in Camilleri, M.A. (2015). Environmental, social and governance disclosures in Europe. Sustainability Accounting, Management and Policy Journal. 6 (2), 224–242.