Corporate Social Responsibility (CSR) has long been a manifestation of the willingness of large, small and medium-sized companies to effectively manage issues with a social and ethical impact within and across their operations.
The European Union previously defined Corporate Social Responsibility as a voluntary action, i.e. the integration of companies’ social and ecological concerns into their business operations and their relations with stakeholders. For more than a decade, the Commission has moved beyond this notion, reducing the weight of a subjective approach and calling for greater adherence to the principles promoted by international organisations such as the OECD, the UN and the ILO. This is an innovative and much discussed concept, on which the European Parliament has also recently adopted a position to integrate human rights and environmental impact into corporate governance.
According to this vision, companies will have to identify and, where necessary, prevent, end or mitigate the negative impact of their activities on human rights and the environment, such as child labour, slavery, labour exploitation, pollution, environmental degradation and biodiversity loss. They will also have to monitor and assess the impact of their value chain partners, including not only suppliers, but also sales, distribution, transport, storage, waste management and other areas.
Although the new rules will apply to large companies based in the EU (more than 250 employees and a worldwide turnover of more than EUR 40 million) and non-EU companies with a turnover of more than EUR 150 million (if at least EUR 40 million of this was generated in the EU), medium-sized and small companies will also be affected. Specific targets and a sanctioning mechanism for non-compliant companies will be entrusted to the national supervisory authorities.
All this represents a turning point in the reflection on the role of companies in society, how they relate to people, their rights and the protection of the environment. And therefore how to support healthy businesses through fair trade law rules that exclude companies which have made environmental damage and exploitation a revenue model.
To learn more about Domus Line’s sustainable development project visit roots.domusline.com.