Small businesses must not be forced to abide by the corporate social responsibility (CSR) legislation currently under discussion in the European Parliament, says the Forum of Private Business (FPB).
Small businesses must not be forced to abide by the corporate social responsibility (CSR) legislation currently under discussion in the European Parliament, says the Forum of Private Business (FPB).
The FPB, which represents the interests of small businesses, is urging MEPs to support the case for businesses having a voluntary approach to CSR rather than having to adhere to more regulations.
Martin Smith, the FPB’s European spokesperson, says: ‘Smaller firms have much stronger commitments to their communities than their larger counterparts. They recognise the value of responsible and productive interaction with that community.
‘Often, these relationships are informal, assisting their cost-effectiveness. To regulate them would add cost and slow the process down, not only having a detrimental effect on the firms concerned but more than likely impacting on the positive effects for the community too.’
Two different committees in the European Parliament are currently looking at the topic. The committee on industry, research, and energy has produced a report, drafted by Gunnar Hokmark MEP, outlining a number of ways in which CSR can benefit business and the community on a voluntary basis, while the employment and social affairs committee drafted a report by Richard Howitt MEP calling for CSR reporting to be made mandatory alongside financial reporting.
Howitt does, however, call for a minimum threshold for smaller businesses, to avoid any disproportionate cost of fresh red tape for those less able to cope with it.
Smith contends this may not be workable and may indeed change the legislative process: ‘Besides the difficulty of identifying what constitutes a smaller business and then setting the level of exemption from any regulations, the exemption itself may disappear.
‘For example, the European Commission is working with the International Accounting Standards Board on new accounting standards, moving in the direction of making smaller firms follow the same standards as larger companies. The most convenient place to put regulation on CSR may be in accounting standards regulations. If these make no exemptions for smaller businesses, their exemption would be wiped out.’
Smith denies that not regulating CSR would let firms behave irresponsibly. ‘There are many rules and regulations already governing the activities of businesses, whatever size and sector. Fresh regulation on CSR would merely act as a deterrent when what we need is to hold up examples of CSR and its benefits, to openly encouraging firms to engage,’ he says.
