Small companies would lose time and money by being forced to abide by mandatory corporate social responsibility (CSR), according to the Forum of Private Business (FPB).
The FPB has warned that small firms would be burdened with further increases in red tape if the European Parliament were to enforce compulsory, rather than voluntary, CSR reporting.
“Smaller firms have much stronger commitments to their communities than their larger counterparts,” said Martin Smith, the FPB’s European spokesperson.
“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.”
Currently, there are two European committees looking at the issue.
One of these, the Committee on Industry, Research and Energy has suggested that CSR is more beneficial if it is performed on a voluntary basis.
Conversely, the Employment and Social Affairs Committee believes that CSR reporting should be made mandatory, but calls for a ‘minimum threshold’ for small firms in light of the additional paperwork that would be caused by the new law.
However, Smith believes that such as solution still might not be workable.
“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,” he said.
“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.”
© Crimson Business Ltd. 2006
