What is CSR? Definition, key principles and regulations

According to a 2018 study, Les PME-ETI et la RSE, conducted by Bpifrance Le Lab among 1,150 French SME managers, 50% of respondents said they had implemented a CSR (Corporate Social Responsibility) policy. In recent years, CSR has become a major issue for companies. Here, we define what CSR is, and give an overview its main principles and the regulations governing it.  

What is CSR?

The European Commission defines CSR as, “the process whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. In other words, CSR encompasses all the actions taken by a company, beyond its legal obligations, to contribute to the challenges of sustainable development, on a social, environmental and economic level.  

Who is concerned by CSR?

All companies can implement a CSR policy, regardless of size (SMEs, large companies, groups, etc.), sector of activity (retail, industry, banks, insurance companies, etc.) and legal form (micro-business, sole proprietorship, private limited liability company, etc.). Implementing CSR offers numerous advantages for a company: enhancing brand image amongst customers, candidates and partners; reinforcing competitive advantage; improving employee commitment; reducing water or energy costs; reducing the carbon impact or consumption, etc. If you are looking to introduce a CSR initiative in your company, see our article, " Steps to setting up a CSR initiative in your company" to find out more.  

What are the principles of CSR?

Corporate social responsibility is governed by the ISO 26000 standard, an international standard that groups seven major CSR principles:

1. Demonstrate accountability to society: i.e., be accountable for your impacts on society, the environment and the economy.
2. Demonstrate transparency in decisions and activities: your company is committed to communicating its CSR actions and policy.
3. Adopt ethical behaviour, based on honesty, fairness and integrity.
4. Ensure respect for the interests of stakeholders (suppliers, customers, partners, employees, etc.) and respond to them.
5. Ensure compliance with the principle of legality, i.e., comply with all applicable legislative and regulatory requirements.
6. Ensure compliance with international standards of behaviour.
7. Ensure respect for human rights.

The standard also defines seven central issues that must frame all CSR initiatives:

1. The governance of the organisation
2. Human rights
3. Labour relations and working conditions
4. The environment
5. Fair practices
6. Consumer issues
7. Communities and local development.

Numerous measures can thus be implemented under a CSR approach, whether environmental, social or economic commitments (environmental protection, respect for human rights, support for the local economy, etc.). A company can monitor and improve its CSR policy through extra-financial reporting, as well as through the CSR platform made available to companies by the government.  

What are the regulations governing CSR?

In 2019, France initiated the implementation of CSR regulations with the adoption of the PACTE law (Action Plan for Business Growth and Transformation) of May 22, 2019. The law introduced three main measures, both mandatory and voluntary:

The taking into consideration of social and environmental issues

The first mandatory measure of the PACTE law complements Article 1833 of the Civil Code: “Every company must have a lawful purpose and be incorporated in the common interest of the shareholders. The company is managed in its corporate interest, while taking into account the social and environmental issues related to its activity.” All companies must therefore identify their social and environmental issues and ensure that they are taken into account in the organisation’s strategic decisions and daily actions. With this measure, the PACTE law makes it mandatory for companies to implement a CSR reflection and approach. The two remaining measures under the PACTE law are voluntary:

The formulation of raison d'être in the company’s by-laws

Article 1835 of the Civil Code has been amended and now recognises the possibility of establishing a raison d'être in a company’s by-laws: “The by-laws may specify a raison d’être, constituted of the principles which the company is endowed with and for the respect of which it intends to allocate means in the performance of its activity.”

The creation of the “mission-lead company” status

The final voluntary measure under the PACTE law concerns the creation of the “mission-lead company” status. In other words, a company can publicly declare its status as a “mission-lead company”, provided it meets the following conditions:

• “Its by-laws specify a purpose, within the meaning of Article 1835 of the Civil Code.”

• “Its by-laws specify one or more social and environmental objectives that the company has set itself to pursue in the course of its activity.”

• A Mission Committee is in charge of monitoring and evaluation, with the presentation of an annual CSR report. This committee must "carry out any verification it deems appropriate and obtain any document necessary to monitor the execution of the mission".

This recent regulation reflects the increasingly important place that CSR holds in the concerns of communities and companies. At WAYDEN, we are aware of the issues surrounding sustainable development. Wishing to act at our particular level, we introduced our own CSR initiative. We have been awarded the LUCIE label and are therefore the first interim management company to have adopted a CSR strategy.