Are the European finance sector's corporate social responsibility (CSR) initiatives effective at addressing climate change, poverty and economic exclusion, corruption, and human rights abuses, or do they in fact exacerbate these problems? Earlier this month, the UK Presidency of the European Union (EU) convened a conference on corporate social responsibility (CSR) and the finance sector in Europe. Two reports resulting from this conference provide different answers to the above question.
The official conference background paper, while acknowledging the negative social and environmental impacts created by the European finance sector, ultimately advances a rosy view of the effectiveness of voluntary CSR initiatives, such as the UN Global Compact.
"Critics argue that the finance sector itself is a major cause of these global problems--that many of its actions encourage unsustainable behavior and short-term thinking, or that it has no interest in the social and environmental impacts of its lending or investment practices," states the conference paper. "Others argue that existing governance and regulatory structures are inadequate and encourage a narrow focus on maximizing short-term returns."
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