Corporate Social Responsibility (“CSR”) as a concept is centred on the principle that a company functioning in the current environment should not only follow its main purpose, namely to produce profit, but also act responsibly towards the general environment in pursuing their bottom line. In a somewhat pejorative manner one may be able to say that CSR is considered as the "7 years at home" principle (Romanian expression where the age before starting school is associated with character and manners development, adapted version - good family upbringing concept) but applicable to companies. The twist is that in their case this modus operandi is rather implemented after adulthood, as some start-ups manage harder to adapt their business conduct in line with the principles of CSR and most of them are not generally watched upon in respect of their CSR policy.

In order to identify what may be considered a responsible behaviour, the Organisation for Economic Co-operation and Development (“OECD”) issued in 1976 a set of principles in business conduct. They tend to define the mode of action for a company to be regarded as one who is involved in CSR. This set of principles is constantly evaluated and revised to ensure correspondence with the latest standards in terms of social perception of CSR. Meanwhile, the World Business Council for Sustainable Development, as well as a large part of other organizations active in the field, says that perceptions regarding the concept of CSR varies from one company to another mainly depending on the area of ​​activity, geographical presence, or company origin. Nevertheless, CSR is viewed in an integrated manner as one of the fields in which the contribution given by companies is helping towards the establishment of the concept and the development of society as a whole.

CSR is often regarded as having to major components, the CSR activities and the CSR reporting section. The CSR activities section being generally observed itself in part by the company’s reports in this regard. The sub-branch of corporate social reporting is, as the name suggests, that section for how public companies present their CSR activity. The concept of Corporate Social Reporting was and is more closely observed by the legislator nationally and internationally, most probably for being the main line of communication in this domain. As such, different reporting obligations are considered depending on the characteristics of the company. It could be considered that thorough imposing a reporting obligation companies are basically urged to engage in CSR activities as a whole. The two components are, apparently, in a relationship of part to whole, but they are also functionally interdependent activities, CSR be unable to fulfil the economic purpose without reporting, and the sphere of reporting is content less without CSR activity to report about.

In this article we will seek to enunciate and address some of the legal components at national and international level. Furthermore, few legislative and contractual effects of this organizational concept will be reviewed.


Hard Law. Looking at the relevant legislation, at European level the concept of CSR, at least in terms of reporting, is addressed through Directive 2013/34/EU of the European Parliament and Council as amended by Directive 2014/95/EU of the European Parliament and Council. Within this Directive an additional reporting requirement was introduced on certain economic operators beside the general financial report, namely a complementary nonfinancial statement containing information on environmental issues, social and labour, human rights, fight against corruption and bribery. With this statement/report it is sought to identify companies’ policies on the above matters, expected or preliminary results and some of the risks faced by a company in its work.

At national level, in Romania, the obligations regulated by the above mentioned directive were implemented through various orders of the authorities involved in the supervision of the companies. These include, Order no. 123/2016 of the Ministry of Finance on the main aspects of preparing and submitting annual financial statements and annual accounting reports of economic operators to the local offices of the Ministry of Finance, Order no. 1.802/2014 of the Minister of Finance for approval of accounting regulations on the annual individual and consolidated financial statements. Regulations having similar content were issued by the Financial Supervisory Authority or National Bank of Romania in their field of supervision.

The above listed regulations, although exhibit a tendency to enforcement on companies listed on the stock exchange or within the financial sector, consider, such as the directive, to divide companies that have a CSR reporting obligation, to those who do not have this obligation. Identifying those who need to submit financial statements in accordance with international financial reporting standards (IFRS) and further include an extensive report on CSR matters.

Some of the IFRS standards are overseen in Romania by the Financial Supervisory Authority (FSA). Thus, Rule no. 39/2015 for the approval of the accounting regulations compliant with International Financial Reporting Standards, applicable to authorized entities, regulated and supervised by the FSA duplicates what conditions need to be met and the persons to whom it is addressed.

Under this rule, companies ("entities") that on the moment of issuance of the balance sheet exceed an average of 500 employees during the financial year shall submit a nonfinancial declaration comprising information on their environmental, social and employment, human rights, combating corruption and bribery actions, including:

a) a brief description of the business model of the entity;

b) a description of the policies adopted by the entity in relation to these matters, including due diligence policies;

c) results of such policies;

d) principal risks arising from the entity's operations, including, where relevant and proportionate, business relationships, products or services that could have a negative impact on the areas concerned and how the entity manages those risks;

e) indicators - non-financial key performance indicators relevant to the specific activity of the entity.

The regulation provides an exemption from the reporting obligation, i.e. the entity will have the possibility of filing a non-financial declaration offering a clear and reasoned explanation about the option not to report one or more of the non-financial aspects listed above. System also known as “report or explain” rule.

Additionally, there are various other regulations with implications on the field of CSR, such as legislation on employment of people with disabilities, legislation on social enterprises, law on volunteering or the one on transparency and anti-corruption. None of them addresses CSR in such an integrated and direct manner by reference to all components of its sphere, to the above one, that requires a report on all of its main components.

Soft law. (Optional/Voluntary Legislation). The nearest source of domestic soft law in this matter is the BSE's (Bucharest Stock Exchange) Corporate Governance Code, code through which companies listed on BSE are urged to ensure greater transparency on their activities. In this respect, art. 9 - Corporate Social Responsibility from the Corporate Governance Code, encourage adherents to include the concepts of CSR in their ordinary course of business. Although this code is voluntary, most companies listed on BSE have chosen to comply with it, most likely due to the policy of comply or explain, such as the one mentioned in the directive and the FSA norm.

We found that the soft-law section is generally more developed in the international sphere. Thus, under the aegis of the UN General Secretary the UN Global Compact initiative was created, having over 13,000 participants (companies and other stakeholder groups) from more than 170 countries. As a member of the UN Global Compact a company guarantees that it assumed its actions contribute to the goals of the initiative and to respect the ten guiding principles of the UN initiative.

Moreover, the International Standardization Organization (ISO) adopted in 2010, ISO no. 26000, a standard that is meant to fairly represent what can be considered a benchmark in the field of CSR. This standard, although optional, may become a necessity due to the fact that there are companies or governmental authorities that begin to require fulfilling this standard by their contractual partners. Furthermore, among other important initiatives in the field of CSR/SR we can mention few other international certificates associated with the ISO 26000 standard, such as ISO 14000 or 9000 (for systems of quality management and environmental) and international fair trade initiatives or environmental labelling such as Fair-trade Labelling Organizations International. There are also other components, such as the GRI initiative (Global Reporting Initiative) - a process of "multi-stakeholder" and independent institutions whose mission is to develop and disseminate guidelines for reporting on global sustainable development, guidelines that are similar in nature to those from the OECD, but more industry oriented.

Last but not least, companies that are active in CSR tend to definitively change the field of inter-company contractual relations because they tent to require as a contractual standard, if not an affiliation to certain organizations (e.g. UN Global Compact) at least some form of statement within their agreements regarding the involvement of trade partners in CSR or meeting some of the guiding principles of the concept (e.g. guarantees of non-involvement in corruption activities, non-exploitation of employees or environmental activities).

Concluding on the above, the field of CSR is developing as most other legal institutions where national regulation is being influenced from outside, either by international legislature, organizations, companies or individuals. CSR also appears to be one of those areas that are rapidly growing through user generated content, its participants actively assisting in the dissemination of the concept.


One may consider that current development of the concept of CSR could be associated with the evolution process of the society, who is requiring increasingly more transparency from companies and additional corporate responsibility for their activities. This social trend can also be observed at the state level, legislators paying increased attention on potential developments, something that will most likely generate new regulations in the field.

Also, the trend of integrating corporate social responsibility as overall business strategy across the company can also be observed in an increased number corporate actors. This development might be considered a general aspiration and stabilisation of the concept at society level. As a result, the inclusion of socially responsible business model as a fundamental strategy of a company ought to become a standard. The process will require that companies reconsider their approach, giving up sporadic and inconsistent involvement in CSR, through various humanitarian or environmental campaigns, to assuming it as a permanent business model.