Corporate social responsibility (CSR) is one of the major developments affecting business over the last decade. CSR has been defined by the European Commission as ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’. Starting with roots in a variety of separate pressures upon corporations to become more socially responsible, CSR is now a major driver behind business decisions. From the 1990s it is issues relating to the supply chain that have come to the forefront. Most large western organisations have been able to clean up their own backyard, ensuring that within their own boundaries issues like human rights, labour standards, environmental care and occupational health are being dealt with through programmes aimed at ensuring consistency of treatment and minimum standards. However, with the growth and complexity of supply chains and the move to global sourcing, it has become increasingly difficult to ensure similar conduct further down the supply chain.
One sector affected, like others, by these developments, and in which CSR issues have recently come to the fore, is the utilities sector. In addressing supply chain issues, however, many utilities are faced with legal constraints that do not apply to other private firms, namely the restrictions of the EC Utilities Directive (Directive 2004/17). As chapter 2 explained, this directive regulates the procurement of many public and private utilities, with the aim of opening their procurement markets to EC-wide competition.