Requirements for investors regarding “Responsible Business Conduct” (RBC)  

The Organization for Economic Co-operation and Development (OECD) is an international organization that brings together member countries and a number of partners to cooperate in addressing key global issues that have an impact at national, regional and local levels. This cooperation is made possible by the governments, politicians, and citizens who work together to address the economic, social, and environmental challenges of globalization. Bulgaria’s National Contact Point (NCP) was established by Council of Ministers Decision No. 682/17.09.2021 as a permanent mechanism for implementing the Guidelines for Responsible Business Conduct of Multinational Enterprises in Bulgaria. The NCP operates in accordance with the basic criteria of visibility, accessibility, transparency, and accountability established by the OECD. NCP website: https://bulgariancp.bg/ Email address: ncp_bg@sme.government.bg   “Responsible business conduct” or (corporate social responsibility) is an approach whereby companies take into account the social, environmental, and economic consequences of their actions. The goal is for businesses to act ethically and responsibly toward all stakeholders—employees, customers, partners, society, and the environment. The principles of RBC are as follows:

  • Ethics and integrity – applying transparent and honest practices, avoiding fraud, corruption, and manipulation;
  • Environmental responsibility – sustainable use of resources, reduction of harmful impacts on nature, and support for initiatives to protect it;
  • Social responsibility – fair working conditions, equal opportunities, and the well-being of employees and the community;
  • Economic sustainability – creating long-term value rather than short-term profit;
  • Commitment to society – supporting social, educational, and health initiatives.

Investors who adhere to RBC principles take social, environmental, and ethical factors into account in their investment decisions, rather than focusing solely on financial returns. Key aspects of investor decision-making should include:

  1. Investing in sustainable and ethical companies
  • Assessing not only financial stability, but also social responsibility, environmental practices, and ethical standards.
  1. Avoiding “unethical” industries
  • Investors may decide not to invest in industries or companies that engage in activities considered harmful to society or the environment, or companies that do not respect fundamental labor rights.
  1. Applying ESG criteria
  • Taking environmental, social, and governance indicators into account when analyzing companies.
  1. Actively engaging with companies
  • Participating in joint events, supporting sustainability initiatives, demanding improvements in management.
  1. Long-term perspective
  • Avoiding short-term risks and losses associated with unsustainable management or reputational damage.
  1. Support for social and environmental initiatives
  • Investing in companies and projects that make a positive contribution to society and the environment.

The application of the principles of responsible business conduct by investors will not only help to achieve financial gains, but will also contribute to the sustainable development of ethical business and corporate responsibility.

OECD Guidelines for Multinational Enterprises:

– Concepts and Principles – The introductory chapter emphasizes the basic obligations of enterprises to comply with national law and explains the nature of the functioning of multinational enterprises within the meaning of the OECD Guidelines.

– General Policies – This chapter provides a summary of the objectives and key recommendations to enterprises set out in the OECD Guidelines. This includes recommendations on sustainable development, due diligence, local capacity building, and human rights.

– Disclosure – Companies should operate transparently, informing the public not only about their financial performance, but also about all other important aspects of their economic activity, such as how they manage to meet social and environmental standards.

– Human rights – Regardless of their size, sector, operations, and structure, multinational enterprises are required to respect human rights. The guidelines emphasize their responsibility by setting out important criteria for conducting human rights due diligence.

– Employment and industrial relations – This chapter addresses the internationally recognized labor standards of the International Labor Organization (ILO), freedom of association, the elimination of all forms of forced and child labor, and the elimination of discrimination in the workplace.

– Environment – The recommendation to multinational enterprises is to implement effective environmental management systems, such as transparent reporting guided by the precautionary principle, as well as effective impact plans to address any damage caused to the environment.

– Combating bribery and various forms of corruption – To combat corruption, multinational enterprises must not offer, promise, give, or demand bribes directly or indirectly. They must strive to combat corruption in a transparent manner.

– Consumer interests – In order to respect consumer interests, multinational enterprises are encouraged to adopt fair business, marketing, and advertising practices and to ensure the safety and quality of their products and services.

– Science and technology – Multinational enterprises are called upon to implement procedures that allow for the transfer and rapid dissemination of technology and expertise, without neglecting the protection of intellectual property rights.

– Competition – To protect competition, multinational enterprises should apply fair competition rules and not form cartels that distort competition. Competition rules in the countries concerned should be respected.

– Taxation – Multinational enterprises must contribute to public finances within the framework of applicable laws and regulations and comply with the tax rules and regulations of host countries.   The 2023 edition of the Guidelines provides updated recommendations for responsible business conduct that reflect societal challenges and address the urgent social, environmental, and technological priorities facing societies and businesses.

 

OECD Guidelines for Multinational Enterprises on Responsible Business Conduct  

Useful links: https://eur-lex.europa.eu – Directive (EU) 2024/1760