A thought-provoking article at EUobserver.com considers how the European Union’s approach to regulation affects American companies and consumers. Leigh Phillips interviews Mark Schapiro, author of Exposed: The Toxic Chemistry of Everyday Products and What’s at Stake for American Power, which studies consumer product regulations in the context of “the massive global economic power shift” driven by “the eclipse of the United States by the European Union.”

I’ll leave aside the question of which side of the Atlantic is waxing or waning, but Schapiro does make some interesting points about the EU’s impact on corporate social responsibility (CSR) practices. He argues that the EU regulates more aggressively because government directly pays the price for corporate activity:

“There’s a really interesting distinction about how the EU and the US approach the basic idea of economics and profitability. One of the principles at the core of many European ideas is the question of externalized costs that make something appear economically possible….The key difference here is that you have a public healthcare system in Europe, so the costs of illness that come from chemicals or environmental degradation are borne by governments. Thus the state is looking at this and thinking: “Wait a minute - we’re paying the cost for this so-called low-cost production. Let’s shunt that cost back onto the producers and deliver an accurate rendering of the costs.”

Schapiro does caution against “Americans thinking that the EU is some sort of benevolent Shangri-La.” His research is a reminder that the social investment community’s work is always entwined with geopolitics.