The phrase Corporate Social Responsibility (CSR) sends a shiver down the spine of many an entrepreneur. Not because they are socially irresponsible, but because it holds the threat of ever more government interference. So the fact that the European Parliament is currently discussing CSR at EU level will come as unwelcome news to many small business directors.

You might be wondering what CSR has to do with the EU. After all, for most small businesses, being socially responsible is second nature, and reflects their wider role in the local, not international, community. But CSR has long been a hot topic for the EU, and has come to symbolise the tug-of-war between pro-business deregulators and the trades union movement.

Back in 2006 businesses found an unlikely champion in the European Commission when Industry and Enterprise Commissioner Gunther Verheugen launched a new policy on CSR that enshrined its voluntary nature. This was a massive shift for the EC, which had previously favoured monitoring implementation of CSR principles and naming-and-shaming those with poor records. Verheugen put a stop to this growing enthusiasm for regulation.

Verheugen's work was welcomed by the business community but criticised by trade unionists as an attempt to knock CSR into the long grass. In retrospect, the critics were probably right. But the European Parliament is keen to keep the argument alive with a counter proposal.

The Parliament's draftsman for a new report, Labour MEP Richard Howitt, has offered a lukewarm endorsement of the Commission's new policy but would like to see companies perform integrated social, environmental and financial audits, which would be "backed by regulation". The draft report floats the idea of exemptions for small businesses, but does not offer any guarantee of protection.

While the proposal has yet to gather any pace, entrepreneurs should still be wary: CSR will not be going out of fashion any time soon.