In the same month that Marks & Spencer finds itself under unaccustomed attack over allegations of unethical business practices by a supplier, new techniques are pioneered to permit fair scrutiny of good business behaviour.
MEASURING UP TO VALUES
The Body Shop International published its 1995 Values Report at the end of January, presenting its record, with independent validation, on the environment, animal protection and human relationships within the business. The social audit, conducted by the New Economics Foundation, measures performance against policies, targets, internal management systems, stakeholder expectations and external benchmarks. The environment audit follows the provisions of the EU Eco-Management and Audit Scheme (EMAS), while the animal protection audit assesses internal procedures and purchasing criteria according to ISO 9002.
Each section of the report details future action promised and gives both good and bad news. For example, a staff survey showed that 71% enjoy their jobs but 45% were dissatisfied with the way the company encourages them to obtain qualifications. Customer complaints rose from 18.3 per 100,00 transactions in 1992/93 to 20.9 in 1994/95. The UK distribution truck fleet produced 1,165 of global warming gas CO2 last year and it is promised to eliminate or compensate through tree planting and other initiatives all such emissions by 2010. Contact BSI on 0190 373 1500 (http://www.think-act-change.com/)
SOCIAL AUDIT STANDARDS
A new body to develop independent accreditation and quality standards for social auditors has been launched by a group of business schools, companies and consultancies, led by the New Economics Foundation. The International Institute of Social and Ethical AccountAbility will help provide companies with the tools to present a holistic assessment of their activities, measured against their stated values and those of all stakeholders. Contact Claudia Gonella, New Economics Foundation, 0171 377 5696 (neweconomics@gn.apc.org; http://sosig.ac.uk/NewEconomics/newecon.html)
ETHICAL INVESTORS
The Ethical Investment Research Service is extending its scrutiny of companies to all the European top 500. Leading British companies are already judged against a range of criteria. The new European Index covers negative factors such as weapons, alcohol, animal testing, gambling, nuclear power, Third World exploitation and environmental damage. Positive criteria include health and safety policies, clear statements of environmental action, and women in senior management. EIRIS plans to extend its positive screening in depth on equal opportunities, community involvement, working conditions and the environment, but is hindered by the lack of publicly available information in some countries.
Meanwhile there are indications that Britain’s charities are increasingly insisting on an ethical approach to the management of their estimated £25 billion assets. In January, the United Charities Unit Trust adopted an ethical and environmental policy which will cause the replacement of a fifth of its underlying assets. Also in January the Methodist Church established an investment management company to share with others the experience of its Central Finance Board, which manages assets worth £550 million, avoiding companies involved with alcohol, tobacco, arms and gambling. Contact Peter Webster, EIRIS, on 0171 735 1351
DEFENDING REPUTATION
Marks & Spencer has adopted an immediate and high profile response to allegations about the use of child labour and incorrect labelling which were broadcast on January 8 in the Granada TV programme, World in Action. In addition to legal proceedings against the company and newspapers who repeated the allegations, it has displayed prominent rebuttals in stores and written directly to all shareholders and chargecard customers. Contact Sue Sadler, Marks & Spencer, on 0171 268 6436
Comment
The higher you are, the further you fall. First the Body Shop, then Shell and now Marks & Spencer. The media loves nothing better than putting people on a pedestal and then knocking them off. The problem is that when the attack comes many companies have little with which to defend their reputations except injured pride.
In the face of this relentless and growing media and public scrutiny, companies really only have two options. The first is to go forward, setting standards for good business practice in all areas, tracking progress, validating findings and publishing all. The second is to abandon the effort and make no greater claim than to be ruthless short-term profit maximisers.
However those seeking the higher path have until now lacked tried and tested tools to gather the objective facts for a fair account to be made, if and when unfair attacks are made. That’s why AccountAbility, the pioneering institute from the New Economics Foundation, is to be welcomed. Some may find The Body Shop rather too sanctimonious – and will be pleased to note that by its own figures, the Trade Not Aid policy accounts for just 2% of raw material purchases (more if you count ‘accessories’). But it is setting standards others will be judged against. It is also testing out the methodology.
After Marks & Spencer, which good corporate citizen is next? The 16th century English poet, John Donne, unwittingly provided companies with their community affairs raison d’?tre in writing “no man is an island, entire of it self”. He also issued a warning. “And therefore never send to know for whom the bell tolls; it tolls for thee.”
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