East Ham to Westminster may just be a short trip, but the new CSR minister has picked up some important lessons on the way.
I am convinced that responsible corporate engagement is one of the best prospects we have for new and effective approaches making inroads on the big challenges of today’s society – a conviction based on my experience of now over 20 years of being involved at a political and community level in my constituency in the East End of London.
Twelve years ago, when I became Leader of Newham Council, I had a visit from the new chief executive of Tate and Lyle. He was in the process of establishing the East London Partnership, which has become the East London Business Alliance (ELBA). At that time, the relationship between the Council and what was then the area’s biggest employer were strained – something that dated back to Labour’s desire to nationalise the sugar industry back in the 1950s. For the Council and the community there began with that meeting an immensely fruitful partnership which has brought benefits at many different levels and in lots of unexpected ways. From my direct experience, therefore, I have seen that responsible corporate engagement can bring ambition and imagination and good organisation where otherwise there was just frustration. It can bring new ideas and new approaches, new enthusiasm of the kind that gets things done. It can put caring people – of whom there are many – in touch with situations that need caring about, and there are lots of those as well.
As to the future direction of CSR, I am deeply sceptical of knee-jerk regulatory requirements in this area because of their potential to stifle the generosity and creativity that have characterised the issue to date. Legislation and fiscal powers cannot compel virtue, while excessive intervention risks distorting or stifling progress rather than fostering innovation. I therefore welcome the recent Communication on CSR by the European Commission, which recognises that a voluntary and business-led approach is the right one.
Government measures to promote CSR are aimed at getting socially responsible activities into the mainstream of business practice rather than being seen as an “add on” or extra. For example the requirement that funds should report whether they have policies on socially responsible investment, which was introduced in 1999 when I was the pensions minister, has put CSR firmly on the investment community’s agenda. Similar requirements in the recent company law review again place responsible best practice at the heart of how UK companies are governed.
As to the challenge to join-up efforts to promote CSR across government departments, I consider this to be an important part of my new brief. One area in which I’ll be looking to develop cross-departmental consistency is in the government’s own procurement practices. Certainly a great deal remains to be done. Our aim is to maintain the momentum, recognising that CSR can simultaneously benefit economic, social and environmental goals – which are of interest to all of us.
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