The UK government has attempted various policy interventions over recent years to promote corporate citizenship. Here, Roger Cowe examines the highlights and finds there’s still work to do.
For a concept which is supposed to be all about voluntarism, CSR has seen a lot of government intervention in the past few years, especially in the UK but also elsewhere in Europe and Scandinavia, Australia and South Africa.
Naturally, there has not been enough activity, nor strong enough, for many campaigners, but to the credit of the UK government, several other governments have copied initiatives here. Indeed, Kim Howells was the first CSR minister when he was appointed in March 2000.
The Pensions legislation, requiring trustees to comment on social, environmental and ethical issues in their annual policy statements, was announced soon after Labour came to power in 1997, although it didn’t come into effect until July 2000. Similar requirements have since been introduced in countries from Germany to Australia.
The Ethical Trading Initiative (ETI) is another development backed early in the government’s life by the Department for International Development.
This year has seen further significant UK developments which again demonstrate leadership. The CSR Academy was launched in July. And after much agonising we now have the final plan for the Operating and Financial Review (OFR), which quoted companies will have to start publishing from Spring 2006.
It is easier to list these actions than to be clear about the impact they have had. The Pensions amendment has produced quite a few statements, but precious little change in investment behaviour by pension funds. Similarly, there has been some interesting learning from the ETI but it is not clear that many companies’ buying practices have changed significantly.
It is obviously too early to tell what impact the Academy and the OFR will have. Scepticism is understandable on both but may be misplaced, especially on the reporting front, where again the OFR goes further than any other government has dared. For example, France has been widely quoted as requiring public companies to report social and environmental issues, but in practice this appears to have had minimal effect.
There will be plenty of pressure on companies from NGOs to produce meaningful OFRs, although this may not translate to official pressure from the Financial Reporting Review Panel.
Tracking reporting developments may be the main focus for CSR-watchers, but there is still plenty for governments to do, beginning with putting their own houses in order, especially so far as public procurement is concerned. In the UK, it will be interesting to see how the recent health white paper translates into requirements on business, likewise the impending update of the government’s sustainable development strategy, and especially the implications of sustainable consumption.
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