On the up
The number of FTSE250 companies producing non-financial reports on social and environmental issues has increased almost a fifth since last year. But over three quarters (76%) of companies do not examine their supply chains, according to Directions in CSR Reporting, an annual survey of non-financial reporting by CSR consultancy Context and branding company SalterBaxter. Less than a quarter (24%) have their CSR reports independently verified to provide assurances that they are accurate and complete. Contact Penny Baxter, SalterBaxter 020 7229 5720 (http://www.salterbaxter.com)
According to a study released on February 11 by Oracle and the Economist Intelligence Unit, 85% of executives and investors rank corporate responsibility as a central consideration in investment decisions, almost twice as many as five years ago. The Importance of Corporate Responsibility surveyed 136 executives across numerous industries, and 65 investors. One quarter of all Global Fortune 500 companies now produce some type of report that charts their environmental, social or sustainability efforts, the survey found. Additionally, 84% of executives and investors surveyed felt corporate responsibility practices could positively impact a company’s bottom line. “Executives take a pretty hard-headed view of corporate responsibility,” said Nigel Holloway, director of executive services, Americas, at the Economist Intelligence Unit. “They feel strongly that ethical business conduct helps to sustain their company, but that charitable work and links to NGOs are less central objectives.” Contact Susanne Penner, Oracle 00 1 650 506 1973 (http://www.oracle.com); Nigel Holloway, EIU 00 1 212 554 0656 (http://www.eiu.com)
The state of CSR
CSR is not being widely or deeply integrated into core business functions, suggests a report published in December. Taking the Temperature of CSR Leaders, based on 400 responses to a survey of participants at the European Conference on Corporate Social Responsibility and the BSR Annual Conference by BSR and the Dutch Ministry of Economic Affairs, found that less than a tenth of respondents believe current integration of CSR is adequate. Financial markets are widely seen as offering inadequate incentives for companies to adopt CSR policies. Government solutions that encourage implementation, though more broadly supported in Europe than in the US, still face significant resistance in both places. Nevertheless, three-quarters (73%) of business leaders are confident CSR “will make the crucial and necessary contributions for the betterment of people and the environment,” while most (93%) see CSR as becoming “an even more important part of business practice five years from now”. And three-quarters of respondents expect there will be legally mandated accountability measures over the next few years, especially in areas like reporting. Contact Matt Hirschland, BSR 00 1 415 984 3263 (http://www.bsr.com)
UK opinion formers trust NGOs more than business to do what is right, according to Edelman’s sixth annual Trust Survey. NGOs are trusted by 44% of opinion formers as compared with just 37% and 27% for business and the government respectively. Trust in CEOs fell from 27% in 2004 down to 19%, bringing them on a par with union representatives. The survey also found that more than half (56%) of British people are less likely to buy US goods and services because of the Bush administration, and only two fifths (40%) feel that a US-based company will do what is right. UK opinion formers agree that it is the job of businesses and government to take responsibility for solving the obesity problem and tackling environmental pollution. NGOs bear less responsibility for these issues. Contact Olly Scott, Edelman 020 7344 1276 (http://www.edelman.com)
Invitation to action
Energy and aluminium supplier Hydro has produced a guide for implementing CSR policies within its business. Invitation to Action, available externally as well as to Hydro employees, is a tool to help managers include CSR-related issues in business planning and the daily conduct of business. The guide identifies key issues and provides examples and dilemmas on principles in Hydro’s Social Responsibility Directive: human rights, integrity, diversity, dialogue and diversity, and then outlines a framework for implementing CSR. Contact Tor Heggekroken, Hydro 00 47 2253 8100 (http://www.hydro.com)
Cadbury Schweppes is Britain’s most admired company, according to an index compiled by magazine MT (Management Today) and the Nottingham Business School. The UK’s 10 largest companies in 22 sectors were asked to evaluate their peers on nine criteria, including community and environmental responsibility and quality of goods. Cadbury Schweppes, closely followed by Unilever and BP, displaced last year’s top performer Tesco, which this year fell to fourth place, achieving low scores on the community and environmental responsibility rating, a category in which Unilever outperformed other companies. Of the nine evaluating criteria, however, community and environment was the category accorded least importance by participating companies. Contact Matthew Gwyther, MT 020 8267 4967(http://www.clickmt.com)
Business in the Community is inviting UK companies to enter its Awards for Excellence 2005. The awards are supported by Pearson’s newspaper Financial Times, the Department of Trade and Industry and Marks & Spencer. Contact Sarah Hebburn, BITC on 020 7566 8796 (http://www.bitc.org.uk)
Procter & Gamble has started posting details of its policies on key aspects of CSR on a website, pgperspectives.com. The move comes in response to requests from stakeholders for more transparency on product safety, the environment and sustainability. Contact George Carpenter, P&G 00 1 513 983 3886 (http://www.pgperspectives.com)
Gap has been recognised for social reporting in US-based Business Ethics Awards. The company’s social responsibility report for 2004 was praised for “taking social reporting a quantum step forward by risking unprecedented honesty in reporting on factory conditions”. Contact Gap 00 1 650 952 4400 (http://www.gapinc.com)
Vodafone UK recently launched a CSR newsletter, to be published electronically on a quarterly basis. The newsletter will highlight Vodafone’s progress against its strategic goal “to be a responsible business”. Contact Nicola Woodhead, Vodafone 01635 33251 (http://www.vodafone.com)
BP’s noble cause
CEO Lord Browne does not explicitly recognise corporate social responsibility, nor indeed does he have much time for stakeholders, according to comments made at a press conference in February. Instead, BP is in a position of “mutual advantage” with the people it comes into contact with, Browne told journalists following the publication of bumper annual results. “It’s all about mutuality, If we get that right, we make profits: business is in business to make profits,” he said. Forced to defend BP’s annual profit of $16.2bn (£8.7bn) against the backdrop of heightened concern about global poverty, Browne said BP’s profits go to millions of people who are “thinking about their future”, meaning those with pension funds investing in BP. “In that way, we do a lot of very good things for the world. It is a very noble purpose because we employ vast numbers of people and pay vast taxes,” Browne added. Contact BP 020 7497 4076 (http://www.bp.com)
At first glance, Lord Browne’s dismissal of CSR per se appears somewhat strange for the head of a company with an extensive range of social and environmental policies. But seen in the context of recent comments concerning limits to the role of business in society, the BP CEO appears to be merely making another appeal for a ‘back to basics’ approach to conducting business.
At Davos, Browne attacked what he called the creation of ‘pseudo markets’ within Britain’s public sector. In a seminar entitled Does Business Have a Noble Purpose? the outspoken CEO rejected one of the Labour government’s key tenets: that competition should drive standards in the public sector, namely schools and hospitals. Browne clearly believes that companies should be left to make money, because that’s what they do best (and by doing so, contribute to wider society). Meanwhile, government should take care of the public domain.
This view can equally be applied to BP’s approach to CSR. By making money (in BP’s case a lot of money), the company is acting in the best interests of everyone in society. But coming in the face of high-profile campaigns to fight poverty in Africa, the oil company has a major job on its hands. Convincing society that in pursuit of profit it is not just making those in the developed world wealthier might well be a tough call.
Corporate Citizenship Briefing, issue no: 80 – Mar