SustainAbility and WWF have published Influencing Power: Reviewing the conduct and Content of Corporate Lobbying , which aims to address “fears that opaque dealings with government over public policy” by business are “inevitably against the interests of wider society”. The report assesses and ranks 100 of the world’s largest companies on the transparency of their lobbying, and the degree to which reported activities align with core business values. While around half (51%) of companies provide some degree of transparency around lobbying activities, most companies strike a defensive tone, asserting their right to lobby and maintain their positions on certain issues. SustainAbility characterises this style as consistent with a ‘second generation’ approach to CSR, where the main driver is risk management and transparency and consistency in lobbying are promoted primarily as a way of minimising reputational risk to a business. SustainAbility suggests that a ‘third-generation’ approach would view CSR as a strategic differentiator and recognise the potential for lobbying to help drive stronger social and environmental policy frameworks in support of business networks. Top performing companies are mostly from the energy, materials and health care sectors, while companies in the financial and telecommunication sectors receive low ratings. No companies, however, reveal how much they pay to professional lobbyists, and examples of “disjointed company practice” where government lobbying contradicts the company’s public position – including GlaxoSmithkline, Ford and General Motors are cited. Although these companies performed well on transparency, their focus was generally on defending controversial positions rather than how corporate responsibility and related policy activities can support core business commitments. An example of best practice given is ABNAmro, BP, HSBC and Royal Dutch Shell’s membership of The Corporate Leaders Group on Climate Change , but such examples, SustainAbility notes, are still few and far between. Contact SustainAbility 020 7269 6900 ( http://www.sustainability.com)
THE BUSINESS OF INFLUENCE
Business has a legitimate interest in the development of regulations and government policy, and governments need to consult business, argues a new report from the Institute of Business Ethics, sponsored by F & C Asset Management . The Ethics of Influence , however, also cautions that many companies have weak internal controls on their lobbying activities and notes a growing demand for companies to be transparent and consistent about their lobbying. The report calls for companies to give details in their annual reports of all political donations made, as well as an estimate of their worth, and to develop a set of policies and standards to regulate their lobbying activities. It also recommends that companies ensure that the trade associations and pressure groups to which they belong operate according to the same standards. Contact IBE 020 7798 6040 ( http://www.ibe.org.uk)
CBI FAILS PROGRESSIVES
The CBI has been accused of failing to speak for the progressive business voice on climate change, in a report issued by environmental campaign group Friends of the Earth. Hidden Voices identifies the lobbying organisation for UK industry as the most significant “block” to “progressive regulatory frameworks” that would help to cut pollution and enable new markets for environmental industries. It also argues that the CBI suffers from a ‘knee-jerk reaction’ when it comes to measures to tackle climate change. FoE alleges that the CBI “routinely exaggerates the costs” while ignoring the benefits of environmental regulation, citing as proof of an anti-regulatory stance its successful attempts to freeze the Climate Change Levy in 2005-06 and to increase the UK’s greenhouse gas allocation under the EU’s Emissions Trading Scheme. The report was dismissed by the CBI as a “gratuitous attack”, but welcomed by other sections of the business community. Speaking at a briefing, Merlin Hyman, director of the Environmental Industries Commission – one of two trade associations to publicly disagree with the CBI’s stance on environmental regulation – stressed the need to recognise that “competitiveness and high environmental standards do go together”. Concerns that regulation damages competitiveness are unfounded, he suggested – a view shared by the Commons Environmental Audit Committee, whose pre-budget report unequivocally condemned the CBI for its antipathy to environmental regulation: “We are sceptical about the extent to which environmental regulations damage competitiveness, and we reject the scaremongering approach which the Confederation of British Industry has adopted in this respect”. Contact Friends of the Earth 020 7490 1555 ( http://www.foe.co.uk)
A RIGHT-WING FRONT
A report from Corporate Europe Observatory (CEO), an Amsterdam-based research and campaign group, expresses concern about a growing pool of donations from corporations and foundations with a radical rightwing agenda to neo-liberal think tanks in Europe, which it alleges is helping such organisations to gain ground and become increasingly effective. The report says none of the think tanks disclose on their websites information about their corporate funders. Corporate Europe Observatory says that “without the disclosure of funding sources there can be no real scrutiny of think tanks that aim to influence the EU debate and decision-making”. The report says the think tanks are serving as fronts for corporations, promoting “an economic jungle society with few limits on corporate activity.” The effect it says is the opening of a channel through which corporations can buy their way into the political debate and undermine democratic process in public policy-making. Contact CEO 00 31 2 612 7023 ( http://www.corporateeurope.org)
ROLE UP
The DTI has launched a guide to encourage business to get more directly involved in shaping EU policy in corporate law and governance. Promoting Competitiveness: The UK Approach to EU Company Law and Corporate Governance aims to stimulate debate on the way forward on the EU action plan on company law and corporate governance. It encourages business to take an active role in the debate by engaging with the European Commission, European parliament, other member states and EU business organisations in a timely and effective way. Contact DTI 020 7215 5000 ( http://www.dti.gov.uk)
TAPED UP
Businesses see regulation and red tape as the key factor inhibiting development across the UK, according to a survey from the CBI and the Regional Development Agencies. Availability of finance and inadequate government support are the second and third most significant issues identified in the fifth Regional Survey of Economic Trends. Contact CBI 020 7379 0945 ( http://www.cbi.org.uk)
UNBURDENNG BUSINESS
The consultation stage of the Better Regulation Bill has been launched to enable the government to implement measures to remove unnecessary burdens on business quickly and efficiently. The government is committed to: regulating only where necessary and in a light touch way that is proportionate to risk; setting exact targets for reducing the cost of administering regulations and rationalising the inspection and enforcement arrangements for both business and the public sector. Contact DTI 020 7215 5000 ( http://www.dti.gov.uk)
Editorial Comment
Like travelling on the bus, you can wait ages, and then three come along at once. If nothing else, these studies of lobbying confirm that pressure is mounting on companies that say one thing in CSR reports, but do another behind closed doors. Such overt double standards may not be widespread, but it does happen and – more troublesome – it’s eminently believable (the conflicting agendas within corporations are well known, never mind between companies in trade associations) and it’s hard for companies to positively prove the absence of something (how do you convincingly show you never do it?). The picture is more complex still, as some lobbying is perfectly right and proper. Managers have a duty to defend their shareholders from unnecessary costs. Legendary ‘red tape’ destroys economic value and has to be tested against any social or economic. Indeed governments often ask companies for their help and advice in framing new regulations to make them workable. The starting point for managing these issues must be transparency: set out a clear principle, publish specific policies around direct political donations, ‘soft’ money and trade association activity, then provide a description of activities undertaken, amounts paid, and why. But that alone is unlikely to be enough: the key is rebuilding trust among critical audiences. To achieve that, companies need to go beyond lobbying to protect their own interests and embrace lobbying for society’s interests – speaking out on climate change or demanding more regulation if a voluntarist approach to sustainable design isn’t working, for example.
THIRD WAY
The government should increase the role of the third sector in delivering public services, suggests a report from the Social Market Foundation and the Association of Chief Executives of Voluntary Organisations (acevo), published on July 26. Communities in Control: The New Third Sector Agenda for Public Service Reform draws on examples from Australia, where two charitable organisations – The Salvation Army and Mission Australia – constititute the country’s largest providers of employment training services. Nick Aldridge, the author of the report said: “We want to see the State transferring substantial sums of money to third sector organisations to enable them to take over the delivery of public services…” Contact Nick Aldridge, Acevo 0845 345 8481 ( http://www.acevo.org.uk)
FUEL TO THE FIRE
A voluntary approach to CSR is insufficient and binding rules should be imposed on companies, Socialist and Green MEPs told the European Commission at a press conference on June 29. They used as evidence of the failings of a voluntary approach testimony from community leaders from six countries including Nigeria and the US, alleging that pollution from Shell oil refineries had caused high rates of cancer and asthma within their communities. The press conference, coordinated by environmental pressure group Friends of the Earth, aimed to highlight alleged corporate malpractice by Shell, and was timed to coincide with the company’s AGM and the release of its annual report. The MEPs are calling for a more stringent CSR policy in advance of a planned Commission communication on the issue in September. Contact Richard Howitt, EP SubCommittee on Human Rights 01223 240 202 ( http://www.europarl.eu.int)
CONSUMER STRATEGY
The government has announced its new consumer strategy, A Fair Deal for All , which will form the basis of consumer policy for the next decade. Key parts of the strategy include:
– rolling out Consumer Direct , a telephone and internet advice service, across the country by September 2006
– bringing in a single clear ‘fair trading law’
– integrating trading standards work across regions, including the introduction of regional ‘scambusters’, with £1.5m funding support
– promoting alternate dispute resolution services to avoid recourse to the courts.
US food giants are binning healthy options because they do not satisfy consumer tastes. Industry heavyweight, Yum! Brands [b], whose chains include [b] Taco Bell, Kentucky Fried Chicken and Pizza Hut , admitted efforts to shape-up its menu have failed to entice customers. Speaking at the annual convention of the Institute of Food Technologists, Yum! Brands chief nutritional officer, Marilyn Schorin, said “the fast-food industry is successful because Americans go out to indulge in foods that they don’t cook at home, and they don’t expect to find the healthy options at take-away outlets that are available at upscale restaurants”. She also revealed that the company’s decision to axe Taco Bell’s half-fat alternative, Border Lights, was influenced by the success of Pizza Hut’s ‘double-stuffed-crust’ pizza.
Schorin’s words echo other voices in the industry. McDonald’s director of global nutrition, Cathy Kapica, was reported as saying that fatty fare was a simple case of supply meeting demand: “If Americans wanted tofu, McDonald’s could provide the best-tasting, most convenient, most affordable, freshest tofu there is,” she said. ‘”The problem is, Americans don’t want tofu”. Contact Marilyn Schorin, Yum Brands, 00 1 502 8748436, ( http://www.yum.com/nutrition/)
SALT OF THE EARTH
Targets to reduce the amount of salt in food have been cut after food manufacturers and retailers, including Heinz, J Sainsbury and Tesco , said the initial recommendations “would not be achievable”.
The Food Standards Agency (FSA) said the industry had opposed its initial targets because of concerns that reduced-salt food would not be to consumer taste. An FSA document shows for instance that a target of 0.5g per 100g of dried soup was increased to 0.7g per 100g after the industry said the old target “would not pass consumer acceptability”. But Professor Graham MacGregor, chairman of Consensus Action on Salt and Health (CASH), suggested there was no reason why less salty food could not pass the taste-test. Speaking to the BBC he said: “It’s nonsense for the industry to say it’s not possible to do it. Public acceptability will be fine provided it is done slowly”.
CASH said research had shown that reducing the average salt intake to the government target of 6 grams per day could prevent 70,000 strokes and heart attacks. In response Martin Paterson, deputy director general of the Food and Drink Federation insisted “The food industry is committed to continuing to reduce levels of salt in products and providing lower salt options where technologically possible, safe and acceptable to consumers”. Contact ( http://www.salt.gov.uk)
SWEETS AND THE SWEET
Coca-Cola and PepsiCo , along with other soft drink companies, have together agreed to voluntary restrictions on sales in US schools. Under the agreement, fizzy drinks will be withdrawn completely from elementary schools and replaced by water and fruit juice. In middle schools, full-sugar drinks will no longer be sold during the day, while in high schools the companies have promised to ensure that only half of vending machine choices are soft drinks.
The move is in response to growing pressure on drinks companies to confront childhood obesity. Susan Neeley, president of the American Beverage Association, told the Financial Times : “Childhood obesity is a serious problem in the US and the responsibility for finding commonsense solutions is shared by everyone, including the industry”.
Soft drinks are considered one of the main causes of childhood obesity. The average US teenage boy consumes the equivalent of 15 teaspoons of sugar a day through soft drinks, according to the US Center for Disease Control and Prevention. The companies’ agreement to limit sugar intake amongst young people is likely to increase pressure for similar action in Europe. Contact American Beverage Association 00 1 202 463 6732 ( http://www.ameribev.org)
HONEST PORKERS
Foodservice company Compass Group North America has announced plans to reduce the amount of antibiotics used in pork production. Compass has developed a new purchasing policy with its partners Environmental Defense and Smithfield Foods . The policy will prohibit the purchase of pork pumped with antibiotics of the sort approved for use in human medicines. The overuse of antibiotics in animal agriculture and in human medicine can cause the drugs to become less effective. Under the new agreement suppliers of pork, and to a lesser extent chicken, will have to report and reduce antibiotic usage over time. The policy applies to all animals that are raised by suppliers for the duration of their lives. Contact Cheryl Queen, Compass Group, 00 1 704 328 4018 ( http://www.cgnad.com)
ORGANIC CODE
Caterers without full organic certification can now register for a new code of practice. A spokesman from Soil Association Certification, which administers the code, said it would be “an excellent way for non-certified businesses to build customer confidence in the organic food they serve”. The registration fee for the code is £75 per year. In return caterers receive a notice to display their commitment to the code’s requirements. Contact Soil Association 0117 314 5000 ( http://www.soilassociation.org)
FISHING LINES
Less than a third of UK consumers are prepared to reduce their consumption of endangered species of fish, according to a report commissioned by Unilever , the company behind frozen fish brands Birdseye and Findus. Fishing for Good , a report by Forum for the Future, indicates that sustainability can be a hard sell – 14% of participants admitted to buying endangered fish because they were more concerned about taste, price and availability. Three years ago Birdseye launched hoki, an “ocean friendly” alternative to cod, but the product was withdrawn following a poor consumer response. Unilever is still committed to a target of sourcing all of its fish from sustainable stocks. The figure stands at around 60% and is set to rise with the launch of sales of pollock, a white fish sourced from a sustainable Alaskan fishery. The Marine Stewardship Council (MSC), a certification body established by Unilever and the World Wildlife Fund, says the number of certified fisheries is on the increase as more than twenty fisheries around the world move close to certification. Contact James Goodman, Forum for the Future, 020 7324 3630 ( http://www.forumforthefuture.org.uk)
Editorial Comment
Few accounts of CSR can honestly be described as a cracking good read, but this is one: the story of how one company faced up early to the sustainability challenges of a key product and has spent ten years trying to solve them, with mixed results. Recognising its dependence on suppliers and retailers, partnership was the chosen route, and it’s been a rocky path. Along the way, bold, indeed risky, decisions were taken, like setting a goal of 100% sustainability by 2005 even though no one then knew how it could be attained. Without a clear simple goal to inspire and drive action, it’s doubtful so much progress could have been made, but it created a vulnerability. Thankfully Unilever’s good intentions have, for once, protected it from criticism of falling short, and in Jonathon Porritt’s hands, the tale is well told. Every good story needs a clear villain – in this case it’s you and me: the British consumer, to whose every whim the retailers dance. A CSR whodunit: the shopper, in the supermarket aisle, with the fussy taste buds. Read on.
Alcohol Policy
LABELLING THE BOTTLE
Leading drinks company Diageo has announced plans to provide nutritional information and a responsible drinking reminder on all of its beers, wines and spirits. The information will be shown on labels, secondary packaging, a global website and consumer-care lines, and will contain:
– “Drink Responsibly!” messages
– nutritional information, presented so as not to imply dietary benefits
– allergen statements, where the product is know to contain allergens
– alcohol content and standard serve size/unit labelling
Alcohol-related deaths have risen by almost a fifth in the last 4 years, according to figures released in August from the Office for National Statistics. Although the numbers are still relatively small – 6,544 – there is concern that alcohol-related illnesses are spreading. According to the Independent , girls as young as 17 have been diagnosed with cirrhosis of the liver. The news has highlighted the need for better ways to encourage responsible drinking. A spokesperson from the charity Alcohol Concern told the Independent : “we have got to be a lot more savvy about how we get our messages across, and maybe take our cue from how clever the drinks industry has been in advertising its products”.
The government estimates that alcohol-related harm costs £20bn a year, yet it spends just £40,000 a year on campaigns to promote sensible drinking. That compares with £25m spent on anti-smoking advertising. Contact Alcohol Concern 020 7928 7377 ( http://www.alcoholconcern.org.uk) ( http://www.statistics.gov.uk)
TIME, YOUR HONOUR?
Judges have joined the fight against plans to relax licensing laws as medical professionals, opposition parties and the police protest against proposals to let pubs and bars in England and Wales open longer. A report from the Council of Her Majesty’s Circuit Judges said the new laws, due to come into force on November 24, will lead to an increase in violent crime. The report said: “Those who routinely see the consequences of drink-fuelled violence in offences of rape, grievous bodily harm and worse on a daily basis are in no doubt that an escalation of offences of this nature will inevitably be caused by the relaxation of liquor licensing which the government has now authorised”.
The Association of Chief Police Officers earlier voiced it concern at the proposals. A police report said there was “a strong link between the increase in disorder and the explosion of late-night premises”, adding that “one only has to look to popular holiday destinations to see the effect of allowing British youth unrestricted access to alcohol”.
According to the government, 9 out of 10 pubs are thought to have applied for later licenses, but only for an hour or two, not all night. Under the new Licensing Act authorities will have more power to close down pubs, install CCTV, bring in new management or even reduce licensing hours. Contact Department for Culture, Media and Sport, 020 7211 6200 ( http://www.culture.gov.uk)
SHIELDING THE YOUNG
US alcohol companies can protect underage youth from over-exposure to alcohol advertisements and still reach young adults legally entitled to drink, according to a white paper released by the Center on Alcohol Maketing and Youth (CAMY). Alcohol trade associations currently recommend that ads should not be placed where under-21s form more than 30% of the audience. But CAMY argues that this figure could be dropped to 15%, without losing the lucrative 21-34 year-old market, as the 30% cap is based on ages 2-20, allowing for twice as many underage age youth – ages 12-20 – as there are in the population. According to CAMY, a 15% cap would enable advertisers to pitch alcohol products more effectively at a legal age audience. Contact CAMY 00 1 202 687 1019 ( http://www.camy.org)
SMOKING BAN
Almost three-quarters of the public would back a complete ban on smoking in workplaces, according to anti-smoking campaigners. A survey commissioned by Action on Smoking and Health (Ash) and Cancer Research UK found that 73% of the 1,000 people questioned favoured a complete ban. The poll also shows that 85% of people would visit bars and pubs as often or more often if they were smoke-free by law.
The government intends to ban smoking in all public places, but has proposed exempting pubs and private clubs that do not serve food.
Cancer Research UK’s chief executive Professor Alex Markham said that the experiences of Ireland and New York, where there is a complete ban, provide “clear evidence that going smokefree does not damage profits”. Ash director Deborah Arnott said: “The pointless and damaging exemptions for pubs and clubs must be dropped from the final Bill. Smoke-free legislation must be comprehensive if it is to be successful”. But campaigners for smokers’ rights dismissed the results. They cite other surveys, which have found that about two-thirds of people are against a ban on smoking in pubs. Contact ASH 020 7739 5902 ( http://www.ash.org.uk)
COMMENTS