Corporate affairs minister Kim Howells (pictured, left) says that, “apart from the usual suspects”, companies have not yet recognised that a business case can be made for more acceptable corporate behaviour, writes Andrew Sawers.
Speaking at the launch of a new report* on corporate social responsibility (CSR) by PricewaterhouseCoopers at the House of Commons, Howells argued that, despite the apparent cost, socially responsible management would benefit companies.
The venue was appropriate as the report examined MPs’ attitudes towards big business, and found that 44% of them believed that global companies had more power than governments. While 90% of them said it was important for UK companies to be seen as socially responsible, 80% did not think that companies were currently doing enough to meet society’s demands.
Most believed that companies were not committed to CSR and that business did not see a bottom line benefit in it. Almost all MPs (90%) think that companies view CSR as a PR exercise – and even more think government has a role to play in encouraging CSR.
The phrase CSR is subject to a wide range of interpretations, however, which doesn’t assist corporate adoption of CSR practices. For some, CSR means community projects. For others, it means not employing children to stitch training shoes together.
People attending the press launch argued that you have only to look at the new breed of protestors disrupting the World Trade Organisation to realise how quickly the public mood – and media coverage – can swing against businesses that are perceived to be exploitative. Therein, they say, lies the shareholder value argument for responsible behaviour on the global stage: endanger your reputation and you endanger your customer-base, your trading relationships, even your access to capital.
At the beginning of March, FTSE International, the company that compiles the FTSE-100 and a range of other indices, announced that it is preparing to launch a new set of “FTSE4Good” share price indices to be used as benchmarks for “socially responsible” investment funds.
* Politics of responsible business.
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