As published on Guardian Social Enterprise Blog
Last week I was asked to speak about corporate social responsibility at a business conference in theMidlands. The invite came at a good time as I’ve been wanting to investigate the watering down of CSR which seems to have quietly continued since the global recession. Is it down to over-stretched resources or a deliberate change in direction from the top? So instead of launching into my usual presentation I decided to experiment and asked 150 delegates who were senior managers from a range of blue chip companies “What makes a good company?”
The answers were compelling. Of course someone suggested “profits” but financial measures were swamped by values like “integrity”, “work in the community”, “customer service”, “openness”, “helping charities” and “honesty”.
As someone who believes business can contribute very positively to society I found this encouraging. There was also warm support for organisations like Green-Works who train and mentor young people that are struggling to get a job.
But when the formal talks were over several people told me their company could not invest in an ethical supply chain because they are under enormous pressure to reduce costs. Many of these same firms have environmental policies and donate to charities, but the possibility of using their huge purchasing power to address environmental or social concerns was not on the agenda. This seems counter-intuitive when just a small difference to the cost of a supply chain can immensely improve a company’s social impact. Businesses have a choice. They can financially support suppliers that are at best neutral, and at worst actively damaging to communities, or pay a bit extra to purchase from social enterprises, fair trade businesses and others tackling community problems as well as providing good services.
In light of this I was disappointed by the comments made by Civil Society Minister Nick Hurd at Voice 11. There he refused to entertain the idea that environmental and social reporting should be integrated by law into company reporting. How short-sighted when it is clear reporting obligations are a very persuasive way of encouraging change without prescribing how to do it. Top executives like Karen Brady certainly think this is an effective way of promoting the campaign to get more women on company boards and I’m convinced that this is a constructive way of getting CSR issues considered more seriously at a senior level.
If real progress is to be made in realising the Government’s Big Society idea everyone will have to play their part; companies included. Such a simple thing as an obligation to report will transform corporate perceptions. Big businesses will do what all good companies do when faced with new challenges – incorporate these factors into the supply chain and make the solution an integral part of the business. Staff will be encouraged to bring forward new ideas and companies will compete to improve their relative performance.
Corporations will only improve their impact on society when CSR values are properly integrated into everyday business activity as opposed to being bolted on as a nice to have. Anything less is CSR lite and shouldn’t get the credit real social responsibility deserves.