Not so fluffy after all

Controversy over tax is sharpening up the CSR debate, says one MP, as the UK Government promises a new framework for action on corporate responsibility.

We can thank Andrew Mitchell MP – former cabinet minister for international development, brought low by ‘plebgate’ – for the thought that CSR used to be understood “in a fluffy way” as a form of global paternalism where companies “bunged in ten million quid” as conscience-salving charity. No more feel-good, sucking up to consumers, he says: the tax avoidance furore has caused a radical redefinition of CSR. (Interview with TLQ digital magazine)

Coming as the UK Government launches a consultation about corporate responsibility (A call for views, June 2013), it raises the wider thought about whether politicians and civil servants have ever really ‘got’ what business responsibility and sustainability is all about. Certainly there aren’t many of us actually working in the field who ever did think there was anything ‘fluffy’ about it.

The last government was praised for establishing a CSR unit in what was then the DTI (back in the late 1990s – remember the last century? – when Tony Blair was prime minister). It arguably led the way in the rest of Europe on what governments can do to encourage or enforce responsible business practices. That said, it went through CSR ministers like hot dinners, with only Stephen Timms standing out for his focus and understanding.

Credit where it’s due, the current government has some of the right pieces in place. It has a formal policy to make companies more accountable to their shareholders and the public. To achieve this, company reporting rules are being changed, boards encouraged to be more representative of women, shareholders given more power to link pay to performance, and employee ownership made more accessible.

And the consultation is covering important topics in the CSR area: consumers, supply chain, human rights, small businesses, reporting and metrics. Responses will contribute to a new “framework for action on corporate responsibility”, the government says, to be published by the end of 2013…. which raises a question about action by whom?

The Government’s definition of CSR is still about voluntary actions over and above statutory requirements, a minimalist approach that even the slow-coach Brussels Commission abandoned in 2011.

That limited thinking, coupled with the current fixation about de-regulation – rather than smart regulation to set standards, drive innovation and fuel sustainable growth – raises doubts in my mind at least about how much ‘action’ will be involved.

If I’m right that those working in the field, both in leading companies and supporting agencies, are streets ahead of politicians’ thinking, let’s use this consultation to bring government policy into the 21st century.

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