Category Archives: Sustainability

Government announces next steps towards scaling up Corporate Responsibility and Open Business

Corporate responsibility, Sustainability

In September 2010 I reflected on the merits of the Government launching an Open Business Responsibility Deal.  Today at the BITC Summit in London – with our new Minister for Corporate Responsibility Norman Lamb looking on – I was delighted to see the idea developed into two distinct strands as the Prime Minister announced:

– Open Business Forum: This will “bring together companies and organisations who, like government, believe in the power of transparency and are eager to embed openness in the way they do business. It will explore how businesses can become more transparent, without making life difficult, and identify where government can help. The Forum, will be business-led and free to shape its own detailed objectives based on the priorities of members… Members of the Open Business Forum include; Chair – Philip N Green, Government Adviser on Corporate Responsibility; Aviva; Business In The Community; Carillion; E.ON; Excell Group; Procter & Gamble; Sir William Wells; Trading for Good and Waitrose. The Forum will also be welcoming new members over the coming months.”

– Trading for Good: Being developed by Excell this is “a new online directory for SMEs that will showcase the good work they do in the community; and provide free toolkits to help businesses get involved in socially responsible practices.”  Excell report it will launch in February.  Also involved in the project led by the Every Business Commits Forum are “the British Retail Consortium, the Institute of Directors, the Forum of Private Business, Dods, Visa Europe, Ernst & Young, Itineris and Eyebright Media.”

I hope the Trading for Good website will extend to offer a kitemark for participating SMEs and also the option of submitting their light touch reports to Companies House (as Community Interest Companies already do).  This should enhance the credibility of the approach.

Also announced was Workality.  The website, which is to launch later this year, has founding sponsors that include: “Serco; Centrica; Eversheds; Engine; Mcdonald’s; Salesforce.com. With support from charities including the IEBE and The Ideas Foundation. And receiving advice and support from leading technology providers such as Facebook, Microsoft, Google, IBM, LinkedIn, Cisco and Blackberry.”

Together all these initiatives have the potential to change the internet landscape for corporate responsibility in the UK.  However, vitally important too will be the work of individuals and networks that support businesses developing their responsible business practices on the ground – as well as continued innovation by Government to encourage responsible business practice.

Work experience and internships: does pay matter?

The idea that left me least convinced today was the Prime Minister’s assertion that: “Put a young person into college for a month’s learning, unpaid – and it’s hailed as a good thing.  Put a young person into a supermarket for a month’s learning, unpaid – and it’s slammed as slave labour.”  Surely when Tescos, Argos and Poundland are reflecting on the concerns about the race to the bottom (deflationary pressure on wages and jobs) that these “workfare” schemes could trigger it is time for Number 10 to take note.   Tescos particularly suggest in theirstatement that the “risk of losing benefits that currently exists should be removed”.  I would suggest the Government should focus on work experience and internships that are a close match to the qualification level of the individual concerned, if they are going to pursue a strategy of compulsion.

Unpaid work experience for a week or two at Key Stage 4 (KS4) and Key stage 5 (KS5) seems reasonable, but post-18 work experience placements/ internships should at least secure the minimum wage.  The Internship Charter is the absolute minimum voluntary standard to which the Prime Minister should be turning for inspiration, but he would sensibly back the Deputy Prime Minister’s call for “access to internships [to be] open and transparent, with financial support such as providing expenses or accommodation, or by treating the internship as a job that can be paid under National Minimum Wage law.” [I continued these relections on Sunday…]

Red tape strangling sustainable ideas – Guardian Sustainable Business blog

Cooperatition, Corporate responsibility, CSR, Sustainability

As The Cooperation Incubator‘s work in partnership with Business in the Community continues to gather momentum you can read my article in today’s Guardian Sustainable Business blog on the challenges competition law presents public benefit collaboration by businesses:

http://www.guardian.co.uk/sustainable-business/blog/red-tap-strangl…

I would also highly recommend this article, along a similar theme, by Jason Clay (WWF US):

http://www.guardian.co.uk/sustainable-business/precompetitive-behav…

…and watch a video of Jason’s presentation last July at TED:

Beyond the OFR: The ‘Open Business’ Responsibility Deal

Corporate responsibility, CSR
In August I posted my initial thoughts on the Department for Business, Innovation and Skills (BIS) consultation that had just been launched on the Operating and Financial Review (OFR). The deadline for getting your response in is the 19 October 2010. In my draft submission to BIS (below) I suggest there is now a need for Government to look beyond simply improving reporting in the UK’s largest companies and to also embrace SMEs in a Gov’t backed voluntary CR reporting process.
 
SITUATION: THE OFR DOES NOT COVER SMEs – THE MAJORITY OF UK WORKING POPULATION
In these tough times it is more important than ever for companies to engage with their responsibilities and help the UK meet carbon targets, ensure a healthier workforce, invest in skills and their local communities, as well as improve their competitiveness. Responsible business practices also make good business sense as they often reduce costs. Yet, assuming that post-consultation the Coalition Government implements the Operating and Financial Review (OFR), this will only institute more challenging reporting requirements (than those of the current Business Review) for companies that have a turnover higher than £6.5m or have a balance sheet of more than £3.26m.
Furthermore the OFR may not deliver its desired outcome with this target group of companies. Government
will have to keep a close eye on the concern raised by some that strengthening the reporting requirements risks driving a compliance approach, rather than either a business strategic or Big Society-inspired approach, to the role an enterprise plays in its social and environmental context.
What is clear however is that the current OFR proposals will still leave the vast majority of the 1.25m UK private and public companies without a government-recognised voluntary or mandatory Corporate Responsibility
(CR) reporting framework.[i] Large enterprises, those with 250 or more employees, account for only 0.4% of UK companies.[ii] The majority – about 60% – of the UK working population are employed by SMEs. SMEs deliver about 50% of the economy’s turnover.[iii] This is why if the Government wants actual social and environmental impact from its responsible business policies it is essential that it reaches SMEs. The OFR may also still leave reduced CR reporting expectations for large unquoted, versus quoted, companies. All this falls short of rising to the responsibility and sustainability challenges of our time.
TARGET: SMEs VOLUNTARILY SUBMIT SELF-CERTIFIED ANNUAL CORPORATE RESPONSIBILITY REPORT USING SIMPLE GOVERNMENT-ENDORSED FRAMEWORK
The Big Society and a new era of responsibility should mean that all businesses have the opportunity to voluntarily use a simple system of self-certified online reporting to share openly their responsible business practices (process and performance), at the same time as their annual financial return to Companies House.
The most community minded SMEs/ micro-enterprises already report briefly, often through a page on their websites or more sophisticated mechanisms. However a short CR report (equivalent to 1-2 sides of A4) – using a Government-endorsed reporting framework – submitted online each year to Companies House might inspire the SMEs/micro-enterprises that have been slow to respond to the responsible business agenda and start to level the playing field for businesses that already proactively invest in people and planet.
Responsible business practices have the potential to increase the performance and competitiveness of UK business[iv], as well as trust[v] – and a stronger emphasis on CR transparency by Government, as promised in the Coalition Agreement, has the potential to remind some small companies of the need to balance how they exercise their rights and responsibilities. Most importantly, with small businesses most under pressure at the moment, an ‘Open Business’ Responsibility Deal could help SMEs regenerate ideas, skills and competitiveness to better build for the future – thus boosting the resilience of the British economy.
PROPOSAL: LAUNCH ‘OPEN BUSINESS’ LABEL AND ONLINE TOOL PROMOTED BY COMPANIES HOUSE
1. Companies House send out Annual Return reminder to all companies that includes link/ promotion for a voluntary web-based corporate responsibility report.
2. Companies complete a light touch, online ‘Open Business’ report with optional boxes for additional narrative. This would be along the lines of the ‘London Better Together’ model assessment[vi] (figure 1), with online advice if required from the Small Business Journey[vii] (figure 2) – or professional advisors. Establishing this web-based tool is the one unavoidable cost of the proposal but it is estimated the website could be developed for £50-100k.
Figure 1: London Better Together

Figure 2: Small Business Journey resource

3. An ‘Open Business’ label could incentivise companies to complete the voluntary report by enabling them to put the label on stationery/ websites celebrating their completion of the CR report and/or financial incentives could be considered (for example waiving annual return submission fee to Companies House or making the time required to complete the form a tax deductible expense). Recognition of the label and companies that have completed the submission by public sector procurers would also act as an incentive.
Figure 3: Illustration of what the label might look like

4. To maintain credibility of the scheme an assurance mechanism might be required. This could be a year two development and an optional extra. It would undoubtedly require an extra fee and network of independent auditors around the country qualified and approved to review companies’ reports, as well as a distinction between the label that companies with unaudited versus audited submissions can use. However it is worth noting that given companies would be signing off their submissions as a statement of fact, they might fall foul of the Trade Descriptions Act 1968 if any of the information submitted before using the label was later found to be false by a consumer. This could be highlighted at the point of submission and provide an incentive for companies to ensure their reports are true and accurate.
For further information – or suggestions to improve this proposal – please email me hi@andrewdakers.com or post a comment on this blog entry.
ENDNOTES
[i] The exception is Community Interest Companies (CICs) that already complete a light touch Corporate Responsibility report through their CIC34 annual return:
[ii] Inter Departmental Business Register (IDBR), Office for National Statistics,http://www.statistics.gov.uk/cci/nugget.asp?id=1238
[iii] Small and medium-sized enterprise (SME) statistics, Whitehall Pages,http://www.whitehallpages.net/news/archive/4282
[iv] Ipsos MORI/ BITC research on performance against FTSE350 peers of companies participating in
BITC’s Corporate Responsibility Index (CRI) each year between 2002 and 2009,http://www.bitc.org.uk/media_centre/bitc_news_press_releases/lg_res…
[v] Edelman Trust Barometer 2010, http://www.edelman.com/trust/2010/
[vii] Small Business Journey, http://www.smallbusinessjourney.com