Let's Walk the Talk on Corporate Integrity ; `Social Responsibility' Is the Buzz Phrase in the Business World, but Critics Say It's PR Spin. Deborah Doane Asks If Multinationals Are as Ethical as They Claim, While, below, Kotaro Miyata Sees How Investors Are `Engaging' Companies to Improve Their Behaviour
Doane, Deborah, The Independent on Sunday (London, England)
Ethics is becoming an industry. There are now more than 400 consultancies, at least 15 award schemes and at least one conference or seminar a week devoted to corporate social responsibility (CSR). Peter Mason, editor of Ethical Performance Newsletter, the industry insiders' guide, says the number of consultancies tackling ethics has grown dramatically in the UK and Europe over the past four years.
But people are starting to wonder if this is making any difference to the social and environmental performance of companies. Far from providing solutions to global problems, CSR seems more successful at spawning its own business than at helping corporations tackle things like climate change or labour standards.
The value of these consultancies can be quite high, especially if they net the business of a big multinational. Retainers paid by a FTSE 100 company usually exceed pounds 1m a year for the lucky firm, says one insider.
CSR is now dominated by consultants specialising in PR and communications. When the Institute for Public Relations started up a "CSR Network" late last year, discussing subjects such as the social report, it attracted over 220 members.
By some measures, this effort is working. A study by Next Step and corporateregister.com last month found that almost all FTSE 100 companies now issue some information on their social and environmental performance, with 72 producing a standalone report.
But, argues Nick Robins from Henderson Global Investors, "there's a big difference between reporting and disclosure, and there are very few good examples of the latter". In fact, he adds, "the growth in the consulting industry around CSR reporting may well be getting in the way of good practice and diverting resources from real progress".
Tom Burke, visiting professor at Imperial College London, sees the number of consultancies and codes of conduct as a sign that the issue is now important. But others maintain that, beyond mere "consciousness raising", the apparent ethical benefits bear little resemblance to what's happening on the ground.
BP, often upheld as the oil sector's leader in CSR for breaking ranks and accepting the Kyoto Protocol, has a barrage of critics at its doorstep for its dubious responsibility practices. It wasn't enough that it retreated from its "Beyond Petroleum" rebranding two years ago, after activists at the company's AGM revealed that it had no intention of reducing its production of fossil fuels. In January, Henderson Global Investors pulled out of BP following health and safety problems in Alaska. And now a group of non-governmental organisations is taking a case to the UK Government under the OECD Guidelines on Multinational Enterprise, which provides a code for appropriate behaviour. They claim, among other things, that BP evaded labour, tax and environmental laws in the development of a pipeline running through Azerbaijan, Georgia and Turkey.
The case is part of the wider concern felt about voluntary codes of conduct that have dominated the CSR agenda and form the bread and butter of most consultancies. For example, the flagship UN Global Compact has been heavily criticised for not offering any way to ensure …
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Publication information: Article title: Let's Walk the Talk on Corporate Integrity ; `Social Responsibility' Is the Buzz Phrase in the Business World, but Critics Say It's PR Spin. Deborah Doane Asks If Multinationals Are as Ethical as They Claim, While, below, Kotaro Miyata Sees How Investors Are `Engaging' Companies to Improve Their Behaviour. Contributors: Doane, Deborah - Author. Newspaper title: The Independent on Sunday (London, England). Publication date: May 11, 2003. Page number: 7. © 2009 The Independent on Sunday. Provided by ProQuest LLC. All Rights Reserved.
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