In the UK, corporate social responsibility has been on a rapid development path that has seen change as the only real constant. Twenty-five years ago, it was all about how businesses get involved in local communities – whether through donations, employee volunteering or the in-kind support of goods or services. Now – although those aspects continue to thrive – the focus is much more on the responsibility of businesses for the way they make their money.
Whether it is food companies and the issue of childhood obesity, clothing companies and labour rights in their supply chain, or absolutely everyone and the issue of climate change – companies are now facing more challenging expectations.
A leader in the CSR field …
By and large, the UK is seen as one of the countries that is furthest forward in CSR. There are a number of reasons why this has come to be the case.
The first is that the most senior business leaders from the most important companies have been engaged with CSR over a long time. It has generally become an accepted tenet within business that top leadership includes taking care of your company’s corporate citizenship.
Second, CSR in the UK has been seen as the one area where those business leaders are truly prepared to collaborate. This has led to a general pressure upwards to improve how businesses get involved, and how they measure and manage the impact of their activity. In developed business environments that are well behind on CSR, it is often notable that such collaborative spirit is absent.
Third, businesses have been prepared to develop rigorous and testing benchmarks of performance, and then to be counted against them. The Corporate Responsibility Index, the PerCent Club, the London Benchmarking Group – and others – are all systems where business performance on some aspect of corporate responsibility or another is compared and publicly reported. And it works. Since the Corporate Responsibility Index was introduced five years ago, the performance of those companies that take part in it has generally been continually upward.
Finally, businesses have led the way in developing models for social and environmental reporting that have encouraged them to set targets for future performance and to work hard to meet them.
… but a long way to go
So does this mean that the job is done, all stakeholders are satisfied, and the UK is heading for a sustainable and prosperous economy? No – there remains a long way to go. There are a lot of leader companies making good progress, but there are many more follower companies that are on a much earlier stage of the journey.
So, for example, if the world needs to achieve 30 per cent reductions in greenhouse gas emissions soon, and 60 per cent long term, most businesses in the UK are a long way from understanding how they will achieve that.
Likewise, poverty and social problems continue to be pervasive in many places in the UK, both in inner city areas and in some rural areas. For all that business now cares more about understanding whether its investment in communities is making a real impact, it still understands too little about how social and economic regeneration really takes place to be able to target its interventions in the best way.
Lessons from the UK
Mostly, however, the UK situation offers some interesting lessons. In particular, it highlights the special challenges that exist in promoting CSR in developing country environments. In many such environments, CSR has become defined by multinational corporations that write cheques to local charities or causes. Not only does this often mean that many of the other benefits that businesses can bring – business skills, in-kind support etc – are not brought into the mix, but it is often the case that the senior business leadership community of the country then does not see the role that they could, and should, play as leading corporate citizens within their community.
If CSR is all about foreign companies giving charity, it is easy to then imagine this is nothing to do with you. But the experience of the UK suggest that it is only by bringing business leaders together to engage on the key social and environmental challenges for their business and their country that CSR has a chance of achieving its full potential.
Mallen Baker is development director of Business in the Community. Email email@example.com