BPRI Group

News Item

28 Sep 2007

The Telegraph: Wake-up call for firms doing the right thing

The Telegraph comments on BPRI and BMRB's independent research that shows politicians and public views on companies' corporate social responsibility (CSR) programmes.


Corporate social responsibility is all too often seen as an exercise in spin-doctoring, says Jamie Oliver.

New independent research shows that both the public and politicians see companies' corporate social responsibility (CSR) programmes as overwhelmingly about image.

Some 44 per cent of the public and 66 per cent of MPs think the motivation behind CSR is enhancing company image, rather than contributing to the community or motivating employees, say researchers BPRI and BMRB.

Although MPs are more cynical than the man in the street, just 11 per cent of the public believe CSR is about companies helping their local community. Worryingly, 10 per cent of the public think CSR is just to impress shareholders.

So what's going on? CSR is basically about companies moving beyond a base of legal compliance to integrating socially responsible behaviour into their core values, in recognition of the business benefits in doing so.

The Government's approach is to encourage and incentivise the adoption of CSR. For example, the Pensions Act Amendment legislation came into effect in July 2001 and requires trustees of occupational pension schemes to state their policy regarding social, environmental or ethical considerations when investing funds. And it is popular. More than 80 per cent of FTSE 100 companies report on social and environmental issues, according to CSR resource CorporateRegister.com, although commercial history is littered with big business making the right noises only to be found to be doing the complete opposite.

Jane Goodland, investment consultant at Watson Wyatt, admits there is a problem. "Large shareholders are interested in how companies manage material environmental and social risks, but often there's a gap between CSR policies and real practice. Rather than relying on CSR reports written for a wide audience, shareholders are better off talking with company management on these issues."

Milton Friedman argued that a corporation's main purpose is to maximise returns to shareholders, leading critics to argue that CSR can only work if linked to profits. And this is where small firms can steal a march on their larger counterparts, by being ethical from the off.

"A lot of firms stick the Fairtrade badge on their coffee and leave it at that," says Jeremy Torz, co-founder of coffee firm Union Hand-Roasted. "But it's more of a safety net than anything. The Fairtrade price of coffee doesn't necessarily meet the real needs of coffee producers. We pay nearly 30 per cent over the price of Fairtrade coffee anyway."

Union's approach goes deeper. "We work with communities in Rwanda, Guatemala and Indonesia and I spend around 12 weeks a year travelling to see producers. The problem we found in Rwanda was that youngsters didn't want to get involved – they saw coffee farming as an old person's job. So we sponsored a football team, bought kit, supplied transport and food and asked all those going along to come to a coffeemanagement seminar we ran that also talked about farming and budgeting issues. The young people enjoyed the football and learned a lot, making them realise that there is a future for them in coffee."

Cara Berry, BPRI managing director, said: "Our report is no reason to give up on CSR, but it is a wake-up call. Companies need to stop exploiting CSR to gain positive media coverage or purely to build brand image as this trivialises what are often genuinely good motivations for undertaking CSR."

   View all News items