Ethical Performance
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the man with no taste for regulation on CSR

June 2002

EP talks to Douglas Alexander, UK minister for corporate social responsibility, on his year in office – and why he still believes regulation is not the way forward

When the gourmet coffee chain Starbucks recently declared a commitment to corporate social responsibility, it became a target for those who ask: ‘why are they not doing more?’

As for companies, so for governments. The UK’s five-year-old New Labour administration has been a visible proponent of CSR, yet it too has come in for its fair share of sniping. Much of the criticism it has attracted in recent months has arisen from frustration that, after a good start, New Labour does not appear to be doing much at all.

As the minister responsible for CSR at the Department of Trade and Industry – as well as e-commerce, consumer goods and the communications industry – Douglas Alexander inevitably took some of that flak. Earlier this year the New Economics Foundation think tank publicly accused him of a ‘lack of vision’ in the post and said it was ‘sadly disappointed’ by his performance.

While NEF’s opinions in some respects hit under the belt – by focusing on Alexander rather than his department, for example – it is not difficult to find off-the record detractors. Not just non-governmental organizations, but also many from the corporate sector believe things have been allowed to drift in the year since Alexander took over from predecessor Kim Howells.

Although the minister admits that co-operation on CSR across government departments can be improved, he is vehement that there has been no loss of momentum. ‘We’d like to think we’ve been firing on all cylinders on CSR in the past 12 months,’ he says. ‘We’ve made real and substantive progress.’

Ask him to quantify that progress, however, and he quotes either measures such as the pension disclosure regulation announced four years ago and enacted in 2000, or initiatives marginal to the practice of corporate social responsibility such as community investment tax credits or payroll giving.

Ask him what he considers his greatest achievement as CSR minister, and he cites the government’s second CSR report, published last month.

He does, however, appear genuinely enthusiastic about the significance of the 44-page report, which for the first time explicitly sets his government the task of bringing CSR ‘into the mainstream of business practice’. He warns against allowing CSR to become ‘a preserve of large companies’ and wants the DTI to publish case studies, hold roundtable meetings and support research to promote CSR within all businesses.

‘For me what is most important is making a difference, not making a splash,’ he says. ‘Our job is more than cheerleading for CSR. It’s being more intelligent than that.’ Clearly annoyed at the growing clamour for regulation in the field, he would prefer that the behind-the-scenes approach he favours be seen as a sign of strength, not weakness. Alexander wants to leave behind the ‘tired and rather sterile debate about whether to regulate or not’ in favour of a ‘more sophisticated understanding’ of the government’s role on CSR.

Though his department reserves the right to wield the stick of regulation, he says it is unwilling to use it. ‘If you look at how fast the evolution of CSR has gone, it doesn’t strike me that legislation is the right answer,’ he says. ‘What was deemed a significant step forward on CSR last year may not be deemed so good this year, so we have to think: “is now the right time to legislate when thinking is still evolving on what are the appropriate boundaries of CSR?”’.

That position may not have endeared him to those (including members of his own party) who support mandatory social and environmental reporting, but it has muted any criticism of his performance from the business world – which generally opposes regulation.

What it may do, however, is move Alexander and his government onto the fringes of the CSR debate as other European administrations – notably France, the Netherlands, Belgium and the European Commission – all begin to show a greater taste for CSR regulation, although recent elections results in the first two countries may change government priorities there.

There is a hint that although Alexander claims he has been ‘keen to maintain the UK’s lead in the field of CSR’ he may be happy with that lower profile for his nation. ‘We want to adopt an approach that rejects the view of the evangelists who see CSR as the answer to every problem, but also the cynics who say the private sector cannot advance the public good,’ he says.


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