not unworkable, just a fresh way of thinkingMay 2007
EP talks to the Conservative party’s Jonathan Djanogly about the state of his party’s policies on corporate responsibility – and why the CSR minister post may be old hat
It’s not often the Conservative Party and the Confederation of British Industry (CBI) fail to see eye to eye, so the party’s spokesman on corporate responsibility, Jonathan Djanogly, may have been rather alarmed recently to see Tory proposals on CSR dismissed by the CBI as ‘unworkable’.
For the past 12 months Djanogly, MP for the rural constituency of Huntingdon and a partner at London legal firm SJ Berwin, has been heading a review group that will produce a final report this summer on possible Conservative policies on corporate responsibility. But the group’s two big new ideas – to create a ‘social emissions’ trading scheme and set up a series of responsibility deals with business – have been savaged not just by the CBI but also by the British Chambers of Commerce (BCC), often regarded as one of the party’s natural allies.
On the surface at least, Djanogly appears unconcerned at the criticism, and is at pains to point out that the working group, which published its interim review in January (EP8, issue 9), has so far been feeling its way. But it’s clear that the social emissions trading scheme – under which ‘social pollutants’ produced by companies, such as alcohol, would be subject to ‘emissions limits’, with surpluses traded – will not see the light of day.
‘We produced a working paper that put out a lot of ideas to be consulted on, some more radical than others,’ says Djanogly. ‘The social emissions idea was really pushing things to the limit and, yes, some people have said it’s a non-starter. But it wasn’t a final report and they are not our final recommendations to the party.’
However, the notion of ‘responsibility deals’, whereby companies would receive a tangible benefit in return for good behaviour, may yet survive. The review document suggested that such agreements, brokered by a Conservative government, would involve corporate participants forming a group to ‘see through a shared solution to a problem’ such as obesity, and to make ‘commitments to change that would be binding’. In return, the companies would be subject to a lighter regulatory burden.
Although the idea has been criticized as ‘not workable’ by the BCC and unduly complicated by a number of others, Djanogly maintains that it has been ‘generally well received’ by the 40 or so FTSE100 companies that have responded to the consultation.
He concedes that while it would be simple enough to set up groups of companies with common CSR goals, ‘the complexity comes in reducing regulation’ as a reward for good behaviour. However, he insists this is not an insurmountable problem, and cites examples in other areas, such as health and safety, where responsible companies are subject to a less rigorous regime if they have a clean record. ‘It’s not divorced from reality; this kind of thing is happening already,’ he says.
New ideas may also come forward before the summer. One likely area of work is socially responsible investment practice. Djanogly says that he is concerned that institutional investors ‘spend a lot more time looking at corporate governance than CSR’ and suggests the final report ‘will look at how this has got to change’.
But whatever its shape, Djanogly believes the group’s final document, which he stresses will not necessarily be taken up in its entirety by the party, can strike an imaginative counterbalance to what he sees as the Labour government’s lack of ideas in this area.
‘British business needs to take the credit for setting the national and international agenda in this field, not the government,’ he says. ‘Labour have just been followers. Philosophically they don’t have a stance on corporate responsibility, and that came out very clearly in the Companies Act, particularly in relation to the Operating and Financial Review regime, where they just swung backwards and forwards. Labour’s main initiative, the CSR Academy, they have let go. They haven’t moved things ahead at all.’ In policy terms, the Conservative’s interest in encouraging responsible business practice complements the party’s wider emphasis on the need for greater responsibility on the part of individuals.
If he gets the chance to put some of his ideas into practice in government, Djanogly, 42 next month, may well do so without the moniker of ‘CSR minister’. His current role is shadow minister for corporate governance, and although the question of whether an individual minister should hold the CSR brief, as happens at present, ‘is not something that’s been discussed’ by his party, he is personally not wedded to the idea. ‘Labour have a CSR minister who doesn’t seem to do much CSR at all,’ he says. ‘I think we’ve got to move beyond the idea of having a stand-alone minister, in the same way that companies have been moving away from stand-alone corporate responsibility boards. The whole point about corporate responsibility is that it should be part of an integrated approach throughout an organization.’
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