Ethical Performance
inside intelligence for responsible business


CSR's trail-blazer needs to get out of the thicket and back on track

July 2008

The UK government has been instrumental in the development of corporate social responsibility over the last decade. Listed companies must now produce annual forward-looking business reviews that cover social and environmental matters, pension funds are required to state their ethical investment policies, and government bodies from local authorities to the Ministry of Defence now lead the way on sustainable procurement.

On the international stage, too, the UK government contribution has been vital. The Extractive Industries Transparency Initiative, launched in London in 2002, continues to play an important part in helping to plug the governance gap, particularly in Africa, by promoting disclosure of revenue payments by oil, gas and mining companies to officials in developing countries.

The UK has also strengthened oversight of company behaviour in poor countries by improving its procedures for looking into complaints about alleged breaches of OECD guidelines on corporate behaviour (see page three). On the Millennium Development Goals, prime minister Gordon Brown has talked a good game, and there are signs that the weak record on bribery investigations may improve.

But the world does not stand still. In a range of policy areas, other countries are leapfrogging the UK. Denmark is requiring its 1000 largest companies to report annually on corporate responsibility. Norway leads the way in state-sponsored ethical investment. Belgium, France and Spain are ahead on sustainable procurement in public contracts. Denmark's NCP is held up as the model to follow. Outside Europe, Australia's CSR plan seems streets ahead of anything the UK has to offer, though it is still early days, while Indonesia is attempting to mandate responsible business practice. In the US, November's presidential election is likely to create a much more favourable climate for CSR (see page nine).

The UK government's loss of attention is a symptom of a wider problem. Having been in power for 11 years and recently changed leader, this administration has run out of steam. Having blazed the CSR trail, the UK is now lost in a thicket.

With a general election not expected before 2010, the government still has time to recover a sense of direction. The most urgent priority is to establish where responsibility lies within the machinery of government. It used to be the Department of Trade and Industry, but that is no more. The government needs to designate without delay a lead department with clear lines of accountability. The CSR minister, who has become invisible, must be clearly seen at the helm.

Peter Mason | UK & NI Ireland | CSR


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