Reasons to be hopeful about the state we’re in

Welcome to this September issue of Ethical Performance. I’m welcoming you to this, my first edition as editor, having succeeded Peter Mason in this role last month. I’m new to CSR but have a background in green and sustainability issues, so this is a natural progression.

One thing is clear to me: it’s a particularly interesting time to be involved with CSR, given the current debate on its future. Does it merely evolve? Will it morph into or be superseded by corporate shared value? Or will it become subsumed by ‘sustainability’?  

Companies are subject to considerably more scrutiny than before, and the means by which people can judge and share their  views is more immediate and can have a greater direct impact. The internet is of crucial importance here as it has broadened lines of communication, given people a voice and an audience, and allowed people to foster a sense of engagement and power.

There’s also an increased general focus of environmental, social and governance issues, and these engender a sense that urgent progress needs to be made ... which, in turn, leads to frustration when progress is slow. Given this, it is not surprising that CSR has become not only much more of a consideration for investors but, now, also the state.

Looking through this edition, you may notice a tendency towards state intervention, ultimately via the legal process, that could help force corporations to factor more so-called ‘non-financial costs’ into their operational plans. Doing business badly will come with an increasing risk of exposure to potentially enormous costs.

News Corp is a case in point. Failure to avoid illegal means of sourcing the best, exclusive stories for the News of the World has opened a real can of worms.

Phone-hacking has exposed it to divestments, potentially costly shareholder lawsuits and possible criminal prosecution, in addition to the reputational damage and consequent loss of circulation among its News International newspapers. And that’s without even thinking about the ‘Murdoch discount’ on share value.

Meanwhile, the ruling that US corporations can be sued for any involvement in human rights abuses around the world under the Alien Tort Act will focus minds, if it’s allowed to stand. And then there’s the Bribery Act and the growing call for corporate tax responsibility in the UK.

Changing corporate culture is a tough nut to crack but perhaps the rationale for integrating CSR into core business practice is becoming all the stronger.

As I said earlier, there’s a great deal going on and I’d love to hear from you as I get more involved.