CSR 'best as voluntary activity' - Minister
Energy Minister Malcolm Wicks has said attempts by Government to enforce corporate social responsibility would undermine its value.
The Energy Minister, who also has responsibility for CSR issues, was however in no doubt that an ethical business was a business with an edge.
"Successful companies will be the ones that continually seek to raise their game and take a responsible approach to all their activities," he said.
"We're all more conscious these days of the impact of our societies on the environment.
"Managing and reporting on environmental performance can lead to significant financial benefits as well as benefits to the environment [and] is a sustainable way to reduce risks and develop opportunities."
"These activities contribute to a kind of triple bottom line: ecological, financial and social.
"No-one can be in any more doubt that the future of our planet demands this."
A solid CSR strategy could help a company to identify potential cost savings as well as avoid fines and also lead to a better reputation in an age where customers are becoming more aware of the environment, said the Minister.
"It's essential to recognise these risks also offer opportunities, in the form of product innovation and new technologies; increasingly our customers will be demanding CSR, and employees too," he added.
"A company with a good record on CSR is likely to attract the best workers."
Mr Wicks was also keen to get across the progress made by Government in its promotion of CSR.
He highlighted the Government's CSR website which gives advice on the issues for companies of all sizes which do not employ dedicated staff to manage their environmental policy.
He also outlined the work of the CSR academy that provides training and information as part of the DTI's learning and skills initiative.
Mr Wicks said the Government was also proud to fund the Ethical Trading Initiative, an alliance of companies, trade unions and NGOs that work together to improve labour conditions and supply chains of the corporate members which has become an exemplar to the international community.
On the prickly issue of how much Government should enforce companies to be good corporate citizens and how much it should step back and leave them to make their own choices, the Minister came down in favour of the hands-off approach.
Giving a nod to the philanthropists of yesteryear and their impact on welfare and workers' rights, Mr Wicks said business could sometimes lead legislators, rather than the other way around.
"In our own society many of the activities of some of the more forward looking companies have then been followed through in terms of law and social policy," he said.
Going over and above minimum requirements was a way for a company to earn a licence to operate or be seen as a good corporate citizen in a society where we are all much more likely to have the appropriateness of our actions challenged by civil society than we had been in the past, he added.
"For example, there's been significant growth in the demand and supply of organic food and ethically produced goods. Many of our major retailers are increasing their commitment," said the Minister.
But Government is keen for CSR to remain a voluntary, business-led approach.
"We want to provide the right policy framework to support it while letting business decide how to apply it," he said.
"The position of Government is that CSR is something over and above the legal requirements and we feel it's best as a voluntary activity.
"Where the society judges that something is so crucial there should be at least a minimum standard, then we should legislate for it.
"But I would see CSR as the social policies of companies and essentially something that is added to that."
Falling back on the semantic standby that corporations aren't behaving especially ethically if they are simply complying with the law, he said: "It could be something of a non-sequitur if you enforced CSR - it then becomes legal policy rather than CSR."
Asked to convey to the Treasury the disappointment of some in the business sector over the last minute scrapping of the OFR last November (see related story), Mr Wicks promised he would, but declined to comment on the Chancellor's decision.
by Sam Bond
© Faversham House Group Ltd 2006. edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.