Forum Brief: Corporate social responsibility

The Institute for Public Policy Research has published a report on Tuesday entitled "A new business agenda for government".

It looks at the role of corporate social responsibility and "soft regulation" in the delivery of social and environmental public policy objectives.

A DTI spokeswoman said: "Legislation is not a magic wand; it cannot force virtue. Excessive intervention risks stifling, rather than fostering innovation. However in an enabling role legislation can improve transparency and reporting which is exactly what the Operating and Financial Review aims to do.

"In the White Paper 'Modernising Company Law' (published in July 2002) the Government recognised the importance of social and environmental issues by requiring directors to include information on these issues where relevant to an assessment of the company's business.

"It would be for directors to decide precisely what information is material to their particular business. The government has considered all the responses to the White Paper and will be consulting on draft regulations implementing the OFR in due course."

Forum Response: British Retail Consortium

Russell Hamblin-Boone, head of public affairs at the BRC, told ePolitix.com:"We support the principles outlined in the IPPR report.

"The retail industry has an excellent record on CSR and individual companies undertake their own monitoring and reporting of CSR ethics according to their accounting models, which in turn informs their business plans.

"However, we would oppose any form of mandatory reporting that set prescribed how a business should be judged.

"The diversity of the retail sector means that one size cannot not fit all, and one standard cannot apply to all businesses.

"For example, small shops support the local community in many ways but would not wish to be held to account on the specific way they offered such support.

"All retail businesses recognise their responsibility to the community and continue to appreciate the commercial benefits of a good CSR record.

"Mandatory reporting would stifle innovation in CSR and become another bureacratic burden on business."

Forum Response: Barclays

Martin Mosley, director of consumer and community affairs, told ePolitix.com: "We welcome the debate around social and environmental reporting and have been reporting on our approach to CSR for the last three years.

"However, we believe that if legislation is introduced, it should allow companies the flexibility to choose how to report, reflecting the impacts most relevant to their business."

Forum Response: Rio Tinto

Andrew Vickerman, head of communication and sustainable development, told ePolitix.com: "Rio Tinto has been reporting its social and environmental performance for many years, in increasingly greater detail. Good business practice demands that all areas of company performance be measured regularly and reported transparently.

"Companies are expected to contribute to social outcomes today in ways that would not have been contemplated only a few years ago. Moreover, serious attention to social issues also evidences an underlying ethical foundation which is more expected of corporations now, and rightly so.

"However, as IPPR suggest, the investment community does need to understand such issues more deeply. Corporate social responsibility needs to be understood as an integral aspect of good business management, rather than a desirable but optional accessory.

"The imperative here is not that companies must somehow become development agencies - rather that they need to conduct all their activities within a sustainable development framework.

"Stakeholders of all descriptions are entitled to access good information, and company performance can be improved by engagement with informed stakeholders.

"Rio Tinto certainly follows such a policy, partnering with some of the most respected environmental NGOs in addition to comprehensive programmes of engagement with investors, employees and community representatives.

Of course, reporting guidelines must be sensibly framed to ensure that the performance measures they prescribe are meaningful and actually contribute to transparency and better governance."