Business Respect - CSR Dispatches No#65 - 2 Nov 2003

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this issue, we review the recent World Bank report on barriers to the effectiveness of codes and standards in the supply chain.

Welcome

There is a commonly accepted perception amongst many in what might be loosely terms the CSR movement that the engagement of Small to medium sized companies is one of the great tasks that has to be accomplished. After all, the number of SMEs is counted in the millions, and the aggregate impact on society of all these small firms is immense.

It all depends on what the question is. If it's about sustainable development or minimum standards on human rights - it's never going to happen through persuading small firms to embrace best practice.

Reviews of the marketplace in the UK when some years ago reckoned that something like 60 percent of small firms are simply content to survive. They are the newsagents, the laundrettes - the firms that are content to turn enough money over to give their owners and staff a passable living. They do not aim to grow. They are not interested in management theory. Beyond the occasional bit of casual citizenship - involvement in a local school because the manager's kids go there - they will not see, feel nor touch this agenda.

If minimum standards need to be applied - that takes legislation.

At least twenty percent of the remainder are growth oriented, ambitious and looking for any lever they can use to survive and become successful. Such companies will often be the ones seeking out the large contracts with the big buyers. They will be alive to the trends that affect their marketplace. They are the natural small business champions of social responsibility.

But mostly - so far - they simply don't see the business case. The CSR movement doesn't help them, since it consistently overcomplicated and jargonises the whole movement. So far, the best salespeople for CSR amongst small companies are the large buyers who have increasingly been called upon to manage social responsibility down the supply chain.

After all, if it is your product that is being made, it is your process - even if some other company actually runs that part of it. There's no point managing your environmental emissions, your health and safety and your community involvement if you've outsourced most of your product development to others and it now falls fully out of the scope of what you're doing.

So far, it is supply chain pressure that is the biggest business case for small businesses. Few small firms can play to the ethical market niche, although some do so very successfully.

The trouble is that if we want supply chain pressure to deliver real results with knock-on effects - in the absence of legislation - we need to achieve real scale. And such scale is not being achieved. A recent report commissioned by the World Bank looks at some of the barriers preventing such scale and impact. We review this, and consider some of the conclusions.

Meanwhile, we have a big 'thank you' to offer Jeroen Hoff, from the CSR Academy in Rotterdam. Jeroen is the first of our volunteer web page translaters who has come back with the text from some of the core website pages translated into Dutch. This is a fantastic contribution of time and skill, and we offer our heartfelt appreciation. We look forward to getting these pages live onto the website soon.

Speaking of the website, the vote there continues. The current status is as follows:

In countries like Burma or Sudan where there are huge human rights challenges, companies should:
Withdraw - no company with a conscience should do business there
69 (24%)
Do business there - but use its influence to try to make things better
196 (68%)
Do business there - and keep out of interfering in politics
22 (8%)

Many thanks to the 287 people that have voted so far. Still a couple of weeks if you would like to make your views known - although we will replace this poll soon.

News

US: SEC describes fund abuses

The US Securities and Exchange Commission says it has discovered widespread bad practice amongst many of the largest fund companies and brokerage firms - half of the 88 companies it recently surveyed.

Russia: Yukos head charged with fraud

Mikhail Khodorkovsky, head of Russian oil company Yukos and Russia's richest man, has been charged with six criminal offences after a dramatic arrest at a Novosibirsk airport in Siberia.

Ireland: Vodafone to provide free broadcast for dolphins

Vodfaone is to collaborate with a wildlife programme in Cork by enabling its customers to listen in to the sounds of dolphins in the Shannon estuary for free.

Arab Business Council calls for corporate accountability

The recently formed Arab Business Council (ABC) has called for greater transparency and accountability amongst business and government in the Arab world. Business also needs, it said, to lobby governments for needed reforms.

Ireland: CEOs sign Corporate Responsibility Charter

Twenty-three chief executives from companies based in the Republic of Ireland have signed a Corporate Responsibility Charter, covering greater stakeholder dialogue and accountability.

South Africa: New Diamond Corp mine closed down

The government has closed down the mining operations of New Diamond Corporation in response to contraventions of environmental regulations.

China: Fook Tin Technologies wins environmental recognition

Fook Tin Technologies, the manufacturer of weighing devices based in Shenzhen, became the first winner from mainland China of the environmental performance award granted as part of the Hong Kong Awards for Industry.

UN should investigate corporate complicity in Congo

The UN Security Council should insist that member states launch investigations into the involvement of multinational corporations in the war in the Democratic Republic of Congo, according to a number of human rights and environmental campaign groups.

UK: Finance union slams move of workers to India as 'profit without conscience'

The finance union UNIFI has reacted angrily to Lloyds TSB's recent announcement - the latest of several from major banks or call centre operators - that it is to move around 900 jobs from the UK to India.

Philippines: Banks refuse corporate governance tests

Twenty of the Philippines' big commercial banks have refused to take part in a test on corporate governance produced by the Institute of Corporate Directors (ICD).

US; BOC to challenge verdict on fumes and Parkinson's Disease

Industrial gases group BOC has said it will challenge a Madison County court verdict linking welding fumes with the onset of Parkinson's Disease.

UK: New corporate governance rules come into effect

The new code of corporate governance, produced following the Higgs Review of the Role of Non-Executive Directors, has come into force. The code is the latest of a number of international initiatives to prevent further corporate scandals following the fall of Enron.

Article

Buying into social responsibility

Author: Mallen Baker, dated 2 Nov 2003

The importance of how companies manage social responsibility across the whole of their production process - including that part owned by their suppliers - has been stressed for some years now. Nevertheless, it remains the area where current practice remains pretty poor.

Previous edition - No 64 | Following edition - No 66