Telling the rhetoric from the reality on corporate social responsibility

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A survey of directors of small, medium and large companies about corporate social responsibility was commissioned by the Institute for Public Policy Research with the Institute of Directors. The results show a mixed picture, and drew a mixed reception.

The Institute for Public Policy Research (IPPR) emphasised that despite warm words, many companies are not implementing effective policies to protect the environment or deliver equal opportunities.

The survey showed strong support for policies to improve employees' experience at work. Half of the directors interviewed encouraged staff to achieve basic skills and work-life balance. However, while three quarters said that their company promoted equal opportunities, only just over half collect information on how many women they employ and under 40 per cent monitor employment of staff from minority ethnic groups.

Ella Joseph, ippr Research Fellow and report author said: "Our survey shows that most company directors support promoting equal opportunities and making their organisation greener. However, there remains a real gap between the rhetoric and reality of responsible company behaviour. Our survey suggests that Government must work with customers, shareholders and business representatives to encourage responsible corporate behaviour."

Key findings
Directors sign up to equal opportunities, but it is narrowly defined and poorly evaluated:
- Three quarters (73%) of directors say that their organisation has a policy to promote equal opportunities.
- However, only half (53%) of directors collect information on how many of their employees are women and four out of ten (38%) do so for employees from minority ethnic groups.
- One out of ten directors say that their organisation has a policy to change the profile of its workforce in relation to gender (12%), minority ethnic groups (11%) or the local community (7%).

Directors' interest in the environment does not mean they want to be green:
- Six out of ten (62%) directors think that environmental impact of customers or suppliers is important in making commercial decisions.
- However, less than a third (27%) of directors say that their organisation collects information on its emission of CO2 and other greenhouse gases and (28%) say that their organisation has a policy in place for reducing emissions.

There is little knowledge of Government's voluntary 'corporate social responsibility' initiatives:
- Less than a third of directors (31%) had heard of the Government minister for Corporate Social Responsibility.
- However, voluntary initiatives developed by the Government are often more well known than non-governmental initiatives.

The market is a key driver of responsible corporate behaviour:
- Eight out of ten directors think that their employees (82%) and customers (81%) are important in encouraging their organisation to think about its social and environmental impacts. Two thirds say business representative groups (68%) and shareholders (65%) are important.
- Six out of ten (63%) directors say that the Government is important and four out of ten (39%) think non-governmental groups are important in this regard.

Limited social and environmental reporting:
- Eight out of ten (81%) organisations do not report to the public on their social or environmental impacts.
- Only a third (33%) of those organisations that produce environmental reports publish information on their organisation's emission of CO2 and other greenhouse gases.

Companies of all sizes benefit from behaving responsibly:
- Over nine out of ten directors with policies in place to improve their employees' basic skills (92%) or satisfaction with their work-life balance (96%) say that they experience business benefits.

Policies are in place to improve employees’ experiences at work:
- Half of all directors say that their organisation has a policy in place for encouraging all employees to achieve basic skills (50%) and improve employee satisfaction with their work-life balance (48%).

The Institute of Directors took a different view of the same research. They were more impressed by the commitement to corporate social responsibility, and rejected any suggestion that the government should become more involved.

Ruth Lea, Head of the Policy Unit at the IoD, said: "We were pleasantly surprised by the results of this survey. Given that most of our members are from SMEs and that CSR policies are very frequently implemented as integral parts of company culture and not as 'stand-alones' to be discussed separately at boards, we are impressed that nearly 50% of members actively discussed social issues and nearly 60% actively discussed environmental issues at board level. These figures are significantly higher for the larger companies, as expected. Many businesses, especially smaller businesses, take the view that social and environmental issues are everyone's concern. Equally we were encouraged that significant proportions of the larger companies having board members with specific remits for social (36%) and environmental (48%) issues.

"It is also gratifying to note that our members are concerned about how the people they deal with, whether suppliers or customers, treat their staff (67%) and respect the environment (62%)

"It is clear that IoD members take their employment and environmental policies seriously and, moreover, they believe that the successful implementation of these policies helps their businesses. 'Good' business is 'good business'. Much of this is done on a voluntary basis, following the principles of best practice, and this is how it should stay. Of course, there is always scope for improvement but there is nothing at all in this survey that justifies specific CSR regulation and legislation. The burden of regulations is already damaging business competitiveness and is particularly painful for small businesses; it must not be added to."

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