Stephen Howard, CEO Business in the CommunityToday we publish the results of the 7th Corporate Responsibility (CR) Index and the Big Tick winners of Business in the Community’s 12th Awards for Excellence which identify and celebrate businesses that have a positive impact on the community, environment, marketplace and workplace. Both processes recognise businesses who acknowledge the impact they have on society and the environment and who are committed to tackling the issues, not just because they should, but because it’s good for business.
Stephen Howard, CEO of Business in the Community
We believe that both the CR Index and the Awards for Excellence provide glimpses into the heart and head of business. They support our long held belief that responsible business is good business and that business success must be based on more than short term financial performance.
In a time of extraordinary change and questioning of the role of business, both the CR Index and the Awards for Excellence highlight what has been achieved by UK plc. It’s important we take time out to congratulate the companies listed and to encourage others to follow in their footsteps.
The key themes that jump out from this year’s CR Index are the increased focus of boards on corporate responsibility, investment in people, workplaces, talent and skills development and long term sustainability.
9 out of 10 CR Index participants having ‘substantive CR discussions’ at board level
The Index tells us that 9 out of 10 participants are having substantive discussions at board level and there is a clear correlation between better performance overall in the Index and the number of board members with responsibility for CR issues.
And yet for me this raises an interesting paradox. At a time when many commentators are screaming about the level of effective oversight at board level – the Index tells us there is more boardroom ownership of corporate responsibility! I believe the underlying reason for this is that although corporate responsibility is discussed at the boardroom it is still disconnected from discussions about business strategy and business operational issues.
This year 141 businesses participated in the CR Index and there were 358 applications for the Awards for Excellence, with 106 achieving a Big Tick. We like to think that over time the CR Index reveals the CR journey that individual companies are on.
Climate change a key issue for all CR Index participants
An analysis of submissions for both, reveal the critical issues that businesses are facing and the innovative and inspiring solutions that they are finding. All the companies participating in the Index reaffirmed that climate change is now a key issue affecting the future viability of their business.
While many identify it as a risk, this year more than ever there is an increased reference to cost savings and increased business opportunities. Yet, despite the benefits from addressing climate change, businesses seem to still be struggling with it. So the key message to get across to business in the middle of the recession is to keep up the momentum on climate change.
Column inches on its importance does not equate to action and if we are to be at the vanguard of countries preparing to operate in low carbon economies, then commitment, action and investment need to be made now.
Another very clear message emerging from the Index is that if businesses are to survive and thrive it is their people, and the workplace that supports, empowers and nurtures them, that will largely determine success or failure. A number of companies have shared their approach to responsible downsizing and employee engagement through their Index and Award submissions. CR Index participants also highlighted supply chain vulnerability as a key business risk.
Talent and skills development are ‘business critical issues’
From the results of the Index and a parallel consultation we conducted with 1,500 companies, it is clear that talent and skills development are business critical issues. For economic reasons we simply cannot afford to squander our existing and potential talent. If we are to maintain social cohesion we cannot add to the numbers of disaffected and alienated young adults or people neither in employment, education or training. As the economic situation facing the UK and the rest of the world becomes more difficult, the talent challenge becomes more not less important.
This year we introduced a step change into the CR Index called Platinum Plus which has enabled us to test the extent to which a business’s commercial strategy is underpinned by thinking around long term sustainability.
Platinum Plus achievers
This year seven businesses, BT, EDF Energy, National Grid, The Co-operative Financial Services, Northumbrian Water, Scottish and Southern Energy and United Utilities have been awarded Platinum Plus. These companies demonstrate that they have a business strategy that integrates sustainability thinking, enabling them to envision how they will operate in and positively contribute to, a world where resources are constrained and when societal expectations may well have changed. They have defined responses to these future challenges whilst remaining competitive and true to their values.
We believe that both the CR Index and the Awards for Excellence provide glimpses into the heart and head of business. They support our long held belief that responsible business is good business and that business success must be based on more than short term financial performance.
Last October research undertaken by BITC with Ipsos-Mori tested the assertion that there is a link between corporate responsibility and improved share price. Based on evidence from 33 FTSE companies who had all taken part in the CR Index for each of its six years, the research found that the more a company measured its environmental and social impacts, the less volatile its stock price.
In fact, those companies outperformed their FTSE 350 peers on total shareholder return by between 3.3% and 7.7% throughout the period 2002-2007.
Where next for corporate responsibility?
So that’s where we are today, but where next for corporate responsibility? Shareholders voices need to be heard and, despite significant advances over the past decade, many are calling for increased collaboration between government, business and the third sector. Reconciling growth plans with sustainable consumption is an immense challenge.
There is a great opportunity for business to emerge from the recession with a more balanced position between being wealth creators and having a responsibility to steward our social, environmental and economic wellbeing. This very much depends on businesses’ readiness to deal with challenging questions about long term value and to collaborate with others in both learning and developing new ways of doing business.
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