It won't have escaped connoisseurs of corporate policy that the UK's biggest companies love the idea of Corporate Social Responsibility (CSR), a Government-backed concept that, to the uninitiated, requires companies to care for their workforce, the marketplace, the community, the environment and human rights.
Take leading hospitality companies Scottish & Newcastle (S&N), Compass and Six Continents. Each makes room in its annual report and Web site for its CSR achievements, including information on how it cares for the environment and how it carries out not-directly-for-profit community work.
As old-fashioned charity, the companies' good works add up to a tidy sum. S&N says that between 2000 and 2001 it donated £524,000 to charity and community projects throughout the UK. Compass says that after the attack on the World Trade Center in New York it provided more than 200,000 free meals to rescue workers.
Six Continents says that over the next three years it plans to donate £300,000 to UNICEF (the United Nations Children's Fund) and £150,000 to Victim Support.
Advocates of CSR say businesses are having to become more socially responsible because their employees, their customers and their investors are becoming more socially responsible. Rather than fighting these changes, businesses should accept them and re-evaluate the way they do business.
Published in May, the DTI's second annual CSR report reaffirms how important this approach is to the Government. Douglas Alexander, minister for CSR, says in his foreword that a successful society needs business, the voluntary sector, and public bodies to work together. "It is a strength of CSR that its approach gets away from the old view that economic and social goals must somehow always be in conflict."
Over the past year, the Government has encouraged CSR in several ways. The annual donation limit to the payroll giving system has gone up. More than half a million people now pay money to charity as they earn. The new Community Investment Tax Credit provides incentives for investment in disadvantaged communities. And a new £40m fund, the Community Development Venture Fund, provides support for companies operating in deprived communities.
In the future, the Government plans to work with relevant organisations to promote socially responsible behaviour at every level of business and by companies of all sizes.
There are benefits to be had by being socially responsible. Tony Allen, chief executive of Hospitality Action, the industry charity charged with providing financial help, support and advice for hospitality workers, argues that by following CSR's key ideas the industry can attract qualified staff and help solve the skills and recruitment crisis.
"Today, staff feel pride in working for companies that make them feel socially responsible," he says. "If you think you're working for a company that cares, that makes you feel good as an employee. It's another reason to come to work in the morning."
For Nicky Hayward, owner, with husband Nick, of the 16-bedroom Seaview hotel on the Isle of Wight, this translates into a strong focus on HR issues. An escapee from the rush of London, she's run the hotel on CSR lines for 20 years. Her business philosophy? "What goes around, comes around," she says.
"Some people on the island think we're potty. But if you treat your customers, your employees and your suppliers really well, then they value what you're doing and they'll support you through the difficult times, like foot-and-mouth, where other companies with a more traditional outlook may suffer."
In Hayward's kitchens, food is sourced only from local suppliers. Getting milk from the local dairy farmer may cost more, but then the farmer's feed rep always stays at the Seaview when he visits the island.
Her 40 staff get two consecutive days off a week and they are paid more than the industry norm. Not surprisingly, at 14% rather than the more usual 50%, Hayward's staff turnover rate is the envy of her rivals.
Prue Leith also believes a social business can offer a solution to the industry's recruitment problems. With the support of big industry players, she plans to launch the Big Bowl, a 100-seat training restaurant in London's East End, early next year. While providing its young professional customers with simple, high-quality food from around the world, the Big Bowl aims, as a social business, to provide training and support for its apprentice staff. The idea is to equip individuals who've had a rough deal in life with a competitive edge and give them the personal and culinary skills to succeed in catering.
Simon Ward, Whitbread's former strategic affairs director, is closely involved in the project. With industry backing, he says, the restaurant model may eventually be rolled out across the country. "Employers are finding it difficult to fill vacancies so we need to be targeting all potential employees, including groups which are socially disadvantaged: the unemployed, young people who've become involved in drugs and drink," he says.
However, profits are still important, even with companies operating a CSR approach. Jerry Marston, community investment director at Whitbread, advises anyone thinking about CSR to ask themselves: is it going to make a measurable difference to the business? "If it's not, then we need to ask ourselves why we're doing it, because the case for philanthropy per se is just not there any more," he says.
Bob Cotton, chief executive of the British Hospitality Association, warns that for many small businesses, CSR paperwork may be too tall an order. Big businesses have the resources to be socially responsible, he says. "On the other hand, if you're a small proprietor, you've got to deal with all the other regulations. At the end of the day, if it's about going into liquidation or surviving, what do you concentrate on? For many small businesses today it isn't about being socially responsible, it's about survival."
Society and Business (DTI Web site about CSR)
The Prince of Wales International Business Leaders Forum (Corporate Social Responsibility forum)
15-16 Cornwall Terrace, Regent's Park, London NW1 4QP
Tel: 020 7467 3600
What can small businesses do?
David Irwin, head of the Small Business Service, suggests that companies new to CSR should start by:
- Setting out a list of company principles.
- Identifying their most important stakeholders and their concerns.
- Introducing a social and environmental strategy - with targets.
- Measuring performance.
- Involving staff by celebrating with them when goals are achieved.
- Communicating company principles to all stakeholders.
- Checking back with stakeholders to review progress.
David Irwin's pamphlet, Encouraging Responsible Business, is available on the Small Business Service and DTI Web sites (www.sbs.gov.uk and www.dti.gov.uk) and from the following telephone number - 0870 150 2500.
What is Corporate Social Responsibility (CSR)?
According to the DTI-backed Business Impact Task Force, a company following a CSR approach may be caring for:
- Its workforce.
- The marketplace.
- The community,
- The environment.
- Human rights.
CSR can include supporting staff volunteering; initiatives designed to improve the local community; causes linked to business development; making sure that each link in the supply chain follows a CSR approach.