WEBVTT 1 00:00:00.000 --> 00:00:04.920 Welcome to this session of the 2009 Adelaide Festival of Ideas. 2 00:00:05.020 --> 00:00:08.680 My name is Michael Barber. I'm Vice-Chancellor of Flinders University, 3 00:00:08.980 --> 00:00:13.200 and it's my great pleasure this morning to chair this session, 4 00:00:13.740 --> 00:00:16.720 of which our speaker will be Dr Peter Shergold, 5 00:00:16.800 --> 00:00:20.900 and I'll say a little about him in a moment before I hand over the lectern to him. 6 00:00:21.060 --> 00:00:26.740 I think many people in the audience are, of course, well-knowing of the format of the Festival of the Ideas. 7 00:00:26.740 --> 00:00:31.060 It's one of, perhaps I think, one of the most exciting festivals in this festival city, 8 00:00:31.740 --> 00:00:37.000 and today certainly the theme of pushing the limits, as Robert Fideon said in his foreword, 9 00:00:37.100 --> 00:00:42.320 came at a very interesting time where the world, financially, economically, environmentally, 10 00:00:42.560 --> 00:00:44.520 is perhaps pushing back on us. 11 00:00:44.700 --> 00:00:49.120 So today we have the pleasure to hear from Dr Peter Shergold, 12 00:00:49.120 --> 00:00:53.500 talking on the theme of has corporate responsibility reached its limits. 13 00:00:53.920 --> 00:00:56.720 Peter was appointed to Professor of the Arts, 14 00:00:56.740 --> 00:00:59.140 at the Australian School of Business at the University of New South Wales, 15 00:00:59.300 --> 00:01:04.300 where he is the Macquarie Group Foundation Chair of the newly established Centre for Social Impact, 16 00:01:04.640 --> 00:01:09.880 a cross-university collaboration which aims to deliver business management teaching and research 17 00:01:09.880 --> 00:01:13.680 for social enterprises and promote corporate social responsibility. 18 00:01:14.160 --> 00:01:18.120 I think many of us have not actually realised how much in Australia that third sector 19 00:01:18.120 --> 00:01:25.040 of non-government and social organisations are playing in the full life of the nation. 20 00:01:26.740 --> 00:01:30.060 Peter has been the CEO of the Australian Public Service for over two decades. 21 00:01:30.420 --> 00:01:33.860 I first met him back in 2002 when I joined CSIRO, 22 00:01:33.960 --> 00:01:37.340 and Peter at that time was Secretary of Education, Science and Training, 23 00:01:37.420 --> 00:01:39.160 and he joined the CSIRO Board. 24 00:01:39.520 --> 00:01:44.620 Prior to that he'd been Chief Executive Officer of Comcare, 25 00:01:44.820 --> 00:01:48.360 he was a Public Service Commissioner from 1995 to 1998. 26 00:01:48.760 --> 00:01:52.940 He then served as Department of Employment, Workplace Relations and Small Business, 27 00:01:53.160 --> 00:01:55.000 and then transferred, as I said, 28 00:01:55.060 --> 00:01:56.560 to the Department of Education. 29 00:01:56.740 --> 00:01:57.740 He then served as the Director of Education, Science and Training. 30 00:01:57.940 --> 00:02:00.920 For five years, from February 2003, 31 00:02:02.080 --> 00:02:05.040 Dr Shergo was Australia's most senior public administrator, 32 00:02:05.260 --> 00:02:07.920 serving as Secretary of the Department of Prime Minister and Cabinet. 33 00:02:08.560 --> 00:02:12.120 In all, he served directly three Prime Ministers and eight Ministers 34 00:02:12.120 --> 00:02:14.380 in both Coalition and Labor Governments. 35 00:02:14.540 --> 00:02:19.260 He was made a Member of the Order of Australia for Public Service in 1996, 36 00:02:19.680 --> 00:02:23.420 and in 2007 he was elevated to his Australian Highest Award, 37 00:02:23.620 --> 00:02:25.380 the Companion in the Order of Australia. 38 00:02:25.380 --> 00:02:30.500 As a senior officer, you do get to interact with both politicians and public servants 39 00:02:30.500 --> 00:02:31.980 at various levels of government, 40 00:02:32.140 --> 00:02:38.140 and I have to admit, of all of the senior bureaucrats and public servants I've met 41 00:02:38.140 --> 00:02:43.640 in my engagement in public life, Peter Shergold stands right up at the top of them. 42 00:02:43.720 --> 00:02:47.900 A man of great integrity, great intelligence and great fun. 43 00:02:48.020 --> 00:02:50.380 I've always enjoyed conversations with Peter. 44 00:02:50.500 --> 00:02:54.060 He can be challenging, as you might have been, as you were on the CSIRO Board, 45 00:02:54.060 --> 00:02:57.840 but wisely challenging, and always in a great role. 46 00:02:58.560 --> 00:03:01.620 So with that background, I've ever been an academic, a public service, 47 00:03:01.640 --> 00:03:05.820 and now returned to academia, he is in fact an admirable person to take on 48 00:03:05.820 --> 00:03:09.740 an interesting role in the Australian School of Business at the University of New South Wales, 49 00:03:09.860 --> 00:03:14.720 and to talk to us today about corporate responsibility, has it reached its limits? 50 00:03:14.880 --> 00:03:15.820 Dr Peter Shergold. 51 00:03:24.060 --> 00:03:27.960 Well, thank you so much for that wonderfully warm introduction. 52 00:03:29.060 --> 00:03:35.560 I must say I was somewhat worried when I saw I was doing this session on Sunday morning 53 00:03:36.380 --> 00:03:39.580 about whether there would be an audience, but I was more worried, 54 00:03:39.660 --> 00:03:46.040 having now done four panel discussions, that I would actually have run out of my stock of ideas 55 00:03:46.640 --> 00:03:48.480 by the time that I got here. 56 00:03:48.800 --> 00:03:54.000 So I hope that isn't the case, because the issue I want to address this morning 57 00:03:54.060 --> 00:04:01.900 I think is profoundly important, and it does go to the festival theme about pushing the limits. 58 00:04:03.180 --> 00:04:08.480 What I want to do this morning, under the cloud of economic recession, 59 00:04:09.340 --> 00:04:13.980 in an environment in which business is doing it tough, 60 00:04:15.060 --> 00:04:17.820 and many Australians are doing it far tougher, 61 00:04:17.940 --> 00:04:21.520 to talk about corporate responsibility. 62 00:04:23.460 --> 00:04:27.120 Corporate responsibility, it's often postulated, 63 00:04:27.460 --> 00:04:34.600 is about business doing good because it's good for business. 64 00:04:35.540 --> 00:04:41.940 The question is, is it only good for business when business is good? 65 00:04:42.660 --> 00:04:48.100 And that seems to me to imply three other quite fundamental questions 66 00:04:48.100 --> 00:04:51.500 related to the limits of business. 67 00:04:51.520 --> 00:04:57.380 The first, and it is a profound question, 68 00:04:58.520 --> 00:05:05.660 is in what way did corporate responsibility fail us in the global financial crisis? 69 00:05:07.020 --> 00:05:13.140 The second is, is corporate responsibility now collapsing 70 00:05:13.140 --> 00:05:17.420 under the strain of worldwide economic recession? 71 00:05:17.420 --> 00:05:23.000 And the third, the final question which I will address, 72 00:05:23.240 --> 00:05:29.140 is whether corporate responsibility can learn from its failures, 73 00:05:29.320 --> 00:05:33.140 can, if you will, make itself over, 74 00:05:34.420 --> 00:05:42.780 can reassess and re-articulate and revitalise its ethos and its mission. 75 00:05:43.860 --> 00:05:48.880 So as we start to grapple with these ideas, 76 00:05:49.320 --> 00:05:53.480 let's look at what the evidence is. 77 00:05:56.220 --> 00:06:02.080 The first thing that is clear is that corporate responsibility 78 00:06:02.780 --> 00:06:10.820 is a concept that has been made manifest in a variety of different forms. 79 00:06:10.820 --> 00:06:14.380 If you think back over the last 10 or 15 years, 80 00:06:14.540 --> 00:06:20.320 there are times when it's usually been articulated in terms of business ethics. 81 00:06:21.040 --> 00:06:24.680 There was a time a decade ago when, many of us will remember, 82 00:06:24.900 --> 00:06:29.160 it became the thing to do triple bottom line reporting. 83 00:06:31.020 --> 00:06:36.380 And then of course, corporate social responsibility or CSR, 84 00:06:37.060 --> 00:06:40.400 which then often evolved over the last few years 85 00:06:40.400 --> 00:06:40.800 to become the most important form of business ethics. 86 00:06:40.800 --> 00:06:42.380 And then there's the notion of corporate sustainability. 87 00:06:43.980 --> 00:06:47.560 Some businesses call it corporate citizenship. 88 00:06:48.800 --> 00:06:51.680 All of these, in my address this morning, 89 00:06:52.800 --> 00:06:55.880 I'm going to embrace under the notion of corporate responsibility. 90 00:06:56.920 --> 00:07:04.140 And the range of activities that is embraced by corporate responsibility 91 00:07:04.140 --> 00:07:09.980 are, I think, as rich and as diverse as a semantic vocabulary. 92 00:07:09.980 --> 00:07:10.780 And I think that's the key. 93 00:07:11.900 --> 00:07:14.600 You can go and see this for yourself. 94 00:07:14.700 --> 00:07:20.280 You can go and look at some of the large Australian corporates 95 00:07:20.800 --> 00:07:22.120 and look at the report. 96 00:07:22.380 --> 00:07:26.140 They nearly always now produce an annual report on social responsibility 97 00:07:26.140 --> 00:07:28.020 or sustainability or citizenship. 98 00:07:28.480 --> 00:07:34.780 Go and look at the reports of organisations like the National Australia Bank, 99 00:07:34.780 --> 00:07:41.340 Coca-Cola Amatil, PricewaterhouseCoopers, Rio Tinto, McDonald's. 100 00:07:41.380 --> 00:07:46.300 All now produce an annual report on what they do in corporate responsibility. 101 00:07:46.720 --> 00:07:51.420 Of course, many corporates do it through the foundations that they have established. 102 00:07:51.720 --> 00:07:53.620 And they too have annual reports. 103 00:07:54.780 --> 00:08:00.080 The AMP Foundation, Telstra, Macquarie Group, Westpac, Qantas. 104 00:08:01.040 --> 00:08:04.780 So it's quite easy to pick up the publication. 105 00:08:05.780 --> 00:08:08.500 Usually it must be said, a glossy publication. 106 00:08:08.680 --> 00:08:12.060 Usually it must be said full of inspiring photographs. 107 00:08:12.440 --> 00:08:16.040 But you can pick that up and get a good sense very quickly 108 00:08:16.580 --> 00:08:22.200 of what these corporates see as corporate responsibility. 109 00:08:23.060 --> 00:08:25.780 Get a sense of how diverse it is. 110 00:08:25.780 --> 00:08:28.640 But also, I think, very quickly get a sense 111 00:08:29.280 --> 00:08:36.580 that virtually every business interprets its corporate responsibility differently. 112 00:08:37.420 --> 00:08:45.620 At its very narrowest, I think you will find that business identifies corporate responsibility 113 00:08:46.280 --> 00:08:49.040 with operating within the law. 114 00:08:49.900 --> 00:08:51.640 Responsible business practices. 115 00:08:51.900 --> 00:08:53.020 Honest governance. 116 00:08:53.780 --> 00:08:55.760 Effectively not just meeting the needs of the business. 117 00:08:55.780 --> 00:08:57.120 Not just the letter of the law. 118 00:08:57.300 --> 00:09:00.340 But the spirit and purpose of the law. 119 00:09:01.060 --> 00:09:04.780 That, I think, is the narrowest definition. 120 00:09:05.480 --> 00:09:13.320 But corporate responsibility today is usually seen as going beyond what is legally necessary. 121 00:09:14.780 --> 00:09:21.020 So that, for example, it is usually seen to embrace fair labor conditions for workers. 122 00:09:21.840 --> 00:09:25.160 And a good occupational health and safety scheme. 123 00:09:25.780 --> 00:09:27.740 And promoting workforce diversity. 124 00:09:28.780 --> 00:09:33.580 In most instances, to a greater or lesser extent, 125 00:09:33.820 --> 00:09:37.640 it embraces the support of community endeavor. 126 00:09:37.840 --> 00:09:43.280 Not just providing financial support for community organizations. 127 00:09:44.280 --> 00:09:50.440 But in particular, providing pro bono and volunteer support to the community sector. 128 00:09:51.420 --> 00:09:55.140 In the last decade, increasingly, 129 00:09:55.140 --> 00:10:01.180 that corporate responsibility has taken the form of environmental responsibility. 130 00:10:02.140 --> 00:10:04.480 With an emphasis on energy efficiency. 131 00:10:05.640 --> 00:10:08.660 And offsetting the production of emissions. 132 00:10:08.840 --> 00:10:11.980 And reducing carbon footprints. 133 00:10:14.040 --> 00:10:22.920 It has, or should, also embrace the notion of ethical governance arrangements within the business. 134 00:10:23.800 --> 00:10:34.840 And, crucially, it should always embrace reporting on this range of activities in an open and transparent manner. 135 00:10:36.660 --> 00:10:41.480 Now, I have to say that for most of the large corporations now, 136 00:10:42.280 --> 00:10:49.400 corporate responsibility is not just what we sometimes label a tier one activity. 137 00:10:49.600 --> 00:10:50.920 What I mean by that 138 00:10:50.920 --> 00:10:56.820 is that it has been extended backwards along the supply chain. 139 00:10:57.100 --> 00:11:04.380 In other words, increasingly it's recognized that resource production or manufacturing 140 00:11:05.420 --> 00:11:09.880 in multinational companies that are located or headquartered in the developed world 141 00:11:10.420 --> 00:11:14.080 is being sourced from developing countries. 142 00:11:14.500 --> 00:11:18.180 And therefore, as you look down the supply chain, 143 00:11:18.400 --> 00:11:20.800 there is a greater emphasis on 144 00:11:20.920 --> 00:11:24.460 issues such as product safety and human rights. 145 00:11:25.920 --> 00:11:29.880 What I find interesting is that corporate responsibility, 146 00:11:29.980 --> 00:11:34.700 as it has become increasingly global over the last decade, 147 00:11:35.020 --> 00:11:37.820 as its nature has evolved, 148 00:11:38.060 --> 00:11:41.560 so it has taken on the particular emphasis, 149 00:11:42.420 --> 00:11:46.760 which is often quite different from corporate responsibility 150 00:11:47.420 --> 00:11:50.640 as it's been articulated in North America and Europe, 151 00:11:50.920 --> 00:11:52.660 and Australia and New Zealand. 152 00:11:53.700 --> 00:12:00.640 We talk about corporate responsibility as something that has emerged from the corporate sector. 153 00:12:02.520 --> 00:12:05.580 China now embraces corporate responsibility. 154 00:12:06.460 --> 00:12:10.680 Its major business schools include it in their curricula. 155 00:12:11.840 --> 00:12:14.940 And yet it is, in a sense, quite different, 156 00:12:15.000 --> 00:12:17.280 because for the Chinese government, 157 00:12:17.280 --> 00:12:23.860 they see this as important as a fundamental basis of creating a harmonious society. 158 00:12:24.180 --> 00:12:28.580 You go to countries like Singapore, where I went earlier this year, 159 00:12:29.280 --> 00:12:32.340 and you can see that when they talk about corporate responsibility, 160 00:12:32.620 --> 00:12:35.940 it is something that has actually been driven by government. 161 00:12:36.360 --> 00:12:39.820 It is the Singapore government that has brought together 162 00:12:39.820 --> 00:12:44.640 corporates and unions in a very Singaporean way 163 00:12:45.280 --> 00:12:47.260 to embrace corporate responsibility. 164 00:12:48.480 --> 00:12:55.240 So it means different things to different companies in different countries. 165 00:12:56.840 --> 00:12:59.240 Certainly in the developed world, 166 00:12:59.360 --> 00:13:04.260 it has evolved from notions of charity or even philanthropy 167 00:13:04.260 --> 00:13:07.480 to the notion of social investment. 168 00:13:08.980 --> 00:13:14.600 Just as the economic activities of the firm bring a return to shareholders, 169 00:13:14.600 --> 00:13:20.140 so corporate responsibility activities bring a return to society 170 00:13:20.140 --> 00:13:22.200 in which the business operates. 171 00:13:24.080 --> 00:13:31.620 Concurrently, corporate responsibility is no longer just seen as doing good for society. 172 00:13:31.960 --> 00:13:37.440 It is increasingly argued that it does good for business. 173 00:13:39.060 --> 00:13:42.620 Now, let me just make two things clear, 174 00:13:42.620 --> 00:13:48.480 because I don't want to be misinterpreted in the final stage of my remarks. 175 00:13:48.740 --> 00:13:52.860 The first is that I have no doubt whatever 176 00:13:53.620 --> 00:13:57.840 that the activities embraced as corporate responsibility 177 00:13:58.620 --> 00:14:01.960 have benefited society in many different ways. 178 00:14:02.260 --> 00:14:03.900 So we're not arguing about this. 179 00:14:04.540 --> 00:14:07.680 It has done good. 180 00:14:08.660 --> 00:14:12.160 Corporate support for emergency relief and social welfare 181 00:14:12.160 --> 00:14:13.620 and environmental sustainability, 182 00:14:14.240 --> 00:14:16.560 corporate support for heritage protection 183 00:14:16.560 --> 00:14:20.840 and support of the arts and education and medical research 184 00:14:20.840 --> 00:14:25.100 and so on and so on has been beneficial. 185 00:14:25.360 --> 00:14:26.840 That's not an argument. 186 00:14:29.060 --> 00:14:35.820 Business through these activities has made our society a better place. 187 00:14:36.620 --> 00:14:38.040 And indeed, I'd go further. 188 00:14:39.160 --> 00:14:40.140 In some instances, 189 00:14:40.140 --> 00:14:46.360 I can see that corporate Australia has been willing to engage 190 00:14:46.360 --> 00:14:51.100 and take a stand in areas where governments have feared to tread. 191 00:14:51.840 --> 00:14:54.120 The most obvious instance, I think, 192 00:14:54.140 --> 00:14:58.160 is the willingness of many of Australia's mining companies 193 00:14:59.140 --> 00:15:03.620 to seriously engage in indigenous community support 194 00:15:04.140 --> 00:15:06.820 and training and employment and education, 195 00:15:06.820 --> 00:15:09.860 often to pick up where governments have failed. 196 00:15:10.820 --> 00:15:14.980 Some of you may have noticed that last week in The Weekend Australia, 197 00:15:15.820 --> 00:15:21.700 Noel Pearson was outraged about the way governments were now claiming 198 00:15:22.820 --> 00:15:23.760 the Cape York initiatives. 199 00:15:24.740 --> 00:15:26.440 And I understand why, 200 00:15:26.580 --> 00:15:29.980 because those were initiatives that came from the community. 201 00:15:30.800 --> 00:15:33.800 And the first organisations 202 00:15:33.800 --> 00:15:36.740 and organisations that he won to support them 203 00:15:36.740 --> 00:15:39.000 were not governments or public services. 204 00:15:40.000 --> 00:15:42.720 They were corporates and corporate foundations. 205 00:15:43.160 --> 00:15:47.760 It was governments that came in somewhat reluctantly later. 206 00:15:48.800 --> 00:15:50.080 The second thing I want to make clear 207 00:15:50.080 --> 00:15:54.300 is that corporate expenditure on corporate responsibility 208 00:15:55.720 --> 00:15:58.060 is undoubtedly being wound back. 209 00:15:58.160 --> 00:16:00.060 So this is not a cause of argument. 210 00:16:00.060 --> 00:16:05.320 Are corporate responsibility activities now being reduced? 211 00:16:05.380 --> 00:16:08.500 The answer categorically is yes. 212 00:16:09.080 --> 00:16:11.940 As businesses tighten their belts, 213 00:16:12.060 --> 00:16:16.660 they are tightening too their responsibility belts. 214 00:16:16.960 --> 00:16:19.700 And the amount of financial support 215 00:16:19.700 --> 00:16:22.860 being provided by corporates and foundations, 216 00:16:23.040 --> 00:16:24.780 although it is continuing, 217 00:16:25.560 --> 00:16:26.980 is being reduced. 218 00:16:27.580 --> 00:16:29.820 In early next month, 219 00:16:29.860 --> 00:16:30.040 I will be talking about 220 00:16:30.040 --> 00:16:34.440 a very important study, I think, 221 00:16:35.040 --> 00:16:36.300 supported, interestingly, 222 00:16:36.520 --> 00:16:37.940 by PricewaterhouseCoopers 223 00:16:37.940 --> 00:16:41.400 as well as the Fundraising Institute of Australia, 224 00:16:41.640 --> 00:16:43.600 which is looking in detail 225 00:16:43.600 --> 00:16:46.220 at what impact the economic recession 226 00:16:46.220 --> 00:16:49.060 is having on community organisation funding 227 00:16:49.060 --> 00:16:50.780 and as part of that, 228 00:16:50.880 --> 00:16:53.240 what is happening to corporate support. 229 00:16:53.860 --> 00:16:55.920 I think it is a very interesting story. 230 00:16:56.060 --> 00:16:58.200 If any of you would like to make sure 231 00:16:58.200 --> 00:16:59.860 you get access to that straight away, 232 00:16:59.960 --> 00:17:00.020 please do. 233 00:17:00.020 --> 00:17:01.740 If you come down at the end 234 00:17:01.740 --> 00:17:03.200 and give me an email address, 235 00:17:03.420 --> 00:17:05.140 I will make sure that you are sent that 236 00:17:05.140 --> 00:17:06.560 early next month. 237 00:17:07.240 --> 00:17:09.840 So, those are two statements. 238 00:17:10.080 --> 00:17:12.380 But the important question is, 239 00:17:12.600 --> 00:17:14.980 will the activities of corporate responsibility, 240 00:17:15.140 --> 00:17:17.840 the very concept of corporate responsibility, 241 00:17:18.740 --> 00:17:21.580 survive this significant economic recession? 242 00:17:21.800 --> 00:17:24.300 Has it reached its limits? 243 00:17:25.620 --> 00:17:26.780 I've got to tell you, 244 00:17:26.780 --> 00:17:30.880 this is one humdinger of a debate. 245 00:17:31.020 --> 00:17:34.220 We could have had a really good panel discussion on this 246 00:17:34.220 --> 00:17:37.420 because there are two antithetical views. 247 00:17:37.800 --> 00:17:39.140 On the positive side, 248 00:17:39.260 --> 00:17:40.520 there are those who believe 249 00:17:40.520 --> 00:17:43.160 that companies that have built 250 00:17:43.160 --> 00:17:45.100 their responsible business reputation 251 00:17:45.780 --> 00:17:49.140 at some considerable cost over many years 252 00:17:49.140 --> 00:17:52.340 are not now readily going to sacrifice it 253 00:17:52.340 --> 00:17:55.060 for short-term financial savings. 254 00:17:56.780 --> 00:17:59.800 The positive argument is that 255 00:17:59.800 --> 00:18:02.400 a global financial crisis 256 00:18:03.280 --> 00:18:06.380 that has undermined public trust in business ethics 257 00:18:07.280 --> 00:18:09.580 and in which the natural impulse of governments 258 00:18:09.580 --> 00:18:12.120 will now be to regulate corporate activities, 259 00:18:12.240 --> 00:18:13.740 in that environment, 260 00:18:13.820 --> 00:18:17.720 corporate responsibility is more important 261 00:18:18.280 --> 00:18:19.140 rather than less important. 262 00:18:20.400 --> 00:18:23.100 On the other side of this debate, 263 00:18:23.260 --> 00:18:24.360 on the negative side, 264 00:18:24.360 --> 00:18:26.700 there are those who believe 265 00:18:26.700 --> 00:18:30.560 that actually there never was 266 00:18:30.560 --> 00:18:33.360 any real substantive quality 267 00:18:33.900 --> 00:18:36.560 to corporate responsibility. 268 00:18:37.420 --> 00:18:41.400 It was a fig leaf of social responsibility, 269 00:18:41.720 --> 00:18:44.460 driven by corporate communications, 270 00:18:44.680 --> 00:18:48.460 embracing things like the greenwashing 271 00:18:48.460 --> 00:18:50.260 of corporate products, 272 00:18:50.460 --> 00:18:53.240 not fully embraced or understood 273 00:18:53.240 --> 00:18:55.440 by senior management or the board. 274 00:18:55.620 --> 00:18:56.860 It was, in other words, 275 00:18:57.800 --> 00:18:59.400 a valuable illusion 276 00:19:00.140 --> 00:19:02.720 created by public relations spin, 277 00:19:02.920 --> 00:19:04.700 a publicity stunt. 278 00:19:05.300 --> 00:19:08.020 As one businessman once described it to me, 279 00:19:08.740 --> 00:19:10.700 a launch, a lunch and a logo. 280 00:19:12.960 --> 00:19:13.760 And me? 281 00:19:14.640 --> 00:19:16.160 Well, my answer, 282 00:19:16.260 --> 00:19:17.280 and I'll give it to you now 283 00:19:17.280 --> 00:19:19.660 just in case you want to leave early 284 00:19:19.660 --> 00:19:21.740 and see if there are some other better sessions around, 285 00:19:21.880 --> 00:19:23.040 my answer is, 286 00:19:23.040 --> 00:19:27.100 yes, corporate responsibility will survive. 287 00:19:28.460 --> 00:19:30.820 There will be reduced financial commitment 288 00:19:30.820 --> 00:19:31.840 in the short term. 289 00:19:32.380 --> 00:19:35.580 There will be a separation at the corporate level 290 00:19:35.580 --> 00:19:38.080 between the true believers and the fellow travelers. 291 00:19:38.980 --> 00:19:40.140 Having said that, 292 00:19:40.260 --> 00:19:42.120 I think that corporate responsibility 293 00:19:42.120 --> 00:19:45.260 will only properly grow if it is transformed. 294 00:19:46.600 --> 00:19:48.720 And now, what I want to tell you 295 00:19:48.720 --> 00:19:50.280 is why I've come to that conclusion, 296 00:19:50.440 --> 00:19:53.000 which is actually a more interesting story, 297 00:19:53.020 --> 00:19:55.340 than the bold outcome. 298 00:19:56.660 --> 00:19:57.860 Corporate responsibility, 299 00:19:59.020 --> 00:20:00.480 I'm using that now as a shorthand 300 00:20:00.480 --> 00:20:03.000 for all this diversity of activities, 301 00:20:03.460 --> 00:20:06.420 will survive if it is, 302 00:20:06.560 --> 00:20:08.400 actually is, 303 00:20:08.640 --> 00:20:11.020 seen as good for business. 304 00:20:11.200 --> 00:20:11.980 This is important. 305 00:20:12.400 --> 00:20:13.900 Too often one sees the community 306 00:20:13.900 --> 00:20:16.020 and environmental activities of businesses 307 00:20:16.020 --> 00:20:18.300 being criticized in the media 308 00:20:18.300 --> 00:20:20.000 as cynical ploys. 309 00:20:20.880 --> 00:20:21.980 You'll see, you know, 310 00:20:21.980 --> 00:20:24.620 business isn't doing this because they really care, 311 00:20:24.760 --> 00:20:27.300 but because they see there are some advantages to themselves. 312 00:20:27.640 --> 00:20:29.940 They're getting something out of this activity. 313 00:20:30.740 --> 00:20:31.760 I've got to tell you, 314 00:20:31.820 --> 00:20:34.280 I think that is a completely, utterly, 315 00:20:34.980 --> 00:20:36.420 wrong-headed line of attack. 316 00:20:36.920 --> 00:20:38.720 What we should look for 317 00:20:38.720 --> 00:20:40.860 in a corporate responsibility program 318 00:20:41.480 --> 00:20:44.340 is something that is mutually advantageous, 319 00:20:44.340 --> 00:20:45.720 a genuine partnership 320 00:20:46.480 --> 00:20:48.580 between the private and the community, 321 00:20:48.620 --> 00:20:50.220 or third sectors. 322 00:20:50.220 --> 00:20:52.980 For it's that benefit to business 323 00:20:52.980 --> 00:20:54.480 that is going to sustain 324 00:20:55.220 --> 00:20:58.020 and to strengthen community benefit. 325 00:20:58.720 --> 00:20:59.940 And what are 326 00:21:00.720 --> 00:21:02.580 the avowed benefits to business? 327 00:21:03.620 --> 00:21:05.300 Well, I will give you four. 328 00:21:05.480 --> 00:21:08.640 First, there is a view that it is very important 329 00:21:08.640 --> 00:21:10.680 in increasing the loyalty of employees. 330 00:21:11.500 --> 00:21:14.880 The fact is that many of those who work in the private sector 331 00:21:15.720 --> 00:21:17.640 relate more strongly to a company 332 00:21:18.220 --> 00:21:19.360 that shows itself 333 00:21:19.360 --> 00:21:20.200 committed to the business. 334 00:21:20.220 --> 00:21:21.900 They are committed to fair labor conditions 335 00:21:21.900 --> 00:21:23.880 and ONH standards 336 00:21:23.880 --> 00:21:25.320 and community support 337 00:21:25.320 --> 00:21:27.280 and environmental responsibility. 338 00:21:29.220 --> 00:21:31.120 People want to work for companies 339 00:21:31.720 --> 00:21:34.540 that support not-for-profit organizations, 340 00:21:35.100 --> 00:21:38.000 that provide time off to employees to volunteer, 341 00:21:38.220 --> 00:21:41.100 which promote payroll giving in the workplace. 342 00:21:42.160 --> 00:21:44.060 Many companies tell me 343 00:21:44.060 --> 00:21:46.700 that they find it easier to recruit top talent 344 00:21:46.700 --> 00:21:48.380 and to retain it 345 00:21:48.380 --> 00:21:50.400 and to maintain its enthusiasm 346 00:21:50.400 --> 00:21:51.680 and increase its morale 347 00:21:51.680 --> 00:21:55.080 by the fact that the staff, the employees, 348 00:21:55.880 --> 00:21:58.880 identify with the corporate responsibility activities 349 00:21:58.880 --> 00:22:01.140 of the company for which they work. 350 00:22:01.440 --> 00:22:03.240 Second, of course, 351 00:22:03.240 --> 00:22:06.000 it's meant to promote the loyalty of customers and clients. 352 00:22:07.140 --> 00:22:08.720 Now, often in the past, 353 00:22:08.920 --> 00:22:11.040 this has been made manifest 354 00:22:11.880 --> 00:22:14.380 only when there is a negative campaign 355 00:22:15.920 --> 00:22:17.500 against a business. 356 00:22:20.540 --> 00:22:22.700 And therefore, there is a tendency 357 00:22:22.700 --> 00:22:24.300 to see corporate responsibility 358 00:22:24.300 --> 00:22:27.200 as preparing you for negative publicity. 359 00:22:27.760 --> 00:22:30.180 We know how damaging it is 360 00:22:30.180 --> 00:22:32.440 when companies become exposed 361 00:22:32.440 --> 00:22:34.480 because their products are unsafe 362 00:22:34.480 --> 00:22:37.260 or because they have exploited child labor 363 00:22:37.260 --> 00:22:39.780 or they are not involved in fair trade 364 00:22:39.780 --> 00:22:42.200 or they are not environmentally safe. 365 00:22:42.560 --> 00:22:45.480 All of those things can and do 366 00:22:45.480 --> 00:22:47.140 directly affect 367 00:22:47.140 --> 00:22:48.360 the financial situation. 368 00:22:48.360 --> 00:22:48.560 And so, 369 00:22:48.560 --> 00:22:50.200 the actual bottom line of companies 370 00:22:50.200 --> 00:22:51.900 and everything from training shoes 371 00:22:51.900 --> 00:22:54.320 to diamonds to wool to toys 372 00:22:54.320 --> 00:22:55.380 to chocolate and coffee. 373 00:22:55.840 --> 00:22:57.200 But increasingly, 374 00:22:57.520 --> 00:22:58.540 corporates are now saying, 375 00:22:58.720 --> 00:23:01.040 let's not just have a defense, 376 00:23:01.200 --> 00:23:03.780 but let's actually go on the front foot 377 00:23:03.780 --> 00:23:06.440 and be proactive in this area. 378 00:23:06.660 --> 00:23:09.880 Take ethical standards to the marketplace 379 00:23:12.080 --> 00:23:16.580 and thereby build consumer support 380 00:23:16.580 --> 00:23:20.060 and client support for our products and our business. 381 00:23:20.420 --> 00:23:23.900 The third is that it can be very useful 382 00:23:23.900 --> 00:23:25.980 in terms of loyalty of investors 383 00:23:25.980 --> 00:23:29.760 because what's happened particularly over the last decade 384 00:23:29.760 --> 00:23:32.100 is there is increasingly a movement 385 00:23:32.100 --> 00:23:34.020 by those who want to invest 386 00:23:34.020 --> 00:23:36.220 to invest ethically, 387 00:23:36.380 --> 00:23:38.380 to at the very least do no harm 388 00:23:38.380 --> 00:23:41.680 and hopefully to do good from one's investment. 389 00:23:41.900 --> 00:23:45.320 So, you've got the emergence of ethical investment firms. 390 00:23:45.320 --> 00:23:49.620 This too can feed into the financial bottom line of companies. 391 00:23:50.080 --> 00:23:51.140 And fourth, of course, 392 00:23:51.180 --> 00:23:53.600 you can actually get direct cost savings 393 00:23:54.820 --> 00:23:56.220 out of responsible activity. 394 00:23:57.820 --> 00:23:59.760 Better occupational health and safety 395 00:24:00.320 --> 00:24:01.520 improves the bottom line. 396 00:24:02.820 --> 00:24:03.940 Greater energy efficiency, 397 00:24:04.300 --> 00:24:05.180 reduced travel 398 00:24:05.820 --> 00:24:07.640 improves the bottom line. 399 00:24:08.900 --> 00:24:11.940 Rising investment in green power 400 00:24:11.940 --> 00:24:14.180 is often driven by 401 00:24:14.180 --> 00:24:16.900