A new era of responsible business:
2007 Corporate Responsibility Index
by Simon Longstaff
Managed by St James Ethics Centre in partnership with The Sydney Morning Herald, The Age and Ernst & Young, the Corporate Responsibility Index is a business management tool that allows companies to map and measure their progress in corporate social responsibility. Now in its fifth year, the Index has fast become one of the most comprehensive ways for Australian businesses to chart their progress in responsible business practice. Simon Longstaff reflects on the most recent results.
The latest round of the Corporate Responsibility Index (CRI) represents something of a ‘coming of age’ in the evolution of responsible business in Australia. The mark of this development is not to be found in a table marked by row upon row of high-performing companies. Rather, it is the record of variable performance that is exemplary. Unlike other indices, participation in the CRI is entirely voluntary. As such, it would be easy for organisations to choose only to participate if confident of achieving superior performance. Yet, in a sign of growing maturity, a significant number of local companies have chosen to report their performance even when to do so will draw attention to areas requiring further improvement. To add to the significance of what is happening here, it should be noted that the CRI offers a private benchmarking option – for organisations wishing to minimise risk as they ‘dip their toes’ into the measurement and reporting waters. A number of companies take this option – understanding that there is an expectation that they will move to full, public reporting in due course. So, those who have reported publicly deserve double praise – first for voluntarily participating at all and secondly for doing so in such a transparent manner.
The second major lesson to emerge from the latest round of results is that taking a global approach to corporate responsibility, and building expertise over time, is the best way in which to generate superior results. As will be seen from the table of results (see page 5), a very high level of performance has been achieved by all of the companies making global submissions. This result has been attained using the same questions and same criteria as apply when validating and scoring submissions by companies that operate predominantly in Australia and New Zealand. Of course, some Australian companies (like BHP Billiton and Rio Tinto) make global submissions. As such, they are exposed to the full breadth of international expectations about how they should operate – thus honing their capacity to perform.
A third observation concerns the position of leading Australian companies in relation to the operation of the CRI. As the results indicate, a number of companies have taken a ‘leave of absence’ or have not submitted in the last round. Others, most notably ANZ, have continued on with an unbroken record of participation. In discussions with participating companies, both approaches have been shown to have merit. In some cases, Australian companies have been in the forefront of international performance – quoted overseas as having set the standard to be met. Indeed, at a recent meeting with Israel’s major organisation promoting corporate responsibility, the performance of Australia’s best performing companies was singled out for comment. For such companies, continued leadership may require something more than completing the CRI on an annual basis. Indeed, all of Australia’s leading companies have joined a Leaders’ Network within which a series of innovative developments are being developed. This Network is likely to expand in the coming months as more companies become eligible to participate in the generation of ground-breaking new initiatives. At the same time, St James Ethics Centre has been advancing discussions with other indices – so as to rationalise the reporting burden borne by business.
That said, it is our view that there is no substitute for regular assessment and reporting, against common criteria that evolve in response to improved standards. Indeed, the latest iteration of the CRI is far more demanding than it has been in earlier years – and there is every intention of ‘raising the bar’ so as to set new challenges for leading companies.
Finally, it should be noted that this year’s list of participants is the most diverse yet. One of our aims is to develop new tools that further expand access to the CRI methodology – especially for the small to medium enterprise (SME) sector. The Allen Consulting Group has been commissioned to undertake the first phase in an extensive program of research and development for this sector – a process that we understand has not been undertaken before.
However, of all these developments, I think that the most significant is the evidence now emerging of a corporate sector that is beginning to lose its fear of candid and transparent reporting. This suggests a deeper commitment to learning than has been evident in the past. As such, I hope that all the participants in this year’s CRI will be applauded for their leadership – whatever their performance to date.
Full results of the Corporate Responsibility Index are available at www.corporate-responsibility.com.au.
discuss this articleDr Simon Longstaff is Executive Director of St James Ethics Centre.
This article was first published in Living Ethics, issue 72, winter 2008. A version of it was also published in the Executive Summary for the 2007 Corporate Responsibility Index in May 2008.
© St James Ethics Centre