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Encouraging responsible business practice

by Rosemary Sainty

As the Australian Prime Minister Kevin Rudd announced Federal Government funding of $2 million for St James Ethics Centre to undertake a three-year project to expand responsible business practice nationally, the Great Hall in Parliament House rang out with spontaneous applause, writes Rosemary Sainty.

The funding announcement was made at the fifth Corporate Responsibility Index (CRI) Awards dinner as part of the ninth National Business Leaders’ Forum on Sustainable Development, held in Canberra on 19 May 2008.

There is no doubt that this funding represents an exciting opportunity for St James Ethics Centre, uniquely placed within Australia to deliver the goals of the project. The Centre has strong international links with key players in corporate responsibility and sustainability, including its trusteeship of the Corporate Responsibility Index (CRI) – an initiative of Business in the Community UK (BITC) – and its longstanding partnership with the National Business Leaders’ Forum on Sustainable Development. Add to this the high level of trust within the Australian business community and the respect within the general Australian community, that understands that the Centre’s initiatives are based on developing the common good.

Background:

The Federal Government, through Treasury, will provide funding to the Centre of $2 million over a period of three years, with the expectation that all initiatives be self-funding after this time.

The goals of the project are:

1. To expand the number of Australian companies actively engaged in identifying and adopting more responsible business practices.
2. To consider options to improve and, where necessary, refine the tools that are available to promote responsible business practices across all levels of corporate management.

Terminology in the field of corporate responsibility can be confusing, with a number of labels and acronyms in use. For the Centre, it is important to differentiate between corporate responsibility/responsible business practice and sustainability. The two are split down philosophical lines: sustainability has been defined by the Brundtland Commission as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs”. This is a consequentialist, utilitarian view, with the focus on the ends rather than the means to the ends.

Responsible business practice (corporate responsibility) on the other hand, includes “a company’s positive impact on society and the environment through its operations, products or services and through its interaction with key stakeholders such as employees, customers, investors, communities and suppliers” (according to BITC). It is equally concerned with how the means are achieved as to what the outcomes are, taking a more deontological approach.

Just as three, two or even one year ago we could not have predicted the effects of global warming on business and the community, it is equally likely that the landscape will change just as significantly over the next three years. In order for the project to maintain relevance and effectiveness, a guiding principle will be to address emergent issues and employ predictive intelligence in forecasting likely impacts. Building adaptive, reflective, responsible and ultimately resilient organisations and communities will be essential.

Scope:

The Centre will use the funding to engage with a wide group of companies, including small and medium enterprises (SMEs), currently comprising over 95% of businesses in Australia. The inclusion of SMEs in the project is crucial, as they form a powerful and important stakeholder group in developing the nation’s social inclusivity, climate change adaptation/resilience and long-term sustainability agenda.

The Centre will work to source, refine and develop tools to engage and promote responsible business practices including the CRI. The key challenge for companies is how to address issues systematically and it is here that the CRI ultimately assists – by providing a framework for implementation and a means to review management systems and processes.

In addition, a range of other initiatives are already in progress in Australia. An important dimension of the project will be to draw together key stakeholders and innovators to facilitate the flourishing of national networks and laboratories of best practice. The project will be characterised by collaboration, inclusivity and creativity.

Initiatives already underway include:

1. Partnership with the National Business Leaders’ Forum on Sustainable Development, the vehicle by which the CRI results are prominently presented to the business and civic leadership community in Australia. The Forum is also where innovative efforts are made to involve more companies in the CRI tool through workshops and annual speakers from BITC.
2. The CRI Leaders’ Network, comprising ‘early adopter’ corporations including Westpac, BHP Billiton, ANZ, Toyota and Energy Australia. This Network has been established to work with the Centre to drive the uptake of responsible business practice nationally drawing on the experience and achievements of participants.
3. Initial discussions with international leaders in corporate responsibility and sustainability reporting and indexing including the CRI, the SAM Sustainability Index, the Dow Jones Sustianability Index (DJSI) and the Global Reporting Initiative (GRI).
4. The completion of the first stage of national research: Responsible Business Practice in Small to Medium Enterprises conducted by the Allen Research Group for St James Ethics Centre. The Centre is keen to ensure that SMEs have a voice in the responsible business practice conversation and an opportunity to lead.

Rosemary Sainty is Head, Responsible Business & CRI Leaders’ Project in Australia for St James Ethics Centre.

* The Brundtland Commission, formally the World Commission on Environment and Development (WCED), known by the name of its Chair Gro Harlem Brundtland, was convened by the United Nations in 1983. The commission was created to address growing concern “about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development.”

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