FT SPECIAL REPORT

Responsible Business

Short shriftLong-termthinking is betterfor groups andshareholdersPage 2

Source codeTightening theapproach tosupply chainmanagementPage 4

Deep thinkingGood practiceneeds to beembedded incompany culturePage 7

Buying inEthical optionsbecome part ofthe choiceavailable toconsumersPage 10

Corporations reach for changeCompanies are on a difficult journey towards balancing profit with social value Page 2

Wednesday June 12 2013 www.ft.com/reports | twitter.com/ftreports

Force for goodActivists begin toturn anger andprotest intocollaborationPage 12

Honours sharedBig Tick awardwinners andthe index ofresponsibilityPages 14-15

Inside »

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2 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 3

Responsible Business Responsible Business

Sarah MurrayFT contributor

Ross TiemanFT contributor

Rod NewingFreelance journalist

Virginia MarshFreelance journalist

Ian MossCommissioning editor

Andy MearsPicture editor

Steven BirdDesigner

For advertising details,contact: Julia Woolley +441473 652 964,julia.woolley@ft.com or yourusual FT representative.All FT Reports are availableon FT.com at ft.com/reportsFollow us on Twitter attwitter.com/ftreportsAll editorial content in thissupplement is produced bythe FT.

Contributors »

One of the messages toemerge from last year’sreview of equity markets byJohn Kay, the LondonSchool of Economics profes-sor and FT columnist, wasthe need to move awayfrom the culture of short-termism. This is critical

when it comes to corporatesustainability strategies,whether conserving naturalresources or fosteringhealthy communities. Yetin espousing this long-termapproach, companies face anumber of obstacles.

Sustainability aside,many argue that short-ter-mism is not good for busi-ness generally.

The Kay Report lays partof the blame for companies’failure to develop strate-gies, such as research anddevelopment investmentand promoting long-termprofitability on the practice

of providing quarterly earn-ings guidance. Abandoningthis practice was somethingPaul Polman was quick toannounce on taking over aschief executive of Unilever,the Anglo-Dutch consumergoods group, in 2009.

“It was one of the firstthings he did,” says GailKlintworth, Unilever’s chiefsustainability officer.“Because the fundamentalshort-term pressure of hav-ing to chase targets everyquarter was something hebelieved rewards poten-tially wrong behaviour.”

Quarterly reporting is

just one among a range ofnorms some believe mustchange before companiescan start to address theirsocial and environmentalimpacts – and persuadeinvestors of the businessbenefits those efforts willdeliver.

One of the biggest prob-lems for companies isexplaining to analysts andinvestors that environmen-tal and social responsibilityand profitability are notmutually exclusive.

“It’s not just an issueabout frequency of report-ing,” says Justin Keeble,

head of sustainability forAccenture in the UK andEurope. “Fundamentally,it’s about having a dialoguebetween the two sides.”

This is not easy. It issomething for example, thatthe food and beverageindustry has struggledwith. When Indra Nooyitook over as chief executiveof PepsiCo in 2006, sheintroduced a strategy ofdeveloping healthier “goodfor you” products.

Yet investors and analy-sis later punished the com-pany for taking its focusaway from sugary drinks.

“There’s a lot of evidencethat long-term thinkingbased on oblique goals paysoff in the future,” saysJulian Birkshaw, professorof strategy and entrepre-neurship at London Busi-ness School. “But I’m con-tinually surprised at howdifficult it is to persuadepeople that this long-termapproach pays back.”

Another obstacle is theperception that sustainabil-ity strategies create costsfor companies. Yet, whilesome upfront investmentmight be required to, say,monitor water consumption

Investors must learn to respect long-term thinkingShareholder value

Short-termism isbad for business andbad for investors,says Sarah Murray

or reduce fertiliser use, thiscan pay off quickly in theform of cost savings orimproved yields.

“It takes a bit more effortto turn waste into anaerobi-cally digested fuel,” says MsKlintworth. “But onceyou’ve done that, you get areal benefit out of it. So thedominant logic that saysthis doesn’t make businesssense is the biggest barrierwe have to break.”

This suggests that compa-nies need tools with whichto quantify the materialimpact of long-term sustain-ability strategies such asproviding healthier prod-ucts, guaranteeing decentworking conditions in sup-pliers’ factories or recyclingwaste.

Such tools are emerging.

For example, Environmen-tal Defense Fund, a NewYork-based non-profit, hasworked with private equitygroups such as KKR, Car-lyle and Oak Hill CapitalPartners to develop a toolthat helps private equityinvestors integrate socialand environmental factorsinto their investment proc-esses.

“What is needed from aninvestment perspective isthe ability to put a numberon the opportunity or riskso that it can be factoredinto investment models,”says Mr Keeble.

Impact investing – anemerging alternative-assetclass whose investors lookfor social and environmen-tal as well as financialreturns – may offer models

that could be used by thecorporate sector. Aimed atimpact investors, the GlobalImpact Investing RatingSystem (GIIRS) is a methodof comparing the social,environment and financialreturns of different funds.

Critically, the GIIRSrelies on a taxonomy pro-viding a common languagefor describing the socialand environmental perform-ance of an organisation.

The question of languageis something that manyargue is what hampersunderstanding of the bene-fits of long-term sustainabil-ity strategies – both inter-nally within companies andexternally, when it comesto communicating withinvestors.

This is something organ-

isations such as the WorldEconomic Forum and theConsumer Goods Forum areaddressing. The CGF has,for example, developed theGlobal Protocol on Packag-ing Sustainability, whichprovides a measurementsystem for the industrywith a common language todescribe indicators for thesustainability of packaging.

Mr Keeble argues thatcompanies will need to domore to foster a culture inwhich investors put a valueon their sustainability strat-egies. “Companies need tobe better equipped to articu-late the long-term value ofsustainability in a way thatinvestors can understand,”he says. “And that’s still anissue we see companiesstruggling with.”

‘And so, in the end, thequestion of markets is really aquestion about how we wantto live together. Do we wanta society where everything isup for sale? Or are therecertain moral and civic goodsthat markets do not honourand money cannot buy?’

The Moral Limitsof Markets

Michael SandelPhilosopher

Many argue that in order totransform capitalism so it ben-efits all of society, companiesmust stop thinking in terms ofcorporate philanthropy or tra-

ditional CSR (corporate social responsibil-ity) and devise strategies that add greatersocial value to their profit-driven commer-cial agendas. The truth is that this is easiersaid than done.

This year’s Responsible Business Awards– run by Business in the Community(BITC), the UK business-led charity –reflect the struggle to narrow the gapbetween strategies that are more philan-thropic and those that deliver direct valueto the bottom line.

For example, Big Tick winners in theEnterprise Growth award (see pages 14-15)– which rewards businesses for supportingsmall enterprises – include Santander UK,the British unit of the Spanish bankinggroup, which uses its funding, knowledgeand resources to help more than 1,300 smalland medium-sized enterprises (SME) createjobs and drive growth.

For Santander, the strategy not onlyhelps the bank contribute to employmentand economic growth. It has brought innew customers and raised its share of theUK SME market to more than 5 per cent.

The business benefits of some corporateresponsibility initiatives are harder tomeasure. EDF Energy won a Big Tick inthe Inspiring Social Action in Young People

category for a programme in London’s for-mer Olympic boroughs, where employeesvolunteer to develop projects ranging fromcommunity drama to crime prevention.

The benefits to the company are not neg-ligible – the Legacy Champions programmeappeals to potential recruits and employeessay they have a better understanding ofyoung people and are more proud to workfor the company. But the extent to whichthis underpins EDF Energy’s financial suc-cess is harder to quantify.

Some changes in corporate strategy –such as the reshaping of supply chains –reflect an understanding that the long-termviability of companies depends on thehealth of society.

When it comes to efforts to address envi-ronmental challenges, there are measurablefinancial benefits in the cost savings madeby cutting water and energy consumptionor reducing use of resources. With theworld’s natural resources under increasingpressure, such strategies can be seen asprudent risk management measures.

Not all the world’s problems aligndirectly with companies’ business models –or at least not those that deliver returns inthe short to medium term.

For companies that want to move fastertowards sustainable business models, thisis a problem, in that capital markets tend toreward short-term profitability rather thanlong-term strategies that support environ-mental sustainability or a healthy society.

Capitalismstruggles tobalance socialvalue and profitEven though progress has beenmade, harnessingcommercial self-interest to benefit society willremain problematic, writes SarahMurray

Many still believe the primary responsi-bility of companies is to make money. In aLondon Business School poll, respondentsrated things such as a responsible culture,moral leadership, contributing to long-termeconomic sustainability and creating anengaging workplace 3.4 and 3.6 out of 5.Maximising financial return to sharehold-ers ranked higher, at 3.7.

The difficulty for companies is that,while improving labour conditions in devel-oping country factories supports the finan-cial sustainability of the business, these ini-tiatives require long-term investments thatdo not necessarily pay off in the next quar-ter’s earnings results.

Some argue that while companies makeclaims about programmes that benefit soci-ety or the environment, they have not yetdone enough to address the negative

impact of commercial operations. For aswell as helping solve societal problems,companies can contribute to them. Thiswas recently highlighted by the death ofmore than 1,100 Bangladeshi workers aftera factory complex – from which several UKclothing brands sourced garments – col-lapsed.

Such incidents are generating a wave ofanti-corporate activism. This comes afteran era in which many of the relationshipsbetween companies and non-governmentalorganisations have been based on collabo-ration, rather than advocacy or boycotts.

These partnerships continue. But frustra-tion is growing on the part of many envi-ronmental and human rights activists that,despite progress in some areas, companiesare not moving fast enough to reduce theiradverse impact on people and the planet.

Another unresolved question is theextent to which consumers can play a rolein pushing companies towards corporatepractices that inflict less harm on commu-nities and the environment. Some evidenceexists of a growing niche of consumers thatwant to match their ethical and environ-mental values with their purchases. Armedwith online social media tools, many areprepared to become more vocal when theysee corporate behaviour of which they dis-approve.

Yet many shoppers’ memories, it seems,are short. A recent opinion poll by RetailWeek revealed 44 per cent of UK citizenswere no more likely to ask where theirclothes were made than they had beenbefore the Bangladesh factory collapse.

To judge from one of the awards catego-ries – Customer Engagement on Sustaina-bility – BITC believes one answer is forcompanies to play a role in changing theway consumers buy and use products.

Award winners in this category includeCoca-Cola, which promoted recycling dur-ing the London Olympic Games, and EHBooths, the grocery retailer, which usesmarketing campaigns to promote sustaina-ble fruit and vegetables, while championingBritish farmers and local suppliers.

One of the Big Tick winners in this cate-gory is B&Q, the home improvementretailer. Its One Planet Home programmehelps customers cut their environmentalimpact – showing them how to save energy,save water, grow their own food and startrecycling products – while helping them tomake greener purchasing choices.

B&Q has been removing products fromstock – such as gas-powered patio heaters,which emit high levels of carbon dioxide –that do not meet its sustainability goals.

How far the corporate sector can go downthis path has not been fully tested. Wouldit be possible for companies to push up theprice of goods such as jeans in order to payfor improvements in the conditions indeveloping country factories? The RetailWeek poll would suggest not.

So if investors and consumers are not yetprepared to reward companies for strate-gies that put environmental sustainabilityand the health of communities ahead ofshort-term profit and the production ofcheap products, who will?

Awards such as BITC’s can encouragecompanies to do more. However, it shouldbe remembered that fallen energy giantEnron won numerous environmentalawards while engaging in accounting fraud.

Until all capitalism’s stakeholders, fromfund managers and analysts to corporatelobbyists, regulators and consumers, sup-port companies in their socially and envi-ronmentally responsible strategies, har-nessing commercial self-interest to benefitsociety will remain an uphill battle.

‘In terms of power andinfluence you can forget aboutthe church, forget politics.There is no more powerfulinstitution in society thanbusiness. The businessof business should notbe about money, it shouldbe about responsibility.It should be aboutpublic good, notprivate greed’

Anita RoddickBodyshop founder (1942-2007)

As well as helpingsolve societalproblems,companies cancontribute to them

Students ata factory inSidcup aspart ofCoca-Cola’sRealExperience

On FT.com »

Social sceneEnterprisedevelopmentgathers steamTwo moves havechanged the game,says Virginia Marsh

4 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 5

Responsible Business

Corporate attitudes to supplychain sustainability are undergo-ing a deep and difficult transfor-mation. In the recent past, it wassufficient for vanguard compa-

nies to do their best to avoid causing envi-ronmental and social damage. Now theyare being asked to become a force for good,and discovering they cannot do it alone.

This “paradigm shift”, in the words ofPeter McAllister, director of the UK-basedEthical Trading Initiative (ETI), wasrammed home by the collapse in April ofthe Rana Plaza clothing factory complex inBangladesh in which more than 1,100 died.The tragedy followed fires in clothing andshoe factories last year in Bangladesh andPakistan that cost hundreds of lives.

The ETI, which brings together multina-tionals, trade unions and voluntary organi-sations, says much of the blame lies with aweak safety culture and poor enforcementof building regulations and planning con-sents in Bangladesh. “If we can’t fix this,the companies will go where their brandsare not at risk,” says Mr McAllister. “Theydon’t want to be associated with factoriesthat put peoples’ lives at risk.” Alarmed atthe threat to a $19bn industry that gener-ates 80 per cent of exports, the Bangladeshgovernment has promised to reform labourlaws, hire more factory inspectors andmake garment factories safe.

Leading western clothing groups haveagreed to ensure more thorough inspec-tions of their suppliers and press the Bang-ladesh government into doing its bit, via anewly-inked collaborative framework, theinter-company Accord on Fire and BuildingSafety in Bangladesh. If this agreementachieves its objectives, “we will learn les-sons for other parts of the world as well,”says Mr McAllister.

In the battle for better supply chains,learning lessons quickly when things gowrong is vital. Pan-European retailer Pri-mark sourced garments from a factory onthe second floor of Rana Plaza. It quicklysaid so, sent teams to help, and promisedcompensation. “To know who your suppli-ers are and where they are is the firstmajor step in supply chain mapping andresponsibility,” says Paul Lister, companysecretary of Primark’s parent AssociatedBritish Foods.

Primark plans to stay in Bangladesh andwork within the Accord framework toensure safer garment factories. “At Pri-mark we do 1,500 to 2,000 audits a year tosee what’s going on,” Mr Lister says. “Weare seeking to ensure that the workers inthe supply chain are looked after, aretreated with respect, and benefit frombeing part of that supply chain.”

Companies must strive to shoulder theburden of inspection – which they do withmixed success – because governments toooften fall down on the job. Mr Lister says:“The laws exist in every country in whichwe operate that would stop exploitation,that would make health and safety a prior-ity. They should be enforced.” That appliesequally in the back streets of Leicester, hesays.

The idea that ensuring worker rights is aresponsibility shared by business and gov-ernment was set out by the UN HumanRights Council two years ago. This “Ruggieframework”, devised by Prof John Ruggie,the UN secretary-general’s special repre-sentative on business and human rights,has three “pillars”. The first is the state’sduty to protect against human rights

abuses by third parties, through policies,regulations and adjudication. Business, forits part, has a responsibility to protecthuman rights: it must avoid infringing therights of others, and must address adverseimpacts. Finally, victims should have moreaccess to effective remedies, both judicialand non-judicial, the framework says.

The ETI code, like many others, is basedon conventions of the International LabourOrganisation. It underscores workers’ rightsto join a union, earn a living wage, work nomore than 48 hours a week, and not experi-ence discrimination, for example. But inemerging economies where capitalism often

jostles with a centralising state, such codesmay conflict with local regulations or deep-seated cultural traditions.

The tensions quickly surface. DavidNoble, chief executive of the CharteredInstitute of Purchasing and Supply, saysthat social media leave companies with nomargin for supply-chain error. Breachesmay be hard to spot in an audit but “youcan’t get away with hoping to brush some-thing under the carpet.” Companies are“getting caught out”, he adds, because theyview procurement as a function out of thepublic eye. But ethical failures in the sup-ply chain can lead to bad publicity and

brand and share price damage. Two thingsneed to happen, Mr Noble says. Analystsand shareholders must ask tough questionsabout supply chains and “in the future, Ibelieve companies need to invest far moreresource and capability in supply chainmanagement”.

In the past decade, leading companieshave made huge strides in environmentalmonitoring of supply chains. Now they arehaving to turn procurement into a force forsocial good around the world. If business isto deliver goods and services that consum-ers can enjoy without guilt, it is a skillcompanies must master with alacrity.

Groups face rising concern on safetySupply chainBusinessmust take responsibility for worker welfare when governments fail, saysRoss Tieman

Since the UN Human RightsCouncil endorsed a new set ofGuiding Principles for Businessand Human Rights two years ago,multinationals have faced apuzzle. How can businesses suchas Unilever, with 171,000 workersin 100 countries and 10,000suppliers worldwide, guaranteethe human rights of all thoseinvolved in or affected by itsbusiness?

Oxfam approached Unilever, arecognised pioneer of sustainablepractices, with a proposal. Whynot let the charity carry out anindependent study of Unilever’scompliance with the UN’s so-called Ruggie Framework ofhuman and labour rights?

Encouraged by previoussuccessful collaborations,including a groundbreaking 2005investigation by Oxfam ofUnilever’s economic impact in

Indonesia, the company openedits Vietnamese operation toOxfam. “We wanted tounderstand what we would haveto change in our currentoperating practices so that wecould demonstrate compliancewith the Ruggie Framework,” saidMiguel Vega-Pestana, Unilever’svice-president for external affairsand media.

Oxfam aimed to assess labourstandards within Unilever and itssupply chain, and developprinciples to guide it and othercompanies in fulfilling their socialresponsibilities.

Over 18 months, a team fromthe charity focused on fourissues: whether workers couldexercise their rights to freedom ofassociation and collectivebargaining in a Vietnamesecontext; whether Unilever and itssuppliers were paying a “living

wage”; whether working hourswere exploitative/unreasonable;how far the use of contractlabour might affect workers’conditions and income.

The context chosen wasespecially difficult. ThoughUnilever has been present inVietnam since the mid-1990s, ithad had to partner with state-owned enterprises (SOEs). Manysuppliers were SOEs, and tradeunions were affiliated with theruling communist party.

Researchers visited Unilever’sfactory at Cu Chi, where 700direct Unilever employees worked,backed by 800 workers from alabour provider. They interviewedworkers and conducted phoneinterviews with 48 suppliers.

Oxfam found that goodintentions were sometimesconfounded by “inadvertentneglect”. It noted that although

Unilever workers were paid morethan double the minimum wage,many said it was not enough tosupport dependants.

Oxfam was also unhappy tofind so many contract workers.

Failings such as these werecommon in the supply chain, too.But Rachel Wilshaw, Oxfam’sethical trade manager, noted thatone supplier “had really goodpractices” without suffering anyloss of competitiveness.

Mr Vega-Pestana said Unileverwas putting contract workers onpermanent contracts andaddressing failings in its businessand those of suppliers.

“We feel that many of the coreprinciples of what we have learntwe can take away and applymore generically to the businesselsewhere,” Mr Vega-Pestanacommented.

Ross Tieman

Scrutiny Unilever teams up with Oxfam to assess workers’ conditions in Vietnamese factories

Aftermath: the death of more than 1,100 after a garment factory collapsed in Savar, Bangladesh, drew attention to ethical sourcing Reuters

6 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 7

Responsible Business Responsible Business

The return on investment fromenvironmental strategies, such asenergy efficiency and responsibleresource consumption, is rela-tively easy to measure internally

and to demonstrate. The business case forresponsible policies is harder to ascertain,yet these more intangible matters have animportant impact on the communities inwhich businesses operate.

“Measuring performance helps to scale upthe contribution business makes globally tosustainable development,” says Ernst Lig-teringen, chief executive of the GlobalReporting Initiative (GRI), a non-profitorganisation promoting economic, environ-mental and social sustainability. “Report-ing changes mindframes, supports dialogueand helps build understanding and trustbetween business and communities.”

Its reporting framework embraces the 10universally accepted principles of the UNGlobal Compact for aligning business oper-ations and strategies with human rights,labour, the environment and anti-corrup-tion. It encourages organisations to concen-trate on the economic, environmental andsocial impacts that matter and to communi-cate the connections between sustainabilityand business.

Internally, responsible business practicesimprove productivity, help to attract andretain talent and externally they supportthe organisation’s right to operate in partic-ular areas. Demonstrating a measurablepositive impact on society encourages theorganisation to continue its investment.

The UK government has been supportive,with the Cabinet Office publishing A Guideto Social Return on Investment. The report’sco-author, Jeremy Nicholls is chief execu-tive of the Social Return on Investment(SROI) Network, an organisation that pro-motes the methodology internationally. “Itis based on information that, like account-ing, is socially constructed and based onprinciples,” he says. “Users share experi-ence to improve the judgments they haveto make and to increase consistency.”

Some 40 to 50 organisations a year gothrough this process, although not everyorganisation wants to participate. It isincreasingly used by international corpo-rates with supply-chain problems, but wasoriginally adopted by non-profit socialenterprises, whose mission was to createsocial value. “Their funders expect more ofthem,” says Mr Nicholls, “so they need tobe better able to manage social value.”

Deloitte, the accounting firm, publishesits impact on the UK economy, as well asits financial results. Last year Deloitte saysit supported 49,190 direct and indirect jobs,created 875 skilled jobs and contributed

£3.5bn, equivalent of 0.1 per cent of grossdomestic product. “Why would the countrycare if our revenues went up or down?”says Heather Hancock, Deloitte’s managingpartner for talent and brand. “What mat-ters is how we serve the social and eco-nomic good and raise the level of skills.”

She says businesses have to make choiceson where they can make the most impactand how to account for it. This will driveorganisations to make much longer-termcommitments in their chosen areas. “Wewill see less flipping according to the politi-cal pressure of the day or the fashionablemantra,” Ms Hancock says.

Sarah Thomas de Benitez, chair of theConsortium for Street Children’s ResearchForum, did independent work into theimpact of insurance company Aviva’sStreet to School project, which has alreadybeaten its aim of helping 500,000 youngpeople get off the street and into educationby 2015. “When young people who had suf-fered abuse and deprivation told us whatelements of their services they most valuedand why other aspects didn’t work forthem, it provided useful inputs for effectiveservice design,” she says.

David Schofield, group head of corporateresponsibility at Aviva, says standardimpact measurement only answers thequestion asked. “This research took us intoareas of surprising outcomes . . . It showedthe things that offer the most potential formeaningful development of programmes.”

ISS UK and Ireland, a facility servicesprovider, uses the London BenchmarkingGroup model to measure its corporate com-munity investments. In 2012 its cash contri-butions, staff time, management time andequipment donations were valued at£371,861, 1.22 per cent of its net profit. “Weare challenging our business areas to meas-ure the impacts they have on society,” saysRichard Sykes, chief executive. “This willmeasure the difference we are making tomaximise our social investment and theimpacts that result.”

Vertigo Ventures, an impact reportingcompany, analysed the CSR and sustaina-bility policies of the 10 largest global phar-maceutical companies. It found that thesector has yet to adopt impact measure-ment. “They report on outputs, such asvaccinations donated, where a more mean-ingful measure would be people vaccinatedor lives saved,” says Laura Fedorciow, itsmanaging director.

With many sectors in a similar situation,more effective measurement of responsiblebusiness initiatives will help companiesidentify where they are making the mostimpact and encourage them to continue, oreven increase, investment.

Measurement ofimpact on societyserves to boostinvestmentThebusiness caseOrganisations that think aboutwhere their social programmeswill bemost effectivewillmake longer term commitments, saysRodNewing

Cadbury’s Spots v StripesOlympic campaign achieved a“social return” on investmentof £13.2m. As as official treatprovider for London 2012, thescheme aimed to inspirepeople to rediscover thebenefit and enjoyment ofplaying games.

Groundwork UK, afederation of 27 charities thatseek to improve quality of lifefor communities in need, wasallocated funding to recruitcoordinators to plan anddeliver community gamesand events with help fromvolunteers.

It was highly successful, inmobilising 4,500 volunteers,double the numberanticipated; reaching1,196,957 people, four timesthe number expected; andgetting 180,296 people toplay community games.

Kraft, owner of Cadbury,and Groundworkcommissioned Ecorys, aconsultancy and researchcompany, to establish thesocial value of the projectusing the Cabinet Office-approved approach. “Theytook a bit of a risk,” says

Nicola Smith, director ofpolicy and research atEcorys. “There was noguarantee that it would comeout positively.”

She says the SROImethodology wasstraightforward to use.Research and surveys weredeveloped to gather data andstatistical expertise used toperform the final calculationsof impact. An interimcalculation was producedthat gave an early indicationof where the main impactslay. This approach allowsa project to be fine-tunedto maximise its socialimpact.

The value of inputs was£3.9m. Cadbury providedmoney and time worth £3.6mand volunteers’ time, effortand skill was valued at£321,000. The £13.2m netpresent value of the impacton communities was £9.5m,£1.6m for participants and£1.9m spectators andvolunteers. Groundwork onlybenefited by £168,000 andCadbury by £8,500.

Cadbury already had manyother activities related to its

Olympic sponsorship thatraised awareness of its brandand deliberately keptbranding fairly minimal atSpots v Stripes events. “Thefocus of the programme wasto get people playing gamesand engaging in sportingactivity, not to build ourbrand awareness,” saysJosephine Bradley, head ofUK communications atMondelez Europe, whichnow owns the Kraftbrands.

Ms Smith advises peoplenot to focus on the totalbenefit figure, but the typesof change that have takenplace in the community andthe impact on the volunteers.

“In trying economic times,companies must be able tojustify their expenditure andmaximise the ‘bang for theirCSR buck’,” says Sir TonyHawkhead, chief executive ofGroundwork UK.

“Assigning a monetaryvalue to social impacts allowsorganisations to demonstratehow they have achieved valuefor money from investing inlasting social change.”

Rod Newing

Olympic campaign How to put a price on the social return

Into the classroom: Indian children learn to paint in a safe environment Dominick Tyler

Big companies are makingan effort through socialresponsibility reports todemonstrate how commit-ted they are to being goodcorporate citizens. This isusually expressed in chari-table donations and staffvolunteering initiatives.

But recent incidents ofpoor behaviour, involvingprice and rate fixing, brib-ery, excessive bonuses, mis-selling and tax avoidance,are undermining publictrust in the business.Clearly, organisations stillhave some way to go.

Corporate responsibilityneeds to extend deep intobusiness governance, struc-ture and culture.

The Ashridge Centre forBusiness and Sustainabilityinterviewed chief execu-tives about what it meansto be a business leader.

“There is a new genera-tion of chief executives outthere, still a small minority,who have a new view oftheir role,” says Matt Git-sham, the centre’s director.“They have passion for‘doing the right thing’ andrecognise that addressingbig issues in the world isnot adding cost, but is actu-ally core to creating value.”

Accountants GrantThornton’s latest annualFTSE 350 corporate govern-ance review revealed that 5per cent of chairmen talkedabout culture and values intheir annual statement.

“There is a small butgrowing trend to talk abouthow they are embeddingthem into that organisa-tion,” says Simon Lowe,managing partner of GrantThornton’s business riskpractice. “They see theseissues as the bedrockor foundation of good gov-ernance practice and are

prepared to commit some ofthat valuable space to driv-ing home that message.”

Corporate social responsi-bility (CSR) groups startedas an arm of communica-tions departments, mainlymanaging outside charita-ble activities. As boardsstarted to take responsiblebusiness practices seri-ously, the focus turnedinward, to educating, advis-ing and supporting linemanagers in responsiblebusiness practices.

“Chief executives’ time islimited, so they need ‘footsoldiers’ on the ground totake the message outaround the organisation,acting as internal changeagents,” says Mr Gitsham.“They are taking a difficultmessage that challengespeople. There will be resist-ance and they have to takeon vested interests.”

Leo Martin, director ofGoodCorporation businessadvisers, advises that theCSR department shouldreport to a board commit-tee, chaired by the seniornon-executive director andsupported by other non-ex-ecutives. One of its tasks isto encourage staff to speakout when they see some-thing is not right and to lis-ten to them when they do.

He warns that having acompliance department canlead managers to assumethe organisation is behav-ing properly, so they stopthinking proactively aboutbehaviour and risk. Themost effective put ethicsand values first, ahead ofprocesses and procedures.

Another vital aspect ofembedding responsible busi-ness practices into theorganisation is to measureand report performance onsocial issues and includethe results in the rewardand recognition systems.

Mr Gitsham advises chiefexecutives to chair regularmeetings with key manage-ment. They report their per-formance against targetsand the chief executiveholds them to account.

Jonny Gifford, researchadviser at the CharteredInstitute of Personnel andDevelopment, says organi-sations need three things toensure that their ethicalreality matches their rheto-ric. They must fully under-stand how their businessmodel affects differentstakeholder groups; have along term sustainable busi-ness model, as short termobjectives will not drivecorporate responsibility;and have the organisation

respect appropriate ethicalvalues.

He believes that humanresources departments havea key role in aligning val-ues and culture with busi-ness practice. They are wellplaced to understand theorganisational culture andto shape and change it.

Changing the culture ofan organisation takes a

long time, with the boardconstantly repeating thesame messages on theimportance of adoptingmore responsible businesspractices.

“Leaders need to showthat they are prepared togive up moneymakingopportunities, if there is arisk that values might becompromised,” says Mr

Martin. “Managers need tounderstand that it reallydoes matter what they dowhen no one is watching.”

The best sign that respon-sible business practiceshave become embeddedwithin the culture of theorganisation is when theystart to become less visible.

This shows that they arebecoming part of the way

that the company does busi-ness and makes decisions.

“Our research shows thatchief executives that arechanging their organisa-tions use softer persuasionon why things need tochange, to reach people’shearts and minds,” says MrGitsham. “To really embedit, they combine it withharder structural changes.”

It matters what you do when no one is watchingGovernance

Companies need towin their staff’shearts and minds,says Rod Newing

Matt Gitsham of theAshridge Centre inHertfordshire

8 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 9

10 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 11

Responsible BusinessResponsible Business

In barely a year “shwop-ping” has entered theBritish lexicon. Frontedby actress Joanna Lum-ley, the initiative urges

the 21m customers passingthrough Marks and Spen-cer’s doors each week toswap old clothes for newusing Oxfam donation binsplaced in all of its stores.

Its success shows howquickly and effectively com-panies can promote positiveconsumer behaviour. Sinceits launch last year, shwop-pers have donated 4.3mitems of clothing, raising£2.8m for the charity.

While companies canrespect workers’ rights ordesign products that useless water, much of theimpact of the goods theymake or sell lies beyondtheir control in the hands ofconsumers.

With much already doneto embed responsible prac-tices in supply chains andproduction, sustainabilitychampions are increasinglyturning their attention tochanging consumer behav-iour.

In contrast to the 1990s,when the emphasis was onsaving the planet, todaysustainability is being soldas a way for individuals toimprove their lives, andwith a lighter “lesspreachy” touch, says AlanKnight, director of sustaina-bility at Business in theCommunity, the charity.“Companies are saying:‘This is about you having abetter life, not about theAmazon rainforest.’”

Shwopping grew out ofthe earnest-sounding M&Sand Oxfam Clothesexchange, part of theretailer’s so called Plan A,pitched in 2007 and aimedat M&S becoming theworld’s most sustainablebig retailer.

Since then, M&S hasrefined its marketing: about70 per cent of Plan A is nowbelow customers’ radarscreen, says Mike Barry,head of sustainable busi-ness. As with other pre-mium retailers, such asWaitrose, responsible prac-tices have become integralto it

Mr Barry adds: “We havelearnt not to bombard peo-ple. Customers are saying:‘You, Marks and Spencer’s,you take the lead [on sus-tainable cotton or fish, forexample].

“We don’t need to knowabout that. Don’t give us

too many difficult choices’.”In this, the sector has

been helped by the rise ofcertification schemes, suchas Fairtrade or the ForestryStewardship Council,marques now recognisableto many shoppers.

“Consumers are verysceptical about the environ-mental claims we make,”says Sarah Greenaway,brand manager for B&Q’sOne Planet Home initiative.“[Third party certification]gives them a reason tobelieve.” The rise of niche

brands with sustainabilityat their core highlights thechanges in both businessand consumer thinking,says Celia Richardson,director of Social EnterpriseUK, the industry body forone of the economy’s fastestgrowing segments.

Businesses such as Belu,a carbon neutral bottledwater venture whose profitsfund clean water projects indeveloping countries, andDivine Chocolate, co-founded by a cocoa farmers’co-operative in Ghana,

“only exist to change posi-tively”, Ms Richardsonsays.

More consumers aresearching for these ethicalproducts. Together with aleading women’s magazine,Social Enterprise is compil-ing a list of the UK’s top 50consumer-facing socialenterprises. “People want toknow how to take theirsocial footprint shopping.”

Social media, however,have brought about the big-gest change in the relation-ships between companies

and consumers, enablingthem to ask each otherbolder and more searchingquestions, commentatorssay.

“How do you use thisproduct when you gethome, what do you throwaway, what is desirable –these are questions compa-nies can ask,” says AnnaSimpson of the sustainabil-ity think-tank Forum forthe Future and the authorof a pending book on brandstrategy. “Brands are moreprovocative and offeradvice. It is not just aboutdeprivation and reducingconsumption.”

For some companies, theimperative is to act to coun-ter negative public percep-tions. Heineken, for exam-ple, last year withdrew twolow-cost, high-strengthcider brands and it hassince launched a 2 per centalcohol beer.

With its bottles and canseasy to spot in litter bins,Coca-Cola, has honed in onrecycling. A £15m invest-ment in a new recyclingplant meant bottles fromthe Olympic opening cere-mony were back on theshelves for the ParalympicGames.

A decade ago it was hardto imagine the group mov-ing into this area, says NickBrown, a recycling special-ist at Coca-Cola Enterprises.

CCE is exploring recy-cling psychology and thepower of peer-to-peergroups, believing that indi-viduals are more likely torecycle if those aroundthem do, or ask them to.

Under a pilot schemelaunched in May, groups oftrained residents on twohousing estates in MiltonKeynes will visit neigh-bours, give them informa-tion about waste disposaland collect “recyclingpledges”.

Andrew Cosgrove, globalanalyst for consumer goodsat Ernst & Young says thelikes of Belu and DivineChocolate have done wellbut remain niche productsfor the well-off. Mainstreamconsumers will buy Fair-trade or Rainforest Alliancecoffee but only if it cancompete on price.

Ethical boundaries arestill regularly breached.Global cosmetic companies,for example, test productssold in China on animals, alegal requirement there.

Sustainability brings com-pelling benefits when itdrives innovation that helpswin market share, he says.Unilever’s move this year tosell aerosol deodorants com-pressed into smaller canshas been a great success.Like other large companieswith the power to changemarkets, it is sure to befollowed.

The ethical way is an easy lifestyle choiceConsumers

Companies arechallengingcustomers, writesVirginia Marsh

‘Consumers arevery sceptical aboutthe environmentalclaims we make’

SarahGreenaway,B&Q

Morecambe Bay potted shrimps, drycured York ham, Formby asparagus –these are some of the “ForgottenFoods” revived by Booths, the nichesupermarket group, and that resonatewith British consumers.

A fifth-generation, family-ownedbusiness based in Preston, Booths hasstocked potted shrimps for 15 years butsales more than doubled after the grouplaunched its Forgotten Foods campaigntwo years ago.

Formby asparagus, another coastalproduct, is up 85 per cent and demandfor York ham outstrips supply. An onlineBBC piece on the initiative generatedmore than 1.5m hits.

Booths, founded in Blackpool in 1847,has stayed close to its roots. Most of its29 stores are in Lancashire andCumbria. In the past decade or so it has

developed its concept of “local”products, established shorter lines ofsupply and formed closer relationshipswith growers and animal farmers, saysEdwin Booth, chairman. Some 28-30 percent, or about 400, of its suppliers,some of which only supply one store,are located near Booths’ base.

Booths’ case seems to showconsumers’ rising interest in provenanceand local sourcing. Although the Boothsmodel is driven by margin rather thanby volume, annual sales have risenabout 60 per cent to about £270mover the past decade.

“In a sense, the zeitgeist came to us,”says Mr Booth. This was demonstratedin this year’s horsemeat scandal. Whileelsewhere consumers turned away frombeef, Booths’ sales of meat rose 12 percent. Booths takes a rigorous approach

to managing its supply chain. From2006, it assessed the greenhouse gasemissions of its entire range, inpartnership with Lancaster university.

The group has lobbied thegovernment to adopt consumption-basedemissions reporting and has alsoincreased promotion of fruit andvegetables in its shops.

It says there may be scope for beefand lamb, the most carbon-intensivemeats, to become premium productswithout threatening its sales or Britishfarmers. “Consumption per se is theproblem. Eating a great deal less meatwould be good for emissions,” says MrBooth. “But we’ve got to be sensitive.We work with some very small suppliersthat could be badly affected.”

Virginia Marsh

Marketing Retailer finds the zeitgeist on its side with emphasis on local sources

In a tough jobs market, eliminatingobstacles to employment remainsvitally important for society. Responsi-ble businesses are playing a role inhelping young people, particularly

those from disadvantaged communities, toacquire the skills they need to developtheir careers. They are also helping groupsfacing particular barriers to employment,such as homeless people and prisoners.

“Employers are from Mars, young peopleare from Venus”, says a recent report fromthe Chartered Institute of Personnel andDevelopment. It reveals a mismatchbetween employers’ expectations of youngpeople during the recruitment process andyoung people’s understanding of what isexpected of them. This hinders young peo-ple’s access to the labour market and con-tributes to high youth unemployment.

Many employers have responded bydeveloping new recruitment processes thatreach out to young and disadvantaged peo-ple. “You can’t build a good talent pipeline,if you only fish in a small pond,” saysKaterina Rudiger, head of skills policy cam-paigns at the institute. “Employers reportgetting talent that they would never haveachieved through their normal recruitmentprocesses.”

Most of these schemes involve exposingpeople to the working environment,explaining recruitment processes, helpingto write applications and career histories,and developing interview techniques.

Get Into Care is an initiative run by Bal-housie Care Group, which runs 27 residen-tial care homes, and the Prince’s Trust. Itgives unemployed people in Tayside, aged18 to 25, six weeks’ training, including car-ing. They are guaranteed an interview atthe end, and most graduates are nowemployed full-time by Balhousie and work-ing towards vocational qualifications.

However, responsible business is not justabout innovative solutions to the problemof winning the war for talent. More enlight-ened organisations are running schemesdesigned to place young people with anemployer for the benefit of the communi-ties in which they operate, often in con-junction with a charity or social enterprise.Hiring graduates themselves is part of theircontribution, but it is not their objective.

Webhelp TSC, a contact centre company,runs a five-week pre-employment academyfor young job seekers who lack the neces-sary communication skills to reach thestandard entrance level of most employers;

137 people from the scheme now work forthe company.

“There were a growing number of candi-dates who did not quite have the interper-sonal skills to pass our recruitment tests,but they were only just failing,” says DavidTurner, the company’s chief executive. “Wefelt that it wouldn’t take much to get themover the line and, that once they were inemployment, they would blossom. Manygraduates have gained employment else-where, such as retail, on the back of havingcompleted the academy.”

Matthew Sanders founded Placeability,an organisation dedicated to helping disa-bled people, the long-term unemployed andpeople with learning difficulties to findemployment. He says that such workerscan be just as productive and reliable asany other employees and are likely to staywith the business longer.

Employability is not just about gettingpeople to work for organisations. They canalso be encouraged to become self-em-ployed or to start their own businesses.

SABMiller, a brewer, launched its Kick-Start programme in South Africa in 1995,to build a culture of entrepreneurshipamong the disadvantaged – especially theyoung. It offers a combination of businesstraining and start-up capital. A $7m invest-ment has supported 22,300 young peoplewho have launched 3,200 businesses, eachcreating an average of 6.7 jobs.

Ms Rudiger advises employers to getinvolved early in the process, by going intoschools instead of waiting for youngsters toenter the labour market.

Some students do not know of the jobopportunities available and, even if theydid, would not know how to apply.

“If you are from a disadvantaged back-ground, you have nowhere to turn to,” shesays. “Your uncle doesn’t work as a barris-ter and your mother isn’t a doctor, so youwouldn’t know about such opportunities, orthe new jobs emerging in social media.”

Shankar Narayanan, country head UK &Ireland at Tata Consultancy Services,believes that business has a collectiveresponsibility to inspire a generation ofyoung people to work at the forefront oftechnological change, whatever industry orsector they choose to work in.

“This could and should be a key pillar ofthe economy for decades to come,” he says,“but it simply will not happen if skillsdevelopment is left to the educationservices alone.”

Employers andthe young are ondifferent planets

EmployabilityMany businesses are developingrecruitment processes that reach out to young anddisadvantaged applicants, writesRodNewing

Coca-Cola Enterprises hasundertaken programmes todevelop skills and increaseemployability amongdisadvantaged young people.

“We are fundamentally alocal business,” says JoeFranses, the company’scorporate responsibility andsustainability director. “Werely on our local communityfor not just our business, butwe manufacture locally andrely on local talent.”

The companymanufactures, bottles anddistributes Coca Cola andother drinks in eightcountries in western Europe.

It employs 13,250 peopleat 60 sites and serves 170mcustomers. Deliver for Today,Inspire for Tomorrow, itssustainability plan, commitsthe company to ensuring that1 per cent of its pre-tax profitgoes to social investment. In2012, it invested $3.9m, about0.5 per cent, in programmesfocused on supporting youngpeople, encouraging activehealthy living and protectingthe environment.

The company is aware thatonly 17 per cent of itsworkforce is under 29 and

that there is a shortage ofscience, technology andengineering skills thatmanufacturing businessesneed. “Employability is a farbigger issue than just ourbusiness,” says Mr Franses.

The company hasprogrammes throughoutEurope that support morethan 100,000 young peopleeach year. They providework-related learning, insightsinto careers in manufacturing,one-to-one mentoring, helpwith preparing careersummaries and finding jobs.

It has committed to ascheme to recruit at least 10per cent of its workforcefrom the underprivilegedcommunities in the suburbsof large French cities inwhich it operates, but hasactually achieved 14 per cent.Its Passport for EmploymentProgramme, in conjunctionwith the French government,helps 2,700 high schoolstudents and recentgraduates with interviewpractice and advice. In theUK it operates a businesscompetition for 56,000secondary school students.

“The biggest challenge for

all businesses is how tomeasure the impact ofinvestments in thecommunity,” says MrFranses. “It isn’t just aboutthe amount of money we putin, but what we achieve withthe money that is important.”

The company has used theLondon Benchmarking Groupmethodology for the past fouryears, starting with inputs.Over the next two years itwill move towards measuringthe impact of eachprogramme on participants.

Over the past three yearsthe company has investedabout $4.1m in employabilityprogrammes for youngpeople, including $1.2m in2012. “These schemes helpus to attract, develop andretain a workforce thatreflects the diversity of thecommunities in which weoperate,” Mr Franses says.

“But, the real objective isto improve the employabilityof people from disadvantagedcommunities. Having suitablyskilled, knowledgeable andqualified young people is notjust what we need, but whatsociety needs.”

Rod Newing

Grassroots Coke invests in developing young people’s skills

Billy Barlow, left, and Les Salisbury, founder of Furness Fish and Game on Morecambe Bay, supply potted shrimp to Booths

Coca-Cola Enterprises teaches students job skills through its Real Business Challenge

12 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 13

Responsible Business

In February this year, Oxfam released abriefing paper titled “Behind theBrands” assessing the social and envi-ronmental impacts of the world’s 10largest food and beverage companies.

The report acknowledged where progresswas being made and also accused compa-nies of failing to “ensure the wellbeing ofthose working to produce their products”.

The Oxfam paper reflects a new era inthe relationship between companies andcampaigners – one in which activism andcollaboration combine.

“It’s not just naming and shaming – it’s acombination of praising and shaming,”says Frances Buckingham, manager in theLondon office of SustainAbility, a thinktank and consultancy.

The approach might be described as thethird stage in what has been a gradualevolution of the relationship between com-panies and campaign groups.

The relationship between companies andcampaigners was once largely combative,with boycotts and protests being the mainweapon in the activists’ armoury.

Brands such as Gap, Nike and Reebokwere often at the receiving end of anti-sweatshop campaigns, for example, whilethe extractive industries have beenattacked for practices such as using mili-tary force to defend their operations.

In recent years, many non-governmentalorganisations (NGOs) and environmentalcampaigners have recognised that activismcan only go so far. Many felt that collabo-rating with companies to help themlower their carbon footprint or create

better conditions for their workers could bea powerful way to bring about change –particularly in the case of the multina-tional organisations that have vast globalfootprints and extensive supply chains.

Most big-brand NGOs now have business-facing units set up with the express pur-pose of helping companies adapt their proc-esses and strategies to take account of envi-ronmental and social needs.

“There was a honeymoon period whereNGOs who may have been solely focusedon advocacy became excited about thepotential to engage companies in newways,” says Sean Ansett, managing partnerat Stake Advisors, a corporate socialresponsibility consultancy.

However, any company predicting thedemise of corporate activism would be mis-taken. The continued willingness of organi-sations such as Oxfam and Greenpeace tohold companies to account is evidence thatactivism and advocacy are alive and well.

“There’s a realisation that no one is mov-ing fast enough and there’s a need to pushcompanies in the right direction,” says MsBuckingham.

New civic organisations are gainingground. These include six-year-old Avaaz,which organises campaigns on everythingfrom corruption and poverty to climatechange. Technology is also providing analternative form of activism by arming con-sumers with social media tools.

“Activism has moved a online,” says Soli-taire Townsend, co-founder of Futerra, asustainability communications company.“It’s death by a thousand tweets.” Social

media makes it quick and cheap to organ-ise and easy for the public to join in. “Itused to take months to organise a cam-paign,” says Mr Ansett. “Now it’s mucheasier for people to participate andrespond.”

Campaigns against companies can causereputational damage that lasts long afterthe publicity has died down. “Peopleremember the campaign and not what youdid about it,” says Ms Townsend.

“Companies like Nike and Nestlé have inmany cases done exceptional work oncleaning up,” she says. “But still the mostmemorable part of their brand for a lot of

people are the campaigns against them.”Meanwhile, as Oxfam’s “Behind the

Brands” initiative highlights, establishedNGOs are developing sophisticated strate-gies that allow them to both collaborateand engage with companies.

“I want us to be challenging, investigat-ing and exposing bad practices when wecan – but also collaborating and supportingcompanies that are trying to lead the fieldand promote good practice,” says MarkGoldring, Oxfam’s new chief executive.“We do a bit of each, and that’s the way ofour future.”

So, whether delivered by social media oras part of an NGO strategy, it seemsunlikely that activism will disappear.

While attitudes to companies have movedbeyond simply viewing the corporate sectoras an evil empire, events that hit the head-lines remind us that companies can have alarge positive or negative influence on thehealth of the planet and the working condi-tions of people in developing countries.

The BP spill in the Gulf of Mexico in 2010provided a dramatic illustration of this,while the recent death of more than 1,200Bangladeshi garment workers beneath acollapsed factory complex has renewed pub-lic attention on ethical sourcing.

Even NGOs that want to work with com-panies to help them make more progress

on social and environmental recog-nise the stick is just as powerful as

the carrot.“Activism is alive and well,”

says Ms Townsend. “But nowit just looks different.”

NGOs get handy with stick and carrotCampaignsActivist critics have turned to collaboration to shape business best practice, writes SarahMurray

‘Social goals can replacegreed as a powerfulmotivational force.Social-consciousness-driven enterprises canbe formidable competi-tors for the greed-basedenterprises. I believe thatif we play our cards right,social-consciousness-driven enterprisescan do verywell in themarketplace.’

Muhammad YunusEconomist

ME

ES

ON

14 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 FINANCIAL TIMES WEDNESDAY JUNE 12 2013 15

Com

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PLATINUM BIG TICK

Alliance Boots Group GmbH Food & Drug Retailers Global

�

Anglian Water Gas, Water & Multiutilities National

�

Anglo American plc Mining Global

�

Barclays plc Banks Global

�

Carillion Support Services National

�

Costain Group plc Construction & Materials National

�

Dairy Crest Group plc Food Producers National

�

EDF Energy Electricity UK only

�

Hallmark Cards plc General Retailers UK only

�

Heathrow Airport Ltd. (HAL) Travel & Leisure National

�

HEINEKEN UK Ltd Beverages UK only

�

J Sainsbury plc Food & Drug Retailers National

�

Jaguar Land Rover Automobiles & Parts Global

�

Kier Group plc Construction & Materials National

�

Kingfisher plc General Retailers Global

�

KPMG LLP Accountants & Consultants UK only

�

Legal & General Group plc Life Insurance Global

�

Lloyds Banking Group Banks National

�

M.A.G Travel & Leisure National

�

Marks & Spencer General Retailers National

�

MITIE Group plc Support Services National

�

National Grid plc Gas, Water & Multiutilities Global

�

Northumbrian Water Group Ltd Gas, Water & Multiutilities National

�

Pearson Media Global

�Premier Farnell plc Support Services National

�

PwC Accountants & Consultants UK only

�

Tata Consultancy Services Ltd Accountants & Consultants Global

�

The Co-operative Group General Retailers National

�

The Crown Estate Real Estate Investment & Services National

�

United Utilities Gas, Water & Multiutilities National

�

Veolia Water UK Gas, Water & Multiutilities UK only

�

Wates Group Construction & Materials National

�

PLATINUM

BAM Construct UK Ltd Construction & Materials National

�

British Broadcasting Corporation Media & Entertainment Global =

BSkyB Media & Entertainment National Retained

Capgemini UK plc Accountants & Consultants UK only =

CSC Support Services UK only

�

Diageo Australia Beverages Australia Retained

e2v technologies plc Electronic & Electrical Equipment Global

�

Elior UK* Support Services National

�

Ernst & Young LLP Accountants & Consultants UK only Retained

F&C Asset Management plc Financial Services Global Retained

Fujitsu Services Ltd Software & Computer Services UK only

�

Home Retail Group plc General Retailers National =

John Laing plc Equity Investment Instruments UK only Retained

Laing O’Rourke Construction & Materials UK only

�

Nationwide Building Society ** Banks National New entry

Places for People Real Estate Investment & Services National Retained

Provident Financial Financial Services National Retained

Reed Elsevier Media & Entertainment Global Retained

Royal Mail Group Industrial Transportation National Retained

RSA Insurance Group plc Financial Services Global Retained

RWE npower Electricity National =

Speedy Hire plc Support Services National

�

Thames Water Gas, Water & Multiutilities National Retained

The Go-Ahead Group plc Travel & Leisure Global

�

The Midcounties Co-operative General Retailers National Retained

Toyota Motor Manufacturing (UK) Ltd Automobiles & Parts UK only Retained

Unipart Group General Industrials Global =

United Biscuits Food Producers UK only =

Com

pany

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Veolia Environmental Services (UK) plc Support Services UK only Retained

WH Smith plc General Retailers Global =

Whitbread plc Travel & Leisure National Retained

GOLD

AESSEAL plc Industrial Engineering UK only

�

Balfour Beatty plc Construction & Materials Global

�

Camelot UK Lotteries Ltd Travel & Leisure UK only =

Eurovia Group Ltd Construction & Materials National

�

FirstGroup plc Travel & Leisure Global

�

Gentoo Group Construction & Materials National =

Imperial Tobacco Group plc Tobacco Global =

Intu Properties plc (formerly known as Real Estate Investment Trusts National

�

Capital Shopping Centres Group plc)

Irwin Mitchell Legal National �

John Lewis Partnership General Retailers National �

Kelda Group Ltd Gas, Water & Multiutilities National

�

Marshalls plc Construction & Materials National =

Morgan Sindall plc Construction & Materials National

�

NHBC Financial Services National

�

Northern Rail Travel & Leisure National =

Serco Group plc Support Services Global =

Sodexo Support Services UK only =

Teachers Mutual Bank Financial Services Australia

�

VocaLink Banks National

�Zurich Financial Services UK only =

SILVER

EE Mobile Telecommunications National New entry

Friends Life Life Insurance National New entry

G4S UK & Ireland Region Support Services UK only �

Greggs plc Food & Drug Retailers National

�

Miller Construction Construction & Materials National

�

Rentokil Initial plc Support Services Global =

Ricoh UK Ltd* Technology Hardware & Equipment UK only

�

Royal London Mutual Insurance Society Ltd Financial Services National =

Siemens plc Industrial Engineering UK only =

Southern Water Services Ltd Gas, Water & Multiutilities National New entry

BRONZE

Cobham Aerospace & Defense Global New entry

DTZ, a UGL company Real Estate Investment & Services UK only =

ISS UK Ltd Support Services UK only New entry

L&Q Group Real Estate Investment & Services National New entry

Midlands Co-operative Society Ltd. General Retailers National New entry

Moy Park Food Producers UK only New entry

NG Bailey Construction & Materials National New entry

Northern Powergrid Holdings Company Electricity National New entry

State Street Corporation Financial Services Global =

The Clancy Group plc Construction & Materials National =

Viridor Gas, Water & Multiutilities UK only New entry

Performance Bands:Companies listed alphabetically by band, based on overall Index score:Platinum (≥95%); Gold (≥90%); Silver (≥80%); Bronze (≥70%)Key:Companies in bold have participated since launch in 2002* Most Improved** Best New EntrantYear on year:� Improved in banding= Maintained previous banding� Dropped in bandingRetained - have carried over the score from previous submissionsNew entry - new entry to the rankingCoverage:Global – multinational companies reporting on 100% of their global business operationsNational – UK companies reporting on 100% of their business operationsUK only – multinationals companies reporting on UK operations onlyAustralia – companies reporting on Australian operations

The Corporate Responsibility Index 2013First launched in 2002, Business in the Community’s Corporate Responsibility (CR) Index measures companies on their social and environmental impact, and the extent to which responsible business is integrated into their strategy Taking the form of an online questionnaire, the index covers four areas: corporate strategy, integration, management and impact with questions on everything from diversity policies to carbon emissions reduction goals.

Responsible BusinessResponsible Business

If this year’s results of the Business inthe Community’s Responsible BusinessAwards are any indication of whatcompanies see as their most pressingsocial responsibility, then helping fight

unemployment – particularly among youthand disadvantaged people – is high on thecorporate agenda.

The BITC awards – launched by the UKcharity in 1997 – reward companies’performance with a “Big Tick”, with someof these companies submitted for judging toidentify an overall winner in each cate-gory.* It is perhaps no surprise thatemployability and skill building are amajor focus in this year’s awards. UK

unemployment is at almost 8 per cent andthe jobless rate for those aged 16-24 at morethan 20 per cent – and yet many groupsstill find it hard to fill their skills gaps.

The awards reflect this. For example, theWork Inclusion Award – recognisingbusinesses that help disadvantaged peopleinto employment or increase their employa-bility – attracted the second-highestnumber of applications (after the Responsi-ble Business of the Year award).

And the desire to promote employabilitycuts across sectors. Big Tick winners inthis category range from law firms, such asFreshfields and Pinsent Masons, to theWates Group – one of the UK’s largestbuilding and construction companies – andthe Hyde Group, a social housing provider.

“A lot of companies have highlighted theneed to invest in youth and tackle unem-ployment by educating them in life skills,”says Kerry Perkins, BITC awards manager.

Of course, the awards also reflect BITC’sown agenda. The organisation has longworked to encourage companies to play a

bigger role in everything from increasingworkplace diversity to promoting employa-bility and skills.

Programmes focused on the workplaceinclude Work Inspiration, in which compa-nies strive to give young people a stimulat-ing first experience of the working world,and Opportunity Now, which aims toincrease women’s success in the workplace.

Greater focus has been given to employa-bility this year. For example, the EducationAward rewards long-term partnershipsbetween businesses and schools thatinspire young people to build successfulcareers. Big Tick winners in this awardcategory include Jaguar Land Rover, whosepartnerships with schools are designed toawaken students’ interest in engineering,science and technology, while also address-ing the UK’s shortage of skilled engineers.

Binding the awards more closely withBITC’s programmes has proved fruitful forthe organisation when it comes to theresults. This year has seen an increase of 13per cent in companies receiving Big Ticks

over the previous year. Some award resultsreveal a strategic evolution in companies’approaches.

Ms Perkins cites the Enterprise Growthaward, a new category that rewards busi-nesses for supporting small enterprises.

“Even though it’s the first year for thataward, the big finding is that companiesare moving away from simple mentoring tohelping small business access large supplychains to focus on job creation andgrowth,” she says.

BITC is also adapting the awards toreflect new approaches, such as the grow-ing recognition that environmental andsocial issues are closely interlinked.* This year, 107 companies have achieved aBig Tick award and nine have won aCommunityMark award. From among theBig Tick winners, 59 companies have beenshortlisted for selection as overall winner intheir category, with the winners to beannounced at the Royal Albert Hall on July2, and published in the Financial Times onJuly 3. www.bitc.org.uk/awards

Honours aim to bridge the skills gapAwards 2013

Attention turns to groups thatprioritise giving opportunities tothe young, writes Sarah Murray

The Big Ticks are awardedto companies whoseprogrammes are the bestexamples of business as aforce for good. This year 107entries have received a newBig Tick, and nine have won aCommunityMark award. The59 Big Tick winningcompanies marked with anasterisk went forward tojudging panels to find theoverall winner in eachcategory. These will bepublished in the FinancialTimes on July 3, 2013.For more information, go towww.bitc.org.uk/awards

Asda Enterprise GrowthAwardRecognises larger businessesthat support smaller ones inaccessing their supply chainsto help them expand theirbusinesses and drive localeconomic growth andregeneration.* Goldman Sachs

International* Star Pubs & Bars (part of

the Heineken Company)* Santander UK* The Co-operative Group* Wates Group

Bupa Workwell AwardFor businesses that areincreasing the health andengagement of employees.* BT Group* Diageo NI* Marks & Spencer* Prudential UK & Europe* UK Power Networks

Citi InternationalAwardFor businesses usingfinancially sustainable modelsto address the UN MillenniumDevelopment Goals.* Barclays* LeapFrog Investments* Tata Consultancy Services

* The Body Shop* The Co-operative Group

Customer Engagementon Sustainability AwardAnother addition, thisrecognises businesses thatencourage consumers to livemore sustainable lifestylesboth through the productsand services they offer andby influencing the way thatcustomers use them.* B&Q* Coca-Cola Enterprises* EH Booth & Co* EDF Energy

Dairy Crest RuralAction AwardThis recognises businessesthat support rural economies,encouraging the demand forlocal produce and investing inyoung people.* Dalehead Foods* East of England

Co-operative Society* Moy Park* Rabbie’s Trail Burners

Inspiring Social Actionin Young People AwardRecognising businesses thatenable young people agedbetween 10-20 to bring aboutpositive change in theircommunities through practicalaction in the service ofothers.AmicusHorizon* EDF Energy* Jobsite UK* Telefónica O2 UK* The Co-operative Group

Education AwardEmphasises partnershipsbetween businesses andschools that focus onlong-term needs, this awardrecognises businesses buildingemployability skills in youngpeople, inspiring youngpeople on the Stem (science,

technology, engineering andmathematics) agenda.

BNP ParibasCSCFamily Investments

* Gentoo Group* Jaguar Land Rover* Nationwide Building Society* Pearson* Rothschild* Wates GroupL’OréalPrudential UK & EuropeWarings Contractors

Jaguar Land RoverMarketplaceSustainabilityLeadership AwardNew award for businessestransforming their productsand services by building short-and long-term environmental,social and economic trendsinto supply chains, marketingefforts and core decisionmaking.

3M United Kingdom* Dairy Crest* DESSO B.V.

* EH Booth & Co* Lubrizol Corporation* Speedy Services

Responsible Businessof the Year AwardFor large businesses that haveadapted their strategies sothat their products, servicesand employees can buildresilient communities andenvironmentally sustainablepractices. This is open only toBusiness in the Communitymember companies that haveattained Platinum Big Ticklevel in the CR (corporateresponsibility) index (see right)in the current or previousyear.

Alliance Boots* Anglian WaterAnglo AmericanBarclaysCarillionCostain GroupDairy CrestEDF EnergyHallmark CardsHeathrow Airport

HEINEKEN UKKier GroupKingfisherKPMGLegal & General Group

* Dairy CrestLloyds Banking Group

* J Sainsbury* Jaguar Land RoverMarks & SpencerManchester Airport Group

* Northumbrian Water GroupMITIE GroupNational GridPearsonPremier FarnellPwCTata Consultancy ServicesThe Co-operative GroupThe Crown EstateUnited UtilitiesVeolia Water UKWates Group

Santander ResponsibleSmall Business of theYear AwardRecognises small and mediumbusinesses that demonstrate aholistic approach to businessresponsibility and sustainabilitywith respect to communities,markets and workforces.

8buildGreater London Hire

* Ipswich Building Society* Lakehouse* Memset* SiteVisibility

Sustainable SupplyChain AwardFor groups that areincorporatingtransformation, impact andinnovation into their supplychains to develop a moresustainable business model.

KPMG* Dairy Crest* BHP Billiton* Waitrose

Work Inclusion AwardThis recognises businesses

that help disadvantagedpeople into employment andimprove their employability.

Affinity SuttonCarillionCircle Housing GroupISGISS UKKier ServicesMarks & SpencerNorse Commercial Services

* Freshfields BruckhausDeringer

* The Hyde Group* Pinsent Masons* Wates Group

Workplace Talentand Skills AwardFor businesses that aremaintaining a pipeline ofyoung people, developing theskills their businesses need inthe young that they hire andintend to hire, and retainingtalent through engagementand lifelong training.

Diageo NILincolnshire Co-operative

* Gi Group Recruitment* JN Bentley* Norton Rose Fulbright* ScottishPower* Veolia Environmental

Services (UK)

CommunityMark AwardThis award – which open onlyto UK groups – recognisesbusinesses that havedeveloped an integrated,strategic approach tocommunity investment andare making a measurabledifference to communities.

British GasCapgemini UKEcclesiastical InsuranceGroupJohn LaingLinklatersLiverpool Football ClubOctinkWates GroupWorkspace Group

Big Ticks Companies – large and small – that can demonstrate they make a difference in society

M&S, BITC Responsible Business of the Year 2012

16 FINANCIAL TIMES WEDNESDAY JUNE 12 2013