Community, Environment, Reporting

The combination of a dynamic business leader like Sir John Egan, a knowledgeable environmentalist like Des Wilson in corporate affairs and some sound community relations has transformed BAA, albeit in an industry where the challenges are clear. For them and others, however, embracing the concepts may prove the easy bit - reporting on performance will take longer, as the BAA report fully acknowledges.

The recently published reports showing companies adopting differing approaches. Some have grown the traditional community report. Others just focus on difficult issues. Few embrace the full `triple bottom line' agenda, including the economic impact (which is, after all, the biggest contribution which firms make to society).

Even the best, like Shell, have few targets and little trend data outside the environment, and virtually no external benchmarks. These are essential to see whether things are getting better or at least are better than others. Often with social performance, there isn't a single right answer. We must wait for several round reporting rounds before anything like standard practice emerges.

So far, so good for companies which have positively embraced their stakeholders and want to make a wider social contribution. What about the bulk of companies, for whom the risk of getting it wrong is a cost-driven (negative) concern? Here the corporate governance rules and the example set by leaders will gradually have a long term impact. Of course the new Turnbull approach won't work on those that don't perceive social and environmental factors to be a risk at all. These won't be convinced until their shareholders have paid the price of another Brent Spar or Nigeria crisis.

Corporate Citizenship Briefing, issue no: 46 - June, 1999