Governance

There was a time when news of business engagement on issues of social concern was limited to the Anglo-American fastness. And even US and UK-based multinational companies would find their overseas colleagues saying 'it's a different culture here'. Now, spurred in part by worries about environmental sustainability and the costs of corruption, more and more countries are getting in on the act.

This raises some interesting questions. Will some countries gain an advantage by embracing CSR more wholeheartedly than others? If you have a critical mass of responsible companies, will your economy be more competitive and sustainable in the long term? That's what AccountAbility is asking through its new index. The logic is impeccable - if CSR is good for a company long term, it must be good for a country when added up across all firms.

If so, governments should understand the contributory factors, monitor indicators of performance, and address the things that inhibit or enhance it. The Responsible Competitiveness Index compiles a basket of some 30 indicators, such as corruption, investment in human capital, tax payments and civic engagement.

Indeed one can argue that a virtuous circle of improvement can operate. When nations tackle these issues - clamping down on bribery for example - they can create the conditions for more responsible firms to succeed, working in clusters. Individual companies can see how their own efforts fit into the bigger picture. Vietnam and Cambodia are two examples of countries trying to use responsible business practices to maintain their share of world trade in clothing and footwear even after protective trade agreements with America lapse.

Of course this is the Index's first outing and it's not yet a practical management tool. Issues remain about relative importance or weighting to put on the individual elements. Sceptics remain to be convinced, just as the business case in individual companies is still argued over. But governments are starting to take this approach seriously, at least as a conceptual framework. And at time when achievement of the eight UN Millennium Development Goals by 2015 is looking increasingly unlikely, anything that helps make the case for a partnership approach must be helpful.