VIEW FROM THE TOP: Spread the responsibility message - Kim Howells talks to Gidon Freeman about his role as Labour's corporate social responsibility minister

It would once have been unimaginable that there would be a minister for corporate social responsibility. The political right insisted a corporation's only responsibility was to its shareholders. The left looked with disdain on the notion that profit-driven organisations would assess their impact on society without being compelled to do so.

It would once have been unimaginable that there would be a minister for corporate social responsibility. The political right insisted a corporation's only responsibility was to its shareholders. The left looked with disdain on the notion that profit-driven organisations would assess their impact on society without being compelled to do so.

Kim Howells' role is therefore a sign of how far corporate Britain has changed in the last two decades. It is now exactly a year since the Department of Trade and Industry's Minister of State for Consumers and Corporate Affairs welcomed CSR into his remit. Until the Prime Minister asked Howells to add this brief to his existing duties, it was widely considered an area which, while of obvious benefit to corporate reputation, was one in which government should not meddle.

Howells' frantic activity over the past year has changed that, and he has become an evangelist for CSR. He is a keen participant in briefings for business leaders on what they can do to improve their company's links with a range of audiences other than shareholders. He is frank with the media about the aims of this activity - to raise the profile of CSR in City boardrooms and ensure it becomes ever more widespread. And he is increasingly clear on what CSR can mean to an investment community which, apart from setting aside a tiny share of profits for philanthropic donation, is wary of giving something away unless a clear business case can be made for it.

He is an appropriate choice for CSR Minister. The 51-year-old MP for Pontypridd has worked in a range of industries including coal and steel.

He served as spokesman and research officer for the South Wales miners' union, and has written and presented radio and TV programmes.

His political career has also been varied since he entered the Commons in a by-election in 1989. Before 1997, he spoke for the then opposition on foreign affairs, home affairs and trade and industry. As a minister for the last four years, he worked in the Department for Education and Employment before being switched to the DTi two years ago.

Howells gave PRWeek an exclusive interview last month at a Weber Shandwick seminar on CSR. He is proud of what has been achieved in the first year.

'We have harvested a lot of information about what's happening throughout the country and around the world,' he says. 'Companies are involved in all sorts of diverse things that benefit communities and there are different perspectives about what constitutes CSR.'

He is insistent there must be no attempt to limit the definition of CSR. In essence, it must be self-defining: if a company thinks what it is doing - in the way it treats staff, or engages with local residents, or designs products or business systems with goodwill to neighbours as a guiding principle - counts as CSR, it does. 'Government always trys to encapsulate and define things as if somehow we can say 'that is good practice - now how do we pick that apart and reassemble it somewhere else?' It's a nice theory but I'm not sure it works.'

Consultants specialising in CSR welcome this approach, and suggest it indicates a mind in tune with the growth of CSR. Tesco's Computers for Schools campaign, with its undoubted good results for schools in deprived areas, was one initiative which set a benchmark for cause-related marketing strategies. The next stage is to integrate this frame of mind into everything a corporation does, from PR to product development.

One way of doing this, suggest enthusiasts, would be to make it compulsory for all companies above a certain size - or turnover, or with a stock market listing - to report annually and publicly on the impact the company has had on society. While this would obviously increase the prevalence of CSR, it would remove its founding urge: volition.

The Company Law Reform proposals include a requirement for companies to report on some level of their social and environmental activities, but Howells is sceptical about the value of legislation in this area.

'What'll happen is that there'll be a great thick wodge of forms arriving on someone's desk once a year and the Government will require them to be filled in and companies will become very creative in terms of that aspect of accounting,' he says.

'The area will lose the sense of freshness and innovation it has at the moment because it becomes something they have to do. I am not remotely interested in creating a whole new area of work for lawyers to benefit from. That's not what CSR is about,' he adds.

Howells sees his position as being a catalyst for the spread of best practice, spreading the word between sectors that rarely meet and by doing so helping grow the CSR world.

The business case made for widening the reach of CSR - and for CSR managers to have the ear of their CEO directly - tends to focus on the issue of reputation management. Howells is in no doubt that while it cannot be simply an image issue, image is easier to communicate if it matches reality.

In short, there are gains to be made through embedding a CSR mentality in your business.

'At its crudest level, I firmly believe that if customers are offered a service or product that is identical in price and quality to another, they'll go for the one from the company they associate with a reputation for good works,' he says. 'That's something that is very difficult to prove but it seems like common sense to me, and if you look at business in general, there is a correlation between a good reputation and sales.'

If that is not enough, there are also recruitment benefits to CSR programmes, he insists: 'There is a close correlation between the ability of a company to recruit the best people and having a good reputation in terms of the work they do outside their core business.'

Because reputation issues are so much at the forefront of the development of CSR, it is absolutely crucial to the PR industry that ownership of the whole area remains within it. This is far from a foregone conclusion since a raft of professional services providers, from lawyers to management consultants, are vying for a piece of the action.

Howells is full of examples of positive CSR work from British companies.

A visit he made to the Cooperative Insurance Society in Manchester sticks in his mind. The CIS is the UK's only insurer to commit to a programme of social accountability, which puts customers, employees, the local community and other stakeholder groups at the heart of its decision-making.

The programme cuts across the business from investment to training, from a commitment to its employees to a commitment to the wider community.

CIS applies socially responsible investment (SRI) policies across the pounds 26bn funds it manages and has been surveying all the companies it has holdings in to determine what they are doing to progress social responsibility issues. This includes policies on the environment, attitudes to customers, fair trading practices and community involvement programmes. Customers play an important role in the SRI policy. If they have a concern about a company in which CIS invests, the CIS' Responsible Shareholding Unit raises that concern with the company's management.

Projects that are a direct result of the social accountability programme include members of CIS's catering staff being given the opportunity to learn about computer technology. This sort of programme aims to ensure that staff have opportunities to contribute to the growth of the business and to achieve personal fulfilment and development at the same time.

Gardening, planning and painting a nursery playground not only help the firm's graduate trainees focus on team building, communication, delegation and motivation, but also help to improve the environment.

CIS's car sharing scheme is among the initiatives the society is implementing in order to limit its impact on the environment. People are increasingly concerned with the quality of life and worried about issues such as pollution.

In taking these concerns into consideration the CIS aims to put environmental concerns at the heart of its decision-making.

CIS has Howells' backing: 'This is an excellent demonstration of the real benefits of an effective corporate social responsibility strategy. This company is providing hands-on help and making a difference to the lives of people in their local community.'

CSR will require intelligent handling. There are thorny issues that need finessing, not least whether CSR can make a claim to the very heart of what corporations do. A recent example is British American Tobacco, which late last year found itself in hot water over its pounds 3.8m sponsorship of a school of business ethics at Nottingham. To various correspondents to the PRWeek letters page, any study of BAT's impact on society ought to start with cancer statistics.

Although Howells is himself uneasy about such deals, he refuses to condemn the college for accepting money which many commentators claimed was used to buy respectability. 'I am a great enemy of tobacco, which killed my father and many of my friends. But the university has to make this decision. If the university feels it can use that money that's a difficult decision to make - I'm not sure I could live with it, but I'm not the university's finance director,' he says.

A recent report by Business in the Community's Business Impact Task Force - Winning With Integrity - has further stoked the debate over CSR, which can only be a good thing for the growing band of missionaries.

CSR, despite the benefits it can bring companies, is still in its infancy.

The letters will soon be as recognisable to business analysts as PR has become. It is the challenge for the industry's next generation to mould this development to its benefit. In this journey Kim Howells is a worthy fellow traveller.



KIM HOWELLS

CSR Minister

1982-1989: Research officer and journal editor, NUM South Wales

1989: MP for Pontypridd

1995-1997: Opposition spokesperson on trade and industry

1997-1998: Parliamentary Under-Secretary, DfEE

1998: Minister for corporate affairs, DTi.



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