Companies, it’s often said, take more notice of corporate social
responsibility once their reputations have taken a serious knock. So
now that Britain’s Foreign and Commonwealth Office has produced a CSR
strategy, cynics are wondering aloud whether it might have something to
do with the UK’s poor record on reining in alleged corrupt practices.
As recently as January, the UK government suffered the indignity of a
formal diplomatic protest from the US over its decision to drop a fraud
investigation into alleged bribery by a UK company operating overseas.
Looked at another way, the Foreign Office’s desire to embrace CSR is
timely, not opportunistic. Its policy is well thought out, with clear
targets making it possible to assess progress (see page one), and makes considerable play of the business case for CSR.
The notion that there should be an ethical dimension to foreign policy,
first introduced by Robin Cook when he was foreign secretary, always
had something of the hair shirt about it and left the impression that
the government was more interested in proscribing certain actions than
encouraging best practice, at least as far as companies were concerned.
This new approach should attract fewer accusations of hypocrisy and
support improvements in the ethical performance of UK companies
overseas.
With only a handful of staff to do this work, the focus has to be on
areas most likely to produce results. Oil, gas and mining are obvious
candidates; Foreign Office diplomacy already supports the Extractive
Industries Transparency Initiative, which directly concerns relations
with other governments, especially of developing countries. The finance
industry is another. The Foreign Office has close ties to businesses in
these sectors. In others, especially construction and tourism, it needs
to strengthen links.
The strategy’s publication is timely in other ways, as there will be a
new prime minister shortly, and the need to restore the UK’s
international reputation will be near the top of Downing Street’s
in-tray. Some SRI funds now shun UK Treasury bonds on account of the
government’s weak stance on corruption; this puts no dent in government
finances, but looks bad. The new strategy specifically links CSR goals
with the need to preserve the country’s reputation, offering the
incoming prime minister a start-point in this area.
In contrast to companies, the Foreign Office can further the ethical
and public interest case for CSR at least as much as the business case.
This will not always be easy. Many countries with the greatest impacts
are among the least susceptible to influence. Even so, furthering the
UK’s interests by promoting responsible business practice adds a fresh
dimension to Foreign Office policy. Many of the companies that
initially embraced CSR to guard their reputations have ended up in the
vanguard of responsible business practice. The Foreign Office can make
the same journey.
