Early indications from the UK
government-backed Digital Futures inquiry into the ethics of
e-businesses suggest that this new business sector is still at an early
stage in developing policies on corporate social responsibility
One
of the grander claims made on behalf of the ‘dotcom revolution’ is that
internet companies are inherently socially responsible. This natural
affinity is assumed for a variety of reasons, including their perceived
low environmental impact, their progressive policies on flexible
working and even the relative youth of many founders of dotcom
companies.
Preliminary results from a UK government-backed
inquiry into the social and environmental impact of e-commerce are now
challenging that view.
The Digital Futures inquiry, which
was launched by the UK sustainable development body Forum for the
Future at the beginning of this year, will issue a final report on 1
March 2001. It has already established that while there is some
enthusiasm for corporate social responsibility (CSR) measures at
management level in dotcom companies, there has been little action to
turn that enthusiasm into concrete measures.
‘It is
clear that we have a tale of two mindsets: a theoretical support for
everything that conventional companies may think of in CSR and yet a
total practical opt-out,’ says Jonathan Porritt, programme director of
Forum for the Future. ‘Theoretical buy in and practical opt-out is not
necessarily the best of combinations.’
With more data from
the inquiry’s survey of 150 dotcom and information technology companies
still to come in, responses from the 78 businesses that have replied so
far show the majority of senior managers and chief executives in the
companies feel social and environmental issues are ‘important’ or ‘very
important’ to their business. Around half also agree that ‘companies
with a good environmental and social reputation are likely to benefit
from improved financial performance’.
Crucially, however,
roughly three-quarters of the companies in question have no systems or
policies to measure their own social and environment impacts or those
of their suppliers.
The main reasons for this are:
a perceived lack of significant environmental or social impacts
lack of time and money
lack of in-house expertise
In this respect the pressures facing dotcoms in this area are similar
to those facing small and medium-sized enterprises, which have also
been slow to develop formal social and environmental policies. Many
dotcoms are, of course, small companies, despite their high profile.
James Wilsdon, co-ordinator of the Digital Futures project, says this
should be borne in mind before too much criticism is sent their way.
‘At least the results so far show that there is an open door in terms
of these issues,’ he says. ‘In many ways it is not surprising that
systems are not in place, given the fact that many internet companies
are very new.’
Nonetheless Wilsdon concedes that the findings so far are sobering.
Steve Frazier, managing director of the internet store Amazon.co.uk,
accepts that many e-commerce companies, including his own, have done
little in the CSR field. ‘This is a very important topic and one which
I confess Amazon have not focused on enough,’ he says.
Frazier, whose company is five years old and employs 500 people in the
UK, warns that companies in the ‘old’ economy ‘have also set the bar
very high’ on CSR. ‘I don’t think that as an industry we can sit back
and say that because we are adventurous and new-thinking people, we are
going to clear that bar’, he argues.
Katrina Giles, head
of social inclusion at AOL UK, one of the few dotcoms to begin to
address CSR issues, says the opportunity is still there.
Her own company has begun to help tackle homeless and diversity issues
through community investment, but she warns that many others have done
nothing, ‘especially on the social exclusion of the digital divide,
which they are in a good place to do something about.’
The
Digital Futures inquiry, which has received financial support from 14
companies including AOL, Amazon.co.uk, BP Amoco and Unilever will now
begin to concentrate on the question of whether dotcom companies may
only start to address CSR issues as they mature and grow, or whether
they can ‘leapfrog’ straight to more responsible models of business.
But Porritt warns that e-businesses should not fall into the trap of
feeling that because they don’t have big reputations to defend in the
same way as longer standing companies, they therefore have plenty of
time to put things right.
In the US, the environmental
impact of dotcom companies is increasingly coming under scrutiny from
pressure groups and investors, while elsewhere things are moving almost
as fast.
‘The NGOS will be coming after these companies
before long, so it would be better for them to take a proactive
approach’, Porritt claims.
