Philanthropy

Baroness Coussins Excerpts

Thursday 2nd December 2010 Lords Chamber

[Baroness Coussins]

My Lords, in congratulating the noble Lord, Lord Janvrin, on securing this debate, I should like to say a little more about the role of business in encouraging philanthropy. In modern terms as we have already heard from several noble Lords, this is part of what is now generally known as corporate social responsibility. I declare an interest as an independent adviser on CSR to various global companies listed in the Register of Interests, all of which commit significant resources to charitable activities around the world. CSR is, of course, about much more than donating to charity or bestowing patronage on the arts. Cynics might say that it is just a way of reducing corporation tax or a relatively cheap way for companies to feel virtuous. However, I would argue that it is a mainstream business driver and a very important aspect of how the success of a company should be judged in the 21st century.

There are various indices and awards that measure and publicise aspects of a company's CSR performance, such as FTSE4Good and the Dow Jones Sustainability Index. The pioneering organisation, Business in the Community, has been mobilising its member companies for nearly 30 years now to work collaboratively in disadvantaged communities. BITC publishes the CR index and in 2008 launched the community mark initiative, which is designed to set a new standard of excellence in community investment.

The word “sustainability” sums up why CSR is important to business. As I said, it is not just about charity, it is also about the way the workplace is run and the workforce is treated; it is about the impact of the business on the environment; and it is about the social impact of its products or services in the marketplace. Unless a business gets all these things right, including the charitable side, its brand image and corporate reputation could suffer. By contrast, we know that new cultural norms and expectations about corporate responsibility are influencing consumer purchasing patterns. We know that FTSE 350 companies that are active in corporate responsibility outperform their peers by between 3.3 per cent and 7.7 per cent a year, so CSR can help give business its competitive edge.

The element of charitable giving or community support should be one of the building blocks of any company's CSR programme. Although its effect and impact may be philanthropic in the traditional sense, it is enlightened self-interest rather than pure altruism which motivates it—and it is none the less welcome or worthy for that. The opportunity for the entire workforce to have a say in which charity should be a company's charity of the year is a good example of how the workforce, as individuals, can feel engaged with the company as a whole. The benefits to the business include positive attitudes towards the employer, team-building and co-operation and, of course, good external publicity. Some companies agree to match-fund what their employees raise and also allow work time, venues and facilities to be used for charitable fundraising activity.

Another example of what might be termed philanthropic business action is volunteering. This features increasingly in companies’ CSR strategies. This might involve carrying out repairs and decorations at a local school, clearing rubbish from rivers and ditches, or giving children one-to-one reading practice. Some companies have enabled employees to participate in mentoring schemes for older children or for ex-offenders. These activities provide a win-win situation for everyone concerned, with the company benefiting from the reputational capital built up in the local community, which, after all, is also its recruitment ground. Then there are the initiatives which involve in-kind support, whereby a company might donate its product or services, facilities or venues for the benefit of a local or national charity. This might include offering work placement or work experience to students or ex-offenders. It could also work the other way around, with professional accountants, lawyers or marketers spending time with a charitable body showing it how to professionalise or scale-up its operations.

Some strands of CSR have a very obvious business case. Measures to reduce energy consumption, waste and packaging, for example, are good for climate change, but they also, self-evidently, reduce costs—just what every shareholder, board member or chief executive wants to hear. Beyond that, there are still too many businesses which think that the rest of CSR is a bit of a luxury or an optional extra—unaffordable in an economic downturn. They need to be encouraged to understand the business case, but they also need the regulatory and administrative obstacles that can sometimes block a good initiative to be removed. This is where the Government should step in to facilitate the progress of enlightened self-interest.

The barriers, from a business perspective, include the time taken and the cost of obtaining repeated CRB checks. The regime for protecting children is absolutely necessary, but is overly cumbersome, time-consuming and costly. I ask the Minister to look at how this could be streamlined, as well as at other aspects of the red tape which often inhibit businesses from embarking on volunteering programmes.

Another example is the difficulty that can be encountered in obtaining professional insurance cover for employees who donate their time and services. The Government could and should do more to provide incentives to businesses to engage with ex-offenders and other socially excluded groups. I ask the Minister to look again at all these issues and to ensure that the role of corporate giving within the broader context of CSR is fully acknowledged in the forthcoming White Paper.