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Stephen Timms MPConstruction Industry Environmental Forum CSR Conference |
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I am delighted to be here today and I welcome the Initiative of the Forum in convening this conference. A successful construction industry is key for Government, as we work to improve the quality of public services. This industry contributes 8% of GDP, and a huge amount to the fabric of our society. As schools minister last year I had the privilege of opening a number of new buildings, and I was able to see the impact in communities of a superb new school where it was clear that the talents and ingenuity of experts in this industry were going to be benefiting children for decades to come. The industry is central to the regeneration of run-down and disadvantaged areas. That is one of the reasons why the Government is more than doubling net public investment in our infrastructure over the next 3 years to £19 billion per year, in order to deliver better schools and hospitals, and new homes. The industry also has a key role in employing some two million people. Among the most pressing challenges it faces is the availability of skilled labour. Construction is competing with many other sectors to attract able young people, and older people too to the sector. There is a great opportunity here to approach that challenge in a socially responsible way, tapping into parts of society and communities which have tended in the past to be under represented in the industry – bringing more people into employment, perhaps for the first time, and also boosting the capacity of the industry. It is essential that people see clearly the positive aspects of construction's contribution to our quality of life. It is appropriate that today's event coincides with National Construction Week – the annual showcase for the industry. At another event in London today about Respect for People, my colleague Brian Wilson, the DTI Minister responsible for Construction, will emphasise that caring for workers makes sound business sense. There are close links between that theme and the one I want to focus on today – the topic of Corporate Social Responsibility which is key for the construction industry given the skills and other challenges it is facing. In the Government we have just returned from a week by the seaside in Blackpool. Nothing ever seems to change in Blackpool. The sun shone and we enjoyed riding along the seafront in the historic trams. I was startled to find that top of the bill on the pier was the Batchelors, who were I think also top of the bill when I went with my parents 40 years ago. But a striking feature of the conference was an immense level of interest in corporate social responsibility. It was in a party conference speech a couple of years ago that the Prime Minister made the point that: "A strong economy and a strong society are two sides of the same coin". That theme does run throughout this Government's thinking. It is a powerful idea with a broad appeal. In one direction the link is a clear one. We need a strong economy to generate the employment and the revenue for public works and dependable public services which are the requirement for a strong society. But fundamental to this Government's thinking is that the equivalence operates the other way too – that a strong society is a precondition for a strong economy – that our economy will miss its economic potential if we have swathes of citizens permanently excluded from employment or for some other reason unable to fulfil their individual economic potential. It is our insistence that there is such a thing as society, and that investing in our society through education, employment training, good quality healthcare and other public services has important economic as well as social benefits, and economic benefits far beyond the obvious – and important – benefits to firms in this industry. At the level of the firm, the equivalent claim is that doing well and doing good can go hand in hand. That is the claim made by the supporters of Corporate Social Responsibility, among whom I am one. I see Corporate Social Responsibility as offering an approach that gets away from the old idea that economic, social and environmental goals must always be in conflict. What we need to work out is how progress on any one of those fronts can support progress on the others – business, the voluntary sector, and public bodies working together, not doing so grudgingly, but because each sees it as advancing its own key interests to do so, as well as the interests of others. Responsible corporate engagement can bring ambition and imagination and good organisation into situations where previously there was just despair. It can bring new ideas and new approaches, new enthusiasm of the kind that gets things done. It can put talented people who care – of whom there are many – in touch with situations that need caring about, and there are certainly a lot of those as well. The key for corporates is that this activity is seen not as philanthropy, but as mainstream to the business – justified not just by altruism but on sound business grounds. Otherwise it will not survive. And in Government we want it to survive and flourish, because it can have such an immensely positive impact in addressing big challenges which are among the toughest we face. And we are seeing a growing set of examples in the UK of companies who have come up with imaginative ideas which have advanced their own economic interests and advanced social or environmental interests as well – sometimes both of those. Let me just give three examples from different speakers. Three weeks ago on Monday, Tesco opened a large new store in my constituency. It is on a very heavily polluted site once occupied by the world's largest gas works but long since abandoned and disused for a generation. Cleaning the site up – a big construction challenge - has been environmentally beneficial. But what has been really interesting for me has been the programme the store has put in place for the recruitment of staff. Instead of advertising the vacancies in the normal way, the company set up with local providers an intensive three month training programme for previously unemployed people identified and referred by the Employment Service. The unique feature was that everyone who got through to the end of the training was guaranteed a job at the store. It is easy to be cynical about these things but it was actually a very impressive process – I visited the training and spoke to trainees who were very positive – and as a result over 100 people have come off the unemployment register directly into employment, contributing a noticeable dent in local unemployment figures. But why has Tesco gone to all that trouble? It is of course not because of all the social benefits which are what impresses me. Rather, it was because Tesco has found in a series of these projects that the people it recruits through this arrangement are better motivated and show a higher level of commitment to their work than people recruited by conventional means – reflecting an appreciation of the trouble which has been taken over them – and that are likely to stay in the job significantly longer than people coming in by the more usual routes. So the initiative has economic benefits for Tesco, as well as the social and environmental benefits. Or another example. The Lattice Group has a programme of training prison inmates to be gas engineers. Primarily that is because it needs, in the current tight labour market, to recruit more engineers than the conventional routes are providing, but the social benefits of doing that successfully, and providing ex-prisoners with a worthwhile future career, could obviously be immense. And that's what we need to find – imaginative initiatives which make sense commercially as well as socially and environmentally. My third example is the Co-op Bank. Ten years ago, the Bank declared itself to be an ethical company which would pursue socially and environmentally accountable practices and commission independent assessment of the results. People thought they were at best cranks, if not downright dangerous. Today, 98% of the bank's energy comes from renewable sources – compared with our national target of 10% by 2010. The head office in Manchester is powered from turbines on the Manchester Ship Canal and its building in Stockport is run apparently – unlikely thought it may seem – on power generated from sewage sludge in Bournemouth! The bank has been showered with awards. It was named Company of the Year by Business in the Community last year. Last April, its partnership report for the year 2000 won the award for Best Sustainability Report in the UK. And later this month, at a glittering ceremony in New York, the Bank will be presented with the special judges' award for overall CSR performance in the International Corporate Conscience Awards – the first UK company to win the award in 16 years. And the bank can point to substantial gains in terms of customer satisfaction, with customers recommending the bank to their family and friends, and to very high level of staff satisfaction too. On the toughest measure of all, the Co-op Bank has increased its profits to a new record in every one of the last eight years. Business benefits from CSR And there are more and more companies today who can point to comparable evidence in their own experience. What they say is that, by developing these responsible programmes they are building loyalty on the part of both their customers and their staff. A lot of CSR programmes – for example those where staff are linked as mentors with school children – have important staff development benefits alongside their social benefits. And increasingly companies are reporting that potential recruits are posing them searching questions about their CSR programmes – and that, if they want to attract the most able young people into their organisations they have to be able to give them convincing answers. Young people taking up corporate employment today want of course a rewarding career, but they also want to feel that they are making a contribution to their community and the society, helping younger people who have had fewer opportunities than they have had, contributing to improving public services. That is the case today in a way it certainly was not even five years ago. But CSR is part of my competitiveness brief at the DTI for deeper reasons still. Asked why he was spending so much time with environmental organisations, an oil company executive said it was because "speaking to those people I can see the future". There is growing evidence that engaging with the challenges of social and environmental responsibility is a spur to innovation and creativity which in turn contribute to the development of the organisation's mainstream business activities. Two further considerations Let me just add two further elements in to this characterisation of CSR which I think are important for the construction industry. First, that we see the question of human capital management encompassed within the ambit of CSR, and that we want to see the mainstreaming of issues like gender and diversity, and flexible working and work-life balance being addressed too. There is a growing recognition that, in staff management and development, doing good and doing well go hand in hand. And the second is that we need to acknowledge the growing importance of companies' addressing these issues in their international activities as well as in the UK. For all the controversy that was generated, the Johannesburg Summit was very successful in targeting a very bright light on questions about companies' practices in social responsibility and sustainability in the developing world, greatly raising the profile of these issues in public consciousness and helping to establish them as being among normal business concernsp> The role of Government The question for me as the CSR Minister is how can increase the scale – encourage for example smaller companies to take initiatives of this kind as the larger companies already have. It is sometimes suggested that what is needed is a regulatory regime for CSR. I don't agree with that. Of course, in both the social and the environmental arenas, there are regulations and those will no doubt be reviewed from time to time. But CSR is by definition a voluntary activity – it is about organisations choosing to go beyond what the law requires, drawing on their own strengths and analysis and developing initiatives to make a contribution beyond their own immediate economic interests. The law is good at stopping people doing bad things but it is bad at encouraging people to do good things. Legislation and fiscal incentives cannot compel virtue. Trying to regulate CSR would simply kill it. We certainly do not intend to do so. That is not to say that there is no role for regulation. In 1999 I was the pensions minister and we introduced, from the then DSS, the requirement that funds should report whether they have policies on socially responsible investment, and if so to state what they are. This has been widely recognised as a very good example of the sort of legislation that is helpful, with similar approaches being adopted in France and Germany. We also have proposals within the current review of company law, which would also require companies to disclose significant social and environmental issues. Another example of light touch regulation is the recent enactment in UK law of the OECD Convention on Bribery, which makes it illegal for UK registered companies and individuals to bribe someone overseas. Our goal for Corporate Social Responsibility is that organisations of all kinds in the UK should take account of the economic, social and environmental impacts of their activities, and should take complementary action to address the key challenges which arise from these impacts based on their core competences – locally, regionally, nationally, and internationally. We aim to:
And in Europe, The European Commission published in July a communication document on Corporate Social Responsibility. The Commission has indicated that its approach will largely follow our own view – that it should be primarily a business driven agenda. The Commission intend to set up a Multi-Stakeholder Forum with the aims of promoting transparency and convergence of Corporate Social Responsibility practices in the EU. It will report back to the Commission in the summer of 2004. The Commission will then consider if any further initiatives are appropriate to promote Corporate Social Responsibility. I welcome this conference and the work of the Construction Industry Environmental Forum. I wish you a very successful day and I look forward to working with this industry and others, and to helping to spread ideas about how we can make headway on the economic, social and environmental challenges – on the challenges which face all of us. |
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Other speeches by Stephen Timms MP
(the following are available from the archive) |
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