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Rewarding Transparency: ACCA UK awards for sustainability reporting

The Rt. Hon. Stephen Timms MP,  Former Minister of State for Competitiveness
British Library,  13 December 2007

Thank you for the kind welcome. I am delighted to be here today. We are starting to see corporate responsibility and sustainability reporting embedded in diverse organisations. For my department, and DTI before it, and for the environment department Defra, it is important to support this work by sitting on the judging panel. It helps us to keep in touch with developing trends. And I commend ACCA’s far sighted initiative in 1990 in establishing these awards, and its consistent support for them ever since.

Competitiveness and corporate responsibility

As Minister of State for Competitiveness at the Department for Business Enterprise and Regulatory Reform, I am in my second term as minister for corporate responsibility – the first was from 2002 to 2004. And at first sight it might appear odd that corporate responsibility should be placed in a ministerial brief around competitiveness. But actually, in my view, that is absolutely the right place for it.

Because corporate responsibility is vitally important for business competitiveness. It helps firms manage key risks; it protects and enhances brands; it promotes innovative thinking and new ideas; it helps businesses attract the best talent.

The construction industry also sits in my portfolio, and a director of one of our major construction firms told me recently that these days, when they have a new graduate employee induction seminar, 70% of the questions raised are about corporate responsibility. That is a big change in mood – a welcome and very heartening change, most striking, according to employers, among the most able young people. Young people want through their work to be helping to solve the big challenges which the world faces, not making them worse. They are not satisfied purely with doing good in their spare time. That resolve gives companies who depend on being able to recruit the brightest young people a very strong motivation for a rigorous programme of responsibility. In helping them recruit the best people, it is key to their competitiveness.

And I see it as important for national competitiveness too. When people around the world want good ideas on corporate responsibility, it is good for Britain’s competitiveness that it is to Britain that they look. A couple of days ago I met James Gifford, the executive director of the UN programme of Principles for Responsible Investment. He is an Australian and he could have located the programme office anywhere in the world – but it is good for Britain that he has chosen to come to London. And I want responsibility increasingly to be part of Britain’s brand – so that, around the world, when people see a British firm providing products and services, they will be able to feel confident that that firm will be practising social and environmental responsibility in the way its conducts its business.

And I am grateful for the chance to speak at these awards today, because reporting is key to this. These Awards celebrate quality in reporting, and they give us the chance to explore the interaction between competitiveness, innovation, successful recruitment and sustainable businesses.

They highlight how all organisations can keep the trust of their customers by reporting effectively on how they are tackling sustainable development. Businesses perform better, and will be more sustainable in the long term, when they take account of the full range of issues in pursuing commercial success – engaging properly with customers and suppliers; ensuring employees are well trained, motivated and properly rewarded. It makes good business sense to take acount of the business’s impact on the communities where it works and on the environment. And these awards help to boost the focus which companies bring to these aspects of their activities.

The special theme this year has been sustainable strategy and governance. I congratulate ACCA for, alongside its consistent championing of good sustainability reporting, this innovative approach of adding further value by drawing out additional learning around the special theme that all can benefit from.

Companies Act changes

We made an important change to corporate responsibility on 1 October, when we implemented key provisions in the Companies Act 2006 on directors’ duties.

Quoted companies must now include information on environmental, employee, social and community issues, as part of their annual Business Review, where in the view of the directors the information is material to an assessment of the company’s future prospects.

It has been an important step in improving corporate reporting, and I look forward to it giving a further boost to the corporate responsibility movement as more quoted companies publish their business reviews over the coming months. I hope many who are writing these reports for the first time will look at the ACCA Awards for good practice and I hope some will be considered for next year’s First Time Reporters Award.

With the crucial debates at Bali under way at the moment, and the importance of securing agreement on binding emissions caps for alldeveloped countries, there is rightly a lot of interest in sustainability reporting. The Chancellor of the Exchequer was speaking about it yesterday as a guest of the Prince of Wales, and I welcome the presence of Sir Michael Peat at these awards today. Its going to be important to see how businesses respond to these new reporting duties over the coming months.

Developing the corporate responsibility brief

Returning to this important and fascinating area, I want to build on my previous work, and on the work of my other ministerial predecessors, to develop further our contribution to and encouragement of corporate responsibility.

Previous major contributions have included the influential Chatham House study setting out what Governments and businesses should be doing. We responded with the document ‘Corporate Social Responsibility – A Government Update’ in 2004, and with the follow up publication in 2005 on the ‘International Strategic Framework’.

Our aim is that private and public sector organisations should take account of their economic, social and environmental impact, and take action to address them, drawing upon their own expertise and resources.

It entails companies going beyond compliance with the requirements of the law, working out for themselves how they can contribute to social and environmental goals. For instance by partnering with third sector groups, trade unions, consumers; and with innovative approaches and policy frameworks that promote and share best practice.

We now need to gather together the different threads of activity into a coherent whole. Too often it can seem as if Government activity is divided between the different Departments who have an interest in corporate responsibility.

So I have asked my officials to look at how we can better pull together and co-ordinate good work across Government – and also amongst business and other organisations – and make more explicit where that effort is based, how to access it and the way it supports our future strategy.

I hope we can engage with business leaders and other stakeholders in that work. I want then to refresh the Government’s approach and support, to show what has changed and clarify our current priority areas.

A good example of Government Departments coming together to improve policy is the new joint Trade Policy Unit. With the Department for International Development and part of our own Fair Markets group, we will bring together trade and development experts.

We want UK competitiveness and market access to come together, to offer better support for those wishing to trade themselves out of poverty. It will bridge the two Departments, tapping into the best skills, networks and resources at home and internationally. My colleague, Gareth Thomas, is the minister leading this example of ‘joined up’ government.

Conclusion

I want to congratulate all those companies who have been shortlisted this year and to welcome the contribution of all those who have contributed to the awards – the staff of the ACCA and all the judges for their time and expertise. Best wishes for the award announcements a little later on this morning – and let’s keep working together to make the most of the key business contribution to sustainability.

Thank you.