Will draft bill wake firms up to corporate responsibility?

Corporate social responsibility, or CSR, was pushed up the government’s agenda last week when a draft corporate manslaughter bill was unveiled in the Queen’s speech. The proposals are far-reaching, with negligent company directors facing imprisonment or fines on personal wealth when a member of staff is killed in the workplace.

The stakes have been raised, and the building industry as a whole is finally waking up to the fact that it has to take CSR seriously in order to be ahead of the game. A survey published by consultant KPMG last week showed that CSR is catching the attention of more companies, and is creeping up the industry agenda – albeit slowly.

KPMG interviewed 226 industry people, 98 of whom were from quoted companies. The survey showed that almost 70% believe that CSR has a large commercial impact on business, compared with about 50% last year.

However, at a time when construction-related deaths are still hitting the headlines, and as companies struggle to attract the levels of staff they need, the survey shows that the importance of having sound CSR policies is still not fully understood. The issues involved are wide-ranging and include health and safety, environmental and pollution control, community development, social accountability, ethics and integrity and stakeholder engagement.

Thirty-four per cent of those questioned said business was affected by public opinion of CSR , but this represented only a 10% increase on the 2003 figure, and the most respondents still said that public opinion had no effect. This seems all the more strange at a time when staff shortages are one of the industry’s major concerns. Younger people are increasingly concerned with the overall ethos and values of the company they choose to work for – demonstrated by the fact that the CSR section on company websites receives the greatest number of hits from graduates and potential employees.

More than half (51%) of those questioned said that clients were sending out questionnaires at the prequalification stage of a tender. Just 28% were asked to engage in detailed discussions on CSR, but this figure was still more than the 11% recorded last year and will no doubt continue to rise.

The responses also indicate that most investors and shareholders do not raise the issue although, again, the past year has seen an increase in those who do, from 17% to 45%.

A panel of eight industry executives invited by KPMG to discuss the survey said that addressing CSR issues would become more common as clients drove it up the agenda. Public sector and blue-chip clients are most concerned with CSR policy, said the panel, partly because those clients are the ones that tend to have a policy in place within their own organisation.

Richard Whittington, head of building and construction at KPMG, said: “Our survey shows that the industry is moving slowly towards embracing the CSR agenda. The risk to businesses’ reputation of not actively engaging with the CSR agenda can be huge. Our survey demonstrates that these issues are now beginning to be addressed and debated throughout the sector.”

One surprising statistic revealed in the survey was the lack of concern and awareness among people in financial roles about the new non-financial reporting regulations to be imposed on UK quoted companies in four months’ time.

The operating and financial review (OFR) will require companies to report on staff, environmental, social and community issues, so that they are more transparent about their strategies. Yet, despite the imminent changes, 61% of those in finance roles questioned by KPMG said that they did not anticipate including CSR issues in their OFR disclosure. And this is despite the fact that, for quoted companies, a bad reputation in the public domain can have a direct and negative impact on a share price – a problem to which Jarvis has fallen victim.

CSR is clearly keeping more directors awake at night than this time last year, but it would seem that more than lip-service has to be paid if the industry is to attract new talent.