Companies face a challenge to set long term targets on environmental and social issues

25 May 2008

The Business in the Community Corporate Responsibility Index is the UK’s leading benchmark of responsible business. Since its development in 2002, 280 of the largest companies in the UK have taken part. This year 126 companies participated and average scores have now reached 87%. The global reach of the Index is confirmed with 88% of companies reporting on their worldwide operations

Despite the last six years showing a significant increase to the extent to which corporate responsibility is now mainstreamed and the fact that leading companies are addressing their material environmental and social issues, there remains a fundamental challenge for business. Many companies rely too heavily on year-on- year incremental measurement and target setting, which is not feeding into long-term business planning.

Other themes that have emerged from this years Index are:

• Clear demonstration of the role of leadership. 3 in 4 participating companies are reporting that corporate responsibility issues are explicitly included in the performance review of board members. This is up from 2 in 3 last year and from around half only two years ago.
• Over the last couple of years, the index has shown more companies involving stakeholders in identifying risks and opportunities for their organisations. This year, companies are also reporting an increase in the extent to which stakeholders influence policy. The Index has tracked this journey with stakeholders - from identifying them, consulting and now their role as influencers.
• Overall, mining, banks, utilities and electricity and media companies are this year’s highest scoring sectors.

This year heath and well-being was the most frequently selected social impact area - with 72% of Index participants completing this question. In separate BITC research of companies in the FTSE 100, the number using quantitative data to report on health and well-being has increased from 7 last year to 25 companies this year. This confirms that businesses are increasingly taking employee health and wellbeing more seriously and embedding it at the heart of their business strategy.

Stephen Howard, Chief Executive, Business in the Community said:
“The Index has identified that businesses are still focusing on short-term prospects rather than long term business performance. Successfully achieving this shift in thinking is a critical challenge for business if they are to develop sustainable businesses of the future.”

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