Corporate Scotland’s ethical credentials up for review

Martin Dorchester, CalMac

“The current Volkswagen emissions scandal shows clearly where customers stand when businesses don’t live up to high ethical standards,” – Jonathan Coburn, Social Value Lab

A new study is underway to discover if businesses are doing their bit to help create a fairer Scotland.
The research, which is the first of its kind in Scotland, is being carried out by Social Value Lab with support from Firstport, Scotland’s development agency for social entrepeneurs and start-up social enterprises.
It’s been designed to examine whether public and government expectations have resulted in changed business practices and how companies can be supported to maximise their social and environmental value.
The study will culminate in a ‘Better Business, Better Scotland’ report, which Firstport says will draw on Social Value Lab’s online consultation with thousands of businesses and provide cutting-edge insights from corporate Scotland.
It will also consider in-depth interviews with business leaders and CEOs and include detailed case studies on businesses which are doing well and “doing good”.
The report, which Social Value Lab has already described as “hard-hitting”, will offer practical  recommendations for businesses and the Scottish Government and will be revealed to nearly 2,000 political and business leaders at the Scottish Business Awards in November.
Social Value Lab director Jonathan Coburn said: “There is a growing awareness that a strong economy and successful businesses are essential to achieving a fairer society in Scotland. We see more and more companies playing a positive role in the workplace, in communities, and in relation to the environment around them. Their response is being shaped by both shareholder and customer expectations. The current Volkswagen emissions scandal shows clearly where customers stand when businesses don’t live up to high ethical standards.
“This study is timely in terms of the First Minister’s agenda for inclusive and sustainable economic growth. The Scottish Business Pledge and other Scottish Government initiatives encourage businesses to make their full contribution to Scotland, for example extending the living wage, ensuring gender balance on boards, working in communities and investing in youth training and employment.
“This research will tell us where business is coming from on taking their wider ethical, social and environmental responsibilities seriously. We’ve heard talk about corporate social responsibility (CSR) for the last three decades. Small family businesses already have it as part of their DNA, while a growing number of CEOs of larger corporates are recognising the challenges and are trying to push the needle.”
Firstport chief executive Karen McGregor said: “Firstport has supported start-up and early stage social enterprisesthat are bringing both social and economic benefits to communities across Scotland, demonstrating the businesscase for ethically responsible companies. We are committed to promoting socially responsible business in Scotland and encouraging the private sector to look at how they can work alongside social enterprises,for example involving them as suppliers, as well as learning from the good practice in the sector.”
Have your say here.

CASE STUDY – Caledonian MacBrayne (CalMac)

One Scottish business leader who needs no convincing of the business case for social responsibility is Calmac CEO Martin Dorchester.
The chief executive of Scotland’s biggest ferry operator says a cultural shift is needed to a more holistic approach if we want to create a fairer Scotland. “Many private companies see shareholder return as their reason for being. They can’t see a financial return on investing in the community. We need to change this perspective if we want to build a fairer society – delivering profits and short-term commercial success isn’t enough on its own.
“We set companies up as a vehicle for profit, when really their fundamental purpose is to provide goods and services, to provide help and support for people and a source of employment. Social and environmental impact is not always at the forefront of companies’ day to day activity when it should be part of their DNA. It’s not just a case of having a CSR policy, it should be part of your business plan from day one.”
Calmac’s strategy for being a responsible business includes ongoing community engagement with both local people on the west coast routes it serves and the wider Scottish community; an employment and training programme; setting waste and environmental targets for fuel use; buying produce locally, and guaranteed procurement for suppliers such as shipyards to help them grow their business. It recently became the first UK ferry operator to gain Living Wage accreditation.
Dorchester says more support is needed to encourage other Scottish businesses to follow suit. “There is very little help for businesses out there. We need a more proactive strategy from government and business groups and more academic research about the benefits, more longitudinal case studies, more high level discussions about how if you build social capital it will be more profitable for you. We also need to change how we measure success. We celebrate Bill Gates for building a billion pound business with high market capitalisation and share price – but we don’t celebrate people who run a business employing disabled people for example.
The CalMac boss says the Scottish Government can help in a number of ways, including procurement, fiscal and tax regimes and improving the investment climate, while government agencies can act as an “honest broker” to bring businesses together and facilitate discussion to tackle social and environmental challenges.
“For example Calmac is a member of Argyll and Bute Economic Forum. One of the area’s main challenges is a falling population so we have spent the last three years investing in extra frequency and capacity on the ferry routes in Argyll and Bute. Calmac is 165 years old – I want it to be around in another 165 years. It’s a sensible business decision. If you as a company believe in investing in your community, you will take the long term view. If you are only interested in short term profit, you won’t do that.”
He says the public sector can also help by giving more credence to social and environmental value in tender processes. “Instead of always going for economically led tenders, they should consider if they give a business a contract now, where will that company be in two years time? There is an opportunity for governments and companies putting out tenders to score on social value and environmental impact, not just on cost. Instead of getting three quotes and taking the cheapest, why not look at the most environmentally friendly? The cheapest quote today may not be the best deal tomorrow.

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