The New Face of CSR in Australia

By James Chua

In November 2007, Dr Leeora Black, the managing director of Australian Centre for Corporate Social Responsibility, wrote in The Age (Business section, 27 November 2007) that Corporate Social Responsibility (CSR) in Australia would be given increasing visibility by the Rudd Government, spelling a new outlook on the way businesses approach CSR.

The Rudd Government, Dr. Black points out, has a strong, committed team including Labour Senator Penny Wong, Anna Burke (member for Chisholm), Chris Bowen (member for Prospect) and Peter Garrett, environment spokesman, among others.

In the article, Dr. Black describes Wong as possibly the most eloquent Australian politician on “issues of corporate responsibility and accountability.”  She has already launched an inquiry on corporate responsibility within the Parliamentary Joint Committee on Corporations and Financial Services. This illustrates the Labour Government’s firm stand on CSR, under which “improved co-ordination of government corporate responsibility initiatives and a greater focus on sustainability reporting” are expected to garner the most attention.

Black acknowledges that CSR is a broad term with many definitions. However, as the Australian Centre for Corporate Social Responsibility (ACCSR) points out, CSR is “not a synonym for philanthropy.” Based on this understanding, ACCSR “defines CSR in a way that emphasises appropriate and positive responses to the effects of business activities.”

In this vein, “What about SMEs?”, a Corporate Citizen article by Black and Kate Niblock-Siddle, touches upon the role of CSR in Small and Medium Enterprises (SMEs) (http://www.accsr.com.au/pdf/CC34-37.pdf). Although the processes and effects of doing CSR in SMEs are not as readily visible, SMEs should also conduct business in ethical ways that benefit their staff, business partners and the larger business community.

Black and Niblock-Siddle also mention two important research projects by Deakin University’s Corporate Citizenship Research Unit (2007) and St. James Ethics Centre (2008) which may shed some light on the role of CSR in SMEs.

Deakin University discovered, in the study conducted among Geelong businesses in Victoria, industry associations may be instrumental in forging closer links with the businesses in the region. For example, the Geelong Chamber of Commerce had introduced the “Business Connections” programme among SMEs and “community organisations that are involved in addressing issues of social disadvantage.” This resulted in “24 new businesses in the region with 300 employees which have had a positive impact on the community through the creation of new job opportunities.”

This may explain why Black (The Age, Business, 27 November 2007) believes that the Rudd Government is “unlikely” to remove the pre-existing “Prime Minister’s Community Business Partnerships” programme, which has produced many successful community-business partnerships from its agenda. Instead, she predicts in The Age that the Labor Government will re-brand that programme.

Deakin University has also discovered, through the Geelong Chamber of Commerce experience, that SMEs are far more involved in CSR than researchers had anticipated.  As Black and Niblock-Saddle note, CSR for SMEs has been “part and parcel of the culture rather than part of the organisational structure as in their larger counterparts.” At the same time, they noted that if top-level management in SMEs do not support CSR in their businesses, it will “be difficult to embed in the organization.”

The research study by St. James Ethics Centre concurred with Deakin University’s findings in the aspect that “personal values of the SME owner/manager are crucial in affecting leadership and engagement with CSR.”

St. James Ethics Centre also found that “there is a need to reach SMEs through their existing networks and specific sector/industry associations when promoting or communicating responsible business practice.” Only then will SMEs play a greater role in contributing to the overall CSR landscape.

Inferring from the Labor Government’s philosophy that “corporate responsibility is fundamentally an issue of sustainability” (The Age, Business, 27 November 2007), Black outlined several areas in which she anticipates the Government will make “some profound and positive behind-the-scene changes” for businesses.

One such instance is government plan to “audit…government regulations and financial arrangements that encourage or discourage sustainable business practices.”  Black described examples such as questioning “subsidies that encourage the use of fossil fuels” and “insurance issues for corporate volunteering.”

A glance at www.ethicalinvestor.com.au shows two major events in the next quarter: Nonprofit Finance Forum (20 and 22 October 2009) and the 9^th Annual Australian Sustainability Awards (9 December 2009) (http://www.ethicalinvestor.com.au/index.php?option=com_content&task=blogcategory&id=952&Itemid=115).  This may signal the level of attention the government is giving to sustainable business practices.

In addition, Carbon Expo Australasia 2009, taking place on 26 to 28 October 2009, is a strong indication of the government’s efforts to push for “higher corporate standards for responsibility and disclosure through investment market levers.” (http://www.ethicalinvestor.com.au/index.php?option=com_content&task=view&id=3291&Itemid=402)

Black also predicts that the Rudd Government will “provide encouragement for business to adhere to international ‘de facto mandatory’ standards in corporate responsibility.”  (The Age, Business, 27 November 2007)

This is perhaps illustrated best by Cadbury Australia’s Dairy Milk’s confirmation in a recent news article on www.ethicalinvestor.com.au that its products would “achieve Fairtrade certification by Easter 2010,” making it the first big chocolate producer in the nation to “make the change to Fairtrade.” (http://www.ethicalinvestor.com.au/index.php?option=com_content&task=view&id=3263&Itemid=402).

Fairtrade pledges to provide “cocoa farmers minimum prices for their produce and additional investment for social, environmental and economic development in their communities.”

Additionally, Black and Niblock-Siddle, in the Corporate Citizen article, believe government support for SMEs with regard to CSR is possible, with a “three-way partnership between government, the NFP sector and small business being much more likely to deliver success than government simply engaging small business.”

They note that “…research suggests the appropriate role of government is to provide an enhancing and enabling environment by facilitating partnerships between SMEs and local industry associations and other stakeholders, encouraging debate, providing best practice case studies, and by offering tools to encourage responsible business practices.”

An excellent example is the Victoria Employers’ Chamber of Commerce and Industry’s collaboration with the Environmental Protection Authority Victoria to create a “Grow Me the Money” programme for Victoria’s businesses.

All in all, Black concludes that “the new Government now has a historic chance to become the best government for CSR the world has seen.”

Indeed, these events and efforts suggest that the Rudd Government is on the right track.◊

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