Sharing the burdens of a global market (From Times Series)

Sharing the burdens of a global market

11:23am Tuesday 15th July 2003

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‘Greed is good’ used to be the mantra on Wall Street. TOM SPENDER meets a man who says big business is now developing a conscience

There is a select group of people who jet from country to country telling world leaders what to do. They have homes in places like the French Alps and they pretty much run the world.

Michael Hopkins, a professor at Middlesex University, is one such person — an economist.

But Prof Hopkins is not conspiring with grey-suited colleagues to enslave the entire world population in the name of profit, as many a lank-haired leftie would have it.

Instead, he chairs the International Centre for Corporate Responsibility and International Business — a small body dedicated to researching corporate social responsibility (CSR).

His new book, The Planetary Bargain, is his vision for a world where big companies shoulder a responsibility for society that is simultaneously being offloaded by the public sector. An easy-going man with an eye for a joke, Prof Hopkins started out as a student Marxist who stood for election as a Labour candidate in Brighton before taking a job with the International Labour Organisation, part of the United Nations (UN) in Geneva.

"It was fantastic for a young blood — every famous person who existed was floating around in the corridors. I was a young uni boy and, all of a sudden, I was on TV, briefing the president of The Philippines on the future of his country. That's the beauty of youth — when you don't know anything, you go ahead and say it anyway.

"I was also chief economist in the Dutch Antilles. It was a little island economy and, as chief economist, you get the whole thing. You set the exchange rate, the oil price and decide what to do with agriculture," he says.

It was from within the UN that he concluded institutions were failing in terms of social responsibility.

"The major [publicly-funded] institutions are failing in CSR. I want to see how corporations could do it instead. They spent US$50 billion on developing-type issues last year. Institutions could only manage about US$100m.

"We have failed because destruction seems so easy. Donald Rumsfeld can raise US$4bn a month for the military in Iraq, but it's almost impossible for me to raise US$50,000 to do a study on Iraq.

"Men like playing with things that go bang in the night. Development takes years," he says.

Prof Hopkins believes that British, and some American, companies are becoming increasingly interested in CSR.

"In the 1970s, people used to say the business of business is business. But if companies believed that, they probably wouldn't be in business today.

"The real question is how do you make your profits. We want to show CSR is good for business.

"Shell and BP are really paving the way. Ten years ago, Shell was a pariah company, with the whole Ogoni Nigeria thing. They are re-engineering themselves into the whole concept of CSR. A fair amount of it is PR but they realise that in the long term, and five years is long term, they can't carry on as before.

"Socially responsible companies are more desirable for graduates to work for. And consumers now avoid companies that exploit workers — people will pay a premium for responsible products. But we are still groping."

As part of his groping for a way forward, Prof Hopkins ranked the top 25 most socially responsible British companies — with Guinness coming out on top.

"We've had a lot of discussions about whether to include product in the rankings. I like wine, so I've got nothing against alcohol," he says.

He also ranked Shell against the UN — and Shell won.

"The UN is a very hierarchical organisation. There's a feeling of alienation there. It's a declining industry. They are really cut off from money. The public sector has been declining and you need growth to do new things. In decline, you are fighting to preserve old programmes," he says.

The professor's ‘planetary bargain’ rests on trust between the public and private sectors.

"Should it be a total free-for-all with no rules or should there be total regulation for what companies do? The point is somewhere in between. Most of the best companies are ahead of policy.

"The best companies would like to have some regulations to create a level playing field. They behave according to guidelines they have created for themselves. It's smaller companies no-one has heard of that are the rogues.

"In developing countries, people trust within family units. But one of the reasons they stay poor is because, if you can't trust anybody else, then you can't do business with them," he says.

"I am not really looking for perfection — some imperfection is nice. I'm not interested if the boss is having it away with his secretary, but if all promotion depends on sleeping with him, then it's time to sort it out."

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