Making ethical choices is harder in tough economic times, but we still need to make them, says Mallen Baker

Most people involved with corporate social responsibility share one thing with Karl Marx: a belief that one’s world view will continue to advance. Each year, more companies will produce sustainability reports. Each year, more chief executives will buy in to a wider view of their social responsibilities.

But we are entering difficult times – a period of consequences – and that is the real test of which companies will hold the line on their values when things get tough.

Take BP’s recent agreement with Russian oil company Rosneft, for instance. Times have been challenging for BP, and are getting more so for the industry. The era of cheap oil is drawing rapidly to a close, and that leaves companies scrabbling for a share of the action on the remaining areas open for development.

On that basis, signing up with a Russian state-owned company to create a joint venture to exploit reserves in the Russian arctic makes perfect sense. So long as you don’t overly care about corruption, and the enormous issues of how the Russian state is interacting with business.

And so long as you’re not overly concerned about where Rosneft got some of its assets, and are prepared to go through meetings without mentioning the word “Yukos”.

You can view this as simply more proof that BP has entered the ranks of corporate villainy, and has just found a new, even more astonishing way to cap its environmental destruction off the Gulf of Mexico. But BP is not run by evil or stupid people, so we are lazy if we believe that. Look instead to wider causes.

BP is simply doing what many others will be tempted to do – this is the beginning of a trend.

We can generally expect to see a scrabble for some strategically key resources in addition to oil. Rare earth metals, for instance, which are essential to many of the hi-tech products we now depend upon. And access to those resources will be a lot more important to companies than concerns around human rights, the environment or corrupt governments.

Scarce resources

Food prices and water scarcity lead the pack of similar issues that will increase pressure on the choices companies feel they can make.

It’s not that companies don’t care about the issues. When they can see ways to do the right thing while making a good profit they would much rather do it that way.

But what happens when it’s do or die? When you need to secure those resources, and the only people that have got them don’t much care about anything other than lining their own pockets? Are you prepared to turn to the people that work for you and tell them that you’re laying them off in order to remain consistent with your values?

I don’t think there’s much doubt. You only have to look at how handily the banks can report on the one hand about how they meet their social responsibilities and, on the other, use the “we have no choice, this is what we have to do to be successful” argument over the payment of large bonuses.

Now take that “we have no choice” line and apply it to the social issue you most care about.

This doesn’t have to be a counsel of despair, but it is a wake-up call to understand that the need for a business case is about to get a lot sharper. Companies acting together around long-term self-interest may be able to change the nature of the choices they face, but it is by no means a foregone conclusion.

Take the crisis of the oceans. We see some countries waving aside concerns to continue exploiting dwindling species, and everyone else failing to come to terms with their failure to rein in consumption and wastage sufficiently.

Companies can work together to try to achieve a more sustainable model of consumption here – and some of them are trying to do just that. Or they can follow BP and decide that when there’s only one yellowfin tuna still alive out there, then they intend to be the one to net it.

Don’t take it for granted which tendency will win out. It is possible we may have passed the high mark for corporate responsibility and it’s downhill from here. But there is still everything to play for.

Mallen Baker is founder of Business Respect and a contributing editor to Ethical Corporation.
mallen.baker@businessrespect.net
www.businessrespect.net