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The election of a Conservative government brings a mix of likely developments to the UK’s corporate responsibility landscape
In corporate responsibility terms, Britain's new Conservative government is likely to place fewer obligations on companies than a Labour administration would have done. But that doesn't mean that business ethics and sustainability will be static for the next five years.
The government will want to deliver its main promise of eliminating the UK’s deficit. This will mean public spending cuts but it will also mean pressure on companies to help. Mike Tuffrey, founding director of sustainability consultancy Corporate Citizenship, says: “The responsibility of companies to pay a fair share of tax will remain a big issue.”
The government will emphasise a pragmatic approach, however. “They are unlikely to be pushing more restrictions and rules and regulations for the sake of it,” Tuffrey says. One area in which this will be seen is country-by-country reporting by companies of their revenues, profits and taxes paid, so that governments can see more easily if they are getting a fair cut.
In the run-up to the election, Labour said it would require companies to publicly disclose this information, but the Conservatives said only that they would “consider the case for making this information publicly available”, and any such requirement would be conditional on other countries doing the same. Countries are working on the issue under the auspices of the Organisation for Economic Cooperation and Development, and the Conservative government is likely to fall into line with international developments without being “in the driving seat,” Tuffrey says.
On issues such as the living wage, the Conservatives are likely to follow a similar non-prescriptive approach. Pre-election, the Conservatives said they would encourage companies to pay it, but would not, for example, impose any obligation to publicly report on it.
Meanwhile, in terms of the role of companies in the community, some of David Cameron's previous “Big Society” ideas are set to return to the fore. In particular, the Conservatives have pledged to introduce a workplace entitlement for employees of large companies and public sector staff to have three days per year “volunteering leave” on full pay.
Overall, the Conservatives are likely to remain true to their “generally deregulatory and pro-free market” stance, Tuffrey says. In one area, however, the government is potentially set to act against these principles.
On sustainability, companies working on renewable energy are positive about the appointment of Amber Rudd as Secretary of State for Energy and Climate Change. “She's always been quite a strong supporter of tackling climate change,” says Robert Norris, spokesman for RenewableUK, which represents wind and marine energy companies.
Rudd will, however, have to oversee restrictions on onshore wind farms, of which the Conservatives have pledged to “halt the spread”, on the basis that wind turbines are unpopular with local communities. “We're obviously very concerned [that the government could impose] a moratorium on all onshore wind development,” Norris says.
RenewableUK disputes the idea that onshore wind farms are hugely unpopular. Norris says onshore wind is one of the most mature renewable energy technologies and is currently cheaper than alternatives. Wave and tidal power, for example, are “15 years behind where wind is”.
Conservative opposition to onshore wind could therefore go against the philosophy of letting the market decide on the best alternatives, and the manifesto promise to “meet our climate change commitments, cutting carbon emissions as cheaply as possible”. Norris contrasts Conservative opposition to onshore wind because of its unpopularity with government intentions to encourage fracking for shale gas, which is also likely to be unpopular with affected communities. “That's why we're so puzzled at the moment,” he says.
On sustainability, the government is in any case bound by targets for renewables to meet 15% of UK energy needs by 2020, and by the Climate Change Act, which requires greenhouse gas emissions to be cut to half of their 1990 levels by 2025. As the government considers its options, companies are sure to be called on to play their part.UK Government UK politics politics government