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Social responsibility low on the corporate ag -

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Social responsibility low on the corporate agenda

AM - Saturday, 16 October , 2004 08:16:00

Reporter: Peter Ryan

HAMISH ROBERTSON: What price corporate ethics in Australia? Well, an index of corporate social
responsibility, being conducted by the St James Ethics Centre and the advisory group Ernst and
Young, is in jeopardy after just 32 of the nation's top 100 listed companies agreed to participate.

Dr Simon Longstaff, who's overseeing the index, says the lack of interest is disturbing, and sends
the signal that the so-called triple bottom line has become less important to our top businesses.

Simon Longstaff is talking to our Business Editor, Peter Ryan.

SIMON LONGSTAFF: Well it is a worry, partly because I'm a great supporter of self-regulation, I
think it's really important that businesses be able to show the community - which is largely
sceptical - that they can take up the baton and run on these issues, rather than it having to be
left to political pressure to try and have government legislation brought in place to make these
things mandatory.

And I just think that businesses have got a self interest in showing the community, and the
community's got an interest in them doing this, to say that they are prepared to measure the things
which we all think to be important.

PETER RYAN: Is this a matter, though, of companies just being modest about their achievements, or
are we indeed seeing a form of index fatigue or corporate apathy?

SIMON LONGSTAFF: In some cases, people say, well, look, why can't we just get on with it, rather
than having to measure it? But of course they'd never say that if it was about financial matters.

So I don't see that there's a contradiction between actually being engaged in best practice and
measuring it. In fact, I think they go hand in glove and we know that from the financial side of
things.

There will be other people who are just hoping, perhaps, that all of this goes away. And I suppose
there are a few that would be quite interested in this, but are cautious about being involved
because they might not perform as well as others.

PETER RYAN: Companies are already under a lot of regulatory and shareholder scrutiny, and perhaps
some CEOs are wondering why open ourselves up to more criticism?

SIMON LONGSTAFF: Well, if they're thinking like that, they're entirely missing the point of indices
like this. This one is particular has been developed in order to provide first class information to
boards and senior management, so they can actually improve their practice.

The last thing you want to do is to pull down the shutters when the community starts to ask
questions. If you are sincere in saying we want to respond to community concerns, we want to take a
leadership position in this so it's not left to government to make us do it, then you will actually
measure things, not just so you can tell other people about how you're going - good or bad - but so
that you can actually improve.

PETER RYAN: I'd imagine there are some usual suspects in this particular index - Telstra, Westpac,
BP, for example - who've been commended on their performance previously. Do you feel this could
actually be a deterrent to some companies who think, well, why go to the trouble?

SIMON LONGSTAFF: Well, the usual suspects are in there, in that sense. These are companies which
have spent years starting to get their house in order, and are starting to derive the benefits from
this.

I think that in a generally competitive environment, you'd want other businesses not to be put off
by this, but to say, actually, what is it that they've got that we can learn about, and in the end,
participating in these things actually aids the sharing of best practice so that even if you're
starting from a low base, you can get access to information and techniques for running your
business which improve your performance overall.

HAMISH ROBERTSON: Doctor Simon Longstaff of the St James Ethics Centre speaking with our Business
Editor, Peter Ryan.

(c) 2006 ABC