Wanted: A home for responsible business in Government

The current lobbying scandal is shining a light on the interaction between business, politicians and the civil service. When the behaviour of public office holders fails to meet the high standards required, and individual interests are put before the public good, public trust in institutions and systems suffers. All sides can be tarnished and the social contract between citizens and rule makers can be eroded. A ‘one rule for us and another for them’ approach seldom ends well and does not create a healthy environment for individuals, and good businesses, to thrive. 

Getting the relationships between business and government ‘right’ can be tricky. What is clear, is that to address some of the major societal problems that we face, such as Covid, deep seated inequality and the climate crisis, both sides frequently need to work together to find and deliver solutions.  

Embracing good corporate governance practice is essential. Compliance with standards and regulations (including both the spirit and the letter of the law), a focus on purpose, culture and values and transparent reporting and accountability are all vital. However, focusing on the shortcomings in current activity, whilst clearly necessary, may not be sufficient, to raise the bar on the responsible business practices needed for a sustainable future.

As well as addressing problems in this area, Government also needs a vision rooted in high standards.  A vision that goes beyond a knee-jerk response to individual scandals and considers the positive role for purposeful business in a strategic way. A vision which matches the challenges that we face in this decisive decade for climate and fairness. 

Business leaders across the globe are starting to wake up to the importance of corporate purpose and what it can do to help address the problems of people and planet. Sustainability First has carried out significant research in this area with public utilities. And the investor community are alive to the ‘Environment, Social and Governance’ (ESG) agenda. ESG is now an increasingly key factor of differentiation within markets.

Government itself also needs to consider what it can do to support and foster this shift. Having a central hub for responsible business in Government would appear to be a ‘no regrets’ action. Following recent changes, however, it would appear that responsible business no longer has a single ‘home’ or strong leadership in Whitehall. With the team in DCMS that brought this work together across Government having moved on, the ‘coordinating hub’ for this activity would appear to have gone. It would seem that promoting this agenda is being left to individual Departments to progress in their own areas.

Why do we need one Department leading on responsible business?

The UK’s continued leadership internationally requires government support and coordination of good UK business. A fragmented approach risks losing linkages between elements of what comprises a purposeful business and also misses the opportunity for learning across sectors. For businesses, standardisation, where appropriate, would make it easier to stay abreast of evolving good practice. For investors, a joined-up approach from government would make comparisons between sectors easier. 

A clear Departmental ‘home’ for responsible business can enable the Government to really champion the role of business in terms of delivering green growth and a fair and resilient recovery.  

Alok Sharma has spoken compellingly about the role of business in terms of climate change. COP26 provides a clear opportunity to show case this thinking. However, to achieve a sustainable recovery, this message needs to go wider across sectors and deeper into supply chains. A central hub in government with a clear focus on good governance – including driving forward responsible business - would send a clear signal on government commitment. It would raise the level of UK ambition and amplify Government messaging as to why responsible business is important.   It would increase impact, making it easier for businesses, Government (national and local) and other actors to connect together and unlock new ideas and opportunities. 

Why should BEIS be the Departmental lead for responsible business?

With its remit covering business and consumers, along with climate change, BEIS is clearly the natural home for responsible business. There is a real opportunity for the Department to provide direction and play a pivotal role in this area. 

A common reference point in Whitehall would make it easier for consumer groups and civil society organisations to get involved in shaping what good looks like. It would help arm people with the knowledge to help exercise their consumer and citizen power and enable them to hold companies to account for their responsible business commitments; in the process helping to avoid ‘purpose wash’ and scandals.

Questions around lobbying clearly need to be addressed. But treating current events as a one off, ad hoc issue, without truly considering the long-term relationships that we need between business and government going forward, would be a missed opportunity. 

We give homes to things we value. As long as responsible business is homeless and left ‘out in the cold’, the signals Government sends about the type of corporate behaviour it wants to see may struggle to ring true.

Providing a clear home for responsible business in Whitehall has to be a part – albeit only one part - of the solution.