Tag Archives: CSR

Is TTIP a licence for unfettered corporate greed?

This blog was originally published on the 2degrees network – read it here.

Have you heard about the Transatlantic Trade and Investment Partnership (TTIP)? Many people haven’t and it’s worrying.

It is a treaty being negotiated behind closed doors between the US and the EU, not to remove trade tariffs, but to remove regulatory ‘barriers’ which restrict the amount of profits that can be made by international corporations. These barriers include many social and environmental standards such as the use of toxic chemicals, labour rights, food and drug safety laws etc. It also forces public services to open up to private competition and worst of all, it allows corporations to sue governments for loss of profit brought about through policy decisions.

This effectively hands over a huge amount of power to corporations and puts governments on the back foot. A similar investment treaty that Australia signed with Hong Kong 1993 has led to cigarette company Philip Morris suing the federal government when they enforced legislation on plain cigarette packaging.

The tighter EU environmental regulations are also threatened, specifically the EU’s REACH regulation on chemicals, introduced in 2007 in order to protect human health and the environment from hazardous chemicals. The EU currently works on a precautionary basis whereby there is a need to prove that a chemical is safe before it can be used. Contrastingly, in the US it has to be proved that the chemical is unsafe with obvious potential conflicts. It works in the same way in terms of food safety.

We need to wake up to this threat and quickly. It is going largely undiscussed in the media but it has huge implications for us all, especially those that hold social and environmental values at our core.

The clock is ticking. The European Day of Action is on 11th October.

Spread the word!

38 Degrees have put together a resource pack including posters and a petition that can be signed to persuade Vince Cable that we do not want TTIP to go ahead – 200,000 signatures are the target and this has nearly been reached.

Are you being served?

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The recent state of social enterprise research, by SEUK, The People’s Business has reported that more than ever social enterprises are needing appropriate investment ‘Twice as many social enterprises (48%) as SMEs sought finance in the past 12 months and 39% cited access to finance as the single largest barrier to their growth and sustainability – the most common barrier experienced.’

This mirrors the findings of our work with Social Enterprise Mark holders who cannot access the right resource level for their growth – ‘The median amount of finance sought by social enterprise was £58,000’ – below the minimum thresholds of many specialist social investment vehicles. This supports other research identifying the need for smaller-scale, patient, risky and unsecured lending for social enterprises. David Floyd in ‘That Shrinking Feeling’ provides good commentary on this issue, although he argues that what social enterprises need most is more customers, but I would say it’s chicken and egg, without investment a social enterprise can’t grow to reach its full potential and access new customers.

At last the penny is dropping that social enterprises cannot access the finance they need through social investment channels – but where are the solutions? Indeed, small scale lending where it does exist, is so risky that it has to be backed up by very high interest rates to justify that risk, which puts social enterprises at a double disadvantage – not only do they have to demonstrate social impact, but also, this is not taken into account on the bottom line by the social investment sector, which in turn charges high interest rates to make its own business model work. The social enterprises then become financially uncompetitive with the private sector which can access cheaper equity and do not have to demonstrate social value. This unlevel playing field and to represent certified social enterprises are two of the factors that led me to volunteer for the HM Treasury Working Group on tax relief for social investment in social enterprise and the argument that I put forward for lower than commercial rate of return for investors. I urge all social enterprises to respond to the consultation and share responses with me.

Another investment channel is the banks. The ‘Banks and social enterprise’ article by Claudia Cahalane shows how much banks are courting social enterprises for current accounts but the unsecured lending offers are very thin on the ground. Why is it not possible to look at some kind of blended product from the banks? I know that there are banking rules that have become more onerous, but why can’t banks’ CSR programmes look at working with others to develop a CSR stream that provides such patient capital which does take into account social value and mission? We seem to be looking into a very small box with everyone saying why it can’t be done. Could this be a great publicity opportunity and chance for the banks to put their house in order and demonstrate their social credentials?

Meanwhile the social enterprises will struggle on with no investment and certainly no grants (now a dirty word). The upshot, as David Floyd says, is that we may not be shrinking in numbers, but we are shrinking in size (turnover). Isn’t it time to do some re-thinking? Who will dare to take this challenge on?

Social value lite?

The Public Service (Social Value) Act is a constant theme at the recent events that I have attended up and down the country to promote the 50in250 campaign. What will it mean? How do we prepare ourselves to demonstrate it? Will it have teeth? Will it be more lip service? Is this social enterprise’s opportunity to rise to the occasion?

One thing I am certain of… you can be sure that the corporates are gearing themselves up to demonstrate social value in bucketloads. My inkling is that there will be social value departments springing up all over the place; an industry will be created and methodologies for measuring it will grow exponentially (which is saying something as scarcely a week went past before the Bill without someone telling me that they had found the holy grail).

It’s great to see that one of our certified social enterprises is already maximising this opportunity: Connection Crew will soon be launching their CSR Account. The Connection CSR Account offers their clients statistical certification of the social impact that their business dealings with them have affected. This kind of activity – together with the guarantee and reassurance that the Mark’s criteria provide – is exactly what businesses signing up to the 50in250 campaign have told us they value and need.

I have also heard that social value is the USP of social enterprises. This is not true of course, as social value is created in many ways: for example, through providing employment opportunities or making ethical buying decisions. What is unique to social enterprises is that their social purpose is their very reason for being in business. Their social and environmental values are central to everything they do including their business practices. The combination of these factors make the essence (USP) of what it means to be a social enterprise.

We need to get our act together! If we’re not careful, we’ll miss the boat on this one. The sector needs to demonstrate how these things fit together, differentiate ourselves, grow up and stop squabbling. We also need some powerful allies that share and demonstrate our values and can help us with this challenge so that we are not seen as ‘pink and fluffy’.

I still believe that we can change the world, but we need to be proactive and find the right and trusted people to help us grow as a sector, in the right direction.

Bid candy?

Have you heard this term before?

It was a new one on me, but it succinctly describes the position that many social enterprises are feeling at the moment.  A big contractor comes along and promises to pass some business a social enterprise’s way and in return they are named as a partner to tick the ‘social impact box’ on the bidding from.  When the contract comes through the promises are not honoured and nobody seems to care (least of all the contract holder).  Perhaps it’s about negotiating clear subcontractor terms, but as we know, when you are at the end of the food chain it’s very hard to negotiate and there often isn’t the time.  Barriers exist with tight bidding deadlines and lead contractors that are focused on the profits for shareholders rather than the social and environmental outcomes.

So, what do we have to do to be taken seriously?

It might be about sometimes saying no, but it is also about encouraging those big businesses to see us differently…. to see us not as a free lunch, or a nice fluffy teddy bear, but as a business to business relationship or partnership.  The Social Enterprise Mark is actively moving the positioning of the sector through the 50in250 campaign by influencing corporate supply chains so that social enterprises are paid a fair price for their services. 

Contract managers, directors, and ministers should also take more responsibility for looking underneath the carpet.  The A4E situation is a classic case of image over track record of delivery and to cap it all provision of huge profits for shareholders.  I’m not saying that everything in the social enterprise world is perfect, but if we are shouting about why we are different, there has to be a clear and consistent way of proving it, otherwise it’s just platitudes.

I first talked about this almost a year ago – it feels a bit like Groundhog Day!  See https://lucyfindlay.wordpress.com/2011/05/23/suffering-from-social-enterprise-identity-confusion/

50 in 250 campaign launches…..

Today we launched our first campaign in the City of London – it seems to have hit the Mark, if you’ll indulge the pun.  Mark holders from all over, came to tout their wares to City businesses – and there were some big name city businesses there, as well as being high in number.  KPMG and Wates Group both talked with passion about why they thought that Social Enterprise Mark holders can make a difference in their supply chains along with strong support from the City of London Corporation.  There was also strong interest in understanding the criteria and rigorous assessment process from City businesses – to remove the risk of engaging with organisations masquerading as social enterprises.  This all  goes to prove there is a definite need for certification which is robust and actually means something.

Chris White MP gave a barnstorming address – not something you often associate with a back-bencher, but his words were inspiring and really set the global context that we now find ourselves in.  Crucially, he linked the Mark to the paradigm shift of the changing business world and demonstrated his strong support.

The dialogue between social enterprises was firmly one of business – I don’t think you would have seen that a couple of years ago nor would you have seen such numbers.  Questions ranged from issues of quality and price to top tips.  My top tip for corporates is to start small and develop the relationship – business relationships in my experience  are fundamentally about trust and ability to deliver what you say you will.

I have to say, being a supporter of the Occupy movement, I was slightly worried about how all this might go down – might we have been better going out to join the protesters?  I discussed this dilemma with some friends (who know nothing about what I do or about social enterprise) over the weekend .  Interestingly, they had been in London and talked to the protesters and their independent conclusion was that they had sympathy for the messages but where were the solutions?  I felt really proud to say that we were in the thick of it; helping to provide some solutions and the means to action them!

It was an inspirational and rewarding event, with some new definite supplier relationships underway. Thanks to all those supporting it including Sensevents, Cafe Sunlight, City of London Corporation. We look forward to meeting many more Mark holders and businesses around the country as the campaign grows.

For more information on the campaign see www.50in250.org.

Supply chains must be challenged

Further to a recent debate on the Guardian’s social enterprise network, focussing on ways social enterprises could engage with big business, I believe its time social enterprises engage more actively with large corporations and other businesses to increase their impact and financial sustainability, moving on from the traditional corporate social responsibility (CSR) agenda.

Over the past decade or so social enterprises have been encouraged to build their businesses in order to deliver government policy, through public sector procurement and other ways.  Government strategies focused on this and the sector largely followed on.  In fact, the sector was encouraged to take ownership under the last government, and sometimes it became difficult to distinguish government policy from our own growth and sustainability strategies  – probably further exacerbated by the funding streams available centrally and regionally.

I’m not saying that all of this was bad, but it made us complacent.  I remember at the time, my friend Nigel Kershaw from the Big Issue saying, ‘What about social enterprises which operate in the open market?  Where are they in these discussions and policies?’   He pointed out that the Big Issue was borne out of a recession and had learned lessons about how to survive.

In these times of austerity, we still seem to be clinging to the same hopes that we had about turning towards government for answers.

These hopes are likely to be dashed.

We need to think much more independently of government; to promote the benefits of buying from a social enterprise; to be much more forthright and clear in our efforts  to achieve this.

In discussions with Social Enterprise Mark holders, there is a sense of frustration that much publicised support from both government and the wider private sector is just rhetoric.

We need to start to hold them to account in the ways that they too do business.  Supply chains must be challenged.  If business and government really believe in social enterprise, why aren’t they buying from them more widely? I’m not just talking about the delivery of public services – what about catering, events management, HR advice, marketing – the list is endless.

Social enterprises, of course, struggle with the procurement processes of both government and business – which often favour the big ‘standardised’ product.  But as a colleague pointed out, although it might be more complicated for the buyer, the rewards are greater AND benefits  society and the environment (… trading for people and planet).  Buying from social enterprises has the benefits of using resources efficiently to add value to the product or service and in addition, provides an alternative model for CSR.  The Social Enterprise Mark guarantees this;  therefore making  a compelling case to buy from Social Enterprise Mark holders.

Just check out the directory of Mark holders – they are a comprehensive and ready source of genuine social enterprises that can prove it!

Useful links

http://www.guardian.co.uk/social-enterprise-network/2011/jun/27/corporate-social-responsibility-and-social-enterprises-live-discussion?INTCMP=SRCH

http://www.socialenterpriselive.com/your-blogs/item/why-csr-why-now