This week, I had a chat with Lord Michael hastings, the former journalist turned activist who works as KPMG's international director of corporate citizenship, when he is not sitting in the House of Lords in London.
A champion of corporate social responsibility, Lord Hastings spent 12 years at the BBC after joining as a journalist and broadcaster. He had headed the BBC's public affairs department in Westminster and was the Beeb's first head of corporate social responsibility. He was also founding member and chairman of Britain's crime prevention organisation Crime Concern. A former commissioner for racial equality, he was awarded a CBE (Commander of the British Empire) in 2003, and was last year made a life peer of the House of Lords.
When I spoke to him, he had just spent some time in Amsterdam at the release of Global Reporting Initiative guidelines. Then it was off to Australia to connect up with his people at KPMG. I spoke to him just a few hours before he was due to fly back to England.
SOX FIRST: How do you fit it all in?
HASTINGS: Most people have much more capacity than they allow themselves the privilege to release. We get bound in by what are the demands of the job, what are the hours expected of the job rather than what is the capacity we need and how can we extend that capacity beyond the boundaries of the job. One of the things that is a huge motivator for me personally is when people feel the job is part of a composite life career rather than the job is the thing I do. Work and purpose and family and wide life fit together in composite whole. How do I do that and work? There are things that any individual can give to make a difference. What can I give? I can give involvement, commitment, resources, leadership and I can corral other people and motivate.
SOX FIRST:Why is corporate social responsibility gaining greater traction in the business world?
HASTINGS: There are a range of issues have collided together. Smart business leaders, whether they are operating in a company that's nationally focused or that aiming to be a global entity, smart business business leaders know you can't evade some of the more seemingly intractable global questions like climate change. You can't pretend they are no longer issues. They are cost issues, they have implications for personal life, they have implications for business life. They also have a moral imperative. But you also can't avoid wide community pressure. What's happened in the last five years is that these wider social, environmental questions have invaded the boardroom mentality because there are costs associated with not dealing with these questions.
SOX FIRST: But why the last five years?
HASTINGS: I think there is a juxtaposition between an increasingly agile global media environment. It's very hard for people pretty much anywhere in the intelligent world, the western world and the world of information technology to be disconnected from things that are going on a very long way away. We all sit up as a consequence of North Korea's nuclear testing and it's not just the people in this region. People on the west coast of the US are asking questions as are people right through Europe. You only have to go back to August 2001 when large numbers of people in the US didn't even have a consciousness of what the significance of what the Middle East turmoil might mean to them. After September 11, it became pretty clear. The interaction between global events and national policy are very clear in the same way as in the same way as the interactions between unresolved community issues and business priorities. There is also a rising sense in business leadership that business leaders can have a moral dimension to getting involved and having the opportunity to change things. That's for two reasons. Increasingly, employees are saying what are we doing as a company, what are we doing as an organisation, what are the thing that matter to our leadership, these things matter to me, and secondly because business increasingly get drawn into thinking strategically globally. Therefore, what the is nature of the markets in which we may well move? What is the nature of the products we wish to sell? What is the nature of the customers and what is affecting the stability of that market?
SOX FIRST: Compared to Europe, Britain and the United States, corporate social responsibility in Australia is under-developed. How will that change?
HASTINGS: Australia now has businesses which are reaching out globally. BHP Billiton is a global mining company, Macquarie Bank has got significant and growing investments interests in Europe and is looking to expand in North America. Australia now has businesses which are reaching out globally and the more that Australian business seeks to engage on a global stage, the more it will rub shoulders with the sense of energy and drive in Europe and to an extent in North America around corporate social responsibility. And the more your business leaders rub up against others within interacting bodies, around for example the World Economic Forum, the Davos movement, or anyone associated with the UN Global Compact, the more businesses get into those sorts of issues, the more they will say, 'Hang on a minute, these aren't just American or European problems, these are our issues too'. That's probably why the traction is slower but it's coming. That will drive pressure, there is no doubt about that. From what I have been told there are 1.5 million people out of 20 million here who qualify under the poverty radar. That's a lot of people. You've also got indigenous communities that are locked out of the opportunity of the new emerging Australia. These are problems boiling away for the future. Sensible, responsible and strategic businesses will want to address them, not because they want to feel good but because the entire stability of Australian society for the longer term depends on it. The European experience is of unresolved community issues and cauldrons of enormous pressure. The riots last year in France send a signal to business. The signals that sends is that increasingly intelligent, globally aware and media savvy people watch others gaining and growing in the society around them. They see their own poverty and disadvantage and can't tolerate the injustice of it any longer so they burn out and react. That is a risk that every nation faces as migration patterns increase around the world. It's just not acceptable to have these sorts of enclaves. If anything is testament to that, it's South Africa. And in Australia, there is the flow of global pressures on society. I am told that people here are very conscious of water shortages, and temperature change. Questions that might not have been asked five years ago are being asked now. You can't avoid, as Al Gore says, this inconvenient truth. All the doubters on environmental responsibility are watching their arguments fall away.
SOX FIRST: You talk about the increasing interconnectedness of countries and communities. Can you expand on that?
HASTINGS: Whatever the protective nature of immigration policies are, people are moving around the world at ever increasing speed and in large numbers. And all of that means the global community is more interconnected now. But even then, you just have to turn on your television, and it's in your front room. It begins to form opinions and those opinions will drive change.
SOX FIRST: We are also seeing big changes in philanthropy with people like Warren Buffett and Richard Branson and organisations like Google getting involved. What are your thoughts?
HASTINGS: You've got business business leaders handing over substantial amounts of cash and of course they have not gone poor, but instead of just just retaining it for personal gain or private ambition they are saying: 'We want to be part of the solution'. It happens the more the global media makes well-meaning and caring people at the top of business leadership conscious of unresolved dilemmas of the 21st century. With all the capacity and technology that is afforded to us, with all the benefits of globalisation, with all the spread of wealth around the world, yet we have those three critical issues of extreme poverty in some of the world's most marginalised nations, the spread of unresolvable disease, particularly AIDS, and the desperate state of orphans and young children as a result of conflicts and war and family loss. Global leaders are looking at that and saying globalisation was meant to be about the equalisation of all of us, it was meant to be about the spreading of and gaining of wealth and instead we're seeing some of the world's communities getting poorer or more desperate. It's the increasing connectedness and with that connectedness, leaders are asking themselves, quite rightly, what is my responsibility? I have accrued and gained in this process of economic advance, a fortune in the case of Bill Gates and Warren Buffett, wealth has multiplied in the course of the last 20 years more than ever in the face of this planet. The number of billionaires has gone through the ceiling worldwide. But as wealth has accumulated, so has the passion to use that wealth. Of course we can't pretend that all the world's wealthy are generous, they're not. But the moves by some of the world's biggest players are sucking in others. All of a sudden, as the big players go in , the second round comes in behind and then the third. It will spread to smaller businesses.
SOX FIRST: What are the emerging trends with corporate social responsibility?
HASTINGS: In Europe, one of the current trends around CSR thinking is around the duties that come out of public taxation. We are only seeing the beginning of this. Business pays large amounts of corporate tax and employees pay large amounts of individual tax associated with business and employment. You have an old model which says you give it to the government and they spend it. A new way of thinking says: 'Hang on, this is personal property and corporate property. What are you doing with it that matches the ambitions we need to share together.' Let''s not pretend that business and government don't spend a lot of time in each other's company. Each one is seeking favors off the other and the more that people question the validity of where their tax money might be going and how it might be spent, the more people will be looking at the balance of what seems to be the need for large amounts of money to deal with climate change issues and global poverty, and then saying what have we spent on conflict or war and how we could match that resource balance more effectively. It's an interesting movement that has started to happen. Questions are starting to be asked in the business community about responsible taxation and what the implications of that are. We have seen for example business leaders in the UK demanding government action on climate change. Business is taking leadership on things you might have previously said was the business of government. There is a a sense of frustration that government needs to catch up to the curve and become more responsible and also more proactive. The heart of successful business is strategic leadership. Business knows how to anticipate where to invest to make a success of the future. Governments tend to have shorter-term cycles. They are very much focused around what you do over the next four years. Business thinks more long term. And with global institutions like the UN Global Compact, the World Economic Forum, World Council for Sustainable Development, business leaders are coming together and these are issues we want to address in the long term. It's then that you come up with the question of what we are doing in taxation terms.
A very informative, succint and captivating interview. I’d like to meet Lord Hastings.
10 out of 10