A breath of fresh air at the Co-op

The 'minority sport' of social audits is gaining ground, says Roger Trapp

THE CO-OPERATIVE Bank will this week become the latest and most mainstream organisation to enter the social auditing arena when it publishes what it calls a "partnership report" alongside its annual results.

As with other efforts in this direction, notably by the Body Shop, Ben & Jerry's Ice Cream and Traidcraft, the ethical trading company, the document, to be published on Wednesday, presents a "warts and all" look at the bank's activities. But Co-op managers believe they are going further by seeking to set new standards in bringing together the three aspects of social responsibility, ecological sustainability and delivering value.

But while the Co-op is laying down a challenge to others, it is worth pointing out that this sort of activity is still seen as something of a "minority sport". The green issue consultancy, Sustainability, says that one third of Britain's top 350 companies do not publish data on their environmental performance.

And a survey of the forewords to company environmental reports written by chief executives shows that even those organisations that do disclose such information "lack a clear understanding of sustainable development and show virtually no comprehension of the 'triple bottom line' agenda of economic, environmental and social value added (or destroyed)".

The report, "The CEO Agenda", produced by Sustainability for the United Nations Environment Programme in association with the Prince of Wales Business Leaders Forum and the Association of Chartered Certified Accountants (Acca), is intended to send a signal to chief executives that their words are noticed and to suggest ways of reporting effectively.

It examines 14 actual forewords, pointing out where companies have failed to mention social or ethical issues with which they have been involved over the year. It also provides 10 pointers for future action, including transparency, corporate governance and benchmarking.

But the report is not all brickbats. For example, it quotes from the report by Interface, a US carpet maker, in which Ray Anderson, the chairman, says: "Three years ago the word sustainability meant little or nothing to me," and goes on to urge readers to look at the rest of the report to discover how and what Interface is doing to help build "a civilisation that flies, rather than crashes and burns".

It also notes how John Browne, the chief executive of BP, stresses, that the company measures success "not just by financial results but by the way in which we discharge our responsibilities to our employees and society generally", and describes the goals Mr Browne has set at the same time as speaking out on climate change and boosting the company's investment in its solar business.

It also says that eight companies, including ABB, Body Shop, Monsanto, SAS and Xerox, produced outstanding forewords.

Meanwhile, the Co-op Bank is seeing its partnership approach as a natural progression from such moves as the development of an ethical policy and an ecological mission statement introduced earlier this decade.

Pointing out the impossibility of satisfying a range of groups at once, the bank's managers have devised the approach based on having the bank at the centre of seven partners - shareholders (in this case just one, the Co-operative Wholesale Society); customers; staff and their families; suppliers; local communities; national and international society; and past and future generations of "co-operators". The idea is to create a balance between these interests.

Nobody pretends it is easy. Even daring to suggest that you are different from competitors can cause problems, as Body Shop for one has found. But it is becoming increasingly apparent that it cannot be ignored.

As Roger Adams, head of technical and research at Acca, points out, the report is in effect asking whether there is intelligent life at the top of our multinational companies. "Are CEOs - the figureheads and public faces of the corporate sector - aware of the new realities and new potentials of the triple bottom line?"

All the evidence suggests that, if they are not already aware of such things, they soon will be. It is now widely recognised that such issues are moving from the fringes of corporate thinking. After all, success in the modern global economy will depend not just on the efficient use of old-fashioned economic capital but also on the ability to utilise other forms of capital, particularly the human variety but also that relating to the natural world and society - what the Centre for Tomorrow's Company has termed the "licence to operate".

Coming at this time, the move by the Co-operative Bank in stepping up the ante can only reinforce such trends.