BCSC Response Corporate Responsibility: A Call for Views

BCSC (British Council of Shopping Centres) is the industry body for the retail property sector, representing more than 2,500 property professionals drawn from over 450 organisations. Our membership includes investors, developers, owners, asset managers, retailers and public sector employees. Our members’ properties play a significant and strategic role in the success of town centres, where retail sales still accounted for 42% of total sales in 2011.
The retail and retail property industries together play a strategic role in sustaining communities, with 7.6 million people currently employed in the UK in both sectors. In 2008, around £6 billion was invested in the UK by the retail property industry, creating tens of thousands of new jobs.

BCSC members understand well the benefits of good corporate responsibility and are leaders in engaging with communities on the ground. Through research published at the end of 2012 ‘Shopping Centres: At the heart of the community’1, we found that most centres are engaging with their communities, and almost all found commercial benefits to doing so. This report is supported with a database of best practice examples of shopping centres providing support to social initiatives across the country.
Shopping centres do not just provide space for retail; they are the hubs of communities providing safe, secure and clean environments for people to shop, dine, meet, relax and be entertained.
Increasingly shopping centres also provide significant support to communities by supporting marginalised community groups, raising funds and awareness of local charities, investing time and resource into improving the local landscape, and creating partnerships between local organisations and providing the leadership needed to transform local communities.
This is against a backdrop of increasingly tight public spending budgets and a move towards decentralised government.
Another key driver is the wider issue of town centre degeneration. As we have seen in the last couple of years, many retailers have faced difficulties due to the economic downturn. This has caused high vacancy rates – an average of 14% nationally – and therefore a negative cycle of deprivation. There is recognition that what is good for the local community is good for the shopping centre and other businesses. A vibrant town centre benefits all through increased footfall, giving rise to increased sales, higher employment and therefore higher local spending power. Hammerson has just published this September research that seeks to quantify the contribution of shopping
1 http://www.bcsc.org.uk/media/downloads/2012CommunityEngagement.pdf

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centres to the economy. It finds that Hammerson employs over 30,000 people, of which 87% are employed locally, and 37% of these people were previously unemployed and were seeking jobseekers allowance. It also found there is a clear multiplier effect that benefits the communities in which they operate, for example, as a result of the Bullring shopping centre in Birmingham there has been a further £500m invested in the Birmingham New Street project. It also found that shopping centres create a halo effect for high streets, to the sum of an additional 20% spend to high street stores.

It is also important to be minded that corporate responsibility is now going further than just being seen as an add-on or as a marketing opportunity. The Crown Estate no longer views CR as mitigating their impacts but is about making a positive contribution, and not just for their direct operations but indirect sphere of influence. Their report, ‘Total Contribution’, is a way of demonstrating the value we deliver to the UK beyond the direct net revenue surplus (profit) they make to the Treasury. Similarly to Hammerson, they have found they support 94,000 jobs and make a gross added value contribution to the economy of £5,233m. Their report also presents the value added to the environment, society as well as economic contributions.

This type of integrated reporting is an industry trend that is set to increase in coverage. This links with the European Commission aims to produce a framework for integrated reporting. It is therefore important the BIS framework takes this best practice and direction of travel into account to avoid being behind the curve and to enable a framework that pushes business to go further than currently.
Consultation Questions

1. What more could Government do to encourage a greater number of companies to adopt internationally recognised principles and guidelines in their own corporate responsibility policies? How might Government, in a light touch way, measure this take-up?
Operating in an increasingly global environment, the use of international standards will give consistency in the approach of corporate responsibility. As high level principles, rather than prescriptive standards, it allows new adopters to sign up to something that is not too onerous.

However, it is important companies do not only use these principles; that these are underpinned by a strategy that is specific to their organisation and implements this on the ground.

Using case studies to show the business case for adopting CR strategies can be a powerful tool for promoting uptake. Government can also provide guidance to companies on the variety of international principles available for use.
Take up could be measured by the number of people that choose to get accredited or audited, or the number of companies that publically disclose. This will not give the full picture of take up but will allow Government to easily monitor the take up of the use of formal processes.

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2. Should Government encourage more sector-specific initiatives and, if so, how might it do that? Do different sectors need different levels of Government support and involvement?

BCSC is encouraged to see Government recognition of the differences in how companies operate in different sectors, and the different issues facing different sectors. For example, a retailer’s efforts may be focussed on labour rights, while a developer will focus on creating a development that leaves a positive long term impact.
High level initiatives should be harmonised, as with international standards, but need to be underpinned by sector specific guidance the more granular they become, i.e. sector specific guidance for projects rather than for setting out mission statements.
BCSC identified in its research ‘Shopping Centres: At the heart of the Community’ the difficulty in trying to set out hard and fast rules for engaging communities at the ground level. Flexibility and innovation should not be stifled by the aim of introducing consistency.

3. Are comparable, voluntary metrics on social and environmental aspects desirable? What might be the costs and benefits of this? What role should Government play in determining what these metrics might be and how might we encourage more businesses to adopt them?
The comparability of metrics is desirable. As pointed out in the consultation document, it allows various stakeholders to compare performance with other companies. However, as alluded to above, different business sectors will have different priorities and different ways of collecting and managing data on the performance against these. This presents a trade-off between flexibility and comparability.
Creating a set of metrics should be part of sector specific guidance to take account of the differences in what organisations’ priorities are.
A good example of this is the Defra GHG Reporting Regulations. This provides a flexible approach to metrics, recognising companies may choose to use different metrics depending on their sector (for example an intensity ratio per employee or floor space), there are a number of sector specific guidance that then set out the best practice in that sector and provides a consistent approach to measurement.
Government could facilitate the development of sector specific guidance with industry groups. This has advantages of being peer reviewed by industry experts, it would not duplicate work already undertaken by organisations to develop their own metrics, it would receive endorsement by these industry experts, and it would allow better dissemination of the guidance within the sector.

4. How might businesses demonstrate that the information they voluntarily capture and present is externally verifiable? What might be the costs and benefits of this?
There are three tiers of being able to demonstrate verifiable information:

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I. Third party certification. This will be the most cost option but has benefits of independent information that can be accredited.
II. Certification. This will give organisations the tools to carry out verification of their own operations via an in-house team. This will require training of personnel within an organisation.
III. Standards. This will give a freely available set of standards that should be adhered to for those companies wishing to use them. This would be set by an independent group (possibly Government).
Each of these options require different levels of information to be provided to support the claims against the metrics, with third party requiring the least and standards the most (as would need to provide more information to support claims).
5. How might companies best manage their supply chains more effectively? How might Government help on this?
There are a number of options for managing supply chain risks. The first step for an organisation is to understand what these risks are. This can be done using hot spot risk analysis of the supply chain.

Once an organisation understands the risks and opportunities, they should work with their suppliers to mitigate these risks. This should be done using a partnership approach as collaboration is a key aspect of being a responsible business.
The use of standards for suppliers sets out minimum requirements in the supply chain for a particular organisation. Going further industry standards can be used to affect industry-wide purchasing decisions. For example, using Producer Responsibility Agreements.
There are numerous guidance already available for managing supply chain risks, Government should support the wider dissemination of these as well as showing leadership through its own Green Procurement Strategy.

6. Should companies be obliged to be more responsible for actions within their supply chain? If yes, how could this be achieved without legislation? What would the costs and benefits be?
You cannot oblige something that is not legally underpinned but there are a number of options for voluntary standards, that once signed up to are binding, such as:
 Codes of Practice
 Voluntary Agreements
 Industry benchmarks
WRAP has a number of good examples of industry-wide voluntary agreements that have been very successful. However, it is difficult to oblige responsibility for actions that a company does not have
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direct control over; the partnership approach should be advocated as the best way to mitigate supply chain risks.
7. How Government best support small business to adopt responsible business practices? What particular challenges does Government face in trying to achieve this? How might it overcome such challenges?
Small businesses will not have the resources or nous that large corporations have therefore making action on corporate responsibility harder.
Traditional thinking on CR suggested it could be applied as easily to a small organisation as a large organisation. Small organisations were just not seen as relevant to the CR agenda. This has changed and SMEs are now seen as having unique contributions.
SMEs differ from large organisations in a number of ways: Different management structures; a narrower strategic vision; weaker capacity to influence their supply chains; and they are less homogenous.
SMEs are less likely to have CR strategies in place because of limited resources; lack of real business benefits; there are more immediate priorities; lack of expertise; SMEs tend to be on the receiving end of CR strategies as downstream players in the supply chain.
However, there are many benefits to be realised in SMEs adopting CR strategies. They are a common part of supply chain management requirements; a means to attract and retain good quality personnel; reputation and relationships premium; mitigate against future regulations; create new platforms for competitiveness; and finally, many SMEs will already be doing something even if they don’t know it.
The following will help to support SMEs:
• Using understandable terminology
• Targeting those most likely to have an impact or those most likely to be receptive
• Use trade associations or industry groups to disseminate the benefits
• Recognition that SMEs are not homogenous
• Providing tools, such as a green checklist may enable small businesses to tackle the low hanging fruit – to start off with some simple, easy to implement and useful options for responsible behaviour
•  Making information freely available

8. How might Government best support SMEs publicise their responsible business behaviour?
SMEs have much lower resource, or even no resource to out towards CSR. Those that have CSR embedded into their business practices should be encouraged to use this as a selling point.

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Government can play a role in helping these businesses through their own procurement practices; providing SMEs with the tools to report, for example freely available templates that are based on the Government’s procurement strategy.

9. What role does larger business have in supporting smaller businesses? Is there an imperative for larger businesses to support smaller businesses? How might Government enable this?

Larger businesses have a significant role to play in supporting SMEs.
The 10,000 Small Businesses scheme, headed by Goldman Sachs, aims to drive long term economic growth and job creation in the UK. Large businesses work with SMEs in their supply chain to provide a practical business and management education, and high quality support.

In the retail property sector, many companies work with SMEs through incubator schemes. This is where a shopping centre manager will work with local entrepreneurs to give them the skills to run their own shops, combined with reduced rates, in order to help them to grow their business and expand. An example, The Marlands Shopping Centre in Southampton runs their Re:So initiative. This centre works with the local university to provide the fashion students with the opportunity to learn how to run a retail shop. This has been very successful and has seen a number of students go on to open their open shops.
A collaborative approach is key and larger corporations should be encouraged to share best practice and work with SMEs.
10. What are the main barriers to businesses contributing more to social outcomes?
BCSC research shows the extent to which shopping centres are engaged in contributing to their local communities. This has moved past the traditional route of allowing charities to use space in shopping centres to shopping centre managers leading on projects that enhance whole town centres.

The retail property sector is well attuned to engaging with communities from a planning perspective – now even more so – as mentioned above, stepping outside of the parameters of development to retail-led regeneration.
Barriers still remain and for the retail property sector these barriers can be grouped together as:
• Lack of funds
• Not knowing where to start, confused with the many options
• Distrust
• Resources – time and staff – to dedicate to full projects
• Priorities
There are also barriers for projects that are started up and may fail at the first hurdle:

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• Not engaging the right groups or enough
• Not promoting the benefits effectively
• Choosing a project that does not resonate with local groups; using a national generic campaign
• Using blanket communication, not tailored to the audience
• A lack of professionalism by some charitable/community groups

11. What more could Government do to make it easier for businesses to support social initiatives? How might Government showcase innovative approaches that other might consider adopting?
Providing business with the tools to engage – BCSC worked with BITC to develop the BITC/BCSC Retail Development Investment Framework. This Framework was developed with the aim of fostering a better understanding of the benefits investment can have on a place, its economy and its people; to make it easier to explain, discuss and engage stakeholders about an investment.
Promoting the benefits of supporting business initiatives – BCSC supports the excellent work of members in supporting small and young entrepreneurs to open their own shops. We do this by showcasing best practice via our community engagement database; our Purple Apple Awards scheme that awards community engagement; and by providing members with the tools to drive social initiatives with a crowdfunding platform.

12. How might the relationship between business and society be strengthened? How might Government support this?
It needs to be meaningful to be successful – business and society is often looked at as two separate things but they are in fact different sides of the same coin. As stated in the consultation document business provides jobs, growth, skills and good and services to society; people are also employed by these businesses; and all co-exist within the built environment.
Businesses need to recognise this as a first step; that they are part of society as well. Shopping centres and retail property provide an excellent example of strong business relationships with society. In particular, the new Marks and Spencer store in Cheshire Oaks provides an excellent example of engaging with the community right the way through the development process.
To go further there needs to be genuine partnership working. Collaborative approaches are invariably better engaged on, have better buy-in from interested parties and respond to genuine needs. Working in partnership also helps business to know their stakeholders better; collaboration with local community groups will give the business insight into the needs and priorities of those in their area of operation.
13. Is there any comment you wish to make on UK business and human rights generally? No
14. Should Corporate Responsibility be recognised as a profession?

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While it is tempting to state that CR should be recognised as a profession, when you look at the direction of travel for the sector, the aim is to integrate sustainable and ethical thinking into day-to-day business practice. Mark Gough, Head of Sustainability at The Crown Estate, eloquently states “sustainability cannot be learnt or a follow a single approach, it has to be innovative and react…a true sign of our success would be that we lose our present titles and stop using the word ‘sustainability/CR’”.
Essentially we should not be seeking to create a separate professional body, but we should be seeking to empower all employees in a company to be making sustainable and ethical choices. This needs for sustainability to be integrated into mainstream decision making, with CR/sustainability ‘professionals’ providing a guiding role for the business as a whole.

15. What more can Government, business and other do to improve information available to consumers who want to take ethical considerations in to account? Does this differ between sectors?

Product labelling has traditionally been seen as a way to communicate to the public but there have been many issues surrounding the information: Not enough information supplied; information is too complex; it does not give whole picture; is it verified?
Other ways of improving consumer knowledge of the impacts of the products they buy have also run into difficulties, for example, green claims can often be viewed as ‘green wash’. Companies can actively market their CR credentials to consumers, but they need to ensure their claims are not viewed as ‘green wash’.

Annual reports and information on a company website provides a medium to discuss progress on CR goals in a detailed way. However, the visibility of these is often lacking and may be too detailed for the consumer (as opposed to other stakeholders such as investors).
The type and detail of information provided to the consumer will differ between sectors and even within sectors depending on the product, the audience, the size of the company and the type of operations.