Companies should engage in socially responsible projects only if doing so ensures that they will make more money, the former head of one of Europe’s leading environmental charities says today.
In a podcast for The Times, Robert Barrington, formerly chief executive of Earthwatch Europe and now director of governance and sustainable investment at the fund manager F&C Management, said that the “bottom line” for companies thinking of ethical projects should be: “Will corporate responsibility make us money?”
Dr Barrington, who describes himself as “an erstwhile environmentalist now in the City”, said: “It is not about ethics or a company’s duty to act responsibly — except insofar as that may help to make money. That may sound a bit cold-hearted, but I believe it is up to governments to legislate if they feel that the market is acting in a way that is against the interests of society and [it is] not up to companies or their investors to try to create a perfect world.
“In fact, when we are talking about corporate responsibility, I think it is important to remember that one of the most responsible things a company can do, and its investors can ask of it, is to be profitable. Those profits help to fund the savings and pensions of millions of people in this country.”
The Oxford graduate, who says that he is an environmentalist but does not “come to work every day wearing a baggy jumper and sandals and hugging every tree I pass”, said that developing nations where bribery in business is the norm would harm British companies and could lead to a “temporary lowering” of ethical standards. He said: “If you are an Indian company and prone to bribery to secure contracts, you are less likely to be caught and the markets will punish you less than, say, an American company, because there are strict anti-bribery laws in the US and companies that are caught can be heavily fined.
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“Every pound or dollar paid in a fine is a pound less for the shareholders, to say nothing of being debarred from future contracts. So Western companies trying to act responsibly because it is good for their shareholders do have a significant challenge when competing against emerging markets companies playing by different rules.”
Dr Barrington said that he disagreed with the notion that corporate responsibility was merely an attempt to “buy good PR, or philanthropy under another name . . . PR and philanthropy have their place in a company’s activities, but corporate responsibility is more than that. I think the problem is that corporate responsibility is often done badly — not properly mainstreamed within a business and so companies do not properly manage the risks or benefit from the opportunities.”
He added that companies should apply normal business approaches to corporate responsibility and not treat it “as a philanthropic add-on that may give some PR value”.
Robert Barrington
Robert Barrington is perhaps an unlikely environmentalist. The 41-year-old read history at Oriel College, Oxford, before pursuing a PhD in renaissance history at the European University Institute in Florence. Once a graduate trainee at HTV, the ITV contractor for Wales and the West, he admits that it took a green-leaning girlfriend to turn him on to environmental issues.
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He served as chief executive of the European arm of Earthwatch, an international charity that promotes scientific research into sustainable development, before joining F&C Management, one of Europe’s largest fund managers, in 2002, where he is director of governance and sustainable investment. Outside the office, he is an honorary visiting fellow of Green College, Oxford, a member of the board of the Environment Council, and the advisory committee of the UK Export Credits Guarantee Department.
He lives on the edge of the South Downs with his wife Coralie and ten-month-old daughter and lists his interests as cricket, opera singing and walking.