This week, a key responsibility of corporations went truly global. Writing in the Observer, Chancellor George Osborne announced his intention to use the UK’s presidency of the G8 to “to drive a serious debate on tax evasion and tax avoidance”.
This can mean only one thing: the concept of paying a ‘fair amount’ of tax – for both individuals and corporations – is now beyond debate. It’s a victory for corporate responsibility on a basic but vital issue.
Or it would have been, if corporate responsibility had had anything to do with it.
In fact, the change was brought about by a series of corporate tax scandals: Starbucks, Google, Amazon and several high-profile individuals were ‘outed’ by the media as paying little or no tax.
It seems obvious now that paying a ‘fair amount’ of tax in the countries in which a company operates is a key component of responsible business – one so basic that, in 2013, it seems astounding that companies thought they could get away with avoiding it.
So why wasn’t this on the corporate responsibility radar before the scandal broke?
The answer touches on an uncomfortable truth about our profession. As much as our annual reports proclaim “sustainability is at the heart of everything we do”, those working at the coalface know that, in most cases, it isn’t really true.
That’s not because we lack creative ideas and robust processes for adding value through sustainability. It’s because, in the rush to add something, we don’t ask the basic questions about the way our companies work.
We find the most effective ways to donate a proportion of the company’s profits, but we don’t challenge the elaborate tax avoidance schemes that mean the company pays hardly any tax in some jurisdictions.
We lobby to embed sustainability criteria into supplier contracts, but we don’t contest the terms of payment that requires small businesses to wait months for their money, and the less-than-reliable payments process that means some of them wait longer.
We launch employee engagement programmes to change behaviour and improve morale, but we don’t raise a fuss to ensure that all employees are paid a living wage – which would likely be the greatest boost to morale there could be.
We develop new ‘green’ product lines, but we don’t have the power to stop selling products that are good for short-term business growth but damaging to society of the environment (see Gareth Kane’s excellent post on why this is the ‘acid test’ for a truly sustainable business).
Now, I’ll be the first to admit that all of the above are thorny issues, and none has a simple answer. But if the basics like these aren’t on your radar, then you’re not affecting core business, and that’s a wasted opportunity.
If there’s one lesson to take from the corporate tax scandals of the past year, it’s that corporate responsibility teams need to be willing to engage with the fundamentals of how we do business – even if that means sticking our noses into areas that have traditionally been out of our remit.
Today, as one of those fundamentals goes mainstream, it’s the perfect time to start.