Speaking of changing expectations…

Energy companies are getting it in the neck here in the UK for their recent price rises of 10%. It’s an interesting one this and really shows that when it comes to certain things, it’s not just a matter of ‘getting the prices right’. I was at a seminar with visiting Hallsworth Professor Mike Muller on water regulation last week and one of the central contentions we were discussing was around attaching prices to things people have a ‘right’ to. At some point down the line this lands you in trouble. Thus energy companies are caught in the conflict between a regulatory system set up in the 1990s that mediates value (what some thing is worth to people or a society) through a single metric: price, and a social expectation that the poor should not die of cold simply because they are poor. We’ve got to be able to find a better way of managing this tension than shifting the burden of decision making entirely onto the private sector.

It is delicious irony that a former oil executive is leading the charge arguing the companies must be “conscious of their social obligations” and “behave with generosity and not merely to maximise opportunity”. Read the full interview over at The Daily Mail, see also their ‘Morals not Markets’ leader column to get a clear sense of the changing expectations on companies in the UK.  The Daily Mail making a forceful case for socially responsible companies? You saw it here first.

To get a smidge academic for a moment, this really reminds me of Karl Polanyi’s ‘The Great Transformation’ which (spoiler alert) argues that a key limit of liberalised capitalism is people’s appetite for the suffering of their fellow citizens. People don’t want to see their compatriots starve. Thus there is a ‘double movement’ where the thrust of liberalised capitalism is pushed back by the moral outrages of a society that believes all have the right to live. We could say this is what’s happening here. Not that I expected The Daily Mail to be at the forefront of the Polanyian ‘push back’, but I am happy to be surprised.

The Engineering and Mining Journal is upping its CSR coverage

It’s great to see the Engineering and Mining Journal is boosting its coverage of CSR issues. There’s some interesting articles on the current state of affairs, things going badly for Vedanta and what the rise of Chinese mining companies means for CSR and sustainability. I had a chat with the news editor spearheading this, Joe Kirscke, this week and it sounds like they have some interesting stuff in the pipeline.

Their editorial announcing this boosted coverage argued that many mining companies are, after their recent efforts, ‘complacent’ in their attitude to CSR and community relations issues. This is quite an interesting industry perspective – many mining companies rightly argue that they are doing much better than they used to, having hired entire teams of people and so on. I would definitely agree that, on a relative scale, mining company CSR programmes, in general, are better than they used to be. The question I’m not sure about, and it seems the E&MJ isn’t either, is, on an absolute scale, are they good enough? In order to answer this question you need a clear understanding of what ‘good enough’ looks like. Which is pretty tricky as I think this is currently a rapidly moving target. ‘Good enough’ for Starbucks a few years ago included fair trade beans and advanced tax avoidance measures. ‘Good enough’ at the beginning of this year looked rather different and Starbucks were caught looking completely out of sync with public opinion.

The second thing worth noting is the threat seen from increased social media. Many mining companies, having been vilified as an industry since the 1980s, basically do their best to keep their head down. The E&MJ coverage effectively makes the argument that this is no longer an option. Unless mining companies are proactive in telling their CSR story and building community support, they could find their reputation in tatters before they know what’s hit them. An interesting point and another indicator of the changing pressures on mining companies to improve their CSR programmes. The question I have, as always (given that it is the main question of my current research), is that there may well be increased pressure, and mining companies may well be taking action – but what are the consequences of this on the ground?

I look forwards to seeing how E&MJ takes this debate forwards.