Building our society

Corporate social responsibility means “giving back” to the community. But will it be another casualty of the cuts, or have a new role in the Big Society? Elaine Knutt reports. Illustration by Dermot Flynn

“There are 1.7 million children in the UK from workless households, which is just one of many shocking statistics when you start to look at child poverty,” says Paul Drechsler, chief executive of Wates. “And nearly 80% of young offenders re-offend within a year – that’s insane.” Hold on. This is the chief executive of a major UK construction business talking about “corporate social responsibility”. But isn’t it Wates’ corporate social responsibility to be the best contractor it can be, leaving probation officers and the teaching profession to be the best they can be too?

But to Wates, and to other contractors stepping up their community-related CSR agenda, being the best contractor they can be does mean taking on responsibility for reducing re-offending, improving children’s literacy, or supporting not-for-profit businesses in the supply chain.

Drechsler puts the issue squarely in a moral framework, invoking a corporate version of Rousseau’s “social contract”. “Whether you’re a construction company or a media company, you have a licence to operate from society and a duty to society,” he says. “If you’re a serious organisation, that duty goes beyond employing people and making things.

No one in construction has the right just to construct, when construction is one of the best ways to make a difference.”

By and large, the construction world does understand its ability to “make a difference”. Construction companies’ business puts them at the heart of communities, and most see the relationship as one worth investing in.

A quick scan through the press releases in CM’s email inbox shows how contractors and consultants, from mega-corporates to SMEs, are paving church driveways, going into schools to add a construction perspective to the curriculum, or taking on trainees who have had a difficult start in life through local labour initiatives (see box overleaf).

But the level of activity Wates is pursuing goes beyond the ad hoc donation-in-kind to the local youth club, or contractually-driven requirements to boost local employment opportunities. From the business point of view, Drechsler talks of putting CSR at the heart of Wates’ corporate strategy, decision-making and target-setting, making it as much a part of the business as financial and, increasingly, environmental reporting. And he talks of extending the idea of what a construction project manager does beyond the site and into the community, which might mean  activities such as paying for books to be posted to all local children.

But is the recent rise in levels of community engagement just a reflection of the fact that public sector contracts recently accounted for 40% of workload, and is therefore likely to wane along with BSF, Decent Homes and HCA funding?

Or will we see an opposing trend at work – driving us towards the so-called Big Society? If, as we’re told by David Cameron and George Osborne, the state will shrink by 25% over the lifetime of this parliament, then the corporate sector may  be expected to take up some of the roles that government agencies once filled. 

Got the T-shirt

And while we’re waiting for a clearer picture to emerge, CSR raises other questions. At the Construction Industry Council, chief executive Graham Watts draws a distinction between companies that engage in CSR for its own sake, and those that just wear the T-shirt – sometimes literally. “There’s a thin line between genuine social responsibility and activities that you suspect were funded out of the marketing budget,” says Watts. “There’s more to CSR than putting people in T-shirts and sponsoring the local half-marathon.” As he says, there’s nothing wrong with half-marathons – except if the PR tail is wagging the CSR dog.

Business in the Community, the CSR charity that counts Wates, Bam, Kier, Morgan Sindall and Morrison among its construction members, claims to represent companies that employ a fifth of the UK workforce. BITC publishes the annual CR Index, a benchmarking tool to evaluate companies’ CSR activity in four areas: community, environment, marketplace and people. According to Kirsty McHugh, BITC director of social investment, the discipline of reporting sorts out the genuine CSR wheat from the PR chaff, by giving companies “no hiding places”.

In general, BITC sees no conflict between the philanthropic component of CSR and the business drivers - just a virtuous circle. Most companies involved testify to the links between CSR and branding; community engagement and contract-winning. CSR activities are also seen as a good way to give younger managers experience, and to make staff feel positive about their companies.

Caroline Cook, head of CSR at Bam, is clear that CSR is for both public and internal consumption, and that the benefits flow in both directions. “We want clients to make the link between Bam and CSR. Clients talk to one another and pick up the message, so the work we’re doing is making friends and influencing people,” she says. Meanwhile, CSR engages and motivates staff. “Our employees like to be involved in the local community, it gives people a sense of pride.”

BITC encourages companies that may already be delivering community programmes to structure and quantify what they do: it’s the old adage that you can only manage what you can measure. Bam, for instance, is part of a BITC group that is working out how to measure the value leveraged into communities – via site programmes and staff volunteering – and express it in financial terms. “All of our sites do a huge amount of work in the community. We’ve started to put together case studies to share knowledge – and they’ll also be useful in bids,” says Cook.

Norwich-based LSI Architects, which has recently won a BITC Big Tick Award, also believes in quantifying the impact of its not-for-profit activities on the business, employees and the community. “We do it for philanthropy, but also the business benefit, and that means we formalise it, organise and give it a strategy,” says finance partner Ben Good. “A team sits down every quarter to discuss what programmes they want to do, and we hear reports on progress every Monday morning. When we have surveys on staff outlook, CSR comes high on people’s response list.”

BITC is also currently promoting a more widely-understood and emotive measure of businesses’ social impact – the concept of a company’s “community footprint”. “It’s understanding the range of impacts you have beyond the site, in employment and training, in employee volunteering, or gifting in kind,” says McHugh. A “toolkit” is being developed with a range of companies, including Laing O’Rourke and Costain, and is due in spring 2011.

But by then, McHugh acknowledges that there might be less corporate community engagement than there is today. “If public sector clients are bearing down on costs, construction companies might have a series of unpalatable choices around what they don’t do. Do contractors drop the environmental standards, the quality of the materials, or the community programmes?”

On the other hand, she also offers a suggestion as to how construction companies could continue with the CSR agenda in the age of austerity – and maybe even extend its impact.

“I think there’s a real potential for construction companies working in the same area to deliver programmes together, to join up their community-based activities. For instance, all the contractors on a local authority framework could collaborate – there would be some economies of scale.” Likewise, there could be scope for local collaboration between contractors and other businesses.

Making it pay

Taking an area-wide approach to community programmes might coincide with another trend: the new coalition’s localist model of a more influential ‘Big Society’. No one quite knows what this will look like, but there could be potential impacts on construction companies. The empowerment of new “localist” organisations – from parent-run free schools and proposed housing trusts to local groups taking over the running of an under-used sports facility – could result in some procurement decisions being taken at a more local level than previously. In this scenario, it’s the contractors that are more engaged and more visible in the local community that will benefit.

At the same time, the “shrinking of the state” could mean a larger arena for the private and not-for-profit sector. “There will be roles for companies and not-for-profit organisations that have the expertise and knowledge to do things that government might otherwise have done,” says the CIC’s Graham Watts, mentioning training and the dissemination of best practice on achieving zero carbon. But as well as opportunities, there could be more responsibilities. “We could see local groups looking to local companies more than they do now, rather than looking for [public sector] grants.”

The New Economics Foundation think-tank has recently published a paper on the Big Society. As far as construction is concerned, researcher Jody Aked describes an intensification of the kind of community programmes that already exist in regeneration and Decent Homes contracts. But she also highlights the idea of “co-production” – projects run as community co-operatives, giving local people both construction skills and a financial stake in the built asset. “It’s moving from an expert role to recognising that everyone can have expertise if they work in equal partnership,” she says.

To realise such contracts, and other ideas implicit in the Big Society, the challenge is to find workable financing models. There are plans for Big Society ISAs talk of “social impact bonds” that will allow individuals to invest their pension funds in local projects. “The government’s rhetoric is around the private markets getting us out of this mess,” says Aked. “If so, maybe it can deliver social value as well as financial returns.”

And this touches on another reason why CSR is likely to gather pace. As McHugh points out: “There’s now more scrutiny from the public of how companies do business, and increasing risks to a company’s brand reputation. At the moment, the spotlight is on the finance sector and BP, but where will it fall next?”

Whether or not they buy into Drechsler’s ”social contract”, construction companies will be aware that of the public’s expectation that companies deliver on value in every sense - financial, environmental and social. As Drechser says: “Trust in business leaders is at its lowest level for decades. We need to earn that trust from society, and that means the communities we operate in.” cm

Five ways to... make a difference

Barnardo’s boys and girls

Maintenance and FM contractor Integral has committed to taking on 12 young people identified by Barnardo’s on 10-week work trials. If the relationship works out, the contractor will offer apprenticeships,  either for site roles or in administration. “These young people haven’t had it easy,” notes HSE and CSR director Don Urquhart. “So the Barnardo’s support team will carry on working with them while they’re at Integral, talking to them every day.” He hopes to eventually extend the project to 30 places a year.

Literary plans for Luton

In 1996, the Dolly Parton Imagination library began posting age-appropriate books to children in Tennessee. It’s been taken up across the US and Canada, and now Wates has brought the idea to Luton. “Winning Luton BSF was the trigger for looking at the community’s needs, and there was an issue with literacy levels,” says sustainability manager Rachel Wooliscroft. “We saw an opportunity to address the problem with pre-school children and foster a love of reading where families might not be able to afford it.”

Waste wood for good

Bam Construct sites are supporting the National Community Wood Recycling Project, a nationwide network of not-for-profit wood recycling social enterprises. Bam sites donate waste timber, which is either converted into woodchip as the basis of MDF, or used as fuel or to generate electricity in wood-chip boilers and CHP units. “The project combines environmental and social benefits. It supports our local procurement agenda and also helps in local regeneration projects,” says Caroline Cook, head of CSR at Bam.

Pro-bono can be profitable

Norwich-based architect LSI Architects is an active member of Norfolk Pro-Help, a network of professional firms that offer free advice and support to community groups and voluntary organisations. “It creates opportunities for young professionals with no project management experience or confidence, and it often results in fee-paying work,” says finance partner Ben Good. “We’re not cash-rich, so we can do more by giving time and expertise.” Nationally, BITC-run ProHelp has 800 member firms.

Widening its world view Project manager Stace works on a wide programme of professional, charitable and community projects, encouraging staff  to take part in corporate initiatives and to support their own causes. It is registered with the RICS to provide pro bono advice for the Property Help charity, and in 2009 Stace provided project management and cost advice for a school in Sierra Leone designed by Foster & Partners for Article 25.  Each year it selects new projects and charities nominated by staff.