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The Responsibility100 Index: A case for optimism and urgency

The Responsibility100 Index: A case for optimism and urgency


Our latest ranking of the FTSE100 companies based on their social, environmental and ethical credentials has found that every company is doing something to improve their standing. It’s just not happening fast enough


A.J. Liebling, the New Yorker writer, came up with what must surely be the perfect journalist’s boast. He said: “I can write better than anyone who can write faster,” he said, “and I can write faster than anyone who can write better.” When I heard this for the first time this week, I laughed. In fact I was with a bunch of journalists and we all laughed. It’s everything you want to be.

When I was a reporter in Shanghai, I remember a correspondent upstairs saying to me: “I’m not good, but I’m fast.” And then an editor, one that I worked with years later in Washington, dubbed me “second edition Harding” and he said to me that if the copy was late, it better be worth waiting for. Journalism is a creature of time. For those of us who aren’t made of the magic stuff that Liebling was, there’s always been a trade-off between speed and understanding.

This week, Tortoise produced the Responsibility100 Index. And heaven knows, it’s taken time. A bunch of colleagues, but chiefly Alex Inch and Maddy Diment and Jeevan Vasagar, have been working for months – and on the back of a data journalism effort that’s now gone on for years – trying to map the environmental and social impacts of the FTSE100 companies informed by the United Nations Sustainable Development Goals. On the issues of climate change and social justice, it is inevitably a painstaking effort – an effort to interrogate the extent to which Britain’s biggest public companies match what they say with what they do; the talk with the walk.

It’s a kind of journalism that’s the opposite of most reporting: it doesn’t capture an event, a moment in time, but it charts a weave of developments, cumulative action over time.

And what are companies doing to tackle climate change and social inequality? The answer is: A lot, but not enough.

I’m James Harding, editor of Tortoise, and in this week’s Editor’s Voicemail, I want to suggest why I think the R100 Index findings make for an optimistic but urgent judgment on business in Britain.

On the one hand, it’s clear from the R100 that things can change. And quite fast. For example, this year’s R100 showed Autotrader, the online car market chaired by Ed Williams, has risen 42 places up the index, and that’s because it radically improved its disclosure, changed the composition of its board, leaned into the issue of fairness on pay. Unilever, for example, has moved back to the No.1 spot on the index – and that’s after it had slipped to No.3 – but this last year it’s lowered Scope 1 and 2 emissions, it’s improved Scope 3 reporting, it’s improved waste recycling and the gender pay gap.

If you get the chance, take a look at the performance, company by company. Because there’s not one that’s not doing something. When I started out as a business reporter, none of the environmental and social issues that are now rightly front and centre of the minds of British board directors – none of them were on the corporate To Do list. And companies aren’t countries: they don’t have as many competing constituencies as national governments. They can, as the R100 shows, get things done.

But it’s just not fast enough. When we aggregated the emissions and even the claimed climate pathways of the FTSE100 companies, it showed Britain’s biggest businesses – the ones with the largest footprints and the greatest responsibility to lead the way – are on course for 2.8 degrees. Not net zero, not 1.5 degrees, but roughly double where the UN’s Cop meeting says the world needs to get to by 2050; double where those companies themselves say they’re aiming for. And at the same time, CEO pay is up by just over 30 per cent; nearly half the FTSE100 companies have no female executives.

Of course, this also comes at a time when Britain has a rate of growth problem. I talked about that in last week’s Editor’s Voicemail; and, unsurprisingly, Jeremy Hunt’s tax-raising, cost-cutting Budget this week has been met by the criticism that what he’s done is not enough. It’s neither a vision nor a spur to growth. The rest of the world is looking at the UK, increasingly unconvinced that we can raise our game.

And if you’re on a board of a big British company this is, essentially, your EPS problem – your earnings per share problem. You’re worried that you can’t improve the company’s financial performance, and you’re frustrated that you’re sitting in board meetings, bogged down in discussions of governance issues – health and safety and welfare and levelling up – when the business itself is being rapidly overtaken – either by international rivals or, more worryingly, private companies.

But Britain also has, as well as its rate of growth problem, a nature of growth problem. The public has lost much enthusiasm or interest in growth itself, increasingly convinced that corporate success is dangerous for the planet and unfair on people. 

And, if you’re on the board of a big British business, this is what you might think of as your ESG problem. Your responsibility to deal with environmental, social and governance issues. 

The fact that businesses are doing a lot but not enough is the result of the fact that we’re asking companies to do these two sets of things – ESG and EPS – but neither of them clearly nor consistently.

While this continues, there’ll be more of the same. More of “A lot, but not enough”. A gradual calcifying of public hostility to business for failing to deal with the environmental and social challenges of our times; and, at the same time, a cemented critique of Britain’s public companies for being too focused on corporate governance at the expense of corporate performance.

And here’s the urgency. Britain’s biggest businesses are going to keep falling short, if we don’t recognise that there’s a generational reset that’s being asked of the boardroom. In 1992, the Cadbury review articulated a set of principles for board directors. This generational reset is not going to happen by itself. It’ll either happen by government regulation or another such review. 

But, without it, things will continue. And not the way A.J. Liebling would want. Neither quite faster, nor better.