Britain shows America the ethical way

American companies see the move towards corporate social responsibility primarily as a way to improve their brand image, in contrast to companies in the UK, for whom CSR is vital to long-term growth.

American companies see the move towards corporate social responsibility primarily as a way to improve their brand image, in contrast to companies in the UK, for whom CSR is vital to long-term growth.

In a survey by British-American Business, a trade body made up of more than 300 transatlantic companies, US firms agreed that CSR was essential for growth, but also listed it as a way to help increase sales.

Last year's devastating accounting scandals have been a big wake-up call for many US companies. However, the survey found that 23 per cent of American respondents – compared to 19 per cent of those in the UK – hadn't taken any steps to "ensure their integrity and preparedness for potential exposures" to financial scandals.

But UK investors with holdings abroad are starting to apply their stricter rules on corporate governance and social and environmental responsibility to their more far-flung investments.

ExxonMobil, the oil company that stands alone in denying the existence of environmental issues like global warming, will get encourage-ment to change its ways.

A group of British leaders in corporate governance, including the fund manager Hermes and the Universities Superannuation Scheme (USS), is understood to be meeting with the oil company to persuade it to take cli-mate change more seriously. Exxon is also being encouraged not to combine the roles of chief executive and chairman, a practice that is frowned upon in the UK.

USS has also written to express the same concerns to 34 of its US investments that have a joint chief executive and chairman.

Despite their concentration on brand image, the US companies did in some ways take the issue of CSR more seriously than their British counterparts. The survey found the Americans were tougher on corporate miscreants: 40 per cent thought that guilty parties in financial scandals should be prosecuted to prevent future criminal activities, compared to just 25 per cent of British respondents.

The UK seems somewhat blasé in assuming it will not suffer a scandal on the scale of Enron. Fifty-three per cent of respondents thought it couldn't happen here. The Americans are more sceptical: only 40 per cent doubted that Britain would ever have its own Enron.