Environmental and social issues can be just as vital to company success

The nosedive in Lonmin’s share value over the last week is proof that the environmental, social and human rights activities of companies are linked to their financial value.

Companies have traditionally been less willing or able to make a business case for their social obligations – to people, communities and wider society – than they have for their responsibility to the environment.

Moral commitments to the environment can often have tangible cost benefits; urging customers to switch off lights and appliances reduces gas and electricity bills for customers, while asking people to switch off taps or use the same towels for an entire hotel stay conserves water and lowers costs.

By contrast, exercising due diligence, conducting human rights impact assessments, consulting with and adjusting large scale projects to meet the needs of local communities and paying the living wage are all more difficult to sell to a board because the short-term advantages and profit-making potential are less obvious. What is obvious is that such measures can engender a significant cost in the short-term.

The solution - long-term cost benefit analysis - is discouraged by the nature of our financial markets but increasingly companies are beginning to discover that the benefits of long-term responsibility are no less tangible and significant when they arise: costs such as delays and disruptions of operations; problematic relations in local labour markets; insurance and security; reduced output; diverted staff time and, perhaps most significantly in this case, reputational damage.

This week’s events at Lonmin demonstrate that the markets understand this too.  There is an increasing recognition that environmental and social factors can have a material impact on returns and should be a greater priority for companies.  In the aftermath of the financial crisis, few would dispute the need for more forward-thinking and long-term planning from multinationals and for greater cognisance of the wider impact of business. The Gulf of Mexico oil spill, which forced BP to cancel its dividend for the first time since the Second World War and to report its first annual loss in nineteen years, demonstrated that environmental and social issues can be vital to company success.

Yet there remains doubt in the private sector, and particularly among investors, that Government is willing to offer the expertise, support and clarity to business about their social obligations and how to meet them. Companies who are leaders in social responsibility complain that the playing field is tilted against them, and want to see greater rewards from Government for good behaviour, and greater sanctions for rule breakers. Successive governments have failed to do this.

In May this year I tabled an amendment to the Financial Services Bill, which would have sent a clear signal to companies like Lonmin that such behaviour would not be accepted by the London Stock Exchange. In October, colleagues in the Lords will put forward similar amendments that will clarify the purpose of the stock exchange, allowing the new regulator, the Financial Conduct Authority, to take into account an applicant’s respect for human rights and sustainable development in protecting the integrity and respectability of the exchange.

Richard Lambert, former Director-General of the CBI, wrote in an opinion piece for the Financial Times in June 2011: ‘It never occurred to those of us who helped launch the FTSE 100 index 27 years ago that one day it would be providing a cloak of respectability and lots of passive investors for companies that challenge the canons of corporate governance, such as Vedanta, ENRC, Kazakhmys, Fresnillo. Perhaps it is time for those responsible for the index to rethink its purpose.’

The government has been handed an opportunity to correct the market failure that led to the death of 34 miners last week. It is widely accepted that a more sophisticated understanding of investment risk – one which takes longer-term sustainability issues into account – is urgently required.  If this Government is serious about its commitment to responsible capitalism and sustainable development, both companies and their investors must be engaged in the debate and the stock exchange is uniquely positioned to facilitate this process.

Lonmin's Marikana platinum mine. Photograph: Getty Images

Lisa Nandy is the MP for Wigan. She was formerly Shadow Secretary of State for Energy and Climate Change.

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“It was like a religious ceremony”: What happened at Big Ben’s final bong?

Both inside and outside Parliament, people gathered to hear the clock’s final midday chime before undergoing repairs.

“It’s just hacks everywhere,” a photographer sighs, jamming his lens through a gap in Parliament’s railings to try and get a closer look.

New Palace Yard, Parliament’s courtyard directly below Big Ben, is filling with amused-looking journalists, waiting for the MPs who have promised to hold a “silent vigil”, heads bowed, to mark Big Ben’s final chime before four years of silence while the tower’s repaired.

About four of them turn up. Two by accident.

It’s five minutes to twelve. Tourists are gathering outside Westminster Tube, as tourists do best. A bigger crowd fills Parliament Square. More people than expected congregate outside, even if it’s the opposite within the Palace. The world and his phone are gazing up at the sad, resigned clock face.


“It’s quite controversial, isn’t it?” one elderly woman in an anorak asks her friend. They shrug and walk off. “Do you know what is this?” an Italian tourist politely asks the tiny press pack, gesturing to the courtyard. No one replies. It’s a good question.

“This is the last time,” says another tourist, elated, Instagram-poised.

“DING DONG DING DONG,” the old bell begins.

Heads down, phones up.


It finishes the on-the-hour tune for the last time, and then gives its much-anticipated resignation statement:

“BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG. BONG.”

Applause, cheers, and even some tears.


But while the silly-seasoned journalists snigger, the crowd is enthusiastic.

“It’s quite emotional,” says David Lear, a 52-year-old carer from Essex, who came up to London today with his work and waited 45 minutes beneath Big Ben to hear it chime.

He feels “very, very sad” that the bell is falling silent, and finds the MPs’ vigil respectful. “I think lots of people feel quite strongly about it. I don’t know why they’re doing it. During the war it carries on, and then they turn it off for a health and safety reason.”

“I don’t know why they can’t have some speakers half way down it and just play the chime,” he adds. “So many tourists come especially to listen to the chime, they gather round here, getting ready for it to go – and they’re going to switch it off. It’s crazy.”

Indeed, most of the surrounding crowd appears to be made up of tourists. “I think that it was gorgeous, because I’ve never heard him,” smiles Cora, an 18-year-old German tourist. “It was a great experience.”

An Australian couple in their sixties called Jane and Gary are visiting London for a week. “It was like a religious ceremony, everybody went quiet,” laughs Gary. “I hope they don’t forget where they put the keys to start it again in four years’ time.”

“When we first got here, the first thing we did was come to see it,” adds Jane, who is also positive about the MPs who turned up to watch. “I think it’s good they showed a bit of respect. Because they don’t usually show much respect, do they?”

And, as MPs mouthing off about Big Ben are challenged on their contrasting reactions to Grenfell, that is precisely the problem with an otherwise innocent show of sentimentality.

Anoosh Chakelian is senior writer at the New Statesman.