Conscious capitalism: Now creed is good

When a mob of anarchist protesters descended on central London on May Day, their first target for a spot of trashing was, of course, a McDonald's burger bar.

With more than 26,000 restaurants in 119 countries, the company has long been seen as the very embodiment of globalisation and the trappings that brings.

Yet the hamburger chain is no longer alone in being the butt of protests against big business.

Recently in the UK, both Barclays and BMW have suffered body blows of bad publicity for championing profits above all else.

McDonald's is despised by many environmantalists

It's always been tough at the top for business's big cheeses, but now it's even tougher.

Which is why many are trumpeting the virtues of a more ethical approach, known as conscious capitalism.

The phrase is one of a number of largely interchangeable buzzwords including corporate citizenship, corporate social responsibility and stakeholder models.

And the jargon doesn't stop there - like any embryonic area of business, a lexicon of obscure terms has sprung up in its wake.

Conscious capitalism stands for a more moral approach to what is often seen as the dirty business of business.

Conscious capitalism

The term "conscious capitalism" was coined by Muhammad Yunus, a Bangladeshi who set up the Grameen "village" bank to help the rural poor

Where once a company would bow only to the demands of its shareholders and customers, under the new order it must take on board its impact on everyone with a direct or indirect interest.

Collectively these parties are known as stakeholders. Along with the shareholders and customers they number a firm's employees, business partners (suppliers, agents, etc.) and the communities in which it operates.

In accordance with the new doctrine, a company no longer puts profits first, but works to a "triple bottom line", considering the effects of what it does on society and the environment as well.

Roberto Goizueta of Coke said "A healthy company cannot operate in a sick environment"

In Britain, the mould for conscious capitalism was cast in the 1980s and 90s by innovative companies such as the Body Shop and the Co-operative Bank. The difference today is that multi-billion pound transnational companies like Monsanto, Reebok and Coca Cola are signing up to it too.

The point, says Marjorie Thompson, director of Saatchi and Saatchi's Cause Connection team, is that bearing a conscience can actually boost profits.

"Showing that you do good works is good for a company's image. It differentiates the brand or service you offer by making it stand out and it increases the loyalty of existing customers."

Robert Beckett, of the Institute of Social and Ethical Accountability, likens the change in corporate culture to that brought by quality standards in the 1970s and 80s. The standards initiative set a benchmark for companies' internal procedures.

"ISO (International Standards Organisation) gave the lie to the theory that investment in this sort of thing would drain profits."

Shell has shown a caring side after problems in the 1990s

Indeed some of Britain's biggest companies have taken up the cause of conscious capitalism. They include Shell, BT, Camelot and mining company Rio Tinto. A handful even issue "social reports" alongside their annual report and accounts.

Mr Beckett, whose organisation represents consultants in the area, admits the movement is in its infancy - he estimates about 20 firms will issue social reports this year.

But Friends of the Earth is sceptical. Policy and Campaigns director Tony Juniper says many firms are only making cosmetic changes to tap into society's concerns.

"It's all very well for oil companies to do this sort of thing. But most of them are still spending money on looking for new oil fields rather than ploughing it into renewable energy."

He cites BP Amoco and Ford as two that seem to be making a more genuine effort. Both have withdrawn from the Global Climate Coalition - the lobbying group campaigning against the introduction of measures to control global warming - and they are investing in solar power and fuel cells respectively.

Yet maybe the message is not getting through to everyone. After all which company in the UK has it's own dedicated children's charity, contributes to other charities, operates dozens of community programmes, sponsors the Tidy Britain Group and produces school resource packs based on the National Curriculum?

The answer is McDonald's.

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