For ease of navigation, the discussion is separated into the following parts:

1/ Introductions, Victoria Hale outlines the lack of drugs for developing world diseases and the work of the Institute for OneWorld Health. Click here
2/ Richard Reed describes Innocent's corporate ethos and the problems of maintaining ethical standards in a fast-growing company. Click here
3/ Malini Mehra explains the work of the Center for Social Markets and India's long tradition of corporate responsibility. Click here
4/ James Smith argues that corporate social responsibility cannot be ignored by modern businesses. Click here
5/ Are multinationals targeted too much by campaigners, and local firms in developing nations let off the hook? Click here
6/ Do corporations have values, or are these only a product of the people who work for them? Click here
7/ How do you square social responsibility with the needs of investors? Click here
8/ Is there an increasing convergence between the work of businesses and non-profit organizations such as charities? Click here
9/ What role should other parts of society -- consumers, governments etc -- play in encouraging corporate responsibility? Click here
10/ The work of industry in lobbying governments over climate change. Click here

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(Start of Part 6)

ROBERT FREEMAN: Before we go out to the floor for questions, I wonder if we can come back to this question of values, which has permeated our discussion. Richard talked about baking a set of values into a company from the outset. Malini has talked about building on centuries-old values and customs. James, I've got to believe that as a result of what happened in Nigeria a decade ago, Shell went through some kind of introspection -- I know you don't like this word -- about its values.

Can a company change its values, particularly a big company? Even the notion of talking about a company and values is perhaps a paradoxical one. Where do values come from?

JAMES SMITH: I think it's been said previously -- values come from people. Corporations, I don't think, have a personality independent of the people. So, when you believe you observe the personality of a corporation, what you are observing is the personality of the people who are in it, particularly the leadership, their beliefs, what they are espousing and whether they are true to them in their actions. I think it's entirely appropriate that a corporation should describe its values -- but they had better be totally synonymous with the beliefs and the behavior of the leadership.

We've had some huge shocks in recent years -- Brent Spar (Click here for external article on the Brent Spar oil platform), the execution of Ken Saro-Wiwa (Click here for profile on Ken Saro-Wiwa Foundation website) in Nigeria, and then more recently, a huge problem with the measurement of our (oil) reserves, where we had to reduce the number by 30%, an extraordinary mistake for a company to make.

Every time something like that happens, you're thrown into a period of crisis, trying to respond to all the questions you've got, trying to maintain the faith of your customers and your employees, trying to deal with all the legal implications of all this as well. Then you're having to think about what this means for the long term, asking yourself some serious questions about whether you've done enough. Is it that people don't understand you and the communication hasn't been good enough, or is it about you that you have to change?

ROBERT FREEMAN: Victoria, could you broaden that to the pharmaceutical industry? Do pharmaceuticals companies have values? Is GlaxoSmithKline different in its values from Novartis or Merck? What's your experiences -- you don't have to name names if you don't want to.

VICTORIA HALE: The pharmaceutical industry is going through some great times now and some rough times now. It's named in movies with arms dealers. The pharmaceutical industry does have values and those values have, I propose, shifted over time, they've changed over time.

People who enter the industry and want to work in pharmaceuticals companies are people who want to heal others -- really -- who want to do good, who want to cure diseases. The shift over time that has occurred has really been to move away from that very clear 'we're here because we are healers and we care' to 'we will heal some people in the world and the rest of the world will be taken care of in another way.

Our effort at OneWorld Health is to say: 'We are one sector, we are one industry, we have to come together on this. We are one humanity -- we are the only ones who know how to make new cures and if we don't come together on this then we're failing humanity.'

And companies are saying: 'You're right. How can we do this together?' Not every company is as aggressive in wanting to partner as other companies; there are timing issues and financial issues and mergers, everything's changing in the industry.

But we do have a key role in the world. We do something that no one else does and the world is counting on us. It's slow but it's happening. It's overdue.

CHARLES HODSON: We haven't heard from Richard -- you're keeping your peace here.

RICHARD REED: With values, that's all there is really, that's what you've got to differentiate between one company and another.

I think every company has published a set of values -- there will be a Powerpoint chart somewhere in every company that's got the little boxes on it -- there's normally about five of them -- that use the word integrity and stuff.

CHARLES HODSON: But doesn't everyone yawn when those appear in presentations: 'By the way, here are our values', and everyone goes 'snore'.

RICHARD REED: I think everyone's had their marketing agency suggest they do them, and it's happened. Of course what's completely important is not what the published values are, it's what the behavior of the company is. You don't watch the person's lips you watch the person's feet.

Principles cost you something. I'm afraid I am a stuck record. It's about getting through the myth and getting to the truth -- how do companies actually behave, what do they do, what don't they do? Not only in those periods of crisis but also on a day-to-day basis.

We are a consumer society, we all absolutely have both the opportunity and I would say the responsibility to hold companies to values. They will publish them on their website, and we can work out what they do and don't do.

Companies follow the cash, that's their raison d'etre, how the capitalist system works. As a business we are designed to chase profit, so we go where the action is, we go where the consumers are. It's consumers that ultimately hold the power. A company will respond to a change in consumer trends a thousand times quicker than it will a piece of government legislation, which it will try and protest against and keep tied up in loopholes for years.

Consumers, ultimately, have an incredible power and their disposal, which is to stop buying, to use digital media to communicate to the world for free the reasons why to stop buying from that entity, from that company.

ROBERT FREEMAN: But who's keeping your feet to the fire? I mean, it's unlikely that CNN or Fortune and going to do an investigation into the suppliers that you're dealing with, because you're kind of small.

RICHARD REED: That's why we get away with it. we're small.

ROBERT FREEMAN: So how do you keep honest? How do you keep innocent?

RICHARD REED: Who says I am? I'm sure as hell not saying I'm perfect, so far away from it. I don't even describe myself as an ethical company. As a company, we're got some values we're trying to live by, but God, is it difficult on a day to day basis.

Who's keeping our feet to the fire? Actually, my mum, my personal conscience, the people I work around. Every time I stand in front of the team at Innocent and talk about what we're doing and what we're not doing, they go: 'Well hang on, I though you said we cared about CO2 emissions, so how can we get our kiwis from Australia?'

It's continuous -- the more you debate it, the more you put it out there, the greater your transparency, the worse it gets, the more questions you get asked. And Jesus, it can get pretty depressing and distressing sometimes.

I think that what it all comes back to is that all you've got is yourself. You've got to be true to yourself. And that's what a company has to be -- it has to be true to itself, its published values, its collective personality.

And I think you have to be your own worst critic. Of course, the media pressure will play a huge part, but that will come and go, and managed against a lot of the time. If you don't really care yourself, if you don't really feel it, you're faking it rather than making it, I just believe it will come back and bite you on the backside at some point.

Maybe I'm being hopelessly naive, but I do think that's all you've got -- your own personal truth, to respond to your own set of values.

MALINI MEHRA: On the whole issue of values and organizations, I think it's instructive not to just talk about corporations, because you can't be an island of best practice in a sea of criminality, frankly. You have to talk about organizational settings, whether in the government, in the educational sector, in non-governmental organizations.

In companies, we all speak about having a certain mission and a certain sense of values. When I used to work at Oxfam (Click here for Oxfam home page), it had a particular set of values, and yet Oxfam was a supertanker of an international NGO. And frankly, when push came to shove -- values, what's that? Values make you feel very nice and cozy when your on an international podium.

But talk about hard things, such as workers' rights, compensation issues, maternity, those kinds of things that in an everyday work environment you fight over, you struggle over, and then it comes out, just how deeply ingrained values are in reality, in the organization's everyday and managerial practices.

You find that there is a huge disconnect between what people aspire to when they join companies and what they accept as operational practice when they are actually in that institution.

And the only way that you can sustain values over time -- let's look at corporations which have managed to do that over 100 years, whether it's the Shell group or that Tata group or whoever it is -- is if you have a very conscious effort of institutionalizing that as a culture, where people are ingrained in that and you have sanctions and penalties, reward systems, for getting people to do the right thing.

Look at Enron (Click here for CNN story on Enron scandal). Enron had a vision and a mission statement. In 2001, when it went belly up, how many people then remembered the number of international CSR awards that Enron gave? So let's be real about this.

(Start of Part 7)

ROBERT FREEMAN: I think we're now scheduled to open this up to discussion, and questions to the panelists.

QUESTION FROM AUDIENCE: A lot of investors are looking mainly at short-term returns. How do you link values with what is seen as value by investors in a company?

JAMES SMITH: The bigger challenge I've got is: how do I stay in touch with my customers for the long term, how do I stay in touch with how the world is going, so I can modify my product set to respond to that? Now if I close my eyes to that, because I concentrate only on the short term, and I'm not interested in corporate social responsibility or trying to deal with climate change, or concerned about the poorer communities in the vicinity of where I work, I believe that's very short term and risky.

So to those who say, 'I'm not so sure', I say: 'Well, at least I have to manage these risks, because if I fail to manage those risks, look at the potential losses, look at the potential impediments to my operations.' They say: 'Yeah, you'd better do that.'

Then I begin to say: 'Well, I can improve on customer acceptance here. I've got a better view of the long-term products here. I can see that renewable energy is going to be very important in the long term, shouldn't I be putting some money and attention into that as well? Shouldn't I be building capability? Because there are uncertainties as to how quickly this is going to take off.'

So I believe I've got to build a very strong business case for this, but also one rooted in beliefs about what's right in the long term, because my customers, and my employees in particular, will tell me that that's important.

VICTORIA HALE: I have faith in youth. I believe that there are many, many investors who if they're not already known, will become soon. Because they are growing in numbers. These are investors who say: ' I invest at least part of my funds ethically, and I just insist that my companies are performing appropriately, to my standards. So if you don't, I'll just go to someone else who is. But if you want to retain me, then you just must do it.'

I have one story -- we're setting an example at OneWorld Health for what a pharmaceutical company -- granted a non-profit pharmaceutical company -- can get for doing good, developing a drug for a disease that kills 200,000 people.

We have a story of a university that came to us with an incredible and very important anti-malarial drug lead. It needed some work, it needed a few years work. The university had taken it a round to all of the big pharmaceutical companies and they all said: 'No, no, no, well maybe, perhaps in a few year.'

And then they came to us and we said: 'Fabulous, we'll take it, of course we well and we'll do it in a very short time because Africa needs it.' And then the university went back to the companies and said: 'If you don't take this, then OneWorld Health will.' And one of the largest pharmaceutical companies in the world said: 'OneWorld Health? That's that non-profit pharmaceutical company, isn't it? Well, we'll take it,' and signed it on.

We're trying to push the boundaries here and accelerate. We know that they'll get there eventually, but by jumping out of the box -- how far out of the box? We just took the profit, kept everything else the same, we're still a pharmaceutical company -- we're pulling the industry.

We say: 'Great, if you do this project then we don't have to do it.' And let's have more examples like that.

(Start of Part 8)

QUESTION FROM AUDIENCE: Are we seeing more of a convergence between for-profit and non-profit organizations, and the way they work together?

MALINI MEHRA: I think that what you're describing is a situation that's been in flux for pretty much the past decade, in a very conscious way. Those of us who have been observing and participating in the re-shaping of models of what is traditionally understood as business, what we observe is that actually there is no one-size-fits-all model anywhere.

Even if you look around here in the UK and you have a long view you can see there are lots and lots of different types of corporate models which have been experimented with -- you've got the joint stock model, which was established 400 years ago by the (British) East India Company (Click here for external article on British East India Company), and you've got the Quaker model.

Now, you've got what is officially termed social enterprise, but I'm sorry, those type of companies have been providing social functions, have maintained the social fabric in the absence of a welfare state for 100 years now in this country.

I think we are getting more conscious about the fact that there is a range of corporate models to choose from, where you can actually have a nice bit between your personal morality and your corporate morality, ie your public and your commercial morality.

VICTORIA HALE: And you can be structured differently -- for profit, not for profit -- you can be funded differently -- by investors or by philanthropy -- you can have different objectives, be they social or commercial. It's not black and white anymore, that space between is blurring.

I think that's your question. It's becoming very gray, which is wonderful. Stir it up. That's how we're going to really have an impact on the world. And it means thinking out of the box: 'Are you here or are you here? Which team do you support? You know something, I'm going to make my own rules, because what's important to me, what's important to us here is to achieve that goal. So who cares what the name of the team is?'

MALINI MEHRA: But there is an important point there -- if you do opt to set yourself up as a nominal social enterprise, then what advantage do you get from that? And that brings it back to the legitimization in the institutional sense. Because if a government says, if you are fulfilling an active social purpose then we will give you X, Y and Z in benefits, whether it's a tax break or whatever, then it's more attractive to people who want to set up those kind of companies to do so.

And in India for example, we have had that kind of a model for many generations now, where we have national banks operating at the state level which have actively provided collateral or credit on advantageous terms to companies which have chosen to set themselves up in that way.

And the more that we do that, the more that we see government legitimization of new forms of commercial models, the more we will see responsible business practice.

RICHARD REED: It's not quite to your question, but I think also the world of business has so much more to learn from the world of NGOs than business realizes. Business tends to study other businesses to get new ideas.

I've found that if you go to see another business you think: 'Oh, you put your water cooler in that bit of the reception, do you, rather than over here?' You go to an NGO and you think: 'Oh my God! This is the most effective organization on the face of the planet.'

I've spent a week with Greenpeace in the Amazon, and they have 14 people protecting something the size of America and ten times more valuable in terms of what it provides to the Earth. I used to think that we were quite a slick, efficient business. I went there and just thought: 'Oh my God, they're just a thousand times more effective in terms of the time and resources they've got and the massive challenge they have, with their total focus and absolute, crystal clear strategy.

I just think the business world has got so much to be humbled by, to learn from, from the NGO sector.

ROBERT FREEMAN: I think that works both ways, Richard. If (TNT CEO) Peter Bakker (Click here for Bakker's profile on Principal Voices) were here today, he would tell you the story about the collaboration between TNT and the World Food Program (Click here for World Food Program homepage). When they first hooked up, he basically said: 'Look, let me come in here, we're a logistics company, I can tell you how to deliver the stuff that you're delivering in a much more efficient, cost-effective way.' And he cut their costs one third, which is his contribution, because they had experience in logistics. There's plenty of inefficiency and bureaucracy in NGOs as well.

RICHARD REED: I'm not saying there isn't any. Of course, the business world has a lot to contribute, too, but everyone knows charities can learn from business. I'm saying you have to look the other way round sometimes.

JAMES SMITH: My thoughts are prompted about the question on the distinction between the not for profit and the voluntary sector and the commercial sector. There's a chap called Victor Adebowale who runs Turning Point (Click here for Turning Point homepage), he's quite a character. He gets very upset if you say he's in the voluntary sector. He says: 'Are you not volunteering? Is someone coercing you to do your job? Are you any different from me? We're all driven by incentives.' He says just call us the third sector, don't use anything that loads the implication about why they're doing it, what the motivation is.

I think it's been said already: NGOs have got concerns about business administration and job structure, and progression and pay and all the rest of it, just as we have. NGOs have got principles and we had better have principles too. I think if you look at what you need to make an organization successful, then a broad spread of things is relevant to all; of us.

The other thing that I wanted to say is, one of the themes here has been the role of profit, the role of markets. I think you were making the point at the beginning, Victoria, that markets don't seem to be delivering the drugs that are needed in the southern portion of the world where millions of people are dying. So there's a huge market failure there.

So I think there's a discussion here that we could have usefully about how far markets can get us and what we need to do when they can't get us as far as we need. It's clear, I think, the need for some further intervention, so thank goodness for Bill Gates and Warren Buffett (Click here for CNN story on Warren Buffett giving away his billions) for what they're doing to get the big levers in, to get the drugs there.

(Start of Part 9)

QUESTION FROM AUDIENCE: One issue we are addressing is that we have to see businesses as political and social entities, not just economic ones. But how do we choose who gets to decide what is a market failure? Who gets to prioritize different types of failure?

ROBERT FREEMAN: I think this gets to the core question we're trying to tackle today -- collaboration. This is a collaboration. It's not just business, it's not just government, it's also other constituencies.

MALINI MEHRA: I'll try and use a concrete example: oil, petrochemicals. You're talking about liability and James has already been talking about climate change, which is now acknowledged by most people as the most lethal life condition issue that is facing us as a species. We all have a responsibility, to varying degrees. I want to use the language of responsibility, not liability so much, because liability has particular legal overtones and implications.

As consumers, of course, if we are using petrochemicals, whether plastic bottles or oil to drive our cars we all have a particular responsibility for keeping that dependency on the petrochemicals sector going. Companies, of course, have a very, very different set of liabilities. I will use that term now, because we have over the last 20, 30 years, evolved a particular concept of liability, and that is expressed by the polluter pays principle.

So if you are a company and you can be seen to discharge pollution into the environment, through effluence in waterways, or into the atmosphere, then under most regimes, it will come back to you in one way or another as a cost to your company.

What we don't have, however, in a much more diffused group of people who are responsible, ie consumers, is a similar sense of responsibility with a penalty attached. I think that that discussion is now beginning to emerge as more and more of us are using the language of lifestyle. We want an ethical lifestyle, which is why we're now talking about the responsibility that we have as consumers for climate change.

I think that what we will see in the coming years is a real sharpening of that sense of responsibility as consumers, as investors, as employers, as employees etc. Maybe that will provide a better answer to your question about how we can collectively address this issue, using all of the different instruments we need to: environmental taxation, pollution costs etc.

(Start of Part 10)

QUESTION FROM AUDIENCE: I'm a little concerned at the way you describe the situation, because when you say it's up to politicians, ultimately, and we all have to be part of the debate, isn't it now fairly clearly established now that the oil and fossil fuel industry in the United States has spent around $25 million to actually influence the debate on climate change negatively? So they have prevent the media from having an open debate and the science being presented to people.

JAMES SMITH: I believe that around the world we've been speaking out on the need to tackle climate change, and in some sense it's trying to create opportunity out of necessity. I see some other big corporations saying the same thing, arguing to their governments: 'Look, if we're going to tackle climate change a whole slew of technologies is going to have to be deployed. If you aren't for it, I'm going to lose out in this international opportunity here.'

And we're beginning to see some of the things that are happening. Wal-Mart, GE, what happened in California, the north-eastern states in the United States. And if you look at the trend of dealing with local air quality, the climate change issues is proceeding on a similar trajectory. And the more that's happening, the more confident I'm getting it'll get to the same conclusion. It's very important that it does.

MALINI MEHRA: I'd like to provide an example of where some very interesting maverick lobbying by segments of the business community can actually help political decision-making, to take a much more courageous route on climate change.

It is patently disingenuous for any of us to suggest that NGOs or companies or governments are not in the business of lobbying -- we do that all the time, that is how we influence change. I was thinking of the example that's been illustrated by Corporate Leaders Group on Clmate Change (Click here for Group homepage) in this country, of which Shell is a member.

You will remember that at the time of Kyoto (Click here for Kyoto protocol homepage) we had something called the Global Climate Coalition, in which we had the leading majors from the oil, the automobile and other sectors. And we had BP (Click here for BP homepage) pull out of that, very famously, I think it was in '97, at the time of Kyoto.

And that caused ructions in the industry, because here was an interesting, one can see in retrospect as principled, stance that was made, not because of a faith that dangerous climate change was actually on our doorstep but because of a vision that yes, 10 years down the road, this could present a real commercial hazard for BP.

Almost 10 years later we now have the Climate Group, which is a kind of antidote, I call it, to the sort of CBI (Click here for CBI homepage) view of climate change and the commercial opportunities and threats.

Because the Climate Group is a new coalition of about 14 or 15 of the largest multinationals in the UK, which has issued a letter last year to (Tony) Blair, saying: 'Prime Minister, we challenge you to do X. Y and Z, to create a much more predictable climate for investment for those of us who do take climate change serious and would like to re-orient our companies along a different path.

That was a year ago, and about a few weeks ago, they reissued the challenge around the time of the time of the G8 meeting (Click here for homepage of G8 meeting in St Petersburg), saying: 'We issued our challenge to you, how far are you prepared to go as a government?'

For those of who are here who think politicians lead, let me disabuse you of that. Politicians are not leading on this debate at all, they are frightened of taking decisions that need to be taken. Having worked in government I can tell you that, unfortunately. we have a situation where politicians are looking for partnership with business, with the voluntary sector, which will strengthen their hands to do the right thing.

And when you have a maverick statement like that, produced by the Climate Group, which basically says: 'The CBI view of climate change is tosh and we disagree with it. Here is an Rubicon marking the distinctiveness of our position,' you can hear the hurrahs going up in Whitehall (Click here for external website on Whitehall).

Finally they have a business constituency with which they can work on climate. change. That's a great thing and I think that's the way forward. That's why people like (California governor) Arnie Schwarzenegger has been able to take the decision he has for California (read CNN article here on California's new measures to combat global warming). And (US President George W.) Bush hasn't, because Bush has not been able to mobilize that constituency.

(CLOSING COMMENTS AND THANKS)