Geoff Lye contests the view of Michael Geoghegan, Chief Executive HSBC, that it is the private sector that ultimately should run society.
HSBC Group Head Office
HSBC Holdings plc
8 Canada Square
London E14 5HQ
Reports of your recent speech in Belfast (The Guardian, Saturday, 7 August) quoted you as saying: “I think in the long term it is the private sector that has to run society.” This notion of essentially unaccountable corporations claiming the right to ‘run society’ is disappointing – especially coming from a company which positions itself at the vanguard of corporate responsibility.
According to the latest Fortune 500 rankings, the top 100 corporations’ revenues are equal to 75% of US GDP, while HSBC alone has revenues equal to more than half of Denmark’s GDP. We seem to be sleepwalking into a world in which global businesses are winning their calls for free markets, free enterprise and free competition as the natural solution to society’s greatest social and environmental challenges. This can only lead to a Darwinian survival of the economically strongest at the expense of the weakest. Perhaps we should demand that you and other leading corporations substitute ‘fair’ for ‘free’? Against a backdrop of weakening market regulation, power continues to concentrate into ever fewer corporations who fail to grasp the issue of ensuring that wealth is responsibly and equitably created and distributed.
You also referred to record low interest rates as somehow unfair: “In a way it has given us a false protection in taking from the responsible [savers] and in some ways biasing the irresponsible [borrowers].” Was it not HSBC who helped fuel the ‘credit boom’? Was it not also HSBC who bought the US bank Household – with a business model founded on recklessly encouraging house owners to release equity accelerating unsustainable consumption? Maybe the subsequent write-off by HSBC of over £20 billion – and of thousands of employees through redundancy – should alert us to the hubris and fallibility of corporations.
HSBC is widely regarded as a leader in Corporate Social Responsibility. Yet, along with other corporations, you appear to be using a model of CSR which too narrowly defines your social, environmental and economic accountability. Perhaps the time has come for businesses to shift from Corporate Social Responsibility to Corporate Economic Responsibility: this would necessitate a profound shift in business models towards responsible, accountable use of their economic power. Far from taking over running society, it would require that they redirect their businesses to respect rather than exploit consumer weakness; to abandon aggressive global tax avoidance practices; and to internalize the huge adverse social and environmental impacts they outsource onto the rest of society.
We would welcome the opportunity to explore these issues in greater depth and to stimulate a wider debate, since they have significant implications for corporate accountability more generally.
Chairman, SustainAbility Ltd