tag:blogger.com,1999:blog-76458284317406932092024-03-07T20:07:53.739-08:00Ethical Corporation's Management BlogWelcome to Ethical Corporation's management blog. This blog is all about how CR is managed, or sometimes not - at big global companies. Written by Oliver Balch, and other Ethical Corporation contributors.Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-7645828431740693209.post-36898563884475973952011-07-13T07:47:00.000-07:002011-07-14T02:01:54.079-07:00Unilever’s Sustainability Plan: “almost insanely ambitious”<span class="Apple-style-span" style="line-height: 24px;">First there were the sustainability plans of retail giants <a href="http://cr2010.tescoplc.com/">Tesco</a> and <a href="http://plana.marksandspencer.com/">Marks & Spencer</a>. <br />
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<span class="Apple-style-span" style="line-height: 24px;">In the mid-2000s, Tesco began by setting goals for increasing locally-sourced products, making their stores and transportation of goods more efficient, and investing large sums into sustainability research.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">Meanwhile in 2007, M&S introduced its lengthy and much more comprehensive <a href="http://plana.marksandspencer.com/">Plan A</a>, aiming to make both broad and specific improvements in areas including climate change, waste, and natural resources. The firm now has 180 targets to hit, with a solid record of achievement to date on many of them.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">But in 2010, Unilever became the bigger kid on the block (in terms of turnover anyhow) of sustainable business when the corporation launched its ten-year <a href="http://www.sustainable-living.unilever.com/">Sustainable Living Plan</a>. The firm is four times as large as M&S.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">Now, just over six months in, implementation of the plan has achieved initial success, yet will soon face achieving long-term goals that may prove to be impossible to realise without substantial help from partnering companies.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">An analytical report on the plan, published in the July-August edition of Ethical Corporation magazine, examines Unilever’s notable progress while pointing out the challenges on the horizon and how partnership can help.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">Unilever’s plan sets out specific quantifiable targets for the company to achieve over the next ten years. The plan is composed of four pillars: improve health and well-being, reduce environmental impacts, enhance livelihoods, and support people. </span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">Its main goals include making Unilever’s entire agricultural sourcing 100 percent sustainable, halving the waste associated with the disposal of their products, and making drinking water available to 500 million people.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">With such extreme tasks, the company’s aspirations are “almost insanely ambitious,” admits Unilever advisor John Elkington in the briefing published by Ethical Corporation.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">Through the plan thus far, Unilever has provided 20 million people with safe drinking water, runs all of its Netherland factories on renewable energy and use only sustainability certified cocoa in its ice cream products, states the report. The company also offers more sustainable product offerings and provides all of the company’s branches with tools to evaluate sustainability progress.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">But in spite of these early achievements, the report reveals that Unilever is now facing challenges in terms of meeting its biodiversity improvement goal and evaluating the water use of its factories, products and consumers. Additionally, consumer-based targets remain Unilever’s most difficult commitment because of marketing’s limited effect and one-on-one training’s expense.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">As such, the report shows the report shows that the key to the success of Unilever’s plan lies not only in speeding up their progress, but more importantly teaming up with outside companies to accomplish their goals.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;"> “The ground breaking scale of Unilever’s commitments means it has big challenges ahead – challenges that will have to work with others outside the company to achieve,” says Mike Tuffrey, director at consultancy firm Corporate Citizenship and a long-term advisor to Unilever in the report.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">So far, Unilever has reached out to conservationist charity WWF to work on its biodiversity targets and non-profit group Water Footprint Network for its water goal.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">If Unilever manages to successfully collaborate with outside companies, the corporation’s bold plan stands a chance of accomplishing not just its individual targets but also its overarching objective of inspiring companies to tackle more ambitious sustainability goals, according to the report.</span><br />
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<span class="Apple-style-span" style="line-height: 24px;"></span><span class="Apple-style-span" style="line-height: 24px;">To read Ethical Corporation’s complete Unilever briefing, go to <a href="http://www.ethicalcorp.com/supply-chains/unilever-no-slipups-yet">this link</a>.</span>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com3tag:blogger.com,1999:blog-7645828431740693209.post-48205605286498501962011-07-01T14:51:00.000-07:002011-07-01T14:51:43.844-07:00Fukushmia & Tepco's kamikaze ethics<!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:EnableOpenTypeKerning/> <w:DontFlipMirrorIndents/> <w:OverrideTableStyleHps/> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
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<div class="MsoNoSpacing"><a href="http://www.ethicalcorp.com/environment/tokyo-electric-power-ethical-meltdown"></a><span style="font-family: Arial,Helvetica,sans-serif;">A group of Japanese pensioners shot to fame last month when they volunteered to lead on the clean-up of the Fukushima Daiichi power plant. Their rationale was straight forward: should they develop cancer, it will take ten to twenty years until the condition becomes fatal. And by that stage, they’ll be dead anyway. The press labelled them the ‘<a href="http://billionaires.forbes.com/article/0dyJ9KHcYK32N?q=2011+Tsunami+Crisis+in+Japan">Kamikaze Pensioners</a>’. </span><span style="font-family: Arial,Helvetica,sans-serif;">To belittle their stance is cynical and unfair. Amid the tragedy of the tsunami that hit the Japanese coast earlier this year, examples such as these demonstrate the remarkable Japanese trait of solidarity and self-sacrifice.</span><br style="font-family: Arial,Helvetica,sans-serif;" /> <br style="font-family: Arial,Helvetica,sans-serif;" /><span style="font-family: Arial,Helvetica,sans-serif;"> It’s just a shame that Tokyo Electric Power (Tepco) has not shown a similar calibre of ethical commitment. Jon Entine’s recent <a href="http://www.ethicalcorp.com/environment/tokyo-electric-power-ethical-meltdown">feature article</a> in <i>Ethical Corporation</i> details a raft of incidents dating back over decades that raise serious questions about the company responsible for operating the Fukushima plant. Faked safety reports, internal cover-ups and blackballing of whistle-blowers seem par for the course at the world's largest privately-owned electricity utility. <br />
</span></div><div class="MsoNoSpacing" style="font-family: Arial,Helvetica,sans-serif;">Entine highlights two critical failures in the Tepco case that are relevant to any sector. The first centres on the relationship between companies and their regulators. In Japan’s power sector, cosiness reins. That breeds complacency and, worse, collusion. Politicians and civil society need to be awake to such scenarios and hold regulators to account. <br />
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The second lesson is more immediate to corporate management. How should senior company executives respond in the wake of an ethics crisis? Japanese leaders, more than most, are quick to accept responsibility for misdemeanours that happen on their watch. How different the reluctant response of <a href="http://crmanagementblog.blogspot.com/2011/01/executive-remuneration-fat-cats-vs.html">BP’s TonyHayward</a> after the Deepwater <span style="mso-spacerun: yes;"> </span>Horizon spill to the mea culpa performed by Tokyo’s <span style="mso-spacerun: yes;"> </span>president <a href="http://crmanagementblog.blogspot.com/2011_02_01_archive.html">Akio Toyoda</a> after the Japanese automaker’s recall crisis? Yet a company must be seen to take action as well, not just offer mere words. Following a major safety cover-up scandal at Tepco in the early 2000s, its chairman and president were made to resign - only to be then given advisory posts at the company. Other executives were demoted, but later took jobs at companies that do business with the utility. <br />
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Nobody could have predicted the tsunami. What happened at Fukushima was, and still remains, a tragedy. One’s left thinking, however, that if Tepco had taken stronger action in the wake of earlier ethical breaches, then it’s a tragedy that could have been mitigated. </div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com3tag:blogger.com,1999:blog-7645828431740693209.post-47248769961984865542011-06-25T14:39:00.000-07:002011-06-25T14:52:32.989-07:00Ethical Competition: time to get real<div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">Type ‘email’ into Google and what do you think comes up first in the search engine’s listings? Why, ‘Gmail’ of course. What’s wrong with promoting your own products? If you’re a search engine, quite a lot, as it turns out. Services like Kayak and Microsoft are complaining that Google’s is routing user inquiries unfairly to its own services. Now the Federal Trade Commission is investigating the anti-trust claims. If found guilty of abusing its dominant market position, Google could find itself facing its largest legal challenge <a href="http://online.wsj.com/article/SB10001424052702303339904576403603764717680.html">yet</a>. </span></span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">In a way, it’s rich that Microsoft should be among those wagging the finger. (The US software pre-empted this latest spat with an anti-trust suit against Google in Europe back in April). For years, Microsoft used its near monopolistic position in the software market to browbeat and bully computer manufacturers into using its operating platform. It waded through endless lawsuits to carve out its place at the top. Now it’s behind the curve. The big fights are no longer over operating systems, but the interface between users and the internet. Microsoft’s own search engine, Bing, has been clinging to Google’s coattails ever since it launched. So could this be seen as a case of sour grapes? Of an underhand jab at a competitor? perhaps. But is that necessarily wrong? In our dog-eat-dog world, could it not just be described as ‘fair play’?</span></span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">It is a question <a href="http://www.ethicalcorp.com/communications-reporting/google-and-facebook-socially-responsible-dirty-tricks">Mallen Baker considers</a> in Ethical Corporation’s latest issue. Yet, interestingly, not in the context of Microsoft (and the rest) v’s Google. Instead, it’s another of today’s teutonic battles: Facebook v’s Google. A few months back, Mr Zukerberg’s social media site was found to have hired a PR agency to push negative stories about Google privacy policies (internet freedom is a separate issue altogether, and one recently addressed by Rebecca MacKinnon in an <a href="http://www.ethicalcorp.com/communications-reporting/podcasts/google-yahoo-microsoft-leaders-or-laggards-internet-freedom-podcas">Ethical Corporation podcast</a>). On the face of it, what Facebook did smells wrong. But how wrong? Not legally wrong. No subpoena papers have arrived at the company’s shiny new Menlo Park headquarters. Wrong in the sense of its public image? Sure, but how many Facebook users have delisted as a result? Precious few, I suspect. Ethically wrong then? The questions get to the nub of Baker’s piece. </span></span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><i><span lang="EN-US">“What Facebook did wasn’t nice. But then Google aiming to move into Facebook’s social networking area of dominance isn’t “nice”. </span></i></span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">Ethics isn’t about ‘niceness’. If it were, it would have gone out of business a long time ago. It’s about principles and values. Those should certainly include a commitment to compete within the law. By that marker, Facebook and its PR agency are (as I understand it) within bounds. It should include provisions against spreading falsehood as well. Again, it’s not entirely clear if Facebook is guilty here or not. The whole affair still feels wrong, though. Which shows just how difficult it is to define ‘ethical competition’ in a competitive world. Companies should draw their own boundaries based on personal and professional conviction – and then, within those parameters, go at it cats and dogs.</span></span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal"><i><span style="font-size: small;"><span lang="EN-US" style="font-family: Arial,Helvetica,sans-serif;">n.b. the opening statement of this post was correct at the time of writing. Rechecking now, ‘Hotmail’ comes out top. A change in algorithms in Menlo Park or are those Federal Trade Commissioners getting to work already? </span></span></i></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-23221205150821762782011-06-14T14:32:00.000-07:002011-06-14T14:32:27.670-07:00Natural Disasters: resilient response required<div style="font-family: Arial,Helvetica,sans-serif;"></div><a name='more'></a><!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:EnableOpenTypeKerning/> <w:DontFlipMirrorIndents/> <w:OverrideTableStyleHps/> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
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</style> <![endif]--><span style="font-size: x-small;"><span lang="EN-US"></span><span style="font-size: small;">In the face of natural disasters and human suffering, it feels a little churlish to talk of things like ‘competition’ and ‘business cases’. At least, that’s what Peter Bakker thinks. The chief executive of Dutch logistic company TNT ordered the crew of one of the company’s 747s to offload a cargo of high-energy biscuits in Miami and load them onto a plane belonging to arch competitor UPS. The biscuits were bound for the crisis-struck Caribbean state of Haiti. TNT’s plane was too large to land in the earthquake-hit country. So UPS’s smaller aircraft had to ferry them in. Culturally, it was an almost impossible ask, Bakker concedes in a <a href="http://www.ethicalcorp.com/content.asp?ContentID=7458&ContTypeID=">recent interview</a> with Ethical Corporation. But if competitors can’t cooperate when it comes to saving lives, what hope is there? </span></span><br />
<span style="font-family: Arial,Helvetica,sans-serif; font-size: small;"><span lang="EN-US"></span></span><span style="font-size: small;"><span style="font-family: Arial,Helvetica,sans-serif;"> </span></span> <div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><br />
</div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">It’s a legitimate question and one that many global companies are grappling with. In a lengthy <a href="http://www.ethicalcorp.com/content.asp?ContentID=7389">feature article</a> in <i>Ethical Corporation</i>’s May issue, Stephen Gardner describes the key role that the private sector can and is playing in the face of natural calamities. From rescue, relief to recovery, large corporations are doing their bit. Gardner turns up some compelling examples, from Walmart’s food deliveries post-Katrina to Coca Cola’s work with Haiti’s embattled mango growers. <br />
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There’s some hard-nosed thinking to be done here though. Yes, disaster recovery is about saving lives. But it’s about saving bucks too. The rate of natural disasters is on the up. Figures from the <a href="http://www.helium.com/items/1936054-increase-in-natural-disasters">Centre for Research on theEpidemiology of Disasters</a> prove it. Climatic phenomena are generally cited as the cause. So too are disaster-related costs. Operational interruptions, increased insurance premiums and workforce displacement are just some of the bottom line implications of natural disasters for business. So while it’s good that companies are become more responsive to disasters, they need to become more resilient too. Building design, facility location, flood defenses, early warning systems – all need to be on the list of forward-thinking businesses. </span></span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com2tag:blogger.com,1999:blog-7645828431740693209.post-23766747765501179132011-06-05T15:20:00.000-07:002011-06-06T13:22:21.472-07:00Resource Nationalism: re-slicing the pie<div style="font-family: Arial,Helvetica,sans-serif;"></div><span style="font-size: x-small;"><span style="font-family: Arial,Helvetica,sans-serif;"> </span></span><br />
<div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><span lang="EN-US">Peruvians went to the polls today. Multinational extractive companies such as Newmont, AngloAmerican. Xstrata and Occidental Petroleum will be watching the results with apprehension. On the ballot list is Col Ollanta Humala, an ex-army officer who once led a military revolt (against President Fujimori, the father of the other candidate in today’s polls). Humala came to the fore in 2006, when he ran unsuccessfully against out-going president Alan Garcia. <br />
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Back then, fears that Humala was in the pocket of <a href="http://www.ethicalcorp.com/content.asp?ContentID=4091">Hugo Chávez</a>, the socialist president of oil-rich Venezuela played a critical role in his defeat. Just a week before Peruvians went to the polls five years ago, Mr Ch</span><span lang="EN-US" style="font-family: "Arial","sans-serif";">á</span></span><span style="font-size: small;"><span lang="EN-US">vez took a 60% controlling stake in Venezuela’s huge Orinoco fields, hitting Exxon, Conoco, Chevron, Total and Statoil. Fellow ‘Chavistas’ in Bolivia and Ecuador were undertaking similar moves to wrest back control of their country’s national assets from foreign companies. <br />
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It’s not just Latin America where resource nationalism has been on the rise in recent years. As a <a href="http://www.ethicalcorp.com/content.asp?ContentID=7442">special briefing</a> in the latest issue of <i>Ethical Corporation</i> reveals, resource-rich countries in Africa and Asia are following suit. As global commodity prices soar, emerging economies (justifiably, it could be argued) want a bigger piece of the pie. It’s their pie after all. The implications for foreign investors companies are worrying. Around 80% of oil produced by Opec countries is in state hands. Foreign oil companies are now being pushed to develop oil sands, a costly and high-risk enterprise. Not because they want to, <i>Ethical Corporation</i> writer Eric Marx points out. But because the choices open to them are becoming increasingly limited. <br />
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So what’s the responsible company to do? In Venezuela, Exxon just walked away. That’s one option. But only if you have very deep pockets, and options elsewhere. These are multi-billion dollar investments in the main. Choosing to renegotiate tax arrangements is another option that’s buying companies time. Good environmental and social investment track-records are proving ever more vital too. Even Chinese companies, which have been pouring money into Africa’s mining sector over recent years, are facing local demands to ‘give something back’. Companies would be well advised to take the likes of Unilever and Standard Bank in undetaking <a href="http://crmanagementblog.blogspot.com/2011/05/companies-development-not-so-strange.html">full economic impact studies</a>, which capture their indirect,as well as their direct, contributions to the economies where they invest. </span></span><br />
<span style="font-size: small;"><span lang="EN-US"><br />
Marx looks specifically at <a href="http://www.ethicalcorp.com/content.asp?ContentID=7443">India</a>, where demands for greater resource nationalism have led to calls for mandatory social investments by foreign companies. In reference to the proposed measure, Indian prime minister Manmohan Singh told industry to see community investment as being in their own long-term interest. “Companies undertaking greenfield projects cannot see their factories and units as oases, cut off from the needs and interests of the community around them,” he warned.<br />
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Citing a range of experts from both industry and civil society, Marx builds a <a href="http://www.ethicalcorp.com/content.asp?ContentID=7443">convincing case</a> for companies to increase the social returns derived from their investments overseas. Either that or face ever greater pressure from host governments. <br />
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In Peru, Humala has tried to distance himself from Mr Chavez and his brand of radical, nationalistic socialism. It might help him get elected (exit polls have him out ahead). It won’t, however, reduce popular pressure for foreign investors to share a larger slice of the pie. </span></span><br />
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<i><span style="font-size: small;"><span lang="EN-US">[6 June 2011: eds. Humala won the election by a narrow margin. </span></span>Lima's stock exchange fell 8.7%, in apparent reaction to the socialist candidate's win]</i><span style="font-size: small;"><span lang="EN-US"> </span></span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-57509094144958118172011-05-27T14:19:00.000-07:002011-05-27T23:59:09.838-07:00GMOs: are we in for a 'Spud Wars' summer?<span style="font-family: Arial,Helvetica,sans-serif; font-size: small;">The season for potato planting is upon us. Big deal. Spuds don’t usually justify a news item (or even a blog post). Nor would they now were it not for those provocative three letters, ‘GMO’ (Genetically Modified Organism). In northern Sweden, the controversial acronym has sent Greenpeace activists into a tizz. This week, they’ve been <a href="http://www.greenpeace.org/international/en/news/Blogs/makingwaves/activist-in-sweden-continue-to-fight-against-/blog/35001">camped out at the gates of a warehouse</a> stocking Amflora, a genetically modified variety of the humble tuber. The GM potato contains a gene that is resistant to antibiotics and should, </span><span style="font-family: Arial,Helvetica,sans-serif; font-size: small;">the protestors say</span><span style="font-family: Arial,Helvetica,sans-serif; font-size: small;">, be banned. The European Union, which legalised the creation of German chemicals group BASF last year, thinks otherwise. </span><span style="font-size: small;"><br style="font-family: Arial,Helvetica,sans-serif;" /></span><br />
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<span style="font-size: small;">A visit to <a href="http://www.gmwatch.eu/index.php?option=com_dategroup">GM Watch</a> will reveal a catalogue of similar protests over recent weeks, months and years. Here's just a recent sample of headlines: ‘No Improvement in EU’s GMO risk assessment’, ‘Unlabelled clone meat allowed on shop shelves’, ‘Industrial poultry, GM feed and the RTRS’. The mainstream press may have wearied somewhat from their ‘Frankenstein Food’ stories of old. But passions among a large sub-set of consumers still run high. </span> <span style="font-size: small;"><br />
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Recent years have seen huge advances in GM technology. Who could have imagined filling your grocery basket with ‘pluots’ (a hybrid of plums and apricots), ‘lematos’ (lemons and tomatos) or ‘grapples’ (grapes and apples)? Or heading down to your local pet store and buying a GloFish (a modified florescent zebrafish)? Gimmicks aside, GM goods now proliferate in our food chain. American dairy farmers, for instance, are now saying the days of non-GM organic milk are numbered. (The warning follows the decision by the US Department of Agriculture earlier this year to legalise GM alfalfa, an essential feed for dairy cows). </span></div><div class="MsoNoSpacing" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
Yet the fundamental arguments are much the same as when GMOs first burst onto the commercial scene. In the one corner, you have a vocal consumer lobby - perturbed about the technology’s potential health and environmental impacts. In the other, you have the biotech industry – rich, powerful and intent on arguing that GM is the future for a resource-stretched planet. The result has been a heated and often vitriolic clash. None more so than Monsanto’s head-on collision with European regulators and the general public back in the late 1990s. </span></div><div class="MsoNoSpacing" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
As part of <a href="http://www.ethicalcorp.com/content.asp?ContentID=7221&ContTypeID=13">Ethical Corporation’s collection of landmark events</a> for the corporate responsibility movement, Ben Schiller examines this mother of all battles. Some of the lessons are particular to the time and the industry. Playing with science – particularly when it’s linked to something as fundamental as the food we eat – is, and always be, an emotive subject. <br />
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</span> </div><div class="MsoNoSpacing"><span style="font-size: small;"><span style="font-family: Arial,Helvetica,sans-serif;">Other lessons, however, are more generic. Most revolve around communications. Sat in St. Louis, Missouri, six hours behind London, Monsanto’s PR team were always one step behind the news agenda. The US company's advertising wasn't always the wisest either. (An early set of ads were rules as misleading by the UK watchdog). <a href="http://www.ethicalcorp.com/content.asp?ContentID=6843">Schiller examines the PR battle in depth</a>. The ultimate lesson? Regretable as it sounds, good news will never trump bad. Companies just have to hope journalists will eventually grow bored and move on. For GMOs, that strategy seems to have worked of late. But the coming potato harvest could see the horror headlines return. Does a ‘Spud Wars’ summer lie ahead? </span></span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-716540386121934842011-05-22T15:07:00.000-07:002011-05-22T15:07:02.062-07:00CR professionals as 'master storytellers'<!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:AllowPNG/> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-GB</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:EnableOpenTypeKerning/> <w:DontFlipMirrorIndents/> <w:OverrideTableStyleHps/> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
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</style> <![endif]--><div class="MsoNormal"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Sustainability professionals are used to being called names. ‘The company’s conscience’, on a good day. ‘Corporate cost centre’, on a bad one. Yet how many have had the term ‘master storyteller’ thrown at them? Few, I’d wager. More’s the pity. So <a href="http://www.google.es/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fwww.som.cranfield.ac.uk%2Fsom%2Fdinamic-content%2Fmedia%2FCR%2520Champions%2520No%25205.pdf&rct=j&q=McLaren%2C%20M.%20%28January%202011%29%2C%20Supporting%20Corporate%20Responsibility%20Performance%20Through%20Effective%20Knowledge%20Management%3A%20A%20Doughty%20Centre%20for%20Corporate%20Responsibility%20How-to%20Guide%20%28%235%20in%20series%29.&ei=x4PZTbb1Oo6yhAfFroHNBg&usg=AFQjCNGZcMvdd4_Toe0Jjip6RsbeEuk9bA&sig2=8TPek1cXPPYz3fYP2s2Tdg&cad=rja">research</a> by the Doughty Centre for Corporate Responsibility suggests, at least. <br />
<a href="http://www.google.es/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fwww.som.cranfield.ac.uk%2Fsom%2Fdinamic-content%2Fmedia%2FCR%2520Champions%2520No%25205.pdf&rct=j&q=McLaren%2C%20M.%20%28January%202011%29%2C%20Supporting%20Corporate%20Responsibility%20Performance%20Through%20Effective%20Knowledge%20Management%3A%20A%20Doughty%20Centre%20for%20Corporate%20Responsibility%20How-to%20Guide%20%28%235%20in%20series%29.&ei=x4PZTbb1Oo6yhAfFroHNBg&usg=AFQjCNGZcMvdd4_Toe0Jjip6RsbeEuk9bA&sig2=8TPek1cXPPYz3fYP2s2Tdg&cad=rja"><br />
</a></span></div><div class="MsoNormal"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"> Narratives comprise an intrinsic part of every company’s identity. No one narrative is the same. A company’s history, its sector, its values, its culture and, above all, its people craft what such a narrative is and how it is told. Composed within this narrative is a separate yet significant sub-narrative: namely, a company’s sustainability ‘story’. Unpicking that story marks a critical part of persuading employees to buy into the whole sustainability agenda. Which is where the story-telling skills of in-house sustainability experts come in. By working with employees to understand <i style="mso-bidi-font-style: normal;">why</i> and <i style="mso-bidi-font-style: normal;">how</i> their organisations support sustainability objectives, those employees become inspired to start taking action. So the theory goes. But how to go about putting it into action? <span style="mso-spacerun: yes;"> </span></span></div><div class="MsoNormal"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;"><br />
In a <a href="http://www.ethicalcorp.com/content.asp?contentid=7418">guest essay</a> in the latest issue of <a href="http://www.ethicalcorp.com/">Ethical Corporation</a>, Doughty scholars David Grayson and Melody McLaren propose three straightforward steps. First, talk to key stakeholders inside and outside your company to assess your current sustainability ‘story’. Second, engage and support individual employees to act as sustainability change agents in order to improve that story. And third, tell your revised sustainability story through use of the company’s formal communication channels as well as through informal social networks. <br />
<br />
All sounds like a curious fiction? Then ask the consumer communications gurus at Saatchi & Saatchi. Few understand the influence of a good story better than they. Which is exactly why Wal-Mart turned to them. Working with <a href="http://www.saatchis.com/">Saatchi& Saatchi S</a> (the PR firm’s new corporate responsibility outfit), the global retailer hit on its ‘Power of One’ concept. The idea? To help its two million employees develop personal sustainability plans. That gave birth to a second, even more ambitious initiative: its Connect the Dots (Do One Thing) campaign. The campaign aims to engage one billion people as ‘change agents’. Their small, consistent actions will – Wal-Mart tells them – combine to deliver large-scale sustainability solutions. Now these are powerful narratives – even if neither example, as yet, has an ending. <br />
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Adam Werbach, global CEO, Saatchi & Saatchi S<br />
“Some companies are already realising profits by putting sustainability at the core of their business. Not with top-down directives from executives, but from dozens, even hundreds of small steps taken by people at every level of their companies.”</i></span></div><div class="MsoNormal"><br />
</div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-19833335787553188112011-05-13T14:31:00.000-07:002011-05-25T12:27:13.351-07:00The M&S Effect: bin bags, business sense and Barry<span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Who wouldn’t agree to give old clothes to charity rather than see them end up in landfill? Few of us, right. Yet, the rubbish tip is where most of it goes: 80% in the case of Marks and Spencer. So for the last three years the UK high street retailer has been engaged in an intriguing experiment. It’s been effectively paying people to recycle. Anyone who heads down to an Oxfam store with a bag of unwanted clothes gets a £5 shopping voucher. The <a href="http://plana.marksandspencer.com/about/partnerships/oxfam%20">idea</a> has been a roaring success with us, the consuming public. Oxfam has collected over seven million garments – that's an item from almost one in every eight UK residents. </span><br />
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</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">There are two conditions to the scheme. First, at least one of the recycled items must be an M&S product. Second, the £5 can only be used against purchases in M&S of £35 or over. Both make eminent sense. M&S wants to cut down its environmental footprint. By including its own clothes in the deal, the retailer can justifiably say it’s doing its bit (3,500 tonnes of it). As for the £35 requirement, the business rationale is self-evident. Oxfam is in the business of reducing poverty. More clothing donations means more funds to do just that. M&S is in the business of making profits. Persuading people to come into its stores and spend is therefore fundamental. A voucher helps towards that. Consumers feel happy (they’ve collectively pocketed vouchers worth over £7.5 million so far), as does M&S (whose tills are busier). <br />
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This kind of alliance is just one of a growing number of savvy corporate-charity tie-ups. Kingfisher provides another example. The home improvements retailer has joined up with an environmental non-profit to promote its ‘eco-products’ range. Again, the benefit is mutual: sales are higher, and the planet’s resources safer. Hard landscaping company Marshalls, meanwhile, joined with a local charity in India to provide educational alternatives for child quarry workers (the programme was singled out for praise at <i>Ethical Corporation</i>’s recent <a href="http://www.ethicalcorp.com/awards/?utm_source=Ethical%2BCorp&utm_medium=Conferences%2BListing&utm_campaign=Banner">annual Awards</a>). The examples are a world away from the days of cheque-book philanthropy and tree-planting CEOs. Ethical Corporation’s new<i> </i><a href="http://www.ethicalcorp.com/content.asp?ContentID=7408"><i>Briefing </i>on NGO Partnerships</a> describes the latest best practice in strategic, outcome-orientated alliances. (It also highlights the <a href="http://www.ethicalcorp.com/content.asp?ContentID=7409">pitfalls</a> to partnership and how to avoid them). </span></div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"><a href="http://www.ethicalcorp.com/content.asp?ContentID=7409"><br />
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</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">The M&S/Oxfam case is interesting for another reason too. The UK retailer is working to meet a raft of sustainability targets, announced back in 2007 under its <a href="http://plana.marksandspencer.com/">Plan A</a> (“There’s no Plan B") programme. Much of the ‘heavy lifting’ – cutting waste, making factories more resource-efficient, minimising transport-related emissions, etcetera –can be done by the company itself. But for M&S to achieve its most ambitious sustainability goals, it must get others on board: suppliers, business partners, government and – yes, us - the consumer. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Influencing public behavioural patterns is no easy task. A small ‘eco warrior’ contingent will do the right thing regardless. Equally, a renegade minority won’t, however many vouchers you give them. But most of us sit somewhere in between – needing a gentle nudge or the knowledge that ‘everyone else is doing it’ (what Mike Barry, head of sustainable business at M&S, calls “<a href="http://www.ethicalcorp.com/content.asp?ContentID=6859">consumer tribalism</a>”). </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">The Oxfam recycling project is genius because it makes choosing the sustainable option both easy and attractive. Like buying fertiliser-free food (who prefers chemicals on their plate when given the choice?), or purchasing ethically sourced coffee (ditto, who’d rather their coffee promoted worker abuses?). Companies can’t force us to ‘do the right thing’. But they can present us with options that take the hassle out of doing what – in our more principled moments – we know to be right. So, about that clear-out . . . </span></div><div class="MsoNormal"><br />
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</div><div class="MsoNormal"><i><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"><b>Note:</b> Working hard in the trenches for years, <b>Mike Barry</b> has done more than anyone to integrate sustainability policies and processes into M&S's day-today operations. Here’s a <a href="http://www.ethicalcorp.com/content.asp?ContentID=31">link</a> to an interview Ethical Corporation did with him nearly a decade ago. Those efforts crystallized three years ago in the company’s ambitious ‘Plan A’. His task since has been to start turning M&S sustainability goals into practice. That work has come to the attention of The Guardian, which has shortlisted him as its Corporate Sustainability Innovator of the Year. The winner will be decided by public vote. Click <a href="http://www.guardian.co.uk/sustainable-business/gsb-awards/vote">here</a> to see the other nominees and have your say. </span></i></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-85200637847838409532011-05-04T15:04:00.000-07:002011-05-04T15:04:12.086-07:00Companies & development: not-so-strange bedfellows<span lang="EN-GB">Businesses are not development agencies. That much is clear. But, like it or not, they are in the business of development. How so? Through the jobs they create, the supplies they procure, the taxes they pay, and products they sell. All these activities have economic and social implications beyond the factory gates. </span> <br />
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</div><div class="MsoNormal"><span lang="EN-GB">That much isn’t new. What is new is that companies are getting better at gauging the size and nature of their overall socio-economic footprints. Progressive corporations have been good in try to capture their immediate impacts. A prime example is AngloAmerica's <a href="http://www.angloamerican.com/aal/development/social/community-engagement/seat/">SEAT assessment tool</a>, which focuses at a local community level. But 'cradle-to-grave' impacts, from sourcing to product disposal - that represents a whole different order of magnitude. Yet companies such as Unilever are giving it a go. The Anglo-Dutch consumer goods giant <a href="http://www.unilever.com/sustainability/economic/impact-studies/south-africa/index.aspx">has calculated</a> that it provides almost 1% of all South Africa’s tax revenues. As for the national labour pool, for every South African on the company’s employee payroll, there are 22 others in its ‘value chain’. So too Standard Chartered. The economic activity – both directly and indirectly – generated by the $65.5bn UK-based bank was found to equal 2.6% of Ghana’s total gross domestic product. </span></div><div class="MsoNormal"><span lang="EN-GB"> </span><span lang="EN-GB"> </span></div><div class="MsoNormal"><span lang="EN-GB"></span><span lang="EN-GB">Such calculations are by no means easy. Relevant data (especially in developing countries) is not always available, nor are accounting frameworks always in place. Yet early some early measurement models are emerging. Efforts by the likes of Prof. <a href="http://www.ethicalcorp.com/content.asp?ContentID=6607">Ethan Kapstein at INSEAD </a>(to whom both Unilever and Standard Chartered turned) and the World Council for Sustainable Development (which published the ‘<a href="http://www.wbcsd.org/web/measuringimpact.htm">Measuring Impact Framework</a>’, together with the International Finance Corporation) are helping navigate the way forward. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-GB">Interesting though these early studies might be in their own right, the numbers are just a small part of the picture. How will managers use this information? That’s the key question, says Peter Davis, Ethical Corporation’s politics editor and author of a <a href="http://www.ethicalcorp.com/content.asp?contentid=7131">recent report</a> on socio-economic impact. His answer is refreshingly simple: use it to make better decisions. The example he gives is Heineken. </span>The beer maker <span lang="EN-GB" style="font-family: "Times New Roman"; font-size: 12pt;">mapped some of its African operations and saw an opportunity to swap imported malted barley and maize (which is shipped in a great cost) for sorghum, a local equivalent (which was cheaper and resulted in jobs for domestic farmers). </span> <span lang="EN-GB"> ‘The end goal is not just to optimise social economic impacts, but business operations themselves’, he clarified during Ethical Corporation's two-day <a href="http://www.ethicalcorp.com/rbs/">Responsible Business Summit</a>, which concludes today. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-GB">Companies may feel uncomfortable with the label of ‘development actors’. Don’t be. Not only is it a fact (and therefore unavoidable), but a better understanding of your relationship to society at large will stand you in better stead for the future. Standard Chartered, for example, is now increasing its investment in SME services in Ghana as a direct result of the impact “gap” (read: opportunity) highlighted by <a href="http://www.standardchartered.com/sustainability/news/20101014/en/index.html">its value chain assessment</a>.<span> </span></span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-GB">In the desire to be ‘business-like’, however, don’t ignore what the development community can teach. Not about programmes so much (leave that rightly to the NGO experts), but about assessment. Davis points to the ‘results chain’ approach used by large donors. Such an approach accepts the complexity of the development process and frequent disjunctions between cause and effect. In so doing, impact measurement standards employed by the likes of the <a href="http://www.enterprise-development.org/page/measuring-and-reporting-results">Donor Committee on Enterprise Development </a>move away from producing isolated data and focus instead on the “consequential effects” of development interventions. That helps </span><span lang="EN-GB">development actors </span><span lang="EN-GB">tell the broader story of their role in, and impact on, society. It works for NGOs. It would for companies too. </span></div><div class="MsoNormal"><br />
</div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-83406327466412440232011-05-04T01:16:00.000-07:002011-05-04T01:16:07.744-07:00Pitching the Press: passing the 'so what?' test<span style="font-family: Arial; font-size: 10pt;">‘Surfer who rode e-commerce wave shares £70m.’ So runs one of the top business stories in <a href="http://www.thetimes.co.uk/tto/news/"><i>The Times</i></a> today. Others include EasyJet’s booking charges, a takeover bid for car dealer Lookers and the latest manufacturing figures. The stories have three things in common. They are ‘news’ in the obvious sense of being ‘new’, and they play to the interests of the general reader. And thirdly, they have nothing (save perhaps the consumer interests of EasyJet passengers) to do with corporate responsibility. </span> <br />
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</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The latter is no surprise. CR professionals might think their companies’ efforts to implement, integrate and generally imbibe responsible business practices are fascinating. Unfortunately, most business editors do not. Bad news – corporate crises, product flops, management malfeasance, fat cats, depressing economic data (see above) – wins out every time. That’s just the way it is. Hence Sony’s <a href="http://www.ft.com/cms/s/2/05a900e0-73d9-11e0-b788-00144feabdc0.html#axzz1LMoQTFSQ">online data breach</a> makes it into the press, and not its <a href="http://www.sony.net/SonyInfo/csr/">mobile libraries</a> in South Africa. </span><span style="font-size: 10pt;"><a href="http://www.sony.net/SonyInfo/csr/"><span style="font-family: Arial;"></span></a></span><span style="font-family: Arial; font-size: 10pt;"></span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">So, should CR execs and their PR teams just forget trying to sell in stories? Not quite yet, says Peter Stiff, a business reporter at The Times and panelist at <i>Ethical Corporation</i>’s current annual <a href="http://www.ethicalcorp.com/rbs/">Responsible Business Summit</a></span><span style="font-size: 10pt;"><a href="http://www.ethicalcorp.com/rbs/"><span style="font-family: Arial;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">. But do change your pitch, he advises. Cut the fluff and buzzwords. Provide some hard numbers. And, above all, spell out “at the get-go” what the business case is. Why are you doing this? What tangible difference does it make to your bottom line? These are the questions that reporters on busy business desks want to know. And make your answers sharp. As Stiffs puts it: “Frankly, I don’t have time to dig.”</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Some topics are more likely to win the ear of an editor than others. As a general rule what works for the in-house magazine (pictures of smiling volunteers, CEOs planting trees etc) doesn’t work for newspapers. New technology or the discovery of “interesting, surprising” data, on the other hand – now, these might just cause an editor to lay aside his scepticism a moment and take a look. At least, so says Daniel Franklin, executive editor at <i>The Economist </i>and another <a href="http://www.ethicalcorp.com/rbs/">Summit</a> panelist. Other subjects on Franklin's potential ‘tick’ list include innovative partnerships with NGOs and “honest engagement” with the real life trade-offs faced by companies trying to become responsible. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Make it relevant, simple and interesting and your news story stands a chance. In that sense, the principles of pitching a </span><span style="font-family: Arial; font-size: 10pt;">CR initiative to a </span><span style="font-family: Arial; font-size: 10pt;">news desk aren't that far removed from selling it to the board. Remember: journalists are fickle, busy and intrinsically suspicious of ‘greenwash’. But they have another trait too: they’re terrified of being boring. As Franklin admits: “If you can make a good news story less boring, we’re much more likely to write about it.” </span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-18546415714741495062011-05-01T15:00:00.000-07:002011-05-02T01:54:22.671-07:00Reporting: forcing the conversation<span style="font-family: Arial; font-size: 10pt;">Most corporate responsibility professionals approach the task of reporting in much the same way as spending Christmas with the in-laws: they grit their teeth at the prospect, try to keep from screaming during the event, and pray they don’t have to repeat it once it's all over. Social and environmental reporting is time-consuming, labour-intensive and expensive. So what’s the value? </span> <br />
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</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Well, more than you might think, argues social responsibility investment guru Rory Sullivan in the <a href="http://www.ethicalcorp.com/content.asp?ContentID=7351">latest issue</a> of <i>Ethical Corporation</i>. For starters, the popular notion that no one cares about such information is misplaced. That might have been the case in the past, says Sullivan. Not any more. Taking account of non-financial issues “has now become mainstream investment practice”. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">That doesn’t mean sustainability reports are flying off the shelves. Most still don’t get read. Why? Because, despite the talk from investors of the importance of social, environmental and governance issues, such reports are seen as “irrelevant” to investment decisions. For Sullivan, the situation is not a lost cause. It all comes down to better communication. Companies need to tell investors what they need to hear. At present, corporate assumptions on what that might be lie way off the mark. Investors don’t help. They are bad about spelling out just <i>what</i></span><span style="font-family: Arial; font-size: 10pt;"> non-financial data interest them and why. The result: an impasse. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Sullivan uses his fascinating <a href="http://www.ethicalcorp.com/content.asp?ContentID=7351">essay</a> (based on the conclusions of his new book, ‘<i><a href="http://www.greenleaf-publishing.com/valuing%20">Valuing Corporate Responsibility</a>’</i></span><span style="font-family: Arial; font-size: 10pt;">) to explain what responsible investment looks like; what this means in terms of investors’ use of non-financial data; and, how reporting can be made more investor-friendly. Answers to the first two provide a host of incisive insights. Unfortunately, these don’t mount to a step-by-step roadmap for reporters. Precisely <i>what</i></span><span style="font-family: Arial; font-size: 10pt;"> data should go into a report remains a “work in progress”. Nor are investors’ interests uniform. The onus, Sullivan maintains, lies with companies. Link information to corporate strategy and performance, and investors will sit up and listen. Don’t and it’ll be like Christmas with the in-laws once again: lots of conversation and very little said. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><i><span style="font-family: Arial; font-size: 10pt;">(Note:</span><span style="font-family: Arial; font-size: 10pt;"> Ethical Corporation readers can obtain a discount </span><span style="font-family: Arial; font-size: 10pt;">on Rory Sullivan’s new book. Click <a href="http://www.greenleaf-publishing.com/valuing%20">here</a> </span><span style="font-family: Arial; font-size: 10pt;">and use the code EC3VCR</span><span style="font-family: Arial; font-size: 10pt;"> at the checkout.) </span></i><span style="font-family: Arial; font-size: 10pt;"></span></div><span style="font-family: Times; font-size: 10pt;"><i></i></span><span style="font-family: Times; font-size: 10pt;"></span>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-60414775089165800142011-04-27T12:10:00.000-07:002011-04-28T01:59:44.467-07:00Competitive Intelligence: fixing on a formula<div dir="ltr" style="text-align: left;" trbidi="on"><br />
<div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Only two senior executives are supposed to know the recipe for Coca-Cola. The US beverage company forbids them to travel on the same plane in case the mythical formula should go down with them. Now the best kept secret in corporate history is out (or so a <a href="http://www.thisamericanlife.org/radio-archives/episode/427/original-recipe">US radio show</a></span><span lang="EN-US" style="font-size: 10pt;"><span style="color: black; font-family: Arial; text-decoration: none;"></span></span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"> would have us believe). All along, the ingredients for inventor Dr Pemberton’s fizzy magic were tucked away in the pages of his local newspaper. So now we all know: just a splash of cinnamon and Neroli oil, a drop of coriander, orange and lemon, a tea-spoon of alcohol and – hey presto – the ‘real thing’. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Hogwash, says Coca Cola. It would. For more than a century, the company has kept the world guessing. Such uncertainty does wonders for marketing. Yet, in today’s competitive, dog-eat-dog world, the days of corporate confidentiality seem to be fast disappearing. <a href="http://www.bbc.co.uk/news/business-12125864">Renault</a> in France, <a href="http://www.reuters.com/article/2009/08/12/us-china-rio-qa-sb-idUSTRE57B0FV20090812">Rio Tinto</a> in China and <a href="http://ethicalcorp.blogspot.com/2011/03/big-corporate-espionage-cases-and.html">Sears</a> in the US are just some of the big names to have found themselves embroiled in recent espionage scandals.</span><span lang="EN-US" style="font-size: 10pt;"><br />
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</span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">It’s natural to want to know what your competitors are up to. Some even say it’s an ethical obligation. (Willful ignorance leads to uncompetitiveness, which leads to shortchanged shareholders, the argument runs). Yet where to draw the line? It’s not easy, admits Rajesh Chhabara in the <a href="http://www.ethicalcorp.com/content.asp?ContentID=7355">latest issue</a> of Ethical Corporation. Especially in an environment where ‘competitive intelligence’ companies are out hawking their investigative services. </span><span lang="EN-US" style="font-size: 10pt;"><br />
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</span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">One basic rule of thumb: if you came by the information ethically, it’s probably okay. And, in the internet age, there is a mountain of publicly-available data out there – if you’ve the time, energy and expertise to go looking for it. If your means were dubious (think: theft, spying, phone tapping, computer hacking, etcetera), then you’ve almost certainly overstepped the line. There are guidelines out there. Surveillance firms have a code of ethics courtesy of US trade group, the <a href="http://www.scip.org/">Strategic and Competitive Intelligence Professionals</a>. Corporations are developing their own norms too. Training staff, developing approval processes and conducting regular cross-functional reviews are just three of the ten best practice suggestions featured in a <a href="http://www.ukcif.co.uk/events/previous-events/10-process-and-technology/44-competitive-intelligence-gathering-ethical-challenges-and-good-practice-the-institute-of-business-ethics">recent report</a> by the Institute of Business Ethics. <br />
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<a href="http://www.ethicalcorp.com/content.asp?ContentID=7355">Chhabara</a> weighs up other angles too. How might companies misuse information collected legitimately, for instance? Or where does collecting information on campaign groups cross the line? (Greenpeace recently sued several companies, including Dow Chemical, for espionage.) <br />
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</span></div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Sophisticated software is making it easier for those with criminal intent to steal competitive information. On the other hand, it’s also enabling companies to better protect their private data. In our high-tech age, however, good old honesty still goes a long way. Like when PepsiCo was offered stolen trade secrets from a disgruntled Coca-Cola employee. It could have paid the asking price. Instead it phone the FBI. Now, in ethical terms, that’s surely the <i>real</i> thing. </span><span lang="EN-US" style="font-size: 10pt;"><br />
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</div></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-90826501554893679242011-04-14T06:37:00.000-07:002011-04-14T06:37:46.982-07:00The CSO: sustainability’s new breed of top dog<span style="font-family: Arial; font-size: 10pt;">I recently put a call into Raffaello Raimondi. In an ideal world, it’d be <i>him</i> phoning me. Or you. A top headhunter at recruitment specialists <a href="http://www.allen-york.com/">Allen and York</a>, he has the job of picking out the next big things in corporate sustainability. </span> <br />
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</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">We’re not talking the typical ‘CSR’ function here. The last ten years have seen a troop of hard-working, well-meaning folk fill the tiers of middle management. And welcome, they are. These are corporate responsibility’s in-field commandos: managers that grapple with the guidance notes for GRI's version G3.1 and crack heads to get a community involvement project off the ground. All this in the </span><span style="font-family: Arial; font-size: 10pt;">hope of making their companies more responsible. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">No, Raimondi’s focus is further up the chain of command. An increasing number of corporate clients are asking him to find someone for the C-Suite. His successful candidates have a daunting job spec: shift their corporations onto a sustainable footing. That’s no small task. “Top to bottom change”, is how Raimondi describes it. Hence the leadership team post. ‘<a href="http://www.ethicalcorp.com/content.asp?contentid=7349">Chief Sustainability Officers</a>’ or CSOs (as they are increasingly being called) have the boardroom clout to get things done. Or so the <a href="http://crmanagementblog.blogspot.com/2011/04/selling-sustainability-to-c-suite.html">theory</a> (and their handsome salaries) runs. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
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</style> </div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">So who are the high fliers in Raimondi’s rollerdex? Few, you may be surprised to know, have the term ‘sustainability’ in their current job titles. Time in the ‘CSR’ trenches is not a prerequisite for today’s CSOs. Think instead: exceptional management skills (the soft bit), hands-on industry experience (the technical bit) and a ‘big picture’ view of corporate strategy (the brains bit). So would the typical CV look like? Here’s Raimondi’s tick list:</span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"> <br />
* A decade or so running process-driven operations in a large company – that’s a given. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">* A respectable MBA - ditto. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">* A stint with a strategic or environmental consultancy - preferable, though not essential. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">* Oh, and evidence of a passion for matters sustainable.<br />
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Got all those and it might just be worth waiting by your phone for the call to come.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><i><span style="font-family: Arial; font-size: 10pt;">For more on the skill set, background and job spec of the emerging role of Chief Sustainability Officer, read the Strategy & Management<a href="http://www.ethicalcorp.com/content.asp?contentid=7349"> feature article</a> in Ethical Corporation’s latest issue.</span></i></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-49478221823134222822011-04-09T14:57:00.000-07:002011-04-09T14:57:06.697-07:00Selling sustainability to the c-suite<style>
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Sustainability needs to be led from the top. That’s not rocket science. It’s a simple fact of corporate life. Whatever the policy area, if it doesn’t have a green light from the board, it ain’t gonna happen. Get the go-ahead, however, and once closed doors magically start opening. Look at the likes of Unilever, <a href="http://www.guardian.co.uk/sustainable-business/b-q-ceo-ian-cheshire-capitalism-reappraisal">Kingfisher</a>, Swiss Re, Pansonic, Patagonia – all are sustainability leaders, all have vocal, pro-sustainability CEOs. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">But what if you find yourself on the other side of the fence? What if your board thinks an annual Charity Day and a tree planting outing is enough to tick the sustainability box? Let’s face it, despite what CEOs might say (93% claim to think sustainability will be “critical” to their future business success, according to a <a href="http://www.ethicalcorp.com/content.asp?ContentID=7073&ContTypeID=">recent-ish UN study</a>), board ambivalence is frequently the norm. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Some business leaders just don’t buy it. Ryan Air’s Michael O’Leary famously referred to man-made global warming as ‘horseshit’. But for most, it's more likely that they just don’t get it. Sustainability sounds fluffy and nice, but irrelevant to their quarterly targets (and annual bonuses, for that matter). Which is why <i>Ethical Corporation</i> columnist <a href="http://www.ethicalcorp.com/content.asp?contentid=7301">Mallen Baker advises</a> would-be sustainability advocates to ensure their business case is absolutely watertight. Company leaders won’t abide wooly thinking. That’s what makes them company leaders. So “Drill and drill” until you have the “hard proof you need”, Baker quotes one leading sustainability practitioner as saying. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Other tips include finding some quick wins that prove sustainability can tangibly impact the business bottom line. Benchmark too. Senior executives hate to think the competition is out ahead. And go public. Chief executives typically have short shelf lives. It’s much harder for a new appointee to backtrack if the world has already been told about your sustainability commitments. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Selling sustainability to the C-Suite is not always easy. But there are harder tasks out there. None more so than trying to implement sustainability without boardroom backing. </span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-1642480826141382252011-03-31T14:56:00.000-07:002011-03-31T14:59:19.061-07:00Certification: a plea for harmony<div dir="ltr" style="text-align: left;" trbidi="on"><div class="MsoNormal"></div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">You can’t move in modern supermarkets without the logo of one certification scheme or another jumping out at you. Some are short and sweet: ‘FSC’, ‘MSC’, ‘FLO’. Others are more long-winded: 'United Egg Producers Certified: Produced in Compliance With United Egg Producers' Animal Husbandry Guidelines' being a personal favourite. After decades on the margins, the big brands are beginning to weigh in. Cadbury has very publicly committed to take all its Dairy Milk fair trade. Kraft has pledged to buy up to 30,000 tonnes of Rainforest Alliance coffee by next year. Consumers should be cheering in the aisles. Some are. But many are not. </span></div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"></span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">It seems a tad churlish to criticise social and environmental certification schemes just as they are going mainstream. Yet the sceptics have a point. Well, several actually. For starters, the people such schemes are designed to help – producers and consumers primarily – are being sold short. The former face extra costs from multiple schemes, while the latter are left confused by so many labels. There are conceptual shortfalls too. Certification generally implies a premium. Who should pay it? Producer, buyer or consumer – no one seems clear. Recalcitrants present another sticking point. Certification works where people care. (So the 20% of Brazilian soya that ends up in Europe needs an ethical stamp.) It’s not so effective where people are indifferent (i.e. the 80% or so of Brazilian soya destined for China). </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">The obvious step – as Rajesh Chhabara points out in <a href="http://www.ethicalcorp.com/content.asp?ContentID=7305">Ethical Corporation’s latest issue</a> – is for standards to harmonise. Farmers and consumers would welcome such a move. So too would companies, who must currently turn to a litany of standards to certify their full value chains. Harmonisation is easier said than done. For starters, every certification provider has its own emphasis and priorities (and, to put it frankly, their own turf to protect). Secondly, the issues under consideration are complex and wildly divergent. <br />
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At an industry level, however, signs of collaboration are emerging. Take Starbucks. The Seattle-based coffee giant has been working with its <a href="http://www.starbucks.com/sharedplanet">own certification scheme</a> since 2004.</span><span lang="EN-US" style="font-family: Times; font-size: 10pt;"></span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"> That covers 81% of its total coffee bean purchases. The remainder it buys from farmers certified under other schemes such as Rainforest Alliance and Fairtrade Foundation. The company is now working with TransFair USA and Fairtrade Labelling Organisations International to explore integrating its approach with that of Fair Trade Certified. It’s not a holistic answer, but it’s a start.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Ultimately, certification is a numbers game. There needs to be enough of it in the market to make it the <i>de facto</i> option of choice. Consumers need to buy it because it’s the only show in town. That works in specific geographies with specific products. Palm oil from Indonesia or hard wood from Bolivia, for instance. In mega-markets, however – which comprise the vast majority of agricultural commodities – certified products remain in the minority. Legislation can help change that. Consider fridges and HFCs. For certification providers to do it alone, however, they must converge and cooperate. As they are, they might win shelf space. They might even nab an entire aisle. But without greater harmonisation, the entire supermarket or shopping mall will always fall out of their reach. </span></div></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-41777397622893307062011-03-29T05:38:00.000-07:002011-03-29T05:38:37.417-07:00Sustainable Agriculture: fact, not factoid<span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Factoids and facts. In the ‘Just Google It” generation in which we live, both proliferate. But an important distinction exists between the two. Factoids win you pub quizzes. Example One: 2010 was the International Year of the Potato. Example Two: almost a third of the 4,000 known potato varieties are grown in the Peruvian Andes. Facts, in contrast, demand that you get up and take action. Example: Peruvian glaciers above 5,000m (26,000ft) will have <a href="http://www.koha.biz/2011/03/potato-cultures/">almost completely vanished</a> by 2015. Why? Climate change. So what? No more potatoes. </span> <br />
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</span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">It would seem a semantic distinction were the same story not being repeated the world over. The planet’s capacity to provide the food stuffs that keep us alive are under strain. Warmer temperatures and changing rain patterns are altering farming conditions and impacting agricultural productivity. Earlier this month, the <a href="http://www.nytimes.com/2011/03/10/science/earth/10coffee.html"><i>New York Times</i></a> reported on how Colombia’s coffee harvest is faltering because of higher temperatures and above average rainfall. That’s not just a worry for the country’s producers (many of whom are small farmers with diminutive incomes). It’s a concern for coffee drinkers too. Less supply means higher prices. Global brands such as Maxwell and Folgers have upped their prices by 25% since the middle of last year. </span></div><div class="MsoNormal"><br />
</div><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">Global agriculture is coming under threat just as demands on farmers are on the increase. Another jump-into-action fact: the world will have an extra two billion mouths to feed by 2050. And another: demand for agricultural products is expected to double over the same period. Without action, the prospect of food shortages looms large. Food price crises point to what could be around the corner. Over the last three years alone, </span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">the UN Food and Agriculture Organisation</span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"> calculates that around 40 million people have been pushed into hunger due to food inflation.</span> <br />
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</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">The business world is beginning to respond. At this year’s World Economic Forum, a heavyweight coalition of seventeen multinational food and beverage companies took the podium to call for a “<a href="http://www3.weforum.org/docs/IP/AM11/CO/WEF_AgricultureNewVision_Roadmap_2011.pdf">New Vision</a>” for the world’s farming and food communities. Their goal? Sure future access to affordable and nutritious food. Their ‘roadmap’? To be decided. </span></div><div class="MsoNormal"><span lang="EN-US" style="font-size: 10pt;"><br />
</span><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">In the search for possible answers, <i>Ethical Corporation</i>’s latest issue includes a <a href="http://www.ethicalcorp.com/content.asp?contentid=7327">Special Briefing</a> about how large food companies are responding to the pending agricultural crisis. Walmart, Pepsico, Unilever Coca Cola, Cargill and Nestl</span><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> </w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" LatentStyleCount="156"> </w:LatentStyles> </xml><![endif]--><!--[if gte mso 10]> <style>
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</style> <![endif]--><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">é</span><em> </em><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">are just a few of the enormous players in the food and beverage industry to have recently come out with big commitments around ‘sustainable agriculture’. Strategies range from improving farmer productivity through crop science to introducing environmentally friendly growing techniques (reducing soil loss, cutting back excessive nutrient use, minimising pesticides) and increasing the capacity of food processors (as in the case of General Mills' new '<a href="http://partnersinfoodsolutions.com/">Partners in Food Solutions</a>' programme).</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;">So far, no one solution has won out. That’s not surprising. Early experiments in sustainable agriculture demonstrate that the right answers depend on a host of factors (geography, soil type, crop variety etc). Nor are the solutions in the hands of private sector alone. World farming requires a complete ‘redesign’, according to the authoritative Foresight Project report ('<a href="http://www.bis.gov.uk/assets/bispartners/foresight/docs/food-and-farming/synthesis/11-628-c8-changing-consumption-patterns.pdf"><i>Global Food and Farming Futures</i></a>'). For that to happen, it will require no less than an overhaul in public policy, market and trade systems, and consumer behaviour. A fact to act on if there ever was one. </span></div><div class="MsoNormal"><br />
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</div><div class="MsoNormal"><span lang="EN-US" style="font-family: Arial; font-size: 10pt;"><i>n.b. as well as an <a href="http://www.ethicalcorp.com/content.asp?ContentID=7313">overview of the issues</a> underlying sustainable agriculture,</i><i> </i><i>Ethical Corporation's Special Briefing includesexamples of <a href="http://www.ethicalcorp.com/content.asp?ContentID=7314">best practice</a> from the food industry as well as an examination of <a href="http://www.ethicalcorp.com/content.asp?ContentID=7315">partnerships</a> with civil society organisations.</i></span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-47363796920120533562011-03-17T06:10:00.000-07:002011-03-17T06:10:31.224-07:00Sustainability Advisory: are the Big Four necessarily the best?<span style="font-family: Arial; font-size: 10pt;">Most corporate responsibility and sustainability teams are skeletal affairs. That keeps them agile and obliges them to work closely with other functions (no bad thing). But the complexity and scope of the sustainability field is expanding fast. Little wonder that sustainability managers often turn to consultants for a helping hand. But who to call? </span> <br />
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</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">One piece of the management puzzle where consultancy demand is consistently high centres on performance measurement. Pressure is on corporations to collate and report on a dizzying array of non-financial metrics and targets. The result is a plethora of annual sustainability reports, some good, some not so good. Alone such information is subject to credibility challenges. Who’s to say the company is embellishing the truth or, more likely, omitting the ‘material’? With the stamp of an authoritative third party, these compendia of data begin to carry weight. Which is where the phone call to one of the <a href="http://www.ethicalcorp.com/content.asp?contentid=7303">Big Four</a> comes in. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The Big Four (once eight) - PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte – are past masters at reporting and assurance provision. Even experienced sustainability practitioners can become lost in the modern day maze of protocols and standards. For the Big Four, on the other hand, the likes of ISAE 3000, AA1000 and GRI are their bread and butter. Three factors differentiate them from the rest: scale (Mongolia, Mauritania, everywhere short of Mars, they can cover), approach (labouriously methodical) and brand (centuries in the bean-counting game).</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The Big Four might be best to sign off your sustainability report, but what about other tricky management brain-teasers? In response to that question, the all-powerful quartet has sought to beef up their sustainability ‘advisory services’ in recent years. The strategy has partially worked. In certain fields, their knowledge of processes and systems make them hard to beat (and, for many smaller companies, hard to afford). Operational strategy is one such area. Advising on internal audit, due diligence and governance are others. Their service offering in the sustainability space is far from universal, however. For big picture visioning, communication strategies or marketing advice (among others), companies would be advised to look elsewhere. On the strategy side, some of the consultancy heavyweights (Accenture, McKinsey, Bain etcetera) are building their sustainability capacity. For everything else, there now exists a slew of boutique consultancies and one-man bands. The choice can be confounding. Which re-introduces the original dilemma: who you goona call? </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><i>For an in-depth overview of the pros and cons of the Big Four’s sustainability services, see <a href="http://www.ethicalcorp.com/content.asp?contentid=7303">Judy Kuszewski’s feature </a>in the latest issue of Ethical Corporation magazine </i></span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><span> </span></span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-52580985870828342132011-03-08T17:26:00.000-08:002011-03-08T17:30:56.708-08:00Big Society or Huge Skive? UK call to up corporate citizenship<span style="font-family: Arial; font-size: 10pt;">Governing in times of austerity is an unenviable task. To try and take the edge of unpopular but inevitable spending cuts, UK premier David Cameron came up with an idea. He called it the ‘Big Society’. So what is it exactly? Well, according to the Prime Minister, it’s <a href="http://www.bbc.co.uk/news/uk-politics-12441972">more than just a mask</a> for government scrimping. It's an invitation to promote ‘<a href="http://www.cabinetoffice.gov.uk/content/big-society-overview%20%20%20">community engagement</a>’ and ‘social action’ by community and voluntary groups. </span><br />
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">UK charities, social enterprises and community groups aren’t so sure. Their budgets, they say, are being slashed just as the government is asking them to do more. British businesses could argue the same. Yet, the notion of the Big Society represents an obvious invitation to responsible companies to set themselves apart.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">As <i>Ethical Corporation</i>’s recent <a href="http://www.ethicalcorporation.com/content.asp?ContentID=7279&ContTypeID=13">UK Briefing</a> reveals, UK business leaders claim to be getting on board. Its analysis of <a href="http://www.ethicalcorp.com/content.asp?ContentID=7269">current government policy</a> cites an authoritative survey that finds that than three in four (77%) companies say they could do more to increase their community investment. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">That the Big Society should be all about voluntary action is nothing new. UK government policy of the last decade has all been about carrots, not sticks. The Coalition’s latest idea - ‘<a href="http://www.csreurope.org/news.php?action=show_news&news_id=1238&type=">responsibility deals</a>’ – comes from the same stable. Corporations are called on to negotiate ‘voluntary action plans’ on issues of public concern. Getting the food industry to tackle obesity is a case in point. If the private sector doesn’t act, the government says it will regulate. But will it? No one is overly convinced. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Responsible companies will find the current policy environment highly conducive. Never has the expectation, or need, for companies to behave as ‘corporate citizens’ (as UK terminology puts it) been higher. The problem lies with the laggards. The current Coalition shows little appetite for putting additional regulations or burdens on its recession-hit companies (unless its banker bonuses).</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Yet business leaders who think they can get away with a Little Society vision (i.e. one of profits before people) will be in for a shock. As <i>Ethical Corporation</i>’s <a href="http://www.ethicalcorporation.com/content.asp?ContentID=7279&ContTypeID=13">UK Briefing</a> makes abundantly clear, businesses operating in the UK must answer to some of the world’s most vigilant <a href="http://www.ethicalcorp.com/content.asp?contentid=7267">consumers</a>, media and <a href="http://www.ethicalcorporation.com/content.asp?ContentID=7268">campaign NGOs</a>. Government policy might let irresponsible companies off the hook, but this powerful trio will do their damnedest to hold them to account. </span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-8600290020517032012011-02-25T11:28:00.000-08:002011-02-25T11:28:12.076-08:00Toyota Recall: 'can we fix it?'<style>
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">For a while, Toyota had it all. It was the automotive equivalent of the prom queen: the Japanese automaker was loved by investors, crooned over by the media and – most importantly – trusted by consumers. </span><span style="font-size: 10pt;"><br />
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</span><span style="font-family: Arial; font-size: 10pt;"></span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">And then it all went wrong. Allegations about dodgy accelerator pedals saw it compelled to announce a massive recall in late 2009 and early 2010. Most of the fall out occurred in the US. But recalls in China, Europe and Japan had the rest of the world raising eyebrows too.<br />
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A year on and it seems Toyota is still not out of the woods. Yesterday, the doyen of ‘kaizen’, or ‘continuous improvement’, announced yet <a href="http://pressroom.toyota.com/pr/tms/toyota/toyota-consumer-safety-advisory-102572.aspx">another recall</a>. A further 2.2 million Toyota and Lexus (a Toyota subsidiary) models are to be withdrawn from the roads in the US.<span> </span></span><span style="font-size: 10pt;"><br />
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</span><span style="font-family: Arial; font-size: 10pt;">The obvious question is ‘where did it all go wrong?' Excessive growth, concludes Stephen Gardner in Ethical Corporation’s special <a href="http://www.ethicalcorp.com/content_list.asp?m=ct&ct=43">Briefing on Classic Corporate (Ir)responsibility Case Studies</a></span><span style="font-family: Times; font-size: 10pt;"><a href="http://www.ethicalcorp.com/content_list.asp?m=ct&ct=43"></a></span><span style="font-family: Arial; font-size: 10pt;">. Toyota’s international growth has been nothing short of spectacular in recent years (Revenue shot up 41.5% between 2005 and 2008). But at what cost? Answer: quality oversight. In short, the rush for market share won out against “Toyota’s traditional, methodical” approach.<span> </span><br />
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Perhaps the more pertinent question, however, is ‘where to go from here?’ The European Academy of Business in Society’s director-general Simon Pickard provides some helpful hints: acknowledge your faults, implement ‘clear and transparent’ systems of redress, accept customer criticism, cooperate with regulators and increase quality assurance.<br />
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Toyota was guilty of being slow in coming forward. While the company was going global, the company’s management was busy staying local. So when crisis struck, Toyota’s hierarchical decision-making structure reduced its agility to respond. As for its transparency, a hearing by the US lower house judged the company’s initial responses as “ambiguous”.<br />
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To Toyota’s credit, it’s since gone all out to turn the situation around. The tone started from the top. Company president Akio Toyoda went on record with a comprehensive <i>mea culpa</i>. “We pursued growth over the speed at which we were able to develop our people and our organisation.” That’s some confession. To follow it up, he ordered a “top-to-bottom review” of its global quality assurance processes. New safety initiatives are also being rolled out. <br />
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Toyota also has revved up its communications - another all-important step in crisis situations. Advertising campaigns, media interviews, free phone customer service numbers and <a href="http://www.toyota.com/recall">dedicated websites</a> – all have been used to reassure customers and send the message out that the company's cars are (or soon will be) safe.<br />
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Reputations famously take a lifetime to build and only a few minutes to lose. Toyota remains in a PR mess. How it acts now and in the coming months will be critical to winning back consumer confidence. Its response measures so far look sound. In the long run, they should - to borrow from author H.G. Wells – prevent the crisis of today becoming the joke of tomorrow. </span></div><div class="MsoNormal"><br />
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</div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-64283956820388712532011-02-20T16:30:00.000-08:002011-02-20T16:32:20.231-08:00Biodiversity: it's a dependency thing<style>
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Five years ago, UK tobacco firm British American Tobacco (BAT) released a public statement on biodiversity. It is far from the first company to have done so. The issue of biodiversity (in short, ‘the totality of genes, species, and ecosystems of a region’) has become a hot concern for businesses in recent years. Last October’s <a href="http://www.cbd.int/cop10/%20">Convention on Biological Diversity</a> </span><span style="font-size: 10pt;"><a href="http://www.cbd.int/cop10/"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">meeting saw almost as many suits as scientists in attendance. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">What stands <a href="http://www.batbiodiversity.org%20/">BAT’s commitment</a> </span><span style="font-size: 10pt;"><a href="http://www.batbiodiversity.org/"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">apart is its explicit recognition that it not only has an impact on biodiversity, but a dependency too. That turns biodiversity from a straightforward risk issue (hedging against reputation loss or avoiding litigation) into one of future strategic importance (most clearly, protecting production and supply). </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The notion of ‘biodiversity dependency’ is only just appearing on corporate radar screens, as <a href="http://www.ethicalcorp.com/content.asp?contentid=7270%20">Ethical Corporation’s recent Briefing</a> on the subject spells out</span><span style="font-size: 10pt;"><a href="http://www.ethicalcorp.com/content.asp?contentid=7270"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">. That’s too bad. Healthy ecosystems are responsible for public goods such as clean water, fresh air, sufficient food and a stable climate – services on which all businesses rely. Seen as such, biodiversity becomes less about saving the panda and more about protecting the bottom line. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">It is strange therefore that more companies are not taking BAT’s lead in trying to manage the issue. A <a href="http://www.eiris.org/files/research%20publications/Biodiversity2010.pdf">recent study</a> </span><span style="font-size: 10pt;"><a href="http://www.eiris.org/files/research%20publications/Biodiversity2010.pdf"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">by specialist investor group EIRIS finds that only 6% of companies with high impacts on biodiversity has sufficiently robust policies in place.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">One reason could be that managing impacts on biodiversity is no easy task. BAT, for example, pledged to embed biodiversity management into all its operations around the world. “It was a nice phrase, but no-one really knew what it meant”, admits Paul Laird, corporate partnership manager at the Earthwatch Institute, an international environmental organisation and a member of the </span><span style="font-family: Arial; font-size: 10pt;">BAT Biodiversity Partnership.</span><span style="font-size: 10pt;"><br />
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</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">After much experimentation and several wrong turns, the tobacco company came up with its Biodiversity Risk and Opportunity Assessment tool (known as BROA). It'</span><span style="font-family: Arial; font-size: 10pt;">is essentially a three-stage process. The first step comprises an initial desk-top exercise designed to identify potential direct and indirect impacts on local biodiversity. The second involves a field-based assessment of those possible impacts. And the third requires local management to address these impacts. </span><span style="font-size: 10pt;"><br />
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</span><span style="font-family: Arial; font-size: 10pt;">One of the unique requirements of the approach is for BAT’s operating companies to work with a local partner. This is seen as giving the process credibility, as well as providing an external, expert perspective. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The management approach has its limits, however. The site-specific nature of this (and similar biodiversity assessment methodologies) makes aggregating data difficult. Identifying generic ecological improvements of landscapes or rating the company’s overall biodiversity performance is not yet possible either. Yet it's a start, and an example of what other companies could - adn should - be doing. </span></div><span style="font-family: Arial; font-size: 10pt;"></span><br />
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</div><div class="MsoNormal"><i><span style="font-family: Arial; font-size: 10pt;">n.b. Ethical Corporation’s recent Briefing on biodiversity provides a detailed overview of <a href="http://www.ethicalcorp.com/content.asp?ContentID=7271">current management practices</a>, as well as efforts to <a href="http://www.ethicalcorp.com/content.asp?ContentID=7272">value ecosystem services</a>. </span></i></div><div class="MsoNormal"><br />
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</div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-23433289628194019052011-02-10T11:12:00.000-08:002011-02-14T10:23:53.014-08:00McLibel: responsibility, the hard wayEvery company would like you to believe that responsible business is part of their “corporate DNA”. It’s not. Companies are no more “hardwired” to be responsible (or irresponsible) than us mere mortals. <br />
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Responsible corporate behaviour evolves from governing principles underpinned by nitty-gritty policies and everyday processes. It’s not a feel-nice philosophy. It’s a case of non-nonsense management mechanics. <br />
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So how do integrated responsibility management systems come into being? Companies have two basic options: the easy way and the hard way. </div> <br />
<div class="MsoNormal">The easy way involves the company taking a measured, calculated approach that chimes with its business operations and objectives. Principles are voluntarily decided; issues voluntarily assessed; policies voluntarily established; and then targets voluntarily set. Hey presto. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The hard way scraps all sense of voluntarism and demands that the company get up to speed across all its operations immediately. What’s more, as the company is doing so, every inch of its activities are publicly scrutinised with the attention of a forensic scientist. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">That second option, essentially, marks the route taken by McDonald’s. When the global food chain threatened to sue two unknown UK campaigners for libel in 1990, it effectively waved goodbye to an easy ride. <br />
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Judy Kuszewski provides a detailed appraisal of what became known as the “McLibel” affair in Ethical Corporation’s recent <a href="http://www.ethicalcorp.com/content.asp?ContentID=7221"><i>Classic Case Studies</i></a><span style="font-style: normal;"> report. The article charts the story of how two individuals and one protest leaflet gave rise to the longest court case in British legal history. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">As a case study, the McLibel experience holds a dual message. First, avoid the law courts wherever possible. Even if the company wins (as McDonald's did, albeit in a pyrrhic sense), the negative publicity can be disastrous. (It’s a lesson that the world’s largest pharmaceuticals also learned in <a href="http://crmanagementblog.blogspot.com/2011/01/big-pharma-big-questions-access-to.html">another classic case study</a> covered in the report).</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Second, it shows that the hard way has at least one upside. As Kuszewski's article indicates, several commentators maintain that McDonald’s has emerged as a better managed, more responsible company as a result. (<a href="http://www.aboutmcdonalds.com/mcd/csr.html">Judge for yourself</a>.) <br />
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Would it have preferred to take the easy way? Yes. Does it regret playing legal hardball? Almost certainly. But at least, the company can point today to a comprehensive management framework – and one that’s born from sweat and tears rather than genetics. </div><div class="MsoNormal"><br />
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</div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-78457125005195534432011-02-03T14:59:00.000-08:002011-02-04T04:28:27.100-08:00CSR & the Elderly: Grayson on Greydom<span style="font-family: Arial; font-size: 10pt;">David Grayson has a knack for spotting what others miss. Back when Thatcher was busy privatising, he was bothering about the jobless in England’s industrial north. When the me.com generation were forever job-hoping, he was worrying about opportunities for those with disabilities. And when the corporate juggernaut was trumpeting global “CSR”, he was pondering the role of small business in the whole shebang.</span><br />
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</span><span style="font-family: Arial; font-size: 10pt;">In a timely essay in the <a href="http://www.ethicalcorp.com/content.asp?contentid=7254">latest issue</a> of Ethical Corporation, Grayson turns his eye to another issue our youth-obsessed culture regularly overlooks: older people. Over one in ten (11%) of the world’s population are over 60. Better nutrition and better medical care will see that percentage double in the next four decades. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">So what? So a lot actually. Businesses can’t afford to ignore the elderly, either on moral or commercial grounds. Take pensions. Who should pay for them and how? It’s just one of a range of issues relating to “intergenerational equity”. If you’ve not heard the term, get used to it. You’ll be hearing a good deal more of it in the future. </span></div><div class="MsoNormal"><span style="font-size: 10pt;"><br />
</span><span style="font-family: Arial; font-size: 10pt;">Here’s another phrase: ‘age friendly’. From a human resources perspective, management needs to think long and hard about how it treats its elderly employees. With retirement ages slipping, workforces are set to become older. As a minimum, that will require new, more flexible working patterns. It may also require some physical adjustments to workplace conditions, much as companies now accommodate the needs of the disabled. A multi-generational workforce also promises its own set of challenges; conflicting expectations, difficulties in communication, differential use of technology, diverse approaches to problem solving and innovation. Think Christmas dinner with the family - only on the factory floor. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><a href="http://www.ethicalcorp.com/content.asp?contentid=7254">As Grayson warns</a>, expect ‘age friendly’ to soon enter the marketplace lexicon too. Advertisers, especially, need to wake up. Old people aren’t just for anti-smoking ads. Not only is airbrushing out the elderly discriminatory. It’s also short sighted. Remember the ‘pink pound’? Well the 'grey pound' will make it look like pocket money. The supermarket that structures his aisles for the less mobile; the mobile phone company that builds a device for the hard of hearing; the bank that introduces a tailored equity release scheme to finance long-term elderly care - all are sitting on mines of silver. </span></div><div class="MsoNormal"><span style="font-size: 10pt;"><br />
</span><span style="font-family: Arial; font-size: 10pt;">Moral responsibility towards the elderly presents business with a number of important management imperatives, both in the shopfront and in the back office. So too with commercial logic. Changing market demographics oblige companies to sit up and take note of the world’s senior citizens. “Anyone who stops learning is old, whether at twenty or eighty”, automobile pioneer Henry Ford liked to say. Companies, take heed and innovate. The elderly are here to stay. <br />
</span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0tag:blogger.com,1999:blog-7645828431740693209.post-3804914336431638362011-01-27T10:48:00.000-08:002011-01-27T10:48:05.024-08:00Bhopal: pinning down responsibility<style>
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<div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">Bhopal is to India what Chernobyl is to the Ukraine: a catastrophic accident that lives on not just in the minds but in the physical bodies of those affected. <br />
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At least, 3,800 people died (unofficial figures are nearly double) when the US-owned Union Carbide factory sprung a toxic gas leak back in 1984. Thousands more were crippled. Even today, hundreds of children in Bhopal are born with congenital birth defects. </span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">There is little debate who was at fault, as Asia editor Rajesh Chhabara explains in a detailed account of the incident in Ethical Corporation’s recent <a href="http://www.ethicalcorp.com/content.asp?ContentID=7221&ContTypeID=13"><i>Classic Case Studies</i></a> briefing. Union Carbide (now a fully owned subsidiary of chemicals giant Dow Chemical) tried alleging sabotage by a disgruntled employee. No evidence has ever emerged. Instead the facts point to sloppy safety measures brought on by cost cutting and management oversight. <br />
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</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">The Bhopal disaster highlights an interesting and largely unacknowledged aspect of corporate responsibility: namely, how ill defined its borders still remain. Just where does ‘responsibility’ start and where does it stop? </span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">Technical responsibility clearly falls at Union Carbide’s door. It was the company’s over-full holding tank that leaked. Legal responsibility should be equally as clear. It’s not. At the time, the US headquarters of Union Carbide said it wasn’t responsible for day-to-day operations of the plant. That fell to its subsidiary, Union Carbide India Limited, in which it had a 50.9% stake. Union Carbide eventually paid up $470 million in compensation, but said its legal liabilities ended there. </span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">As for the personal responsibility of the company’s management, Union Carbide’s chief executive has deftly dodged any number of civil and criminal cases. Seven other senior executives were recently found guilty, two and a half decades after the event. All obtained the right of appeal, as Chhabara observes in his <a href="http://csrworks.blogspot.com/2010/06/bhopal-verdict-corporate.html%20">blog</a>. So no-one - neither the company nor those charged with running it – are left carrying the can. </span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">Where things get really confusing is moral responsibility. In paying up, Union Carbide says it met its “moral obligations” to the victims. Campaigners say the payment was immorally low (roughly $1,000 for every victim). There’s still the clean up bill to think about too. <br />
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As the guilty party’s current owner, does Dow Chemical have a responsibility to meet Union Carbide’s shortcomings? It’s a biblical conundrum – the son paying for the sins of his father. Technically the case is clear. A flat ‘no’. Legally, the answer is less clear-cut. Dow Chemical did, after all, see fit to meet Union Carbide’s asbestos liabilities in the US. Double standards, campaigners say. Not our mess, Dow Chemical replies. <br />
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Is it time to change the rules? Should, as Ethical Corporation asked <a href="http://www.ethicalcorp.com/content.asp?ContentID=3446">five years ago</a>, the rules of limited liability be changed for cases of gross social and environmental damage? </span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;"><br />
</span></div><div class="MsoNormal" style="font-family: Arial,Helvetica,sans-serif;"><span style="font-size: small;">This tragic story does have one silver lining. As <a href="http://www.ethicalcorp.com/content.asp?ContentID=7221&ContTypeID=13">Chhabara points out</a>, the Bhopal gas tragedy woke the international chemicals industry up to potential safety hazards. Under the ‘<a href="http://www.icca-chem.org/en/Home/Responsible-care">Responsible Care</a>’ programme, launched in the wake of the disaster, the industry now boasts a comprehensive certification system. <br />
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To quote from the initiatives own statement: <i>“Responsible Care is a commitment, signed by a chemical company's Chief Executive Officer (or equivalent in that country) and carried out by all employees, to continuous improvement in health, safety and environmental performance, and to openness and transparency with stakeholders.”<br />
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Nothing on the scale of the Union Carbide leak has happened since. The question of who should take ultimate responsibility for the Bhopal crisis, and how, remains unresolved. However, the lessons of responsible management have – hopefully – been learned. </span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com1tag:blogger.com,1999:blog-7645828431740693209.post-83004494747610316332011-01-24T04:14:00.000-08:002011-01-25T01:21:21.519-08:00UNEP in Nigeria: services up for sale?<style>
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The United Nations Environment Programme (UNEP) means well. It <a href="http://www.unep.org/documents.multilingual/default.asp?documentid=493&articleid=5391&l=en">describes itself</a></span><span style="font-size: 10pt;"><a href="http://www.unep.org/documents.multilingual/default.asp?documentid=493&articleid=5391&l=en"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;"> not immodesty as an “advocate, educator, catalyst and facilitator” for the world’s environmental problems. In essence, it’s the green wing of the United Nations. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
UNEP does this by promote dialogue, disseminate information, develop regional strategies, host climate change debates and generally hold the hand of environmental authorities in transitional economies. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
With the best intentions (namely, there’s no-one else with the clout to do so), the UN agency is expanding its brief to actually digging up data, not just sifting it. Since 1999, UNEP has carried out on-the-ground mitigation studies in twenty-five countries. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
Now, as <a href="http://www.ethicalcorp.com/content.asp?contentid=7191">Ethical Corporation’s Eric Marx explains</a></span><span style="font-family: Arial; font-size: 10pt;">, it’s facing its biggest job to date: surveying the Niger Delta. Over the last half century, an estimated 9 billion barrels of oil have seeped out into this highly-politicised corner of Nigeria. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
On the face of it, the project is meeting its objectives. Since its inception in October 2009, the 100 strong UNEP team has taken 1,200 samples and charted 300 spill sites. </span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;"><br />
All is not well, however. Though key groups among the delta’s Ogoni population are backing the process, many Nigerians and environmental groups remain sceptical. The study, they say, is being financed by oil major Shell – the main private operator in the region. The findings will, they continue, therefore be compromised. That allegation was given a boost when the chief of the UNEP mission blamed 90% of spills on oil ‘bunkering’. That’s to say, common thievery. <br />
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</span></div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Shell is adamant that it is standing aloof from the scientific process of monitoring and surveillance. Nor is it the primary financier. More than half (55%) of the $100 million, three-year project is being picked up by the Nigerian government as majority partner in Shell’s Nigerian joint venture. Shell owns 30%. France’s Total and Italy’s AGIP have a 10% and 5% stake respectively. All partners are paying a commensurate percentage. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">At a broader level, the project has raised a larger question:</span><span style="font-family: Arial; font-size: 10pt;"> as Marx asks,</span><span style="font-family: Arial; font-size: 10pt;"> <a href="http://www.ethicalcorp.com/content.asp?contentid=7191">is UNEP for sale</a>? How objective can the agency be when ultimately it is accountable to and funded by its member states. Speaking to Ethical Corporation, UNEP’s executive director Achim Steiner says the agency is not in the business of “legal liability attribution”. That may be so, but truthful science should point a finger in the general direction of the perpetrators. Whether UNEP is willing to be seen as overtly criticising one of its member states – or their key partners – is the issue at stake for the sceptics. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">There’s another side to the debate, of course. UNEP, it could be argued, are the environmental equivalent to the Red Cross. Their stance as expert insiders without a political axe to grind gives them access and behind-the-scenes negotiating power that few (no?) other organisations enjoy. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Extending the reach of their stakeholder engagement efforts should help UNEP strengthen its apolitical credentials. That’s what it did in Sudan with some success. Finding well-resourced local partners in the Niger delta is not an easy task, however. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">UNEP’s final report is due out at the end of this year. In some ways, it’s a poisoned chalice. Too damning and it faces overstepping its impartial brief. Too lenient and critics will accuse it of bias. The best solution is to stick rigourously to the science. There is safety in numbers, of the statistical kind. UNEP’s role is too important to get embroiled in finger pointing. There are others with far more experience in the <a href="http://www.ethicalcorp.com/content.asp?ContentID=6486&ContTypeID=">blame game</a> who can be left to do that.</span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com3tag:blogger.com,1999:blog-7645828431740693209.post-90163362487836685122011-01-18T12:22:00.000-08:002011-01-19T14:54:34.724-08:00Executive Remuneration: fat cats v's the future<style>
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<div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">If Britain’s Liberal Democrats had their way, they would limit bankers’ bonuses to <a href="http://news.bbc.co.uk/2/hi/uk_news/politics/election_2010/8616939.stm">£2,500 per year</a></span><span style="font-family: Arial; font-size: 10pt;">. It doesn’t look like they will, however. UK banks are readying themselves for a predicted £7 billion bonus season. As the bank tills ping back open, the Conservative-dominated Coalition stands accused of a climbdown on a promise to curb “<a href="http://www.independent.co.uk/news/uk/politics/pm-is-protecting-banker-bonuses-claim-lib-dems-2184272.html.%20">unacceptable bonuses</a>”.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">No one likes fat cats. Much of that, let’s be honest, derives from envy. Not always, though. Sometimes the public’s dislike is justified. Why should BP’s Tony Hayward walk away with a <a href="http://thescotsman.scotsman.com/news/Tony-Hayward-payoff-fury-after.6443116.jp">£1.045 million handshake</a></span><span style="font-family: Arial; font-size: 10pt;"> after overseeing one of the worst environmental disaster in US history (not to mention leaving an £11 billion hole in investors’ pockets)? Pay should be commensurate with performance. When bankers so spectacularly failed during the recent financial meltdown, their pay packets should be adjusted accordingly. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Away from the contentious issue of bankers’ bonuses, however, giving your top dogs an annual ‘extra’ has a well-attested business rationale. It’s there in industrial and organisational psychology 101. In sum, bonuses are supposed to motivate those managing certain assets to work those assets harder and more profitably. Hence a large chunk of executive pay comes in the form of share rewards. Perform well and the share price goes up. And then everyone wins, both the managers (executives) and owners (shareholders) of those assets. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Corporate Responsibility advocates are not blind to the appeal of such thinking. They want companies to improve their non-financial performance. They know general business case arguments can get them so far. Those that live in the real world of business and not in do-gooderville know they can get a whole lot further if they can link their agenda to executive pay. A CEO will nod benignly and make vague commitments on responsible business if he has nothing at stake personally. He’ll be sure to pick up the phone and make it happen, meanwhile, if he knows his bonus is one the line. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The move from theory to practice is taking time. Precious few companies have integrated corporate responsibility into senior management pay. Among Europe’s 300 largest companies, the percentage is under a third (28%), a <a href="http://www.eiris.org/media.html#remuneration%20">study</a> by specialist analysts EIRIS finds. Those that have, have done so in a way that could be best described as “opaque”, according to <a href="http://www.ethicalcorp.com/content.asp?ContentID=7041">Ethical Corporation writer Stephen Gardener</a></span><span style="font-size: 10pt;"><a href="http://www.ethicalcorp.com/content.asp?ContentID=7041"><span style="color: black; font-family: Arial; text-decoration: none;"></span></a></span><span style="font-family: Arial; font-size: 10pt;">. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">The reasons are easy to identify, but tricky to fix. First, there’s the deep-seated issue of corporate culture. Remuneration policies lack transparency, full stop. Companies start making noises about confidentiality and commercial sensitivity as soon as the light shines too brightly on their pay schemes. More importantly for corporate responsibility, the metrics for identifying the drivers of value with respect to non-financial factors are not there yet. Even in measurable areas, such as accident rates or <a href="http://www.guardian.co.uk/environment/2010/may/18/bonuses-carbon-emissions">greenhouse gas emissions</a>, establishing a direct causal link between the top dog and the target is not straightforward. To do so requires very strict vertical integration. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">That’s not to say companies aren’t trying. Gardener highlights the example of Dutch paint and chemicals firm <a href="http://www.akzonobel.com/corporate_governance/supervisory_board/remuneration_committee/">AkzoNobel</a>. Half of the share allocations that the company’s directors receive is dependent on the company’s average positioning over a three-year period in the Dow Jones Sustainability Index. It’s not just the board that is impacted. AkzoNobel’s top 600 managers are similarly incentivised. In the same vein, shareholders at banking giant <a href="http://www.ingforsomethingbetter.com/files/pdf.../ING_CR_Report_2009.pdf%20">ING</a> </span><cite><a href="http://www.ingforsomethingbetter.com/files/pdf.../ING_CR_Report_2009.pdf"><span style="font-style: normal;"></span></a></cite><span style="font-family: Arial; font-size: 10pt;">recently approved a remuneration plan that links 40% of the variable element of directors’ pay to sustainability targets. Again a sizeable number (this time, 200) of senior managers are directly affected. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">It’s notable that both cases derive from the Netherlands (Dutch life sciences group DSM and mail operator TNT are other examples). Dutch law makes executive remuneration packages subject to a binding shareholder vote. Shareholders in countries such as the UK, France and Germany also vote on executive pay, but only in an “advisory” capacity. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">There are some important lessons here. First, when it comes to remuneration, it’s investors (as asset owners) that hold the clout. They need to be convinced that sustainability impinges on their long-term interests. The arguments are there. They just need to be made more clearly and more urgently. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Second, investors need to act. If more countries adopted the Dutch voting norms that would certainly help them do so. Whatever the case, it can’t be left to company boards alone. However well intentioned they might be, the language will inevitably be general and the targets vague. Clear deliverables with direct lines of responsibility is what’s required if sustainability is ever to be seriously factored into executive pay. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span style="font-family: Arial; font-size: 10pt;">Hopefully come bonus season we then can begin to talk about the future and not just fat cats. </span></div>Ethical Corporation's Management bloghttp://www.blogger.com/profile/03597305372732562745noreply@blogger.com0