csr-blog

Smart Grid Analysis Released

Thu, 27 Oct 2011 21:56:54 +0100

from SmartMeters.com

The Silicon Valley Smart Grid Task Force co-chairs—the Silicon Valley Leadership Group, the City of San Jose, and Pacific Gas and Electric Company (PG&E)—have released the findings of a new economic analysis of the smart grid conducted by Collaborative Economics.

San Jose Mayor Chuck says that a central tenet of the city’s “Green Vision is that clean technologies are the economic drivers of the future. This report shows that the future is now and that the smart grid has already begun creating jobs in Silicon Valley.”

The study found that the number of smart grid-related firms grew 138 percent from 1995 to 2009, and the number of jobs grew 129 percent in Silicon Valley, maintaining strong local growth even during the economic downturn that started in 2008. Additionally, employment data indicate that Silicon Valley’s economy is recovering at a faster rate than both California and the nation, suggesting that growth related to the smart grid should be expected to continue.

Carl Guardino, Silicon Valley Leadership Group President and CEO, observes, “For decades, Silicon Valley has been on the forefront of new technologies. Increasingly, those new technologies touch the smart grid, and Silicon Valley is reaping the economic benefit of these advances.”

PG&E President Chris Johns believes, “Investment in the smart grid by PG&E and other utilities nationwide is good for customers, good for Silicon Valley jobs, and good for the Bay Area economy. The smart grid is a part of PG&E’s commitment to delivering safe, reliable and affordable energy to our customers.” PG&E will complete its deployment of nearly 10 million gas and electric Smart Meter technology in 2012.

The study’s lead author and Collaborative Economics vice president, Tracey Grose, adds: “The national roll-out of the smart grid will not just drive growth in the broader Bay Area directly related to smart grid technologies. The implementation of these systems will produce huge new volumes of data that must be processed, stored and analyzed. Therefore, smart grid will also drive demand for IT products and services, Silicon Valley’s key sectors.”

The Silicon Valley Leadership Group was established to address public policy issues affecting the economic health and quality of life in Silicon Valley.

San Jose’s Green Vision is a 15-year initiative to solve environmental problems and grow the local economy through Clean Tech Innovation, Sustainability, and Green Mobility. For more information, visit www.sanjoseca.gov.

New EU Definition and Strategy for CSR

Wed, 26 Oct 2011 23:22:48 +0100

from Sustainable Business Forum

It’s only a fifteen page document and well worth a read as another stake in the ground for the accelerating development of CSR as a core business consideration. It never goes as far as many stakeholders would have liked it to, but then again it never was. For me it’s a pretty well balanced carrot and stick approach that owes much to work already done for ISO 26000.

There is one particular paragraph that sums up the ethos of CSR beyond the above definition:

To maximise the creation of shared value, enterprises are encouraged to adopt a long term, strategic approach to CSR, and to explore the opportunities for developing innovative products, services and business models that contribute to societal wellbeing and lead to higher quality and more productive jobs.

…which sounds scarily like my usual description when defending CSR.

The rest of the document outlines the alignment with global standards, recent economic challenges, business of all sizes (corporate to SME) and other complimentary developments such as the Social Business Initiative (SBI).

For me, actions speak louder than words, so here’s a collated and abridged list of the specific “Agenda for Action 2011 – 2014″ listed in the strategy:

Create in 2013 multi-stakeholder CSR platforms in a number of relevant industrial sectors.
Launch from 2012 onwards a European scheme for CSR partnerships between enterprises and other stakeholders.
Address the issue of misleading marketing related to the environmental impacts of products (so-called ‘greenwashing’).
Initiate an open debate with citizens, enterprises and other stakeholders on the role and potential of business in the 21st century.
Launch a process in 2012 with enterprises and other stakeholders to develop a code of good practice for self and co-regulation exercises.
Facilitate the better integration of social and environmental considerations into public procurement.
Consider a requirement on all investment funds and financial institutions to inform all their clients about any ethical or responsible criteria they apply.
Provide further financial support for education and training projects on CSR under the EU Lifelong Learning and Youth in Action Programmes.
Create with Member States in 2012 a peer review mechanism for national CSR policies.
Monitor the commitment made by European enterprises with more than 1,o00 employees to take account of internationally recognised principles and guidelines.
Work with enterprises and stakeholders in 2012 to develop human rights guidance for a limited number of relevant industrial sectors.
Publish by the end of 2012 a report on EU priorities in the implementation of the UN Guiding Principles.
Identify ways to promote responsible business conduct in its future policy initiatives towards more inclusive and sustainable recovery and growth in third countries.

Within the Conclusion there is a clear call to the business community to take rightful leadership for CSR development:

The Commission calls on European business leaders, including those from the financial sector, to issue, before mid 2012, an open and accountable commitment to promote, in close cooperation with public authorities and their other stakeholders, the uptake of responsible business conduct by a much larger number of EU enterprises, with clear targets for 2015 and 2020.

Maersk Line wins CSR award

Sun, 23 Oct 2011 21:15:23 +0100

from MB.com

MANILA, Philippines — Maersk Line has won an award for ‘best integration of sustainability in company strategy’ during the 2011 Corporate Social Responsibility Awards, hosted by the Danish ‘CSR Foundation.’

The carrier bagged the prestigious CSR Strategy Award 2011. The prize is sponsored by KPMG and recognizes Maersk Line for integrating sustainability and CSR into the overall company strategy and business conduct.

The CSR Foundation works with businesses and organizations to ‘generate awareness of the most talented Danish companies and CSR strategies.’ Maersk Line was unanimously chosen by an international jury of experts in CSR and business management.

“The company is committed to embedding sustainability and CSR into operational and strategic decision making and there is a strong link between its CSR and business goals. We were particularly impressed by Maersk Line's commitment to raising standards across the industry,’’ said panel member Mr. Ajoy, Vice President of Tata Consultancy Service.

Maersk Line’s sustainability strategy was launched in the spring of 2010. Since then, the company has invested in energy efficient and responsible transportation solutions as part of its StreamLine differentiation strategy.

“It is important for us to have a strategy that is business driven and creates value - shared value. Both for the company, our customers, our employees and in the many markets we are active in,” said Soren Stig Nielsen, Head of Sustainability at Maersk Line.

Maersk Line continues to invest in infrastructure and next generation container ship designs such as the Triple-E ships. These investments will help the company cut both unit costs and environmental impact while supporting trade development in emerging markets. (EHL)

CSR: a missed opportunity?

Fri, 21 Oct 2011 13:44:22 +0100

from Public Finance

One year into the Comprehensive Spending Review and many public bodies still do not have an effective strategy to deal with the new era of financial constraint. Simply salami slicing budgets isn’t going to work

Almost exactly a year ago, George Osborne unveiled the details of the 2010 Comprehensive Spending Review, and set out how the government would attempt to cut an average of 19% from departmental budgets.

In many ways it ushered in a new era – with everything from the BBC World Service to the way the UK punished and rehabilitated criminals set to change. It also divided opinion; if the UK economy was ill, the dramatic cuts were heralded as either the first injection of a life-saving antidote, or a shock treatment so severe that the patient’s condition would worsen.

A year on, RSM Tenon has conducted a study into the effects of the CSR. It is a necessarily incomplete task: we are only a year in to a four-year project. A third of the public sector bodies we talked to said they did not yet understand what the implications of the budget cuts would be. However, a few themes stand out.

The first thing to consider is that the public sector isn’t a stranger to big, government-led drives that aim to shake the system up so it delivers better value for money. The National Audit Office and the Audit Commission have been conducting Value for Money reviews for a quarter of a century.

There have also been pushes including Better Value Services, the Gershon Efficiency Review and the Phillip Green Procurement Review, not to mention the birth (and passing) of other initiatives such as Best Value and Comprehensive Performance Assessments. Even this comprehensive spending review was hardly unprecedented – the previous CSR was in 2007.

Despite this, the 2010 CSR was different. The savings required are supposedly the largest since the Second World War. This time it’s not an option to just save and survive. To emerge from the other end lean and sustainable, public sector bodies need to be brave, and make wholesale changes. The question is: Faced with yet another efficiency drive, can the public sector rise to the task?

One conclusion to draw from our research is that there are, indeed, pockets of excellence where management and staff are innovating, restructuring, and coming up with ideas that may point the way for public services across the country. But these cases are not nearly as prevalent as they need to be.

When conducting our research, we have mainly come across salami-slicing of budgets. Not enough are being as brave as they need to, and there is a danger that the CSR is a missed opportunity. I’ll give three examples, from three different areas of the public sector, that exemplify the kind of thinking that others need to learn from.

Firstly, the tri-borough initiative in west London, where Westminster, Hammersmith & Fulham and Kensington & Chelsea are merging their upper management while combining many services. And just this week an announcement was made of the appointment of Deek Myers as single chief executive for two of the three. In total, the annual savings are estimated to be in the hundreds of thousands of pounds.

However, there’s no need to be restricted by geography. Several counties – and many miles – separate Cheshire and Northamptonshire, yet both regions’ constabularies have recently brokered an agreement to share back-office services, pooling much of the HR, procurement and finance work. This is expected to save £54m over four years.

But it’s not just about amalgamating services. In Greenwich, a group of more than 40 doctors have formed a social enterprise in order to create their own GP surgery. Because of the model they have chosen, they can provide all of the usual services of a doctors’ surgery, take some of the strain away from the local hospital, but also generate a profit (or a ‘surplus’, in NHS parlance), all of which will be ploughed back into local health schemes.

By setting up projects that help vulnerable people in the local area, it means that they will take some of the strain that would otherwise have fallen to social housing, local government, or local hospitals. Again, this is an innovative solution, and it’s saving money for the public sector.

This is the kind of reform and smart thinking that the entire public sector is capable of. However, we are not yet seeing this across the board. A high proportion of bodies seem to be simply laying people off, cutting some services, or salami-slicing budgets. Sadly, this is not going to work this time.

We should not be in a situation where a third of senior managers do not yet know what the implications of the CSR will be. People should have already made a plan, and be implementing it – at the very least, there should have been a thorough audit of strategic priorities.

It isn’t enough to batten down the hatches – the wind isn’t going to abate. We have to strengthen or redesign our houses.

NGO Collaboration Required For Strong Corporate CSR

Fri, 21 Oct 2011 02:52:41 +0100

from Triple Pundit

Environmental NGOs have often been perceived as anti-business, anti-growth, tree-loving, bunny-huggers. However, they have evolved to become organized, structured and strategic. Instead of always standing outside with protest signs, NGOs can actually work with companies to help implement their CSR initiatives. This is happening more commonly than previously imagined. Watchdog organizations not only put the pressure on companies to clean up their act but also act as facilitators and advisors towards better policies.

A recent report published by C&E Advisory found that companies and NGOs feel very differently about benefits of non-financial support. They surveyed over 150 leading companies and NGOs – 71 percent of businesses stated that harnessing their competencies and non-financial resources would make much more of an impact on the fulfillment of their NGO partners’ objectives. Many NGOs so see cash as a vital means towards cooperation. However, organizations like Greenpeace,Environmental Defense Fund (EDF) etc do not take a single penny from corporate or governmental sources because they maintain that it would compromise the integrity of their campaigns.

Greenpeace has worked with many companies on their environmental policies. Their recent campaign against Mattel resulted in the company pledging to use sustainable sources for packaging. They have also led several campaigns against John West, McDonald’s and other companies. They have also run successful campaigns against Unilever, Nestle, Apple and most recently against major clothing brands like Nike.

In 2010, EDF worked with McDonald’s to reduce the environmental impact of its packaging. There was a wide backlash against the organization and they were accused of selling out. Gwen Ruta, who oversees their corporate partnerships said, ”At the time, it was heresy to say that companies and NGOs could work together; now it is dogma, at least for the Fortune 500.” Similarly WWF is working with Coco-Cola to reduce pollution in China’s Yangstze River.

More recently, Rainforest Alliance worked with Chiquita Brands, to grow bananas in a more environmentally friendly manner. This lead to a strategic CSR partnership that meets the NGO’s objectives for conservation of biodiversity. It also helps the company to become more sustainable in its operations. The examples of corporate-NGO partnerships are numerous.

NGOs have the unique position of being in touch with consumers, activists and business leaders giving them a perspective on situations that is rare. They are also consistently thought of as trust-worthy and reliable. The top three organizations – Greenpeace, and Friends of the Earth collectively have about 150 years of campaigning experience under their belt and are among the most respected environmental authorities. They began spreading awareness even before sustainability became mainstream for businesses. In several instances they offer companies insights into their research and also help in tailoring better CSR policies that ensures sustainability. Their wealth of knowledge therefore, should not be taken lightly as they are able to provide holistic views on many current sustainability trends.

NGOs can help companies in many issues ranging from sustainable agriculture, fishing, packaging, supply chain management, labour issues, renewable energy, forest resources, health & safety etc. NGOs also tend to be transparent about their funding which gives them more credibility. NGOs themselves are global brands in their own right and provide the multidisciplinary arsenal that many companies lack in order to tackle socio-environmental problems.

Firms buck CSR regulation but offer better monitoring

Wed, 19 Oct 2011 16:51:43 +0100

from Business World

IMPROVED MEASUREMENT of gains from corporate social responsibility (CSR) programs is needed but not to the point that government be called in to regulate such efforts, business leaders said in a forum yesterday.

We should be part of the solution to economic problems. We also have to close the gap of trust in the society, if not the rise against capitalism will only intensify,” Ayala Corp. President Jaime Augusto Zobel de Ayala said at the second day of the 10th Asian Forum on CSR.

President Benigno Simeon C. Aquino III similary urged firms to reach out: “At the time like this, it’s vital that business leaders like you should give greater efforts to show the true face of CSR. And we can show this by enacting education programs… conserving the effects of our business on the environment and doing what we can to make our businesses sustainable.”

Mr. Ayala identified three areas in which the impact of CSR programs should be monitored: economic, social and environmental.

Economic indicators of a program’s success include the distribution of fair wages and capital expenditures.

“We can still improve our profitability while improving the economic fabric of our community,” he said.

The social impact meanwhile can be reviewed by looking at fair labor practices, among others.

Scrutinizing energy consumption, carbon footprints and waste management meanwhile can be made to study a firm’s impact on the environment.

Mr. Zobel also said that firms may adopt a standard means of reporting such as that espoused by the Global Reporting Initiative, but it could also set its own metrics and indicators.

Edgar O. Chua, chairman of Pilipinas Shell Petroleum Corporation, echoed Mr. Zobel.

“For example in our operation, if you build a gasoline station, the three should be present,” he said.

Improved CSR monitoring, however, should not entail government regulation, speakers at the event said.

While some CSR efforts are used to “thwart the community agency” according to Catherine C. Coumans, research director of Mining Watch Canada, it would be difficult to apply a blanket policy, said Makati Business Club Chairman Ramon R. del Rosario Jr.

“What is true for mining may not be true to another sector, large sectors and small sectors,” he said. -- C.H.C. Venzon

Companies told to step up CSR amid protests

Tue, 18 Oct 2011 21:03:52 +0100

from Business World

COMPANIES SHOULD improve their public outreach programs amid worsening sentiments against corporations across the globe, management experts at a forum yesterday said.

PROTESTERS MARCH over the Brooklyn Bridge during an Occupy Wall Street demonstration in New York on Oct. 1, 2011. -- Reuters

Corporate social responsibility (CSR) programs increasingly need to be integrated as part of the business’ supply chain and not just be implemented as one-off dole-outs, they said.

“Although many companies have wanted to do this, they still don’t exactly know how to do it. That’s why we have these protests,” Felipe B. Alfonso, Asian Institute of Management vice-chairman, said at the 10th Asian Forum on CSR.

“Probably, through time, when companies succeed in implementing these CSR projects, there will be less and less reasons for them to take to the streets where they are now.”

Protests against economic inequality and perceived corporate greed have been hounding various parts of the world this month, sparked by the so-called Occupy Wall Street rallies in New York City.

“The best way to address those concerns is by putting shared values as an integral part of the businesses that we run,” Makati Business Club Chairman Ramon R. del Rosario, Jr., for his part, said at the same event.

In the meantime, firms would do well to hear out the concerns raised at the ongoing protests, Edita A. de Leon, senior vice-president and head of corporate affairs of Nestlé Philippines, Inc. said.

“If the corporations start to think of the concept of shared value, they would take [these protests] as an opportunity to communicate with the people who share their feelings on how the corporation operates,” Ms. De Leon said.

“So with that mind-set, you can understand then what is the need of the society that the corporation can or is ready to address,” she added.

To achieve this, CSR projects should be tailored to address specific communities’ needs, she said.

Meanwhile, Frank McGuire, member of parliament for Broadmeadows, Victoria Labor Party in Australia, said programs should involve the government, companies and community.

“If you can get an alignment between the community, government, and corporation, you could have sustainable materials,” he said.

And at the end of the day, CSR programs must bring in tangible benefits to the company as well for these to be sustained, said Jana Franke, consultant for state-commissioned German organization GIZ.

“In order to engage the company, you don’t only ask them to do good will. You have to put wealth first to the company before we could distribute wealth,” Ms. Franke said.

NatureWorks Attracts $150 Million Equity Investment from Leading Thailand Company PTT Chemical

Wed, 12 Oct 2011 16:02:37 +0100

from Business Wire

MINNETONKA, Minn.--(BUSINESS WIRE)--NatureWorks LLC, the world’s leading bioplastics manufacturer, announced today that Thailand’s largest chemical producer, PTT Chemical Public Company Limited (PTT Chemical) is investing US$150 million in NatureWorks. NatureWorks supplies its broad family of renewable Ingeo™ biopolymers made from plants to plastics and fibers markets worldwide. PTT Chemical’s investment in NatureWorks, until now wholly owned by Cargill, is subject to regulatory approval.

“The proposed new Ingeo facility in Thailand would be NatureWorks’ second production plant”

“The Thai Government encourages an investment in green chemicals, and particularly bioplastics, which have high growth potential in the Southeast Asian market,” said Thailand's Minister of Energy H.E. Mr. Pichai Naripthaphan. “By attracting what could be the most advanced biopolymer processing plant in the world to Thailand, PTT Chemical has made a significant step in achieving Thailand’s strategic objectives of becoming a regional hub for green technologies and solutions.”

“This is a significant investment by a leading chemical company, which will allow NatureWorks to continue its aggressive growth while expanding its capacity to meet global demand for bio-based products. PTT Chemical’s investment demonstrates a significant milestone in moving Ingeo bio-based plastics and fibers to the polymer mainstream,” said Marc Verbruggen, president and chief executive officer of NatureWorks. “PTT Chemical’s investment supports NatureWorks intent to globalize its Ingeo manufacturing capability by building a new production facility in Thailand, supporting our Asian customer base and delivering on our commitment to renewable feedstock diversification. We anticipate bringing the new plant online in 2015 and expect to announce further details on this expansion later this year.”

“This investment will strengthen PTT Chemical’s green growth strategy towards sustainable development by integrating more renewable and environmentally friendly materials in its portfolio, while offering more green product choices to the customer to fulfill our responsibility as the ‘Power for a Sustainable Future’ for Thailand and all stakeholders,” said Mr. Nuttachat Charuchinda, the chief operating officer, Downstream Petroleum Business Group of PTT Public Company Limited. “PTT Chemical is keen to play a role in pioneering a world-scale bioplastics industry with the aim to become a global leader by 2020 and push Thailand to become an Asian bio-hub.”

“PTT Chemical reinforces NatureWorks’ leadership position and proven track record in bringing cost effective biopolymer innovations to the global marketplace,” said Mr. Veerasak Kositpaisal, president and chief executive officer of PTT Chemical. “NatureWorks is currently the forefront producer of bio-based products with commercially viable production volumes, competitive costing and a global customer base. Our investment in the company and its Ingeo technology platform for plastics and fibers is in line with our long-term strategic green growth and diversification objectives.”

“Ingeo offers the performance of conventional plastics and fibers with a fraction of the greenhouse gas emissions and lower non-renewable energy requirements. Because it is made from renewable plant material, Ingeo has inherently more stable pricing, contrasting sharply to the massive price swings observed from fossil based polymers,” explained Mr. Kositpaisal.

Over the past several years, NatureWorks has seen steady 25- to 30-percent increases in annual product demand. In the last two years, NatureWorks doubled its Ingeo supply availability by bringing online additional production capacity at its Blair, Neb., processing facility.

“The proposed new Ingeo facility in Thailand would be NatureWorks’ second production plant,” Marc Verbruggen added.

More than 100 leading consumer brands and retailers in the United States, Europe and Asia currently offer Ingeobased product innovations in such categories as flexible and rigid packaging, food service-ware, durable consumer products, apparel, home textiles and personal care and hygiene products. An Ingeo innovation display gallery, presented in conjunction with last year’s COP-16 climate change conference in Cancun, Mexico , showcased a selection of commercially available, low-carbon-footprint Ingeo products produced by such international brands as Avianca, Electrolux, Henkel, NEC, Shiseido, Stonyfield and Walmart.

About NatureWorks LLC
NatureWorks LLC is a company dedicated to meeting the world’s needs today without compromising the earth’s ability to meet the needs of tomorrow. With a current Ingeo capacity of 140,000 tons, NatureWorks LLC is the first company to offer a family of commercially available low carbon footprint biopolymers derived from 100 percent annually renewable resources with performance and economics that compete with oil-based plastics and fibers. NatureWorks production of Ingeo uses significantly less non-renewable energy, and generates significantly lower CO₂ emissions than all traditional oil based polymers. NatureWorks remains wholly owned by Cargill pending regulatory approval of the agreement.

Details are available at www.natureworksllc.com.

Ingeo and the Ingeo logo are trademarks or registered trademarks of NatureWorks LLC in the USA and other countries

About PTT Chemical plc
PTT Chemical Public Company Limited is a fully-integrated petrochemical and chemical company, combining visionary leadership and innovation in the chemical industry. PTT Chemical aspires to develop sustainable growth based on social benefit and global environmental standards under its vision to be the “Leading chemical company for better living through innovative technology and people.

Details are available at www.pttchemgroup.com

About Cargill
Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services. Founded in 1865, the privately held company employs 131,000 people in 66 countries. Cargill helps customers succeed through collaboration and innovation, and is committed to sharing our global knowledge and experience to help meet economic, environmental and social challenges. For more information, go to: www.Cargill.com.

Green light for carbon tax, red flag for industry

Tue, 11 Oct 2011 15:39:40 +0100

from The Australian

JULIA Gillard will today win lower-house support for her carbon tax package, the most dramatic economic transformation since the dismantling of tariffs in the 1990s, despite rising industry concerns that the $23 a tonne starting price will hit the competitiveness of businesses.

As Tony Abbott demanded the government seek a mandate for the scheme at an immediate election, the Prime Minister accused the Opposition Leader of hypocrisy, citing his reversal of his previous support for an emissions trading scheme and the endorsement of carbon pricing by former Liberal leaders. And business groups expressed concerns that the starting price was almost double that of permits in the world's biggest carbon scheme in Europe, which new industry research revealed would reduce the profits of energy-intensive small to medium-sized businesses by up to 20 per cent. The 18 bills comprising the clean energy legislative package will pass the House of Representatives this morning, with Labor winning the support of the Greens, independents Rob Oakeshott and Tony Windsor - who were part of the multi-party climate change committee that negotiated the package - and Andrew Wilkie.

A separate bill proposing a $300 million rescue package for the steel industry will also pass after the Greens yesterday decided to support it, although the party's deputy leader Christine Milne will move amendments in the Senate in a bid to force more emphasis on green jobs in the Illawarra and other steel regions. Ms Gillard challenged Coalition members, when they voted today, to be "on the side of history".

"We, on this side of the parliament (Labor), will vote for a clean energy future, for reducing carbon pollution, for enabling economic growth without increases in carbon pollution and for putting more money in the hands of pensioners, working Australians who need it the most, people raising families," the Prime Minister said.

"We will make sure, more importantly than almost anything else, that we seize the jobs and opportunities that come with a clean energy future."

Ms Gillard said the Opposition Leader would not repeal the carbon tax if he won government because more than half his party supported pricing carbon, as did "every living Liberal leader" except him, and so his pledge was "nonsense".

Mr Abbott, who failed to censure the Prime Minister over her pre-election comment that there "will be no carbon tax under the government I lead", said now was the worst time to introduce a carbon tax. "Confidence in our own country is at rock-bottom record lows," the Opposition Leader said.

"Unemployment is edging up. The euro is under great pressure and countries in Europe face the risk of sovereign debt default. There is the threat of a worldwide recession."

Amid the leaders' sparring, Victorian MP Anna Burke told federal parliament she had received numerous emails containing death threats over the past week, one of which was opened by her 12-year-old daughter. Ms Burke said she had referred the matter to the Australian Federal Police after receiving more than 10 threatening emails.

The passage of the bills would represent the first important policy victory for Ms Gillard since she took over as Prime Minister last June.

On the eve of the vote, West Australian National Tony Crook, on whom the government is relying for a crucial vote on its Malaysia Solution people-swap deal, opposed inclusion of off-road diesel in the carbon tax and moved amendments.

Climate Change Minister Greg Combet said the government was of a mind to reject the amendment.

Under the government's package, a fixed carbon price of $23 a tonne will be imposed from July 1 next year, rising at 2.5 per cent a year in real terms for three years. In 2015, the package will convert to an emissions trading scheme with a floating price.

When the floating price starts in 2015, a floor price of $15 will be imposed and a ceiling price, $20 above the expected international price, will also be imposed to prevent volatility.

The Business Council of Australia expressed concern the $23 a tonne fixed starting price was out of step with international prices, and the Australian Chamber of Commerce and Industry released research from global economic and strategic consultant Castalia that found energy-intensive small and medium enterprises were likely to suffer a cut in profitability of between 10 per cent and 20 per cent.

ACCI chief executive Peter Anderson said the research demolished the idea that only 500 big companies pay the tax. Homing in on the 25 per cent collapse in EU carbon permit prices this year, Business Council of Australia chief executive Jennifer Westacott said: "You only have to look at the forward prices of permits in the EU scheme and through the clean development mechanism for the next couple of years to be concerned that the prices being set in the fixed-price period in the Australian scheme place a greater cost on industries in Australia. This is why the council is seeking a low starting price in the fixed-price period when there will be no international linkage."

EU December carbon permits rose 26c, or 2.5 per cent, to E10.72 ($14.65) on Monday, their highest price this month, but 25 per cent below their peak this year as the carbon market collapsed in line with other markets over concerns of a European financial crisis.

ACCI economics director Greg Evans backed the comments. "It's beyond argument Australia will be burdened with the world's biggest and most invasive carbon tax for at least the fixed-price period. Consequently the trade-exposed sector will be under even more intense competitive pressure at a time when they are facing uncertain and deteriorating trading conditions."

Corporate Social Responsibility: A Rapidly Changing Landscape

Tue, 11 Oct 2011 15:32:35 +0100

from EHS Today

The size and scope of corporate social responsibility (CSR) is a topic of ongoing and vigorous discussion. Some stakeholders include sustainability concepts in CSR, while others make distinctions between the two terms, with sustainability considered more closely aligned with environmental activities. The social area, rather than environmental, is where explicit references to occupational safety and health generally are found.

CSR still is in the early stages in most businesses, with the U.S. market lagging the EU and some less developed regions just starting to see their first signs of activity. At the other end of the spectrum, some larger companies and early adaptors are taking their best-in-class CSR programs to new heights, providing much needed leadership in this emerging corporate arena.

Still, there are few resources that provide company managers with an overview of developments to monitor and include in their planning for the future. Within the last year, advances in the areas of public performance reporting, rating systems/guidelines, regulation/legislation and corporate programs have increased the profile and activity level of CSR in the business community.

Public Performance Reporting

Global Reporting Initiative – Public performance reporting has become an important tool for disclosing and measuring a company’s level of CSR activity. Since releasing its first official version of public reporting guidelines in 2000, the Global Reporting Initiative (GRI) has become the framework of choice for reporting CSR performance by multinational businesses in the Fortune 250. The GRI was formed in 1997 by two U.S.-based non-profit organizations, Ceres and Tellus Institute, with the intention of making it an instrument of change for corporate governance.

More than 1,800 companies filed GRI reports in 2010, a small but growing number of which are verified by a third-party assessment. This is a 22 percent increase from 2009. In a recent presentation to stakeholder organizations, GRI reported that businesses using its framework comprise 95 percent of the Dow Jones Sustainability Index, 78 percent of the FTSE4Good, 70 percent of the Global 100, and 70 percent of the NASDAQ OMX CRD Global Sustainability Index. There is no other reporting scheme that approaches the popularity of the GRI for companies and stakeholders at this time.

Since the framework’s adoption is greater in Western Europe than anywhere else, GRI is working to expand its coverage in other regions. A Focal Points USA initiative was launched in affiliation with the Conference Board in early 2011. This is an effort to increase the number of U.S.-based companies that use the GRI format when publishing CSR reports. The GRI staff is working with professional, industry and sustainability organizations to engage their members and encourage reporting. An industry sector leaders program is being developed to improve benchmarking opportunities, and a second Focal Points office is opening in China.

The GRI is continuing to revise and expand the information required in its reporting framework. In March, the organization released G-3.1 Guidelines, an update of its G-3 Guidelines. The G-3 build on the G-2 Guidelines (released in 2002), which were a revision of the initial guidelines released in 2000. Each version of the guidelines is developed through a consensus-seeking, multi-stakeholder process with participants from global businesses, NGOs, labor and the academic and professional communities.

The G-3 requires new disclosures related to the social aspects of CSR, which are contained in report sections titled, Human Rights and Labor Practices and Decent Work. Some of the expanded information includes:

➤ The percentage and total number of operations that have been subject to human rights reviews and/or impact assessments.

➤ The total number and rate of new employee hires and employee turnover by age group, gender and region.

➤ Return-to-work and retention rates after parental leave by gender.

➤ The ratio of the basic salary and remuneration of women and men by employee category and by significant locations of operations.

The next update will be the G-4 Guidelines. The development of this more comprehensive set of CSR metrics began in June. It is anticipated a first draft of the guidelines will be available for public comment in 2012, with the planned launch of the final document in May 2013.

One source of concern is the framework’s failure to include a comprehensive set of performance indicators for occupational safety and health (OSH), which is considered part of the social area. The key focus of required disclosure in the current guidelines is employee illness and injury rates. Those rates are lagging indicators and generally are regarded by the OSH community as insufficient measures of the effectiveness of a company’s health and safety performance.

To address this deficit, the American Society of Safety Engineers recently published a draft Safety and Health Sustainability Index of performance measures. The association also is participating in the G-4 Guidelines development process. Now that GRI-formatted reports are gaining more support, the need to develop better performance measures for the social and governance areas will receive increased scrutiny.

Although the GRI has made CSR reporting more uniform and created common terminology, it has yet to produce the detailed, sector-specific information needed by financial investors and others to effectively compare performance among participating companies. Some stakeholders believe that most corporations are using their reports for the limited purposes of assisting the management of their sustainability efforts, protecting their reputations and enhancing their brand values. Recent catastrophic events caused by companies with positive reports have contributed to this perception. Notwithstanding all of the progress the GRI has made to date, the credibility of its reports and their value as instruments of change is still in question.

Mandatory and integrated reporting – A growing chorus of stakeholders is pushing governments to mandate CSR reporting for businesses, and they are seeking the disclosure of an increasing amount of information in a uniform reporting format.

The Initiative for Responsible Investment and the Hauser Center for Nonprofit Organizations at Harvard University in its recent report, From Transparency to Performance, argues that reporting must be made mandatory “in order to assure that comparable sustainability data is available to investors and other stakeholders.” Such reports should include key indicators with different levels of materiality identified for each industry sector.

Some governments are starting to take action. A study of 30 countries by KPMG, Carrots and Sticks, found 142 country standards and/or laws with some form of sustainability-related reporting requirement or guidance. Of those, approximately two-thirds could be classified as mandatory and one-third as voluntary.

Another emerging trend is integrated reporting. An integrated report is the combination of a company’s financial report and its corporate social responsibility report into a single document. The goal is to provide a more holistic view of its true economic value and to reach a much broader audience in the mainstream financial sector.

An international effort aimed at promoting integrated reporting is spearheaded by a newly formed International Integrated Reporting Committee (IIRC). The committee is leading the development of an integrated reporting framework similar in approach to the work being done by the GRI.

Ratings/Rankings/Guidelines

The community of socially responsible investors is expanding and building a higher profile. In early 2011, over 800 investment institutions (asset owners, investment managers and professional service providers) had become signatories to the UN Principles for Responsible Investment. The principles focus on environment, social and governance (ESG) issues. They require signatories to incorporate those issues into investment analyses and decision-making processes, and seek appropriate disclosures.

Socially responsible investors still represent a small percentage of the investment market, but they have been clamoring for information on ESG issues and performance metrics. To address this need, asset management firms such as Sustainable Asset Management (SAM) have developed surveys and indices to inform investment manager decisions on where to place their funds, e.g. Dow Jones Sustainable Index. These efforts have led to a proliferation of ESG metrics and ratings schemes, most of which are voluntary.

The wave of questionnaires produced by these raters has caused a serious case of survey fatigue for companies interested in disclosing their CSR performance, and confusion about the grading of disclosures by analysts who seem to have only a rudimentary understanding of corporate programs and operations. Corporate CSR personnel are finding themselves overwhelmed by the diversity and volume of information demanded, and questions are being raised about the methodologies used, the overall quality and the usefulness. The situation has been exacerbated by the lack of coordination of content or process amongst the raters.

In June 2011, Ceres and Tellus Institute announced the formation of the Global Initiative for Sustainability Ratings. Its purpose is to develop an independent, noncommercial framework that will serve as a benchmark standard for ESG metrics and cause a reduction in the number of ratings offerings. This effort is notable as the first serious attempt by a non-governmental organization to reconcile and influence the diverse sets of data used by the ratings organizations.

Voluntary standards-setting organizations are addressing the demand for clear direction on CSR requirements and management program components. The most prominent document released within the past year is the ISO 26000 Guidance for Social Responsibility. This comprehensive guideline was developed by the International Standards Organization, with rigorous analysis and diverse stakeholder input. It includes more detailed guidance in the social and governance areas, including occupational safety and health. Although not intended for use for third-party certification purposes, there already are efforts by certification providers to incorporate its contents in their auditing activities.

International government organizations also are undertaking efforts to increase the role of businesses in addressing CSR issues. Building on the momentum generated by its Global Compact, the United Nations recently adopted the Guiding Principles on Business and Human Rights. These principles provide the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. They require human rights due diligence assessments to identify, prevent and mitigate any human rights risks.

The Organization for Economic Co-operations and Development (OECD) recently released the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. It clarifies how companies can identify and better manage risks throughout the supply chain, from local exporters and mineral processors to the manufacturing and brand-name companies that use these minerals in their products. It complements the updated Guidelines for Multinational Enterprises, which include new recommendations addressing human rights, living wages and Internet freedom.

Legislation

New CSR-related legislation has been passed at both the federal and state levels in the United States. A little known provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires public companies that trade on a major U.S exchange to report the use of conflict minerals in their products and work force diversity metrics. The specific conflict minerals are cassiterite (tin ore), wolframite (tungsten ore), coltan (tantalum ore) and gold or their derivatives. The trade of these minerals has supported armed conflict in the Democratic Republic of the Congo and neighboring countries.

Companies are required to disclose certain supply chain information in a report filed with the SEC, including a description of the measures taken to identify the source and chain of custody of such minerals, as well as the company’s efforts to determine the origins of the minerals. The SEC is developing regulations for these reporting requirements.

The California Legislature passed the precedent-setting Transparency in Supply Chain Act of 2010. The law requires retailers and manufacturers operating in California to post on their Web sites the policies they have in place to ensure their supply chains are free of slavery and trafficking by Jan. 1, 2012. This public disclosure must include the extent to which they use third-party verification, conduct independent, unannounced audits and maintain internal accountability for employees and contractors that fail to meet company standards.

Government traditionally has taken a larger role in regulating the private sector in Western Europe than in the United States and other global regions. Many social and environmental responsibilities that would be considered part of a company’s voluntary CSR activity in the Unites States already are legally defined. As a result, the CSR efforts by larger companies in Western Europe are sometimes further advanced and more structured than those found in Central and Eastern Europe. Some EU countries, such as Denmark, have enacted specific CSR reporting requirements, but most of the pressure to move the agenda forward currently is being generated by stakeholders.

The recently published 2011 edition of the respected United Nations CTAD World Investment Report contains a section on CSR that notes the emergence of CSR standards as an important investment policy development. It reviews the universe of standards, challenges and key issues. It urges governments to play a key role in such mainstreaming by “creating a coherent policy and institutional framework to address the challenges and opportunities presented by the universe of CSR standards.” A number of policy options for governments to adopt are also identified, including:

➤ Supporting CSR standards development;

➤ Applying CSR to public procurement policy;

➤ Building capacity;

➤ Promoting CSR disclosure and responsible investment;

➤ Moving from soft law to hard law;

➤ Strengthening compliance promotion mechanisms among intergovernmental organization standards;

➤ Applying CSR to investment and trade promotion and enterprise development; and

➤ Introducing CSR to the international investment regime.

Corporate Activity Trends

The number of chief CSR/sustainability officers in corporations is rising and their roles and responsibilities are expanding, according to a 2011 report, “Structuring & Staffing Corporate Responsibility,” published by the Corporate Responsibility Officers Association. The information is based on membership surveys. Members most frequently described the position as including the following functions: environment/sustainability, philanthropy, governance/risk, human rights and employee relations. The report also identifies two general models for managing CSR activities: centralized and decentralized.

Some pioneering companies with more comprehensive CSR programs are starting to embed them into their core businesses. This involves integrating them into the operations of key business units and not treating them as additional responsibilities and requirements. In those companies, CSR is embraced by senior leadership and becomes part of the business strategy. Some also are finding this approach can become a competitive advantage that generates revenue growth and market leadership.

The social aspect of CSR has been attracting increased stakeholder scrutiny and generating more corporate activity lately. The areas of social focus include human rights, employee diversity and engagement, community outreach and philanthropy. Businesses are finding the need to enter into partnerships and collaborative efforts with NGOs that have specialized social expertise in order to effectively identify and address social issues. They also are developing robust internal and external stakeholder engagement processes to solicit critical social input. Some companies consider engagement on social issues an important citizenship responsibility that they disclose in a public report that is separate and apart from their sustainability/environmental performance.

Corporate initiatives to drive CSR activities through supply chains have begun to gain substantial traction. Wal-Mart has taken the scrutiny of its supply chain to a new level by asking its 100,000 suppliers to provide environmental information. Companies are finding that supply chain emissions from activities such as processing, packaging and transportation often exceed those arising from an individual company’s own operations. The Carbon Disclosure Project is assisting Wal-Mart with the information gathering process. Wal-Mart’s intention is to develop a green rating for certain categories of products in their stores. Other large companies, such as P&G, have developed supplier scorecards to promote responsible and sustainable sourcing. These market-based efforts are introducing CSR/sustainability concepts to small and medium-sized companies.

Another step forward in the evolution of corporate CSR programs is the movement from aspirational goals, some of which are focused exclusively in the environmental arena, to comprehensive, measurable goals across the spectrum of ESG issues. These next-level goals are multi-year in scope and include external stakeholder input. A company’s performance against its goals is then publically reported, and in some cases can impact executive compensation.

As an example, Johnson & Johnson’s Healthy Future 2015 consists of seven strategic priorities, supported by 15 goals and corresponding targets to measure and drive performance. The company says this exercise “builds on our previous environmental goal setting and performance, while also incorporating social- and transparency-related priorities that our stakeholders expect of us.”

What’s Next?

If the activity level this past year is indicative of a trend, there will be continued growth in all areas of the CSR sphere. Performance measures will become more detailed and mature in the social and governance areas. Businesses, professional associations, academics and others not previously active on CSR issues will begin a new level of engagement and bring important perspectives to the dialogue. This activity will include an increased demand for sharing best practices on topics such as employee and stakeholder engagement, human rights and community outreach. Additionally, there will be further penetration of CSR issues and actions into the small and medium business markets, via expanding and more sophisticated supply chain initiatives.

Advocacy groups will bring more pressure to bear on governments to intervene and set standards. This could result in new laws or regulations that require specific CSR actions by businesses. Mandated public reporting likely is an initial focus, including auditing and verification requirements. The new California supply chain law can be viewed as an example of the kind of government intervention that might be initiated at the state level or in the regulatory arena. Proponents of government involvement argue there will not be real, verifiable progress on CSR issues until governments become fully engaged.

Judi Freyman has been the leader of the Mercer ORC Networks Western Occupational Safety and Health Group since August 2001.