Monday, March 30, 2009

Sustainable manufacturing is what we need

What do you think of a company that manufactures solar panels? Do you think it is as green as it can get?

The MIT engineers conducted a research of current manufacturing processes and found them many times more energy-intesive than traditional one.
The increase of material/energy intensity use has been primarily a consequence of the introduction of new manufacturing processes, rather than changes in traditional technologies. This phenomenon has been driven by the desire for precise small-scale devices and product features and enabled by stable and declining material and energy prices over this period.
Now I really understand how by 2020 the world's demand for energy might triple if we continue to innovate the products rather than the processes. The good thing is that companies are becoming increasingly aware of the need to green up their manufacturing. But do you think this will that happen fast enough?

Photo credit: CC@Image Editor
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Thursday, March 26, 2009

Climate change: new regulation, business model and competitive advantage

Although I intended to post this live from the Summit, my laptop refused to cooperate for some mysterious reason. So, with a little delay, here are my main observations from the Summit:

1. Logistic-wise: superior organization, perfect time management and a brilliant interactive survey technology (which allowed participants to answer questions in 10 seconds and aggregated all answers in 1 second)

2. Content-wise: the speakers brought up interesting, relevant and inspiring points regarding three major aspects of corporate sustainability: regulation, business model and bottom line. Below are the most powerful points pertaining to each of these aspects.

Businesses welcome climate change regulation and prepare to innovate

1. 81% of businesses represented at the Summit were in favor of more environmental regulation. Leo Abruzzese, Chairman of the Summit and Editorial Director for North America of the Economist Intelligence Unit suggested that might be due to a great desire for certainty.

2. A cap-and-trade system and higher taxes on fossil fuels are the two most preferred regulatory approaches by businesses.

3. The government should take leadership by creating the infrastructure needed to enable businesses to continue reducing their carbon footprint. While businesses are responsible for as much as 40% of total emissions, the remaining 60% needs to be tackled as well.

4. Companies - in their pursuit of growth - should figure out ways - innovation is highly recommended - not to exacerbate the existing climate problems.

Businesses adapt business models to reduce carbon intensity

1. Any company in any industry should find ways to reduce its carbon footprint. Even such soft-impact industries as professional services or IT can do a great deal both throughout their own operations as well as by enabling their customers to follow suit.

2. The vast majority of customers (70%) while demanding more sustainable products and services will not accept higher prices or lower performance(e.g. customers will not buy an ugly but recycled carpet). Innovation is the only way to remain appealing to these customers.

3. Doing YOUR laundry with cold water will have a huge positive impact on environment! So use cold-wash detergents!

4. Not embracing sustainability is more expensive - over time - than doing it well today.

Businesses can achieve competitive advantage and profitability through sustainability

1. Top-down commitment (top: chairman, CEO, board; down: all executives and employees) and strong value proposition are key drivers of sustainability processes within companies.

2. Executives have to lead by example and model their behavior. (e.g. leave the BMW at home and eat in company cafeteria)

3. Companies need not put out completely new products. They could just clean up existing products.

4. Sustainability benefits are increasingly valued even vis-a-vis the required rate of return. This enables setting more aggressive environmental goals, achieving of which leads to great new opportunities. Today is the time to prepare for the future.
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The big question of corporate sustainability

Today I'm attending The Economist's 2009 Sustainability Summit taking place at W Hotel in Midtown in New York City. The topic of this year's summit is Global Warming and Its Implications for Corporate Strategy No topic could be more urgent particularly if we have only 5,000days left to change the catastrophic outcomes of global warming.

Everybody seems to agree that sustainability is critical to doing business today. Customers and governments demand more sustainable products and operations. So businesses have to adjust their business strategies and models accordingly and remain competitive. Many are already doing a great job but the pressure is to do even more, even better every day. Definitely not easy, but absolutely possible.

Today, several business leaders will discuss ways in which companies can both combat climate change and balance the books, promote sustainability and still drive business growth.

The big open question is: What does a lean, green company look like in terms of its leadership, processes, culture and business model? I hope that by the end of today's Sustainability Summit we will have a more or less clear answer to this.
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Wednesday, March 25, 2009

CSR Social, Penelope Trunk and Sustainability Summit in New York

Aside from a temporary separation from my laptop due to a terminal problem with the power supply cable (a frequent issue with Acer, I learned), this has been an interesting week in terms of events.

1. Yesterday we had an excellent CSR Social with CSR professionals and activists in New York. We discussed and exchanged views about the greenwashing phenomenon so widely spread around us. The idea is that consumers find it hard to distinguish the really green products from the not-so-green-after-all products. Peter Korchnak's post made me think about the many ways companies engage in greenwashing. Competition is one way to curb greenwashing. Consumers might be easily cajoled but businesses that invest in greening their products are fast to notice the false claims. What was your experience with greenwashing?

2. Today I twittered from a sales and marketing event with focus on leveraging social media and promoting Generation Y among businesses. Most of all, I was excited to see, listen to and briefly talk to Penelope Trunk, author of Brazen Careerist. You can find my today's updates on twitter if you want to find some of her very interesting ideas regarding the peculiarities of Generation Y. This was my first live twittering experience at the end of which I realized the event did not have a hashtag. As Penelope Trunk said, with twitter you need to have your unique story. I haven't come up with my story just yet but I'm getting there. Have you? What's your twitter story?

3. Tomorrow I'll be at The Economist's 2009 Sustainability Summit. It promises to be an interesting event and I will keep you posted live from there, so stay tuned! And by the way, thanks a lot to the organizers for taking me seriously and granting me a real media pass to atend this event.
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Friday, March 20, 2009

Communicating the corporate citizenship story matters

The Boston College Center for Corporate Citizenship (BCCCC) has initiated a film festival which aims to highlight the different ways companies tell their corporate citizenship story. According to BCCCC, such short videos - obviously products of communications teams - have been increasingly linked to improving a company's reputation, positive branding and ultimately the bottom line.

“Since so much media focus has been on the negative, it’s easy to overlook the positive contributions business makes to society,” said Bradley K. Googins, executive director of BCCCC. “We’ve launched this annual film festival to provide the public another dimension of business.”

You are invited to watch the competing videos and vote for the one you think communicates a company’s positive corporate citizenship impact in the most compelling way until March 25. My vote went to the FedEx video because it managed to capture a key feature of corporate responsibility: doing good things TODAY by effectively leveraging a company's existing resources.

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Wednesday, March 18, 2009

Cecily Joseph: Symantec is committed to social and environmental issues

I met Cecily Joseph, Director of Corporate Responsibility of Symantec at the UNIFEM/UN Global Compact event. She generously responded to my questions about Symantec's corporate responsibility efforts and I'm happy to share this with you.

What are the reasons Symantec decided to engage in corporate responsibility efforts? What are Symantec’s CR drivers?

We see the threads of corporate responsibility as intertwined with Symantec’s corporate mission of enabling our customers to have confidence in a connected world. When we track and respond to cyberattacks, when we provide clients with software to help them save energy and reduce carbon emissions in their data centers and beyond, when we promote the advancement of women in technology, when we teach parents how to keep their children safe online – all these actions speak to our commitment to larger social and environmental issues as well as an alignment to our business needs.

In developing our approach to corporate responsibility, our drivers have been defined in large part by what our customers, investors and employees tell us is most important to them: good governance, online safety, privacy, customer satisfaction, the environment, and workforce issues, including diversity.

Who is the target audience of Symantec’s CR report?

We want to reach all of our stakeholders with Symantec’s CR report. Employees, prospective employees, vendors, investors, customers, suppliers, government officials, nonprofits – each of these stakeholder groups has helped to inform both the content of the report and the strategy of the program as a whole.

Stakeholder feedback has been a big part of Symantec’s development of a comprehensive corporate responsibility strategy. In 2007, Symantec conducted a materiality analysis to better understand and prioritize the most relevant corporate responsibility issues for the company and its stakeholders. In this way, we could ensure that the topics being given highest priority (and therefore the most space in the report itself) accurately reflected the concerns and interests of our stakeholder base.

The materiality analysis process began with the identification of key company stakeholders. The Symantec team ranked these stakeholders along two criteria: power/influence (the ability of a stakeholder to exert control or influence over Symantec) and dependency (the extent to which a stakeholder is directly or indirectly affected by Symantec’s actions or inactions). Then, we identified issues that each stakeholder cared about and ranked them by stakeholder level of concern, impact of the issue on Symantec, and Symantec’s ability to exert control over the issue. This materiality analysis determined the highest priority issues for Symantec and its stakeholders, and thus the foci of our corporate responsibility program. This materiality analysis is seen as a starting point for deeper engagement with stakeholders around these key issues, so that the company can continuously review its performance and strive for continued improvement. The materiality analysis also helped to drive the content and approach for our first Corporate Responsibility Report, launched in August 2008.

One of the goals mentioned in the corporate responsibility report is to increase dialogue with the Board of Directors around CR issues. What approaches are used to achieve this goal?

In 2007, Symantec’s Nominating and Governance Committee amended its charter to include a directive to oversee Symantec’s position on significant issues of corporate responsibility. Since then relevant corporate responsibility topics (shareholder advocacy, public policy, environmental performance, philanthropy) have periodically been presented and discussed with the Nominating and Governance Committee. In Symantec’s Fiscal Year 2010, we plan to formalize and increase this communication and dialogue with our Board of Directors.

Another goal is to develop and launch a training program for employees and management on ethics and compliance topics. What are the expected benefits of such a program?

As a leading provider of products and services designed to ensure confidence in a connected world, it naturally follows that we must safeguard our own reputation for integrity and ethical conduct. The Symantec Code of Conduct clarifies our expected standards of behavior and guides employees in making ethical decisions. While all employees receive annual training on the Code of Conduct, true integration of Symantec’s corporate values requires a deepened exposure. Additional focused training on such topics as anticorruption, preventing sexual harassment, privacy, records management, and various booking, revenue, or expense policy areas enables employees to consider scenarios they might face at work, to think through appropriate ways of handling such situations before they arise, to obtain proactive guidance, and to have relevant discussions within their work groups.

What is responsible lobbying and how is it practiced at Symantec?

At Symantec, we define responsible lobbying as the alignment of our corporate lobbying focus with our corporate responsibility agenda. This alignment is a key piece of our overall Public Affairs strategy.

We have a responsibility to our shareholders to monitor and take action on public policy issues that are relevant to our brand. But in doing this, it’s critically important that our policy positions accurately represent our corporate values and corporate responsibility focus. We seek out opportunities to lobby for legislation that is beneficial for our business, our customers, and the community at large. One recent example is our recent inclusion in Business for Innovative Climate and Energy Policy (BICEP), a business coalition focused on lobbying for legislative action on such topics as greenhouse gas emissions, energy efficiency, renewable energy, and more.

For more info on Symantec's CR Report, check out this podcast.
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Tuesday, March 17, 2009

Mallen Baker and Business Respect

Great CSR news from over the Atlantic:

Mallen Baker, a UK-based writer, commentator, strategic advisor on corporate social responsibility and chief executive of Business Respect has recently launched a new website for this CSR e-newsletter that I've been receiving regularly in my inbox and have greatly enjoyed reading. Business Respect is one of those resources that offer just the right amount of news, facts, opinion and commentary on CSR trends and practices from around the world. Check out the latest issue of Business Respect for Mallen's own presentation of the website and the good stuff it has to offer.

Below are my favorite picks from the latest issue:

1. The Top 100 Corporate Citizens List - or is it? Since I blogged live two weeks ago from the press conference where CRO announced this list, I found Sun Microsystem's Marcy Scott Lynn's opinion on this particularly interesting.

2. March CSR Social in New York City, March 24, 6:30 pm, XR Bar in Soho. This event is part of a series of montly informal events organized by the New York CSR Meetup for the CSR professional community in New York City since January. See more details here.

3. A video and a story about Marshalls and India's sandstone challenges. It is disturbing to learn about the real cost of patio paving but good to see that a company can work to make things better.

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Monday, March 16, 2009

Water scarcity risks and how companies handle them

Water is increasingly becoming the new - blue - gold.

Water has always been scarce in many parts of the world. It is well-known that every sixth person in the world lacks access to clean drinking water. charity: water organized a photo exhibition at Chelsea Market in New York and proposes to give 100 schools in developing nations safe drinking water in 2009.

Water is high on the international agenda and the 5th Annual World Water Forum Bridging Devides for Water taking place this week in Istanbul is only proof to that. Water scarcity is seen as the next threat, bigger even than the financial crisis.

Water scarcity poses serious risks to businesses, too. Businesses are mostly unaware of the magnitude of these risks, and generally unprepared to tackle them, according to a recent report by Ceres and Pacific Institute.
This research sheds important light on the critical link between climate change and water issues. For businesses, addressing the risk factors of water scarcity and conflict is as urgent as addressing energy security and greenhouse gas emissions, said Jason Morrison, program director at the Pacific Institute and the report’s lead author.
Nevertheless, several companies are already doing their bit and seeing both environmental and business benefits, according to Sarah Fister Gale's article. For example, Frito Lay's is developing systems that will enable it to recycle up to 90% of the water it uses. Avon excels at tracking its water usage across its global operations and has reduced its water consumption by over 10% through efficiency measures and innovative technology applications such as rainwater harvesting and waterless vacuum pumps. General Electric is another leader in efficient water management and set out to reduce its water consumption by 20% by 2012. Whether or not the company will achieve this goal depends heavily on how fast and well its employees will understand that "every leaky faucet or hose that gets shut off results in appreciable reductions." Photo credit: Snap
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Sunday, March 15, 2009

How IBM measures sustainability

This an interesting video interview with Jay Dietrich, program manager of climate stewardship at IBM. The way to get more businesses to achieve sustainability goals is to show them the business value overtime. According to Jay, most businesses can easily achieve 5-10% reduction of energy use by doing small improvements against the baseline assessment.

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Tuesday, March 10, 2009

Gap Inc: empowering women with education

To continue on the workplace diversity subject, I'd like to tell you about an outstanding CSR program carried out by Gap Inc. It's called Personal Advancement and Career Enhancement or P.A.C.E.

This program was born out of Gap's recognition of the central role women play in the company's global workforce as well as in their communities. Rightly so. Women represent 70% of Gap's workforce and over 60% of its customers. Over 80% of Gap clothes are made by women. It is widely-known that workforce empowerment reflects directly onto the overall well-being of a company. Gap set out to fulfill its commitment to empower the predominantly female workforce by helping women advance in work and life through education assuming it is the key factor in changing a woman's life. As Bobbi Silten of Gap Foundation put it so well, "What separates us is not our ambitions, but our opportunities."

The program piloted in 2007 in India's regions of Bangalore and Faridabad and targeted female garment workers employed in Gap Inc. contracted vendor factories. About 280 women have already received training on topics such as problem solving, communications, decision-making, time management, health, gender, legal literacy and government entitlements. 400 more women are enrolled in the next round of training. The program is about to expand in Cambodia as well.

To help you fully appreciate this program, I'll underline the main drivers of success:

1. Women have to "own" their own success. The trainees aspired to advance through education. Learning improved their self-esteem and confidence and made them more productive both at work and in their family/community.

2. Engagement by factory management is key. Factory management and supervisors - mostly men - were oriented on the program because their support was critical to the overall success of the program.

3. Each location needs to be customized. Although more costly and challenging, this approach is also more effective.

4. Curriculum should be customized and taught by local NGOs.
The training was designed and delivered through partnerships with international (International Center for Research on Women) and local NGOs and vendors.

5. Strong partnerships and high degree of accountability is key. Local vendors provided access to women in need of education.

6. Using company's assets ensures sustainability. Strategic leveraging of specific company's assets for this program enabled a model of sustainability rather than charity. This increased the program's resilience in hard economic times.
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Sunday, March 8, 2009

International Women Day: Gender Equality and CSR

Today we celebrate the International Women's Day. On this occasion I'd like to refer to an event I attended on Thursday, March 5 in New York City. "Advancing Women in the Global Marketplace" was co-organized by UNIFEM and UN Global Compact which put the gender (and not only) diversity in an interesting perspective.

The event was subject to Chatham house rule, so I can't give any quotes, although there were plenty inspiring speeches. The main message I personally took home is that empowering women through corporate responsibility is a great cause but also makes a perfect business case.

And a couple of resources on this subject:

1. Calvert Women's Principles
2. Elisabeth Kelan's gender equality research.
3. Overview of the event
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Friday, March 6, 2009

Best Corporate Citizens in pictures

Below are several pictures from the CRO Magazine press conference:







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Tune into Fox Business News and Forbes.com

The 2009 100 Best Corporate Citizens List® will be featured in the January/February issue of CRO Magazine. It will also contain interviews and profiles of the new Board of Governors of the CRO Association, the Corporate Responsibility industry’s association-of-record with over 150 major corporate members. Going forward, the List Methodology Committee of the CRO Association will manage the methodology behind the 100 Best Corporate Citizens List®, which will help ensure the List continues to represent the state-of-the-art in corporate responsibility rankings.

The press conference has officially closed here.

If you want to see CRO's 10th Annual 100 Best Corporate Citizens List® debut live, tune in to TV's Fox Business News 12:15pm-1pm EST today and/or online at Forbes.com. Fox Business News will host live in-studio interviews with IBM’s Stan Litow, Gap’s Dan Henkle, Bristol Myers Squibb’s Susan Voigt and CRO’s Jay Whitehead.
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Questions and Answers Highlights: 2009 Best Corporate Citizens

Question from Computer World: What are the reasons for the upper move of IBM since 2008?

Stan Litow, IBM: "There are a number of performance metrics we've improved since last year such as in kind contributions in innovative technology available to people in need and employee volunteering."

Question by Elliot Clark, CRO: If you look at the List, you find that these companies outperformed the Fortune 500. Does CR create better financial return or because these companies are financially healthy, it is possible for them to have strong CR initiatives?

Paula Luff, Hess Corporation: "These aspects are interralated. There are many factors that influence strong financial performance and CR is definititely a key one."

Stan Litow, IBM: "It comes down to questions of risk and reward. One reason to have good practices in environment or employee relationship, is that it protects against risk. But it also reduces costs and makes a company more competitive. Being a good corporate citizen allows a company to engage more productively with governments and other stakeholders."

Susan A. Heaney, Avon: "CSR is at the core of Avon's operations and it will soon become center in all companies."

Patricia Riddlebarger, Entergy: "Sustainable practices are good business practices because they entail finding ways to reduce energy & water consumption."

Jonathan Marks, Crowe Horwath: "It is paramount to any company to know what the risks are. It is not surprising that companies that have a robust understanding of risk are also significant corporate responsibility stewards."

Kathee Rebernak, on behalf of Symantec: "Symantec has just issued its first CSR report and it brought significant recognition. Communication pays off."

Kevin Martinez, KPMG: "The young generation is well informed about corporate responsibility and this factor prompts a significant shift in corporate America."

Jay Whitehead, CRO : "To us, all of you are heroes. And we thank you all for your great work!"
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And the 100 Best Corporate Citizens 2009 are

Jay Whitehead has just announced the much-anticipated 100 Best Corporate Citizens 2009.

The top five companies in the List are:

1 Bristol Myers-Squibb
2 General Mills
3 IBM
4 Merck
5 HP


While this year’s most-respected corporate responsibility ranking features many repeat appearances by perennial leaders, 2009’s top-ten companies on the List include four dramatic comeback stories from past corporate responsibility challenges. They are Bristol Myers Squibb, Merck, HP and Mattel (#7).

Bristol Myers Squibb, Merck and HP sat in the 2008 List’s Penalty Box for regulator-mandated enforcement actions dating back to 2006. And Mattel sat out in 2008 for issues surrounding 2007 supply chain governance. Since then, each of the companies’ performance in Environment, Human Rights and Employee Relations in particular have earned them top spots on the 2009 List.

The performances of General Mills and IBM reflect newly-energized corporate responsibility, transparency and public disclosure efforts that build on consistently high levels of corporate citizenship practice, as both have made the List for nearly all of the past 10 years.

The 2009 List features the return of the lone 3 companies to be featured on all 10 years’ Lists: Cisco#6, Intel#13 and Starbucks#65.

The 2009 100 Best Corporate Citizens List® methodology, since it is based solely on publicly-available data, puts a premium on companies with high levels of public disclosure and transparency.

Three lessons from this year's List:

1. Transparency: Companies on the List have done a superior job in communicating their CR efforts.
2. Corporate citizenship makes financial sense.
3. Companies assign more corporate responsibility officers. The number of CROs is continuously growing.
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Jay Whitehead of CRO Magazine: Corporate responsibility matters

In answer to those who ask “does corporate responsibility matter in an age where many companies are fighting for their lives?” CRO Magazine’s 100 Best Corporate Citizens List® answers a resounding “yes.”

Why such a List? Three reasons. First, CRO’s 10th annual 100 Best List (compiled by IW Financial and edited by CRO) is completely based on publicly available information. That means the list’s sources are public places accessible to anyone researching Russell 1000® companies—non-secure websites, government and regulatory sources, investment publications and NGO databases.

Second, the methodology used to compile this year’s 100 Best list was debated and voted on in open session by 27 leading corporate responsibility practitioners representing nine major industry segments October 2008 at the CRO Conference in Chicago.

And lastly, for the first time ever, each listed company was asked to review the underlying data in advance of this publication to make sure no publicly available citation was overlooked. Of the 1,011 data edit requests we got back from the listees, 28.3 percent were validated and resulted in data changes. The result? Our most transparent 100 Best list.

Over the past 9 years, companies on the 100 Best Corporate Citizens List® have out-paced the remainder of Russell 1000® companies by an average of 26% in 3-year total return.

In good times, checkbook citizenship can win the day. But in tough times, strong reputations and transparency pack as much punch as a strong balance sheet. In today’s deep recession, human capital and financial capital seek safety — and companies on the 100 Best Corporate Citizens List® are today’s safest harbors.
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Live from Penn Club in New York City

So here we are today at the Penn Club in New York City in anticipation of finding out which companies made the CRO Magazine's 2009 100 Best Corporate Citizens List®. The list will be announced by Jay Whitehead, CRO Magazine Publisher, at the press conference which is about to start.

Over 25 corporate responsibility executives from 100 Best Corporate Citizens List® firms have gathered here. Before the start of the press conference, I talked to several corporate responsibility executives and here are some of their thoughts:

Paula Luff, Hess Corporation: "The trend in the last 10-20 years has been for companies to understand that CSR is increasingly becoming part of business. The CRO Magazine List will encourage companies to continue their good work and communicate it."

Robert F. Draeger, P.E., Bristol-Myers Squibb: "I think recognition of our company's CSR efforts will encourage other companies to become better corporate citizens. CRO Magazine has been putting this list together for the last 10 years and today we are seeing major companies on it."

Cam C. Hoang, General Mills:"A little competition never hurts. We are constantly engaged in these issues and we hope other companies expand their focus as well."

Stan Litow, IBM: "We recognize that because of its scale and size, IBM is a company that is looked to by other companies worldwide. We are delighted by the CRO Magazine's recognition. It is clear evidence of the link between business performance and CSR. We look forward to work with the private as well as non profit sector to improve performance across the board."

Alberto Canal, Verizon: "We are engaged in CSR efforts because we think it's both right and good business. Also, it is a good way to reinforce a positive message for our employees."

Richard Crespin, CRO Association: "Today's event is significant particularly in these difficult times. We are proud to bring this new level of transperancy."

The press conference has just begun. Jay Whitehead, the CRO Magazine Publisher, is introducing the company and PR representatives from MS&L.
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Thursday, March 5, 2009

Find out who the Best Corporate Citizens are

Stay tuned for an exciting event that will take place tomorrow in New York City! The Corporate Responsibility Officer CRO Magazine will announce its 10th annual 100 Best Corporate Citizens List®.

The 2009 100 Best Corporate Citizens List® will be officially announced in a press conference tomorrow, Friday March 6, 2009 at 10:30 am EST in New York City. I have the honor to be the exclusive live blogger at this event, so stay tuned and you'll have the opportunity to find out in real time which companies made it to the prestigious list this year.

First published in 2000 by Business Ethics Magazine, the 100 Best Corporate Citizens List® published by CRO Magazine is the most-recognized Corporate Responsibility ranking of Russell 1000® companies. The List is based 100% on publicly-available information and is compiled for CRO Magazine by Portland, Maine-based IW Financial, a leading provider of SRI rankings to institutional investors. Previous lists can be found here.

ABOUT CRO and the CRO ASSOCIATION

CRO Magazine, TheCRO.com, CRO Summits and CRO Association have evolved into the leading voices of the Corporate Responsibility professions, following the 2006 acquisition of Business Ethics magazine, which originated the 100 Best Corporate Citizens List®. CRO’s mission is to enhance the standing and practice levels of the Corporate Responsibility professions, including governance, risk, compliance, sustainability, EH&S, CSR, philanthropy and HR.
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Wednesday, March 4, 2009

Georg Kell of UN Global Compact: economic downturn increases demand for value

A while ago, I invited you to contribute to my interview with Georg Kell, Executive Director of UN Global Compact, that took place on February 25, 2009 in New York City. Many thanks to everyone for great questions. Mr. Kell and I had an interesting discussion and I'm happy to share with you the most inspiring highlights.

1. On CSR definition
In simple words, our definition of sustainability and corporate citizenship – we hardly use the term CSR – is the voluntary commitment on behalf of CEOs to implement universal principles and to take actions in support of broader societal goals. The constantly changing macroeconomic environment dictates different priorities for voluntary engagement. Ten years ago the central issues were sweatshops and supply chains. Today, the focus is shifting towards environmental sustainability and climate change.

2. On the boundary between government and businesses
The boundary between government and businesses remains very important today. However, there are a lot of places around the world where the public sector is far from being perfect. According to Transparency International, around 70 countries suffer from systemic corruption. Therefore, we have to do everything we can to improve the situation in these countries. Businesses have a choice: they can either accept existing low standards or set higher standards within their own operations. UN Global Compact argues that because governments fail in so many places around the world, there is a need to engage private actors to set good examples.

Even in ‘high-standard’ countries there is need for improvement. There are areas where through innovation and voluntary action it is possible to move beyond compliance and ahead into the future where the government has not yet been. Climate change in US is a good example. Until very recently, climate change was not advanced by the US administration. Yet, a number of companies recognized the need to push forward with innovation and took voluntary action on climate change before the government started regulating this sector.

3. On achievements
The most important achievement is that today, companies all around the world recognize the importance of non-financial issues - environmental, social and government - in shaping corporate competitiveness. Only ten years ago the ESG issues were considered the exclusive prerogative of governments.

Another achievement is that the UN Global Compact helped open up the United Nations to and restore the working relationship with the private sector. Ten years ago the business community was largely suspicious of the UN – a legacy of earlier attempts to regulate business. Through the UN Global Compact, the UN has gained confidence to enter into partnership with the private sector. Today, this partnership is largely based on principled pragmatism.

4. On remaining gaps
Despite these significant achievements, huge implementation gaps remain. Firstly, many corporations started the journey at their headquarters but have not yet consistently implemented their commitment in their subsidiaries and supply chains. Secondly, not much progress has been made on the anti-corruption front. In some parts of the world, the clock is turning backwards and corruption is on the rise.

5. On corruption
We want all UN Global Compact participants to have explicit and proactive anti-corruption policies and annually disclose their actions in this area. A very small number of companies now do so. With proper policies in place, companies would be better prepared to act swiftly when things do go wrong.

6. On the recession
The economic downturn has increased the demand for values. Corporate philanthropy and sponsorship are being cut, but corporations do not cut what makes them strong tomorrow. They are more active in their search for a meaning of sustainability. One result of the downturn is that success will no longer be measured by quarterly returns, but rather by medium and long-term value creation. While some companies have initially joined the UN Global Compact for differentiation purposes, now they see a real business proposition behind it.

7. On risk and climate change
The crisis has revealed that the risk assessment tools used in the financial sector were totally inadequate. The UN Global Compact argues that a comprehensive approach to risk management requires the inclusion of non-financial issues. The next systemic crisis – which is in the making right now - will most likely be associated with climate change. In order to be prepared, we need to switch from a reactive to a proactive, forward-looking attitude.

8. On the logo policy and free rider issue
We have a very strict policy governing the use of the UN Global Compact logo by participants. Every use of the logo has to be approved by the Global Compact Office.

On the free-rider issue, every participating company is required to issue, on an annual basis, a public Communication on Progress (COP) detailing progress made in the implementation of the UN Global Compact’s principles. Companies that repeatedly fail to do so are delisted. As of today, we have delisted 950 companies, about 30 companies per month. We are now in the process of refining the COP policy by introducing minimum quality standards. It will take some time until these refinements become operational.

9. On organizational change
One of the UN Global Compact’s primary objectives is to promote organizational change so that corporations embrace universal principles as benchmarks for ethical behavior. Many brand-name companies have long ago embarked on this transformation process and search for good ethics and values. What the UN Global Compact has added is the global value framework. One of our most popular publications, Raising the Bar, projects a management change model which is similar to the quality change model and includes such steps as CEO commitment, awareness within the organization, incentives for change, the capacity of the organization to take stock internally of its status quo, the capacity to identify risk of exposure and opportunity for improvement. Organizational change is a never-ending exercise in continuous improvement.

10. On Global Compact 2.0
Global Compact 2.0 is an adaptation to the current context where sustainability issues are increasingly driving the agenda. Ten years ago, the UN Global Compact was launched against the backdrop of anti-globalization protests. Today, the biggest challenge ahead of us is to come to grips with climate change. The significance of this issue cannot be overstated. It can only be solved through global cooperation involving all societal actors. Climate change will affect our lifestyle, our consumption patterns, global security, and poverty. The entire UN agenda – I predict – will be redefined by climate change.
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Tuesday, March 3, 2009

Eat less meat and save the planet

I came across a great speach on healthy food by Mark Bittman, author of the New York Times food column The Minimalist.

I'm observing an interesting trend: people who care about good and healthy food also care about how that food - and their eating habits - affects our planet. And I can't agree more with Mark that it's time "we stop growing animals industrially and eating them thoughtlessly."

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Sunday, March 1, 2009

Elaine Cohen: expert opinion on CSR reports

Do you read CSR reports? I do, but not as many and as in depth as Elaine Cohen. If you are looking for a company's CSR report, go to CorporateRegister.com which features reports of over 5,000 companies. If you are also interested in a concise and to-the-point expert opinion on that report, look in the Expert Review section.

A couple of months ago, my interest was sparked by LexisNexis. Particularly the way it used its CSR efforts as a focus of a powerful branding strategy. Their corporate web-site tells you about ongoing efforts to support local communities, ensure sustained good governance, respect and value its workforce and foster innovation and fair-play in the marketplace. All impressive stuff. And their first CSR report brings it all together in an attractive way.

But the report could be better. Elaine found it "positive, with a sparkle of marcom, but lacking in depth and context" and recommended LexisNexis, among others, to assure the report and disclose more data. After all, it's always good to get a second opinion. Photo credit RampCreative
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