Georg Kell: Businessmen, the Planet Needs You

Georg Kell’s op-ed on the role and responsibility of business in tackling climate change ran on The New York Times/International Herald Tribune website today. It will also appear in tomorrow’s print edition of the IHT.

International Anti-Corruption Day: Siemens Launches Integrity Initiative

Siemens has launched a global integrity initiative which will spend USD 100  million over the next 15 years to support organizations and projects that fight corruption and fraud through collective action, education and training.

The initiative is part of a comprehensive settlement with the World Bank Group, following a World Bank investigation into Siemens’ business practices and subsequent acknowledgement by the company of past misconduct.

More details on eligibility, selection criteria and application here.

The Global Compact and Children’s Rights

On the 20th Anniversary of the Convention on the Rights of the Child, the Global Compact encourages participants and stakeholders to increase their awareness of this landmark instrument.

Children’s rights are relevant to a number of the Global Compact principles, including principles 1 and 5.  Global Compact principle 1 asks business to respect and support the protection of internationally proclaimed human rights.  These include children’s rights.  Global Compact principle 5 asks business to uphold the effective abolition of child labour.

Request for Comments: Draft Guide to Human Rights Impact Assessment and Management

This just in:

The IFC, IBLF and the Global Compact are now requesting comments on the draft Guide to Human Rights Impact Assessment and Management [PDF, 2.7mb]. First released in June 2007, this publication aims to help companies identify and address human rights risks and impacts, and integrate the results of the assessment into their management system.

Since its publication, the draft has been used and road-tested by companies from various industry sectors. During the road-testing phase, the Guide to HRIA website was created to provide road-testing companies with additional information, resources. The website was also created to update all stakeholders on new developments during the road-testing process, in addition to hosting quarterly online discussions on HRIA related issues.

Photos Wanted!

As part of the road-testing process of the Guide to Human Rights Impact Assessment and Management ( a joint project of the Global Compact, the International Business Leaders Forum and the IFC), the IBLF has launched the Human Rights issues in a Business Context – photography competition.  Companies are invited to submit photographs depicting a human rights issue in an operational context.

More details here.

Sustainable Stock Exchanges?

As a follow-up to the UN PRI/Global Compact/UNCTAD event on the role of stock exchanges in advancing responsible business practices, Marc Gunther, who moderated a good portion of the day’s discussion, published a very comprehensive summary on his blog.  A critical thought:

I’m not persuaded that we can make the link between the financial crisis and the need for companies to be more responsible, more aligned with society and better governed. If there is a connection, it’s probably driven—or at least it should be—by a greater skepticism among investors, a willingness to dig deeper into risk and the understanding that neither size nor short-term performance tell you what you need to know about a company.

Mark’s point about risk is critical. There are many lessons from the crisis, of course. But obviously the prevailing risk paradigm was fundamentally flawed. And we weren’t even talking about environmental and social risks yet.

Business, Investors and Civil Society Take Stand on Climate Change

Heads of state and government from more than 50 nations met with nearly 200 leaders of global business and civil society organizations at the United Nations today to convey their support for a balanced, fair and effective global climate agreement.

The UN Leadership Forum on Climate Change, organized by the UN Global Compact in collaboration with a broad group of UN Agencies, Funds and Programmes, issued a strong outcome declaration urging governments to take bold climate action in Copenhagen. Excerpt:

“The future of the global marketplace hangs in the balance. A global agreement on climate and a sufficient price for carbon will help ensure the continuation of a global marketplace based on openness and competition. Strong markets are needed to diffuse climate solutions. On the other hand, failure to find agreement would result in trade tensions and competitive distortions that not only threaten the foundations of our global economy, but also any future advances in sustainable economic and social development.”

ESG and Responsible Investment in the Private Equity Community

Georg Kell had the opportunity to address the Dow Jones Private Equity Analyst Conference in New York today. Click here for the full speech.

Detecting Greenwash, Fighting Hogwash

Folks at BSR and Futerra have joined forces for a useful little business guide titled Understanding and Preventing Greenwash. The publication focuses on preventing questionable or outright bogus environmental messages, for good reasons.  Money quote:

 ”[T]he consequences of getting it wrong and being seen as purporting a fraud—or, “greenwashing,” a term now in the lexicon of most industries—are growing. Whether real or perceived, when consumers see greenwashing, they are likely to punish companies with less sales. When NGOs see it, they are motivated to drive negative campaigns and press. And when regulators see it, they can determine that an environmental claim is a “deceptive practice” and fine companies.”

  Needless to say, the same applies when it comes to messaging around human rights or labour standards.

Bridging the Gap Between CSR and Core Business

Ethical Corporation Magazine profiling Adam Werbach who wants corporate responsibility officers to be more commercially aware. Excerpt:

Werbach’s views point to the divide that still exists in many companies between corporate responsibility and core business, despite efforts to embed sustainable business practices in companies. This is especially true among US companies, where corporate responsibility remained, until very recently, largely about community investment.

 

WSJ: Sustainability Works!

In a brief, but noteworthy article on the Wall Street Journal website (“Sustainable Success”), Prof. Lutz Kaufmann of the Otto Beisheim School of Management in Vallendar/Germany and his research team argue the case for corporate responsibility in the developing world:

A commitment to improving social and environmental conditions in the developing countries where a company operates is the key to maximizing the profits and growth of those operations.

That’s the conclusion we drew after studying more than 200 companies. As a group, the companies most engaged in social and environmental sustainability are also the most profitable.

This may not come as news to those in the CR/Sustainability field that have been making the case for years. But it stands in stark contrast to recent calls to scale back sustainability expectations in light of the recession, particularly in developing and emerging economies. We will try and get some more info on the underlying research.

Better ESG Disclosure Needed in Emerging Markets

The Emerging Markets Disclosure (EMD) Project has released results of an investor survey on environmental, social and governance (ESG) disclosure practices in emerging economies. While giving credit to Brazil and South Africa for progress made in recent years (including the launch of national sustainability indices), investors hold more critical views on the overall state of ESG disclosure:

The survey shows that at a time when increasing numbers of institutional investors are demanding more openness and transparency, poor ESG disclosure by emerging market companies threatens to undermine investor confidence and could potentially reduce investment allocations to emerging markets.

More details here. Full survey findings will be presented in New York on 25 June.

ILO Helpdesk: Open for Business

The International Labour Organization has recently opened an email helpdesk for managers and workers seeking to understand the application of international labour standards. Guidance is free of charge, and replies are prepared by a multi-disciplinary team, ensuring that users receive a comprehensive response (within two weeks).

To submit a question to the Helpdesk, send an email to assistance@ilo.org. More information here.

Anti-Corruption Reporting Still Lacks Transparency

Transparency International has just released Transparency in Reporting on Anti-Corruption – A Report of Corporate Practices. The comprehensive study looks at ways in which nearly 500 listed companies from 32 countries and a wide range of sectors report on strategies, policies and management systems to tackle corruption in all its forms.

The bad news:

The average company analysed scored only 17 out of a possible 50 points and was awarded two stars out of a possible five. Only seven companies achieved the highest possible five star score.

The better news:

Half of the companies that achieved a four- or five-star rating came from higher risk sectors where corruption, or the threat of it, is regarded as widespread. This could indicate that companies in these sectors recognise that putting robust policies and systems in place to address bribery and corruption is a form of risk management.

The good news:

Slightly more than one-quarter (26 per cent or 127 companies) of the sample were signatories of the GC. Signatories scored slightly higher in the TRAC report than non-signatories. The average score of GC signatories was 20.4 (a borderline three-star average score).14 For non-GC signatories the average was 15,6 (within the two-star rating). GC signatories are likely, on average, to have slightly more publicly available information in the area of policy and management systems related to anti-corruption and antibribery.

Yet:

17 GC signatory companies in the sample had little or no information in the public domain, and were on the bottom end of the one-star range. This indicates that some GC signatories may not be compliant with reporting on the GC tenth principle.

We’ll look into that. (TI press release here.)

Goodness! Not Another Ranking

Folks at Goodness500 have just launched the … Goodness 500 – a social responsibility ranking of US companies. The problem: measuring charity donations, executive diversity and toxicity produced/released does not really allow for much more than ranking companies by, well, charity donations, executive diversity and toxicity produced/released.

Take charity donations, for example. Spending money is the easy part. The fundamental point is one that we and others have made time and again: corporate responsibility is not about how money is spent, it is about how money is made. There are plenty of companies with big wallets, but poor environmental and social performance.

So, what about human rights policies, labour standards in the supply chain, greenhouse gas emissions, codes of conduct, occupational health and safety, anti-corruption policies, investment principles, water use, third-party verification, and so on? That’s where ESG performance is measured. And it’s also where true responsibility should be assessed (although there are plenty of views on the general validity or CSR rankings). Perspectives welcome.

(Just for the record: Kudos to the Goodness500 people for taking the initiative. Our concerns revolve around the methodology, not the intention.)